New Zealand Blood Service Annual Report 2022-23

TAKOHA TOTO, WHAKAORA TĀNGATA GIVE BLOOD, SAVE LIVES

“ I A M H E R E T O D AY B E CAU S E O F TH E AMAZING PLASMA DONORS AROUND AOT E A R OA .”

–VYRON METE PLASMA RECIPIENT

Annual Report 2022-23

ALIVE AND THRIVING THANKS TO THE SELFLES S G E N E RO S IT Y O F DO N O R S AN D TH E I R WHĀNAU

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VYRON METE, P L AS M A R E C I P I E N T

18

24

JA M E S K E I T H , H E A R T VA LV E R E C I P I E N T

36

I SA AC W E S T, B LO O D R E C I P I E N T

AMY NG -THOMSON, DOUBLE LUNG TRANSPL ANT RECIPIENT

NGĀ K AI OROTO

CONTENTS

04

Our purpose, vision and values

07

How to save a life

08

Who needs my blood?

09

Liquid Gold

10

How plasma saves lives

14

Donor Services Highlights

22

Technical Services Highlights

28

Sustainability

Tō mātou tūmanako me ngā whanonga pono

Mahere hei kaiora tangata

Ko wai e hiahia tōku toto?

Wai āwheo

Whakaorangia tāngata

Ngā pānui hirahira o te kaitiaki o te kaituku

Ngā pānui hirahira o te kaitiaki o te toto

Te ara toitūtanga

30

Update from the Clinical Team

38

Digital Technology and Information Management

42

Quality, Regulatory Affairs and Privacy

44

Code of expectations for health entities’ engagement with consumers and whānau

46

Planning and Supply Chain

48

Our people

52

The Board

53

The Executive Management

He pūrongo hou tō te rōpū hauora

Te hangarau matihiko me te penapena pārongo

Te noho matatapu me te mahi whakarite

Te tikanga mō te mahi tahi a ngā hinonga hauora ki ngā kiritaki me ngā whānau

Te mahere me te whakarato

Ngā aho o te taura

Te Poari

Te rāngai matua

Structure and Governance

54

Statement of Trends

55

Statutory Disclosures

57

Financial Statements

60

Statement of Performance

90

Statement of Responsibility

100

Independent Auditor’s Report

102

Directory

104

Presented to the House of Representatives pursuant to section 150 of the Crown Entities Act 2004

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

TI RO HAN GA WHAK AM U R I

THE YEAR IN REVIEW It has been another busy and productive 12 months for Te Ratonga Toto O Aotearoa | New Zealand Blood Service (NZBS)1, with donors across Aotearoa gifting more than 220,000 units of lifesaving blood or plasma during the year.

We retained an intense focus on business-as-usual across our operations throughout 2022/23, but we also looked to the horizon, investing significant time, energy, and funding into developing our facilities for the future.

BUILDING FOR THE FUTURE Demand for our products, particularly plasma-based products, continues to grow rapidly. It’s vital that we have the infrastructure in place to facilitate that growth, and to assure the health sector and the public of our continuing ability to meet the need for life-changing products.

We were therefore pleased to officially open our new Christchurch and Waikato Blood Banks in October and November respectively. These new blood banks not only support greater work volumes, but are a significant step up from the blood banks they replaced, providing fit-for-purpose facilities and a significantly improved work environment for our staff.

In October, staff from our National Reference Laboratory and New Zealand Transplantation and Immunogenetics Laboratory moved into their new facilities at our Epsom site. This project was around two years and $5 million in the making, and has delivered world-class facilities in support of the specialised work our teams perform there, for all of Aotearoa.

Work also continued on developing our new Waikato Hub, which will house a light, modern new donor centre, as well as accommodating members of our Collections, Logistics, and other teams. And steady progress was made on both our new Tauranga Donor Centre and our biggest-ever infrastructure undertaking; our 4,000m2 Highbrook facility, the details of which are included elsewhere in this report (page 22).

During the year, our stem cell processing function was also successfully relocated from our Palmerston North site to our Wellington site, we acquired new office space in Wellington, we began the fabrication and fit-out of the first of four new mobile trucks as part of our mobile fleet upgrade, and we welcomed the New Zealand Bone Marrow Donor Registry as a fully-fledged member of the NZBS whānau.

So much more has occurred throughout the year, and those activities are further detailed in the various sections of this report.

N AV I G A T I N G C H A L L E N G E Unsurprisingly, the year presented challenges too. While we’ve felt COVID’s impact to a lesser extent than in the previous two years, we have instead had to contend with severe weather events. Cyclones Hale and Gabrielle impeded our mobile vehicles’ ability to access some venues, and our donors’ ability to visit some of our donor centres. Severe weather also caused flooding to part of our Epsom building. In both scenarios, the commitment of donors and staff enabled us to ride out these literal storms with minimal disruption to our donors, recipients, and health sector colleagues.

The exponential growth in demand for plasma and fractionated plasma products also proved challenging, and we fell shy of our collection target this year. Our commitment to maintaining and growing our donor panels remained unwavering however and, in the final month of the year, almost 650 new plasma donors registered with us – the highest number in almost two years. Meeting growing plasma demand is a challenge that cannot be quickly or easily resolved, and is one that we are again preparing to reckon with in the coming 12 months.

Despite these challenges we have successfully concluded another year. No hospital or patient has failed to receive the life-improving or lifesaving products they needed and, as always, this is thanks to the selfless generosity of our donors and the hard work of our skilled and committed staff. We extend our sincere thanks to them for their life-changing and lifesaving contributions.

Fiona Pimm Board Chair

Sam Cliffe Chief Executive

New Zealand Blood and Organ Service was established as a statutory entity in 2000. Our functions include managing the donation, collection, processing, and supply of blood and controlled human substances, providing oversight and clinical governance of organ and tissue donation, and providing support to transplantation services. Where ‘New Zealand Blood Service’ and ‘NZBS’ appear in this report, they refer to the work of New Zealand Blood and Organ Service.

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Staff celebrate the November opening of the new Waikato Blood Bank.

Chris Lowry, Te Whatu Ora Waikato’s Regional Director, Hospital and Specialist Services, Te Manawa Taki, and NZBS CEO Sam Cliffe unveil the New Zealand Blood Service tohu at the Waikato blood bank.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T Ō M ĀT O U T Ū M A N A KO M E N GĀ W H A N O N GA P O N O

OUR PURPOSE, VISION A N D VA L U E S OUR PURPOSE To ensure the health needs of people in New Zealand are supported by the availability of safe and appropriate blood, blood products, tissues and related services.

OUR VISION To be recognised for excellence in meeting the needs of donors, patients, our staff, and the wider healthcare community.

O U R S H A R E D VA L U E S We strive to achieve our vision and purpose in accordance with our shared values and driving principle of safety:

SA F E T Y I S O U R C O R N E R S TO N E KO T E H AU M A R U TĀ M ĀTAU M ĀTA P O N O TAK E TAK E

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Our shared values:

KIA TAU KI TE TI H I S TR IVI N G FO R E XC E LLE N C E TE MAH I N GATAH I TE AMWO RK TE P O N O M E TE TIK A I NTE G R IT Y AN D R E S P E CT TE WHAK AWH ITIWH ITI WHAK A ARO I R U N GA I TE MAHAR AHAR A O P E N CO M M U N I CATI O N TE HAU MAR U H OKI TE K ATOA SAF E T Y FO R ALL These values have been co-designed by staff, volunteers, blood donors and patients. Behind each value is a set of behaviours that guide the way we treat each other and conduct our business. They inspire us, motivate us and drive us to provide the very best service to the New Zealand public.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N GÃ TAU

NZBS IN NUMBERS

850 MORE THAN

T H E O N LY B L O O D

FOUNDED IN

1998

TOTAL S TA F F

S E RV I C E I N NEW ZEALAND

1942

4 PROCESSING SITES

347

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2007 OUR OLDEST DONOR

O U R YO U N G E S T DONOR

DONOR CENTRES

117,004 AC TIVE D O N O R S

AS AT 3 0 J U N E 2 0 2 3

MOBILE PL ASMA

1027 MOBILE BLOOD

D R I V E S AT 6 L O CAT I O N S

AC R O S S T H E M O T U

4,251+ AV E R AG E N U M B E R O F D O N AT I O N S P E R W E E K

D R I V E S AT 2 5 6 S E PA R AT E L O CAT I O N S

101, 4 4 5 PL ASMA UNITS

2 ,759 P L AT E L E T U N I T S

18 G R A N U L O CY T E U N I T S

4 M A N U FAC T U R I N G S I T E S

6 B L O O D BA N KS

3 S P E C I A L I S T L A B O R AT O R I E S

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121,111

WHOLE BLOOD UNITS

C O L L E C T E D I N 2 0 2 2/2 3

400 AROUND

WO N D E R F U L

VO L U N T E E R S N AT I O N A L LY

CA N I D O N AT E? If you are 16-70 years old, in good health, and weigh over 50kg, you may be able to give blood.

I T ’ S AS E ASY AS 1- 2 - 3 1. Check you are eligible to donate by viewing the eligibility criteria on our website: nzblood.co.nz.

2. Eligible? Great! You can make an appointment at nzblood.co.nz, via the NZ Blood Donor app, or by calling 0800 GIVE BLOOD (0800 448 325).

3. You can donate blood at our donor centres or attend a mobile blood drive in your area.

You can donate plasma at one of our donor centres or, if based in Auckland, at one of six mobile plasma drive locations available.

Platelet donors require special machines, so you can donate at one of our four donor centres that collect platelets: Epsom Donor Centre, Hamilton Donor Centre, Wellington Donor Centre, and Christchurch Donor Centre.

W H AT H A P P E N S TO YO U R D O N AT I O N? • In our laboratories, blood is spun in centrifuges to separate the red blood cells, platelets and plasma. Our scientists test every donation for infectious diseases and identify the blood type.

• Plasma can be made into two fresh components: Fresh Frozen Plasma (FFP) and Cryoprecipitate. We also send plasma to CSL Behring in Australia for fractionation into 11 different immunoglobulin products (see pg 11). These are then returned to New Zealand for use in patients here.

• Blood and blood products are stored until they are needed.

The shelf life and temperature requirement is different for each blood component.

– Red blood cells are stored in refrigerators at 2-6°C for up to 35 days. They are used to treat maternity, paediatric, and transplant patients, and people with cancer. They are also used to treat acute blood loss as a result of trauma or surgery.

Before booking your appointment, take a look at some of our key eligibility criteria:

1 / You must be in good health at the time you donate.

2 / If you have recently had a tattoo, you must wait three months from the date of the procedure before you can donate.

3 / If you have recently travelled overseas a stand-down period may apply. Please check our travel tool at www.nzblood.co.nz to check your eligibility.

4 / You must not have lived in the United Kingdom, France or the Republic of Ireland for a total of six months or more between 1980 and 1996, or received a blood transfusion in ANY of these countries since 1980.

NB: This year NZBS is finalising its submission to Medsafe recommending that this restriction be lifted.

ELIGIBILIT Y CRITERIA A R E S U B J E CT TO C H A N G E. FOR ADDITIONAL ELIGIBILIT Y CRITERIA , V I S I T O U R W E B S I T E: N Z B LO O D.C O. N Z

– Platelets are stored at room temperature for up to seven days. They are used to control bleeding following surgery and trauma, and to manage some blood diseases and cancer.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

KO WA I E H I A H I A T Õ K U T O T O ?

WHO NEEDS MY BLOOD? R E D B L O O D C E L L S O N LY L A S T 3 5 DAY S A N D H E L P A VA R I E T Y O F PAT I E N T S , W I T H PA R T I C U L A R CA R E TA K E N T O E N S U R E B L O O D T Y P E C O M PAT I B I L I T Y.

3% 6% 6% 11%

Children, including those with cancer Pregnant women + babies Bone surgery patients People with liver, kidney + heart disease

22%

Accident and trauma patients

24%

Cancer patients

Other medical conditions + surgical treatments

27%

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WA I AW H E O

LIQUID GOLD P L A S M A I S T H E L I Q U I D PA R T O F O U R B L O O D. W E CA L L I T ‘ L I Q U I D G O L D ’ B O T H B E CAU S E O F I T S C O L O U R A N D B E CAU S E O F I T S VA L UA B L E L I F E S AV I N G P R O P E R T I E S .

YO U CA N G I V E P L A S M A E V E RY

2 WEEKS 101,445 UNITS OF PLASMA C O L L E C T E D I N 2 0 2 2/2 3

DEMAND FOR PLASMA I S G ROWI N G BY

10% 90

EVERY YEAR

MINUTES TOTA L A P P O I N T M E N T TIME TO GIVE PLASMA ( A P P R OX .)

17,100 PLASMA DONORS I N 2 0 2 2/2 3

Plasma Plasma makes up more than half the volume of blood in our bodies and contains proteins and antibodies.

Its proteins can be transformed into the fresh products listed below, and into a further 11 different products (see page 11).

Fresh Frozen Plasma (FFP) This is plasma that has been frozen and carefully thawed before use. It is used to replace clotting factors when a patient is bleeding after major surgery or a serious accident.

Cryoprecipitate Plasma that has been specially treated to produce a concentrated dose of clotting factors. It is mostly used for treatment of trauma patients and during cardiac and transplant surgery.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

W H A K AO R A N G I A TĀ N GATA

HOW PL ASMA S AV E S L I V E S Plasma is used to treat people who have lost a lot of blood due to accidents or other trauma, and patients who have severe bleeding during surgery.

DID YOU KNOW?

It is also used to create 11 lifesaving products that help to:

If you feel fatigued giving blood, then you may be a great candidate for giving plasma. This is because your blood cells are returned to you as part of the donation process!

LEARN MORE ABOUT WHETHER YO U CA N D O N AT E P L A S M A

BY CA L L I N G 080 0 448 325

Boost the immune systems of people who have low levels of antibodies.

Control some autoimmune disorders where the patient’s immune system is attacking their own tissues.

VISITING N Z B LO O D.C O. N Z /G I V E - P L A S M A OR ASKING US NEXT TIME YO U ’R E I N D O N AT I N G B LO O D !

Provide special clotting factor concentrates for some people with haemophilia and other bleeding disorders.

With plasma being used to treat an increasing number of life-threatening conditions, demand for this ‘liquid gold’ is growing by ten per cent every year. That means we need many more people to be plasma donors.

Fractionated blood products.

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PROTHROMBINEX™ -VF (FACTO R S II, IX & X )

HYPERIMMUNE GLOBULINS

I NTR AGAM ® P, E VO GAM ® & P R IVI G E N ®

Used in patients who require reversal of anticoagulant therapy, and for preventing and treating bleeding in patients deficient in one or more of the II, IX or X clotting factors.

Provides temporary protection against a specific infection, such as chickenpox, tetanus or hepatitis B.

Use d to tre at some immune deficiencies by replacing antibodies that provide protection against many infections. Also used to treat patients with overactive immune systems that can lead to some autoimmune disorders. They are often used when other treatments are not effective.

NORMAL IMMUNOGLOBULIN -VF

THROMBOTROL®-VF

Provides antibodies to help protect people against hepatitis A, measles and other viruses - for example, when travelling overseas to high risk areas, or if active immunisation is not possible or appropriate.

Used before surgery or during pregnancy and childbirth in patients who might be at risk of blood clots due to an inherited antithrombin III deficiency.

B I O S TAT E ® (FAC T O R V I I I & VO N W I L L E B R A N D FAC T O R ) Contains blood clotting factor VIII and von Willebrand factor, two proteins that are essential for normal clotting. It is used in people with haemophilia A, and to provide von Willebrand factor for some people with very low function of this protein. The treatment is used to prevent bleeding during surgery or after injury.

R H (D) I M M U N O G L O B U L I N - V F ( A N T I - D) A L B U M E X®4

A L B U M E X®2 0

Replaces albumin in people who lose this protein due to severe burns or have very low albumin levels for other reasons. Also used to replace plasma during plasma exchange treatments, and may be used to treat shock due to blood loss.

Given to critically ill patients with a very low level of albumin in their blood due to factors such as extensive burns or acute blood or plasma loss.

Given to RhD negative women during pregnancy or after childbirth, this treatment prevents the mother from producing antibodies if her baby is RhD positive (i.e. incompatible with her own blood group). Without treatment, complications can arise for the baby (and for the mother’s future babies), ranging from jaundice to serious anaemia or even death.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

V Y R O N ’ S D E B T O F G R AT I T U D E TO PLASMA DONORS A year after cutting his sporting career short to donate a kidney to his father, an unfortunate twist of fate resulted in Vyron Mete ending up in hospital battling for his own life.

However, despite going to some “dark places”, the Tauranga local’s story fortunately has a happy ending.

And with his new perspective on life, he wants to pay it forward by sharing his tale in the hope that it encourages more people across Aotearoa to donate the liquid gold to which he owes his current health: plasma.

Vyron, a former top-level rugby player who was talented enough to represent Bay of Plenty and North Harbour at provincial level, required 150 plasma transfusions after being diagnosed with atypical hemolytic uremic syndrome (aHUS) in 2022. aHUS is an extremely rare, life-threatening genetic disease that causes tiny blood clots to form in the blood vessels, blocking blood flow to important organs. It can lead to kidney failure, heart disease and other serious health problems.

Vyron knew something was amiss when he started passing blood and experiencing pain in the right side of his lower back. Initially, he thought it was an infection.

However, his ailment turned out to be something more serious.

Confirmation that he had aHUS came 12 months after he gave up a promising rugby career in order to donate his left kidney to save the life of his father Evan, who had end-stage kidney disease.

For Vyron, the disease was attacking his one remaining kidney to the point where it was starting to fail.

Thoughts initially turned to the transplant and whether that could have been the culprit. Fortunately for

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those involved, doctors allayed those fears when they discovered his aHUS was unrelated.

While that was at least some good news, Vyron’s condition was anything but.

“It was a tough year. After recovering from a kidney transplant, to then finding out I have this rare disease, I was devastated,” he says.

“When the doctor told me I might need a kidney transplant myself, I lost all hope and went to some dark places.”

With his health deteriorating, Vyron was flown from the Bay of Plenty to Waikato Hospital. It was there that he received the first of his 150 transfusions of fresh frozen plasma over 10 days. That was a game-changer for him.

“Finding out that plasma could help with this disease gave me the hope I needed to fight for my life,” he says.

The plasma transfusions did the trick and slowly but surely Vyron has returned to good health.

“I am here today because of the amazing plasma donors across New Zealand.

“My goal now is to help as many people as I can on their health and wellness journey, and raise awareness about donating blood and plasma.”

Today he is living his best life alongside his partner Esther (herself a plasma donor) and embarking on a new career in real estate.

“Thanks to my amazing partner and whānau I’ve made a full recovery. My bloods have all come back to normal and I’m off my medication.

“I now have a new perspective and can continue on with my life.”

“FIN DING OUT THAT PL AS MA COULD HE LP WITH THI S DI S EAS E GAVE ME THE HOPE I NE E DE D TO FIGHT FOR MY LIFE .”

– V YRON

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N GA PA N U I H I R A H I R A O T E K A I T I A K I O T E K A I T U K U

DONOR SERVICES HIGHLIGHTS Donor Services comprises four interdependent functions: Marketing and Communications – to build brand awareness and increase donor panels and understanding through campaigns and media; Donor Relations – to maintain a sustainable donor population and retain existing donors through relationship development and appointmentscheduling to achieve collection targets; Administration – to welcome our donors and patients and support the wider Donor Services team; Collections – to collect whole blood, plasma, and platelets while ensuring donor health is protected and maintained.

Whole blood collections were up this year, with 121,111 units collected compared with 117,554 the previous year. Plasma collections however, were down slightly, with 101,445 units collected compared with 106,890 units in 2021/22. At the same time demand for plasma continues to grow significantly - by more than 10 per cent in the last year.

S U S TA I N I N G A N D G R OW I N G O U R D O N O R PA N E L S Following our 2021 Unseen emergencies campaign, we evolved our messaging to show how blood and plasma donations not only save lives in emergency and trauma situations, but also in medical scenarios where ongoing treatment is needed – for instance, for chronic conditions.

Unseen lifesaving moments was launched in November 2022 and depicted ordinary people going about their daily routines at the same time as their previously-gifted blood or plasma donations were being used to save or treat others.

The fully-integrated campaign used multiple channels including radio, print, television, and social media – to help drive awareness and action as we work to increase our donor numbers by 40,000.

This year we have also made significant progress on our new Donor Relationship Management system (DRM365). This is a vital piece of software used to help us maintain, foster and

grow our relationships with our donors. Once live, DRM365 will offer a more flexible and improved experience for donors, and enable better reporting capabilities for NZBS. The project kicked off in January 2022 and was initially scheduled for launch in early 2023. However, the complex and challenging nature of the system under development has created delays, and it will now go live in the next financial year.

During the 2022/23 year we also increased our number of available appointments by introducing a permanent Saturday collection in Auckland. This was originally a plasma initiative, but whole blood collection is often included too, to help meet demand.

N AT I O N A L B LO O D D O N O R W E E K From June 12-18, New Zealand celebrated National Blood Donor Week. Once again, it was an opportunity to thank our donors for their selflessness and remind them that, whatever their reason for donating, their commitment helps save lives.

The week was also a chance to encourage those who have never given blood or plasma to find their ‘why’ and join our whānau of lifesavers. Stories in support of the week ran across multiple media channels, showcasing the difference our donors make to the lives of New Zealanders who require medical treatment.

RAISING AWARENESS: The theme of New Zealand Blood Donor Week was ‘What’s your why?’ with a range of activities prompting people to think about their motivations for becoming a donor. These included a ‘What’s my type?’ event at parliament, attended by a number of MPs including Rachel Boyack (below right), and an ‘activation’ to engage members of the public at Auckland’s Britomart (below left and middle).

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O U R P L AC E S Waikato

This year has seen excellent progress on the construction of our new, purpose-built donor centre and logistics hub, conveniently located on London Street in Hamilton’s CBD. We remain on-track to move into the three-level facility early in the new financial year and look forward to the muchimproved environment it will provide for donors and staff.

Compared with our current, 34-year-old, donor centre, the new site will be 9382m bigger, with an extra 14 on-site carparks for donors and the capacity to double the number of donor couches we have available.

Tauranga

Construction is also underway on a new purpose-built donor centre in Tauranga, due for completion in early 2024. The Cameron Road centre will provide a more spacious and modern environment for donors and staff and will increase donor parking from five to 15 spaces.

Christchurch

Our Tuam St facility in Christchurch operated as a ‘mobile’ site for the collection of antihemophilic factor (AHF) plasma throughout 2022/23. Then, in June ’23, a Medsafe licence was issued that will allow us to add Fresh Frozen Plasma (FFP), Cryoprecipitate, and some whole blood collections at this site from next financial year. Renovations have already begun to accommodate this added functionality, providing an improved environment for donors and staff.

O U R T E C H N O LO GY Our preparations to successfully implement the new Aurora apheresis technology progressed well this year. Moving to a new type of machine for collecting plasma will keep NZBS up-to-date with improved technology, and have benefits for both donors and staff. Each plasma donation will take a little less time for our donors, and some have said it feels gentler on their veins. For staff, the equipment is easier and better to use, and for NZBS, it will eventually support the move to a paperless process.

This year we have carried out comprehensive validation activities and developed training in readiness for implementing the new Aurora machines. A phased transition to the new technology is expected to start in the first half of the next financial year (FY23/24) in Auckland and conclude in Christchurch early in the second half of that year.

This change of a vital piece of equipment is being supported by staff across many NZBS teams, including Training, Component Processing, Logistics, and - crucially - our Donor Services frontline teams.

COMING SOON (right): Solid progress has been made on the new Hamilton Donor Centre and it remains on target to open early in the new financial year.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

OUR PEOPLE Collections Teams

Our fixed site and mobile Collections Teams are at the heart of Donor Services and have continued to deliver a highquality donor experience in the face of various challenges.

In particular, the extreme weather events of early 2023 impacted our mobile teams’ ability to safely reach collection sites in affected areas of the country. Despite the obstacles, the commitment of staff, and our donors, enabled us to ride out these literal storms with minimal disruption.

National Rosters Team

Last year the National Rosters Team successfully assumed responsibility for the Manufacturing and Logistics Teams’ advanced roster planning. This freed up the Manufacturing and Logistics Team Leaders to focus on their core tasks.

This financial year, the team has focused on building strong stakeholder relationships to further improve the flow of information and the accuracy of first draft rosters across all their teams.

The Donor and Product Safety team

The Donor and Product Safety (DaPS) Team moved into their expanded space, which allowed for three additional desks to be added. The team has been stable over the past year, with recruitment required only for planned growth. DaPS continued to manage a high volume of calls, with 85,410

O U R Y E A R I N CA M PA I G N S

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eligibility queries and 2,214 bone donation assessments completed this year.

Nurse Education Team

The team has continued to address the learning needs of NZBS’ Nurse and Donor Technician workforce, with a particular emphasis this year on our Enrolled Nurse workforce. Using co-design principles, the team has designed and created a range of new resources that support Enrolled Nurses to work to the top of their scope, respond to donor adverse events, and to carry out donor health assessments alongside their Registered Nurse colleagues.

Donor Relations Teams

Large events were back on the calendar this year after several years of COVID-19 restrictions. The Donor Relations Teams were able to increase their presence and activity at events such as Cup Weeks, Field Days, and locations like Parliament. These teams have been extremely adaptable over the year, making many last-minute changes due to severe weather events, travel disruptions, and school strikes. To make up for lost collections due to these events, new and reinstated mobile collections were scheduled, including in Queenstown – our first mobile visit there in four years.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

A ‘ M I R AC L E ’ O N T H E M O U N TA I N – C O L L I S I O N L E A D S T O L I F E S AV I N G DE C I S I O N FO R I SA AC For Isaac West, a skiing trip turned from dream to disaster after a terrible accident saw him come close to losing a limb and needing 10 units of blood to stay alive.

As a mad-keen skier, Isaac was having the time of his life skiing with his dad up Mt Hutt, when suddenly he slid out on the ice before crashing into a snow machine and losing consciousness.

“I still can’t really remember what happened, but I was extremely aware of the most intense pain in my leg. The whole thing was a really scary experience.”

The injury to his leg was causing Isaac to lose a significant amount of blood and he was airlifted off the mountain and taken straight to Christchurch Hospital where he was rushed into surgery.

The air ambulance crew administered blood to Isaac on the way to the hospital, before he required more throughout his eight-hour surgery.

“There are lots of heroes in my story, including the many blood donors who helped save my life. Without the availability of blood, I wouldn’t have got through it – no way.”

Thanks to the swift and careful actions of those on the mountain, in the air ambulance and in the operating room, Isaac’s leg was saved. “A miracle,” says Isaac who had a compound fracture in his tibia and fibula which had severed a major artery.

Only it didn’t stop there.

After staying in Christchurch Hospital for 11 days, Isaac went home to Hamilton to recover and contracted a bone infection, which resulted in him spending another three weeks in Waikato Hospital where he says he was going through “a bag a day at least.”

“I needed so much blood throughout this process, from the accident to the multiple surgeries and then my bone infection – I really can’t believe how lucky I was to have

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the blood I needed there and available. I’m extremely grateful.”

In the following weeks spent recovering at home, Isaac wanted to do something meaningful to give back to those who had saved his leg and his life.

Upon returning to Dunedin to complete his studies at Otago University, where he was studying Human Resource Management, Isaac connected with a friend who was involved in the student association to organise a group blood drive when New Zealand Blood Service next came to town.

Starting his own Team Red, he encouraged friends and fellow uni students to become donors and give blood.

Team Red is NZBS’ group blood donation programme that gives people the opportunity to help save lives with friends, teammates, or colleagues.

“I was hoping to get about 10 or so, you know just give a little bit back, but we managed to blow it out of the park, and we got something like 37 donations or something crazy.”

Isaac’s Team Red now has 74 members, who collectively have given 123 blood donations and 112 plasma donations, saving more than 400 lives.

“The crazy thing is people were joining the team from across New Zealand, I had friends in Welly who heard my story and joined and donated at their local centres.

That’s one of the great things about New Zealand Blood Service is that they’re national so everyone can go out and do their bit.”

Isaac is encouraging others to sign up as he knows firsthand the lifesaving value of being able to access safe blood when needed.

“The truth is my story would’ve gone very differently without blood and the help I received, so I’m extremely grateful to New Zealand Blood Service and the work they do.”

“THE RE ARE LOTS OF HE ROE S IN MY S TORY, INCLU DING MANY BLOOD DONORS WHO HE LPE D SAVE MY LIFE .

WITHOUT THE AVAIL ABILIT Y OF BLOOD, I WOULDN’T HAVE GOT THROUGH IT – NO WAY.” – I SA AC

GRATEFUL: Blood recipient Isaac West with his parents, mum Haidee and dad Carey.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

O U R M I LE S TO N E DO N O R S New Zealand Blood Service is grateful to every single person who makes a life-changing or lifesaving blood or plasma donation. And among our lifesaving whānau are our ‘milestone donors’, those people who have donated blood and/or plasma up to 450 times or more!

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D O N AT I O N M I L E S TO N E

N U M B E R O F AC T IV E D O N O R S W H O R E AC H E D T H I S M I L E S TO N E I N 2 0 2 2/2 3

50

1157

75

552

100

375

125

243

150

160

175

109

200

69

225

53

250

49

275

25

300

16

350

12

400

4

450

2

THINKING OF VO L U N T E E R I N G? G O F O R I T! Dedicated donor Tom Davies is closing in on his 500th donation!

Georgia Lowe began volunteering for New Zealand Blood Service when she could no longer donate herself.

“I’d been a blood donor since my university days,” Georgia says. “Now I’m on medication which means I can’t donate, but I wanted to still be able to help and contribute in a different capacity.”

So that’s exactly what she’s been doing, every Thursday evening, for almost a decade.

“I make sure the donors are hydrated and comfortable while donating,” she explains.

“I’ll take them refreshments, make sure they’re pampered, and am there to help them if they need me.”

Paul Tomlin has made more than 685 donations in his lifetime!

Georgia says she’s amazed by the generosity and consistency of the people she meets on the donor floor.

“They regularly turn up, no problem, they’re always happy,” she says. “Some of them have given 100 or 200 donations – I’m always amazed by these kinds of people.”

And as much as she’s helping donors, the volunteering experience helps Georgia too.

“I love meeting people, talking to the donors and nurses, and being able to help.”

Garry Cunningham, pictured on the day of his 450th donation, has now made 455 donations and counting.

Her advice to others thinking of volunteering?

“Go for it!”

Annette Roberts, pictured with husband Keith, gifted her 450th donation in August 2022. Their two adult sons are also plasma donors, as are two of their grandchildren. As a family, they have contributed more than 1100 donations between them!

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N GA PA N U I H I R A H I R A O T E K A I T I A K I O T E T O T O

TE C H N I CAL S E RVI C E S HIGHLIGHTS The Technical Services Directorate is responsible for Donation Accreditation Testing (blood grouping and screening every blood donation for infectious diseases); Component Processing (manufacturing whole blood, plasma and platelet products, freezing plasma for clinical use and fractionation); Cellular Therapy and Tissue Banking (specialised stem cell processing, serum eye drops, washed cells, managing the national skin, bone and heart valve banks); Operating six National Blood Banks; the National Reference Laboratory and the New Zealand Transplantation and Immunogenetics Laboratory (NZTIL - cross-matching organ donors and recipients).

GROWING AND DEVELOPING OUR TEAM This year we continued to see significant growth in our team as the collection numbers, testing requirements and range of operations we offer has continued to grow. Every unit or product collected is handled by our Technical Services team, which is fortunate to be underpinned by a strong cohort of long-serving, experienced members and leaders who help us ensure the safety and continuity of services as we grow.

THE CHALLENGE OF RECRUITMENT

We anticipate moving into the warehouse and the plasma processing facility in 2024. The cleanroom suites to support our CTTB work will become operational at a later date as part of the development’s second phase.

In Wellington, we also expanded our team and our laboratory and cleanroom facilities. This enabled the relocation of our Palmerston North stem cell processing to Wellington, which now processes stem cells for both the Palmerston North and Wellington regions.

Recruitment into new positions continued to pose a challenge in 2022/23, a hangover from COVID-19 and the associated immigration issues it created. Despite this we had some success targeting overseas markets for specific expertise and, looking ahead, will start considering a programme to ‘grow our own’ – both strategies to help reduce our risk in this area.

K E E P I N G PAC E W I T H C O N T I N U E D G R OW T H As plasma, whole blood and platelet collections increase, our operations have also had to adjust to keep pace. To aid this we invested in extra support for our operational teams, including additional Support Officers, Project Managers and Learning and Development staff. All are working closely with our operational teams to effect important changes, including introducing new equipment and facilities, improving processes, and providing real-time support.

There has been steady progress on the new Highbrook facility in South Auckland.

During the past 12 months we have continued to invest in our teams. This year, 35 staff, including supervising scientists and operational support roles, completed or were soon to complete a leadership development programme.

N E W A N D I M P R OV E D FAC I L I T I E S The year has brought significant progress in the development of our new facilities and saw our Christchurch and Waikato Blood Bank teams move into new, fit-for-purpose premises in October and November. The ongoing redevelopment of our Epsom facility also enabled our Donation Accreditation staff to move into a new laboratory, following our NZTIL and Reference Laboratory staff, who completed their moves in November.

The design work and transition planning for our Highbrook facility has continued. Highbrook will house our national warehouse, cellular therapy and tissue banking (CTTB) operations, and a large plasma freezing and storage facility.

22

Members of the Wellington Component Processing Team in their newly reconfigured lab space.

The new Christchurch Blood Bank was officially opened in October.

UPGRADING OUR EQUIPMENT A N D I N C R E AS I N G CA PAC I T Y Work continued on our equipment upgrade programme, including planning for the roll-out of our replacement blast freezing equipment in Epsom and Christchurch.

We also began preparing for the national upgrade of our blood grouping analysers within our Donation Accreditation teams and increasing our overall testing capacity for the Northern region.

N E G OT I AT I N G T H E C H A L L E N G E O F E X T R E M E W E AT H E R In addition to our planned operational activity, we also had to navigate the impact of severe flooding at our Epsom site after an extreme weather event hit Tāmaki Makaurau on the eve of the region’s Anniversary Day weekend. This resulted in significant water ingress to storage and office areas, and our Component Processing and Donation Accreditation laboratories.

Due to the incredible efforts and teamwork of kaimahi, we were able to minimise the water’s impact and get the laboratories reinstated, cleaned, and re-accredited within two weeks of the flood. Recommissioning our cleanroom, which also sustained some damage, took a little longer, but it was back in use after just three weeks. The impressive collaboration across many parts of the organisation ensured that our Epsombased operations were up and running again in an amazingly short time and, critically, we were able to continue supplying services and products throughout this challenging time with the support of other regions.

F I R S T Y E A R M I L E S TO N E N AT I O N A L H E A R T VA LV E BA N K On October 4 we marked the first anniversary of NZBS taking over accountability of New Zealand’s National Heart Valve Bank, based at Starship Children’s Hospital.

The Heart Valve Bank manufactures approximately 60-70 homografts per year, from about 30-40 donated hearts. These are typically used to repair congenital defects in new babies and small children, and to replace diseased heart valves in children and teenagers with rheumatic heart disease.

Thanks to the generosity of donors and their whānau, more than 50 people received lifesaving homografts this year, with a further 11 homografts being banked to benefit others.

Industrial dehumidifiers were used during the Epsom site clean-up following the January weather event in Auckland.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

D O W N D AY S O F F T H E C A R D S F O R G R AT E F U L H E A R T VA LV E RECIPIENT At age 23 James Keith was fit, young, a keen surfer, and feeling 100 percent well when he visited his GP for what was intended to be a general check-up.

Instead, it became a turning point in his life when James’ doctor detected a heart murmur and immediately referred him to a cardiologist.

“They found out I had severe aortic regurgitation, which was a complete shock - I left Greenlane Hospital, went home, and cried,” says James. “I had to go back a week later and ask the doctor what he’d said to me because I was completely asymptomatic and didn’t believe it.”

Aortic regurgitation is when the heart’s aortic valve fails to close tightly, allowing some of the blood pumped out of the heart’s main pumping chamber to leak backward.

The diagnosis meant James would eventually need to undergo a heart valve replacement.

“I’ve been in the building industry my whole life, so I had to stop the heavy lifting I’d been doing at work and start blood pressure medication,” James says.

A combination of the medication and his meticulous attention to diet, exercise, and his overall health meant James made it to 30 before open heart surgery became the only option.

“I was about to go on a surfing trip to Peru with my mates when I went for a check-up and they said no, that won’t be happening.”

In December 2010, James underwent the Ross procedure – a complex operation during which surgeons took James’ own pulmonary valve and used it to replace his aortic valve.

24

“They then used a pig’s valve to replace the pulmonary valve,” James explains.

The procedure, which also revealed rheumatic fever years before as the cause of his heart damage, was a success. James was able to return to a normal life for the next decade or so – the ‘mileage’ you can expect from a porcine valve.

But in 2022 his health started to deteriorate again; fatigue meant he could only manage two or three days each week at work (‘I’d be wiped out and spend days in bed recovering’), and he had to stop his beloved surfing.

“It was such a hard thing for me not being able to exercise because I’d stayed so fit. My life just started to go downhill; I lost weight, my face was white, and the pig valve had narrowed so you could actually hear the pressure of the blood in my chest in bed at night.”

With hospitals playing catch-up following the impact of COVID-19, James finally got the call-up for surgery in March 2023. And this time, he’d receive a human heart valve.

“I’ve just been blown away by how good I feel,” said James, two months after his procedure. “After major surgery, you normally have a few down days but I’ve just been on cloud nine.”

He astounded his medical team too.

“You can expect to be in hospital for a week to ten days after the operation, but I was out in four. I’d had open heart surgery but my body just accepted it – I was off morphine, Panadol, everything after five days.

“The doctors said to me, ‘You’re testing us – but in the opposite way to everyone else!”

Just weeks after his surgery James was able to lie comfortably on his left side for the first time in 12 years and was preparing to embark on an exciting career change.

“I just want to thank the donor and their family so much – I just have so much appreciation for them and am so grateful.”

He is now steadily re-building his fitness and looking forward to the future and starting a family with his partner, Bree.

“I can’t really have another down day in my life, because how grateful am I to have a heart valve!”

Heart valve recipient James Keith with partner Bree.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

TE C H N I CAL S E RVI C E S I N N U M B E R S

734

STEM CELL UNITS I S S U E D N AT I O N W I D E

28

16,193 D IAG N O S TIC SAM PLE S TE S TE D BY N Z B S ’ BLOO D BANKS AND REFERENCE L A B O R ATO RY

246,973 cm

OF SKIN ALLOGRAPHS ISSUED

H E A R T D O N AT I O N S P R O C E S S E D I N T O 63 CA R D I OVA S C U L A R HOMOGRAFTS

7

2,039,710 M A N DATO RY A N D DISCRETIONARY TESTS O N D O N AT E D P R O D U C T S

MMA T E S T S **

** MMA stands for methylmalonic acid.

An MMA test measures the amount of this substance in the blood. It is most often used to diagnose a Vitamin B12 deficiency, but can also be used to diagnose methylmalonic acidemia, a rare genetic disorder.

26

2

187,823 COMPONENTS AND PRODUCT VIALS ISSUED

BY N Z B S BLOO D BANKS

206,000 UNITS OF PLASMA PROCESSED FOR F R AC T I O N AT I O N

840

AUTOLOGOUS AN D ALLOGENEIC BONE D O N AT I O N S R E C E I V E D. 6 4 4 I S S UE D.

478

S T E M C E L L D O N AT I O N S P R O C E S S E D I N TO 757 U N I T S R E A DY F O R I S S U E

4,132

H L A - B 2 7 T E S T S *** CO M PLETE D BY OU R N EW Z E A L A N D T R A N S P L A N TAT I O N AND IMMUNOGENETICS L A B O R ATO RY *** HLA-B27 is a blood test to look for a protein – human leukocyte antigen B27 - that is found on the surface of white blood cells. The test helps to assess the likelihood of the person being tested having an autoimmune disorder associated with the presence of HLA-B27. Autoimmune disorders occur when the immune system mistakenly targets the body’s own cells and tissues.

158,104 PA R T I A L T H R O M B O P L AS T I N TIME (P T T) TE S T* SAMPLE S R ECE IVE D BY N Z B S ’ BLOO D BANKS AND REFERENCE L A B O R ATO RY *A partial thromboplastin time (PTT) test uses a blood sample to measure how long it takes for our blood to make a clot.

55

DIFFERENT BLOOD COMPONENTS M A N U FAC T U R E D

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E A R A TO I T U TA N GA

SUST

INABILITY

O U R C O M M I T M E N T TO S U S TA I N A B I L I T Y New Zealand Blood Service is committed to decreasing its environmental impact and reducing its carbon emissions while continuing to deliver safe, quality products and services.

Throughout the year, we have refined and agreed our strategic approach to sustainability, with a four-pillar ambition to: • Become a carbon-zero organisation • Become a sustainability leader in the blood service sector • Embed sustainability into the core of our business • Create a community of staff who think and act ‘sustainability’ both at work and at home.

To achieve this ambition, we have set the following objectives to guide our journey: • NZBS will meet the Carbon Neutral Government Programme commitments and do our part to help achieve New Zealand’s target of becoming net zero by 2050.

• We will ensure that materials and resources are being effectively and efficiently used to create a sustainable business model for zero-carbon blood services in 2050.

• We will ensure that we work positively and proactively across our supply chain operations, ensuring there are no modern slavery or other poor employer practices in our activities.

• We will partner with government, other organisations, and iwi, collaborating to create a truly sustainable model through systemic change.

• We will work with our suppliers to understand their commitment to ethical, responsible and sustainable business practices and our supplier expectations. We will also abide by the Government’s Supplier Code of Conduct.

Examples of progress against these objectives this year have included: • Working with our fractionated plasma supplier, CSL Behring, to plan the transition from air freight to sea freight for transporting plasma from NZBS sites to CSL in Melbourne, Australia.

- Sea freight uses significantly less fuel per unit of

cargo than air freight

- Ships are more fuel-efficient than aircraft - Unlike aircraft, which emit other pollutants and

gases at high altitudes (such as nitrogen oxides and

contrails), sea freight does not contribute to these non-CO2 climate impacts.

• Continuing to support suppliers to reduce Scope 3 supplier carbon emissions where possible. ‘Scope 3’ emissions refer to indirect Greenhouse Gas (GHG) emissions generated not because of an organisation’s activities, but from sources it does not own or control (e.g. freight transport, staff commutes, refrigerant use).

• Achieving a 6 Green Star Design Rating for the base build design and construction of our new, state-ofthe-art Highbrook facility in Auckland. Green Star is an independent rating tool, developed by the New Zealand Green Building Council, that assesses the sustainability features and resource efficiency of non-residential buildings. Initially targeted to be 5 Green Star-rated, the base build design was ultimately awarded the 6 Green Star gong thanks to enhanced features such as more native planting and efficient irrigation, better lighting and daylight, a higher percentage of the building base load being covered by solar, and the dedicated provision of carpooling parks. Highbrook was one of the first two industrial properties in New Zealand to achieve the 6 Green Star Design Rating1.

• Revised our carbon emissions baseline to include additional Scope 3 emissions (supplier emissions and international travel emissions).

• Converted 20 per cent of our light vehicle fleet to battery electric.

AC T I O N P L A N We will continue our efforts, concentrating on these six areas between now and 2025:

Electric/hybrid vehicles

NZBS leases its entire vehicle fleet. As each lease comes up for renewal, vehicles will be switched for more energy efficient options where appropriate.

Travel

Continuing and increasing our use of video conferencing (e.g. Microsoft Teams) in place of face-to-face meetings so our level of domestic air travel is no greater than required to maintain service.

Waste

Conducting waste audits to identify how we can reduce what we send to landfill, increase our recycling practices, and work with our suppliers to reduce non-recyclable packaging.

Energy

We will work with our landlords to make our existing and new buildings as energy efficient as possible.

Green Star – Design & As Built NZv1.0 Certified Design Review Rating

1

28

Freight

Together with our contracted freight companies, we will continue working to reduce emissions generated when transporting products.

Refrigerants

Where appropriate and feasible, as part of its upgrade/ replacement programmes, NZBS will switch to lower Global Warming Potential (GWP) gas-containing items for its refrigeration plants and equipment.

B E YO N D E M I S S I O N S NZBS’ sustainability approach extends beyond simply capturing our carbon emissions and working to reduce our carbon footprint. It encompasses a long-term view of sustainability across our interdependent ecosystems; our workforce, our business operations, the communities we serve, and the importance of strategic partnerships to achieve sustainable outcomes.

CA R B O N NEUTRAL G OV E R N M E N T PROGRAMME TIMELINE

2023

By December 2023, NZBS is required to report emissions and publish reduction plans annually from the 2022/23 financial year towards a 42 per cent reduction by 2030.

2025

GHG:

1,070

INDIRECT EMISSIONS FROM I M P O R T E D E N E R GY:

298

INDIRECT EMISSIONS FROM T R A N S P O R TAT I O N :

1534

INDIRECT EMISSIONS FROM PRODUCTS U S E D BY N Z B S:

113

DIRECT EMISSIONS A N D R E M OVA L S O F

NZBS is required to offset carbon emissions with carbon credits to be net zero emissions.

2030 NZBS is required to reduce gross emissions by 42 per cent from the FY22/23 base year, and to offset remaining emissions with carbon credits to be net zero emissions.

2050 NZBS is required to have zero emissions.

TOTA L CA R B O N E M I S S I O N S (t C O2e) F O R T H E 2 0 2 2/2 3 Y E A R :

3016 TONNES

NB: These numbers are subject to change after audit by Toitu Envirocare.

Any significant change will be stated in the NZBS 2023/24 annual report.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

H E PU RONGO HOU TO TE ROPU HAUOR A

U P DAT E F R O M T H E CLI N ICAL TEAM Clinical Services is a multi-professional team that works to provide clinical, nursing and scientific advice and expertise within NZBS and across the New Zealand health sector. We are involved in the support and delivery of all NZBS products and services, and our team includes Organ Donation New Zealand (ODNZ) and the New Zealand Bone Marrow Donor Registry (NZBMDR). We aim to ensure clinical safety in all that we do and to improve our services through innovation and development. These are some of our highlights from the year.

NURSING LEADERSHIP AND I N N OVAT I O N NZBS Chief Nurse Jacqui WynneJones has this year developed and led the organisation’s nursing strategy, providing professional leadership for nurses and donor technicians across all our services, as well as clinical governance and nursing standards.

N U R S I N G G OA L S A N D AC H I E V E M E N T S T H I S Y E A R Nursing leadership: Our regular nursing leadership forums have been refreshed and broadened to focus on providing high quality nursing care, service improvement, and enhanced professional development. The forums are central to delivering change and raising nursing’s profile across the organisation, and have featured presentations from national and international health leaders.

Nursing Strategy: We have been developing our first NZBS Nursing Strategy through the year, using a collaborative engagement process. The strategy will reflect NZBS values and the Nursing Council of New Zealand Nursing Strategy and, on completion, will set the direction and goals for nursing across the organisation.

Contemporary professional nursing standards: Our Chief Nurse and new Nursing Development Lead have updated our Professional Development Recognition Programme (PDRP) for nurses and Qualified Donor Technicians (QDTs). Our goal is to enable our team members to achieve the highest standards of development and expertise. We have also begun welcoming nursing students into our organisation, providing training placements for the first time.

30

Specialist nursing opportunities: New Clinical Nurse Specialist roles have been introduced to provide expertise across Transfusion, Therapeutic Apheresis and Venesection, and Organ Donation and Donor Health, improving care for patients and donors.

Clinical Governance: Work has continued on embedding a strong clinical governance framework to improve consumer experience and embed a culture of multidisciplinar y quality improvement.

M A N AG I N G C H A N G E S TO N E W Z E A L A N D ’ S P L AS M A P R O D U C T S Clinical Services has been working with blood banks and clinicians nationally this year to prepare for changes to our domestic plasma products that will impact thousands of patients. A dedicated project manager has led this work alongside a team of our expert nurses, doctors, and scientists to ensure the changes happen safely and effectively.

The changes are happening because our Australiabased plasma product manufacturer, CSL Behring, is investing in new manufacturing facilities and aligning their manufacturing processes globally. Five of New Zealand’s critical domestic plasma products are changing and the new products will be rolled out between 2023 and 2025.

Throughout the year Medsafe has been assessing the products to ensure they comply with all the necessary safet y and ef f icacy regulations to receive New Medicines Approval.

To support these changes and ensure that both patients and healthcare professionals are well informed, we have this year been developing a range of new educational resources, comprehensive communication and training campaigns, and an online hub for both patients and healthcare professionals.

Five of New Zealand’s domestic plasma products will change between 2023 and 2025.

In addition, NZBS’ Transfusion Medicine Handbook has been updated and moved to an online platform – a change that will allow this valuable clinical resource to be kept up-to-date and improve its accessibility.

Check Twice Label Once Mislabelled samples will not be accepted.

C L I N I CA L D E V E LO P M E N T A N D R E S E A R C H Clinical Services has delivered a portfolio of development projects and supported research across the organisation this year. Some highlights have included: Positive Patient Identification Project: As part of our programme to improve safety by reducing identification errors in blood transfusion, our Transfusion Nurse Specialist Team undertook a national project to increase the stringency of patient identification labelling on blood samples for transfusion. The project, supported by a communication and education programme, highlighted the importance of sample identification in transfusion safety.

New ‘closed-system’ serum eye drops: This innovative new system, devised this year by our Clinical Development Team, means we can now manufacture serum eye drops (SEDs) outside of our clean suites for the first time. We manufacture SEDs for hundreds of patients with ‘dry eye’ conditions that don’t respond to other available therapies. SEDs are traditionally manufactured in clean suites to prevent contamination by bacteria during processing, a timeconsuming and expensive process.The new system uses dockable fluid bags, so that the whole process can remain sealed. SEDs can now be made in a safe and cost-effective way in a standard laboratory.

The team has published their work, so that other blood services can use the new method.

CLiP-II study of cryopreserved platelets: This year we have worked with hospitals across New Zealand to deliver this randomised study examining the use of cryopreserved (frozen) platelets in patients requiring cardiac surgery. The study aims to demonstrate that cryopreserved platelets are as effective as standard platelets in this patient group. We have also progressed our work to extend the shelflife of our cryopreserved platelets, using our novel ‘tandem platelet system’1 to enable rapid thawing in the blood bank. This system should enable us to provide a stable supply of platelets to smaller blood banks for use in emergencies, improving equity of access for patients across rural New Zealand.

Mandatory: - Family Name - Given Name - DOB (DD/MM/YY)

- NHI Number - Date & Time - Signed

Have you confirmed your patient’s ID?

LABEL IT CORRECT OR RE-COLLECT For more information, scan the QR code.

NZBMDR Team (L-R): Carolyn Crump, Paulette Tasker, and Judith Lawrence

W E LC O M E TO T H E N E W Z E A L A N D B O N E M A R R OW D O N O R R E G I S T RY The New Zealand Bone Marrow Donor Registry (NZBMDR) became part of NZBS in December, moving across from its previous home at Leukaemia and Blood Cancer New Zealand (LBC). NZBS and NZBMDR have always had close links and we were delighted to welcome team members Carolyn Crump, Judith Lawrence and Paulette Tasker to Clinical Services.

The innovative ‘Tandem Platelet System’.

NZBMDR works with registries around the world to find unrelated volunteer donors for New Zealand patients requiring a bone marrow or stem cell transplant, and who do not have a suitable family donor. They also recruit volunteer donors, from across Aotearoa, who are willing to donate their bone marrow to a matched patient here or overseas.

Between 1 December 2022 and 30 June 2023 the team searched for donors for 60 people and, of these, 25 patients went on to have a transplant from an unrelated donor, supported by NZBMDR. There were donor work-ups and stem cell collections from eight New Zealand donors, and 20 cryopreserved - and two fresh - products were imported from six countries.

The team also spent time preparing to revert to the use of freshlycollected products, rather than the cryopreserved products that had been used due to travel restrictions during the COVID-19 pandemic.

The Tandem Platelet System is a storage bag that contains frozen platelets at the bottom and frozen plasma at the top. A plastic clip in the middle is used to keep the two components separate until they are frozen, when it is removed. When required for use, the unit can be quickly thawed and the two separate components gently mixed.

1

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

A L I F E S AV E D T H A N K S T O A R O U T I N E H E A LT H C H E C K A N D A D O N O R O N T H E OTHER SIDE OF THE WORLD In 2018 James Hendra was 45-years-old and as fit as he’d ever been when he visited his GP for a routine check-up.

“I was feeling well, had no symptoms, and was planning a surf trip to the Maldives when my results came back showing my blood count was low across the board,” says James, a dad to then seven- and 10-year-old girls.

It was an unexpected finding and one that resulted in a life-changing journey for the environmental planner and his family.

A visit to a haematologist revealed James had myelodysplastic syndrome – a condition where the blood cells don’t form properly.

“It’s pretty much a fatal diagnosis up front. You might survive three-to-five years without treatment, and you can expect to steadily deteriorate over that time – the only guarantee is that you’ll get worse.”

When the haematologist suggested a bone marrow transplant, James knew it was the only choice, but a very difficult one; he wasn’t experiencing any symptoms and didn’t feel sick.

“I was 45, fit, had young children, and a partner who could look after me,” he explains. “The transplant process is nasty and risky, with about 30 per cent of recipients not surviving the first year. But dying a slow, painful death from the disease would have been horrible too.”

The boys’ trip to the Maldives was replaced by a family trip to Bali and Rote Island in West Timor, part of the 12-month lead-in to his life-altering journey.

“There was some surfing, but really this was a chance to have time with my family before the unknown outcome of a transplant.

“Mental and emotional preparation is very important and I was lucky to have the time to do it,” he says. “Most people don’t have this chance because they’re diagnosed once their symptoms are already severe, and have possibly had to endure chemotherapy before even being eligible for a transplant.”

A year after being diagnosed James, who still felt healthy

32

and well, entered hospital for his bone marrow transplant.

“I had a line put in my chest and underwent a tailored programme of chemotherapy to wipe out my bone marrow,” he says. “It took a few days to kick in and was brutal; I’ve never been in that much pain before in my life, and I wouldn’t have trusted myself if there had been a ‘give up’ button I could have pushed.”

But things took a turn for the better when he received his donor stem cells.

“The transplant took really, really well; my blood count went up rapidly and I was able to eat a little. I was out of hospital in 18 days, which was a rapid turnaround – at the fastest end of what you can hope for.”

But the path to recovery wasn’t all plain sailing.

James developed graft vs host disease (GvHD) of the gastrointestinal tract; James’ immune system was attacking his own body, and he was certain he wouldn’t survive.

A long slow journey of internal repair followed, supported by immunosuppressant drugs and steroids, though eating and gaining weight remained difficult.

Then, in early 2022, feeling a lot better but with the GvHD effects still lingering, the light at the end of the tunnel appeared.

“I started taking a newly-funded drug called Rituximab for the GvHD and that helped clear the last of it,” James says.

“So over the past year and a quarter I’ve been on the road to eating properly again, going to the gym, walking the dog, back working fulltime, and getting fit to surf again – I can do anything.”

James doesn’t know the identity of his donor but has sent a letter of gratitude to him, with some photos and the gift of a pounamu, via the New Zealand Bone Marrow Donor Registry.

“It took three years for me to be ready to engage in that way. But this was a person, who had been willing to sign up in the first place, take medicines to make their stem cells migrate to their peripheral blood supply, turn up when asked, and follow through with the donation process.

“People like that make a real difference in the world – they’re giving someone a chance at life and I’d like to think it gives them a sense of deep honour and satisfaction in return.”

So with everything he and his family have gone through, would James opt for the bone marrow transplant again?

“Yes, it was absolutely the right decision. Some people need to have another one – or two or three. When you’re going through it you’re thinking, ‘there’s no way I’d go through this again’ but in retrospect, you don’t know what you’re capable of until you’ve done it.

“Everyone has to make the decision that they feel is right for them. Transplants are the only chance for a cure but they carry significant risks too.

“ I L I K E W H O I A M , T H E S T R E N GT H T H AT I ’ V E GA I N E D, A N D H OW W E ’ V E A L L G R OW N F R O M T H I S . I ’ M N OT S CA R E D O F A N Y T H I N G N OW – I D O F E E L S T R E S S O R D O U B T S , B U T I BAC K M YS E L F. T H AT ’ S B E E N O N E O F T H E G I F T S , A N D I WO U L D N ’ T C H A N G E A T H I N G.”

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

O RGAN DO NATI O N The Organ Donation New Zealand (ODNZ) team has continued to develop and grow during the 2022/23 financial year with a few notable highlights.

Due to the selfless generosity of 61 whānau who agreed to organ donation taking place, 212 organs were donated during the 2022/23 year, enabling lifesaving transplants to take place.

H AV I N G T H E C O N V E R SAT I O N

The gift of life.

We continue our efforts Can you ever thank someone enough for a lifesaving donation? to normalise discussions about organ and tissue donation in the community.

Working closely with the N Z B S M a r ke t i n g a n d Communications Team, we have deployed two ver y successful media campaigns this year; the first in November and the second in conjunction with Kidney Health New Zealand in March. Both campaigns generated positive feedback and public interest.

“Words cannot describe the level of eternal gratitude I will always have for this lifesaving gift.”

Lisa, lung transplant recipient

“I want to show them that I’m fine, put my arms around them. I can never be sufficiently grateful.”

Marcella, heart transplant recipient

“I don’t want to waste the gift I have been given.”

Jenny, liver transplant recipient

In addition, there were 102 tissue donations allowing lifesaving heart surgery and vision-saving eye procedures.

C E L E B R AT I N G T WO Y E A R S W I T H N E W Z E A L A N D B LO O D S E RV I C E November 30 marked ODNZ’s second birthday as part of the NZBS whānau. As well as sharing in cake, this marked a time of refreshment and growth. The future focus continues to be on working together to take full advantage of what the collaboration can offer.

A G R OW I N G T E A M The ODNZ team has also welcomed new members this year; Donor Coordinators Owen Chesbrough and Leigh Travers, and Medical Secretary and Team Administrator Emma Watts. Sue Garland was appointed to the role of Donor Coordinator Team Leader, with Annette Flanagan becoming Deputy Team Leader.

O R GA N D O N AT I O N : A B R I G H T N E W FUTURE After several years of meeting online, in April we held a twoday kanohi-ki-te-kanohi Donation Link Team Symposium.

The theme was Organ donation: a bright new future and guest speakers joined us from Te Whatu Ora Te Toka Tumai, the New Zealand Eye Bank, the Organ and Tissue Authority of Australia, and XVIVIO Pacific. Organ donation and assisted dying specialists in Canada also participated and we heard from ICU representatives from across New Zealand. It was a special opportunity to celebrate the phenomenal work of the past few years, share stories and data on organ donation, learn from each other, and to reset and focus on the future. It was a highly successful meeting that we look forward to repeating annually.

“I really enjoyed the link induction day and the two-day symposium. The team and environment was so welcoming. The speakers were great.

Thanks heaps!”

“Thank you so much. It was an incredible couple of days. Extremely well organised.”

“Great event, great organisation, and a chance to network with others involved in organ donation from all areas. Thank you for all your hard work.”

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“I feel like I am just so blessed and the luckiest girl in the world. I constantly feel grateful to the donor family for this amazing gift and never take it for granted.”

Dorothy, kidney transplant recipient

“I’m so blessed to be surrounded by the love and presence of my mokopuna. Without my heart transplant, these moments of connection would never have transpired. I’m so lucky.”

Wiremu Keepa, heart transplant recipient

These heartfelt words are from New Zealanders whose lives have been transformed through the generosity of donors and their grieving family and whānau. The decision to donate organs and tissue saves and changes lives.

donors, their families and whānau, the intensive care units, operating theatres, and hospital staff. We extend this gratitude to the transplant services, laboratory technicians and scientists, coronial service, pilots, taxi drivers and couriers.

Donating organs and tissue is an incredible act of kindness which deserves all this thanks – and more. We would like to express our gratitude to everyone involved in donation. Thank you to the

You have all helped change the lives of others forever. If you’d like to learn more about Organ Donation New Zealand, please visit our website at donor.co.nz. Thank you.

T H E K E Y TO I N C R E AS I N G O R GA N D O N AT I O N I N N E W Z E A L A N D Organ donation after circulatory death (DCD), when the heart has stopped beating, has been important in increasing donation and transplantation in Australia and the United Kingdom. This year ODNZ has been working with transplant teams to broaden the scope for deceased donors and to train more hospitals to facilitate DCD. DCD can now be an option for potential donors of any age and two more New Zealand hospitals have become formally credentialed to offer DCD.

HONOURING OUR DONORS AND T H E I R W H Ā N AU Thanksgiving services to honour donors, their whānau and their gifts of donation, were held in May 2023. The services are attended by donor whānau, transplant recipients and their whānau, and healthcare teams involved in organ and tissue donation and transplantation. Around 800 people attended the services in Auckland and Christchurch.

T H E VA L U E O F T I S S U E D O N AT I O N One eye donation can help four or more recipients, who are often young and for whom restored vision can be lifechanging. A single donation of heart valves can also help more than four people, often children, in need of lifesaving heart surgery (See James’ story, page 24).

Over the year ODNZ and NZBS have promoted tissue donation as part of our hospital staff education, liaison with coroners and forensic pathology services, and media campaigns. This work will continue with the aim of increasing tissue donations in the coming years to meet patients’ needs.

O R GA N S D O N AT E D T H I S Y E A R :

6

PA N C R E A S

20

81

53

18

EYES

HEART

18 LUNGS

LIVER

H E A R T VA LV E S

3

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THINKING ABOUT BEING A DONOR?

SKIN

KIDNEY

Thinking about whether you would want to be a donor, or not, and having a conversation with your family or whānau, will mean that in the event of your death, they will know what to do.

MALE

To learn more about Organ Donation New Zealand, and how to have that conversation, visit the ODNZ website www.donor.co.nz

FEMALE

14

45

79

YO U N G E S T DONOR

MEDIAN DONOR

OLDEST DONOR

3.3% O T H E R PAC I F I C

3.3% P E O P L E S 1.6%

AFRICAN

11.5% M Ā O R I 13.1% A S I A N 67.2% E U R O P E A N

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

NEW LUNGS GIFT A NEW LIFE TO AMY Nurse Amy Ng-Thomson was gifted a new lease of life in 2018 thanks to the generosity of a donor and their family. She shares her story as the grateful recipient of a new set of lungs.

Never in my life did I anticipate having to one day rely on someone else, or on so many other people’s decisions to keep me alive. Let alone having to receive a lung transplant!

In 2006, after noticing my hands becoming puffy and shiny, I was diagnosed with scleroderma, a rare, chronic autoimmune disease that scars the skin and internal organs.

I attended many rheumatology clinics and started a myriad of drugs. My swollen hands, AKA my “boxing gloves”, started getting in the way of my work as a nurse and then I noticed I couldn’t take deep breaths. I was referred to the respiratory service in 2008 and after numerous tests, was diagnosed with lung fibrosis. I had a “gut feeling” this was going to eventually get worse, so my husband and I travelled while we could.

In 2010 my scleroderma flared up and further lung fibrosis was picked up by a CT scan, so chemotherapy was prescribed for six months to suppress my immune system.

I was then referred to the transplant team who concluded I was sick enough for chemotherapy, but not sick enough for a transplant. So we went and travelled again.

By 2016 my health had deteriorated and I was getting short of breath doing simple tasks. At the end of that year another CT scan showed that my lung fibrosis had progressed and, in June 2017, much to my surprise and shock, I was placed on the active transplant list due to my pulmonary hypertension (a type of high blood pressure affecting the lungs and heart).

My nursing background meant I knew a lot about operations and theatres, but not enough about transplant surgery - and I personally had never had an operation

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before. I had so many questions. My body was ready for transplant, but my mind wasn’t, so I took time off to process what was happening to me. In August 2017 I went back on the active transplant list not knowing how long I would be waiting for a donor.

While I waited my physical health declined – I relied on a wheelchair, oxygen, and my husband to look after me - my mental health also declined; I became quite withdrawn and sad about what could be the end of my time at age 36.

In September 2018, while having dinner with my family, I got the lifesaving phone call from the transplant service that a suitable donor had been found. The news couldn’t have come soon enough for me as by then, I was relying on oxygen 24/7 and doing small things like getting dressed, eating, and showering were “mammoth tasks”.

After more than a year on the transplant waiting list, a family selflessly agreed to donation and I received my new lungs. I underwent an eight-hour lung transplant surgery and now have tailor-made lungs, cut down to size to fit me as my donor was slightly taller than me – not many people can say that. I also bled post-operatively and had to be returned to theatre. So, I also have other people’s donated blood products running through my veins to go along with the new lungs I received.

My recovery wasn’t straightforward; it was extremely hard work physically and mentally. I take a lot of medications now, especially ones that suppress my immune system to prevent rejection and this makes me susceptible to any infectious diseases.

I see myself as a guardian of these precious lungs – a family has very generously donated their loved one’s organs so I will do what I need to protect them.

It has all been worth it, I went to my first post-transplant concert in February 2019; I didn’t have to worry about my oxygen supply or getting stared at in a wheelchair – I was

leash-free and breathing freely. I can now walk with my dogs, go on dates with my husband, travel, contribute to the housework and work again. I get to spend time with my family and friends again and most importantly, I’m alive.

I will always be thankful to the ICU who looked after my donor and their family, to ODNZ for organising the donation, to the transplant team, my support crew especially my husband - and to my donor’s family, for their selfless gesture in donating their loved one’s organs.

Be kind to each other, you never know how someone will be able to help you or how you can help someone in the future! Most importantly, have the conversation. Talk to your loved ones about organ donation, it made yesterday, today and tomorrow possible for me.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E H A N GA R AU M AT I H I KO M E T E P E N A P E N A PA R O N G O

D I G I TA L T E C H N O LO GY & I N F O R M AT I O N M A N AG E M E N T NZBS’ Digital Technology and Information Management team ensures that fit-for-purpose technology and information systems are in place across the organisation. This includes providing and maintaining safe, secure, and robust digital solutions to support both the organisation’s operational activities, and the staff who perform them.

I S B T 12 8 I N T E R N AT I O N A L LABELLING

We have also made good progress on refreshing our NZBS Disposal Authority.

During the year, NZBS has progressed, on behalf of the sector, the ISBT 128 international labelling project. This project will bring New Zealand into line with the globallyadopted standard for coding and labelling medical products of human origin including blood, cells, tissue, milk, and organs. The ISBT 128 labelling standard ensures the highest levels of accuracy for safety and efficiency for the benefit of donors and patients worldwide. Importantly, moving to ISBT 128 standards ensures those hospitals involved in patient trials can continue their work (the Foundation for the Accreditation of Cellular Therapy – FACT – now has ISBT 128 as a mandatory requirement).

This project will be completed next financial year.

We have maintained our momentum across the following priority areas, as well as sharpening our focus, in conjunction with industry partners, on cyber security at NZBS:

B LO O D M A N AG E M E N T SYS T E M S NZBS uses several systems for blood management, including at hospital blood banks. Blood management encompasses the processing, testing and distribution of blood and blood products, and the collection, processing, storage and distribution of tissue and stem cells. These systems are critical to NZBS’ operation and there is a continued focus on their stability and operation. This year, systems’ review work was completed to ensure they continue to support and facilitate changes in business operations. This has resulted in a system modernisation approach, including embarking on cloud re-platforming work which is scheduled for completion in the next financial year.

I N F O R M AT I O N M A N AG E M E N T We have this year implemented an Information Management Strategy and continued to work with Archives New Zealand to advance our compliance with the Public Records Act. This has included implementing enterprise content management, information management governance and policy frameworks, and uplifting our capability in this area.

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• Deploying internal information management policies and procedures • Integrating information management across NZBS • Clarifying our information management expectations with suppliers • Maintaining and improving the accessibility of, and ability to appropriately share, information • Establishing organisation-specific Disposal Authority.

D I G I TA L D I R E C T I O N Our digital direction has continued to evolve around six themes: • Donor experience • Employee experience • Patient experience • Connected partnerships • Better insights • Safe, secure, and considerate.

These themes support our continuous efforts to deliver excellence in meeting the needs of donors, patients, our staff, and the wider healthcare community.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

AN OVE RVIEW OF N Z B S COLLECTION

MARKETING & DONOR RELATIONS

MOBILE DRIVES

WHOLE BLOOD PLASMA THERAPEUTIC APHERESIS + VENESECTION

DONOR CENTRE

HOSPITAL

ORGAN & TISSUE DONATION STEM CELLS CELLULAR + TISSUE LABORATORY (CTL) SPECIAL REQUESTS ORGAN DONATION NEW ZEALAND TISSUE BANKING

ORGANS FOR TRANSPLANTATION

NEW ZEALAND TRANSPLANTATION + IMMUNOGENETICS LABORATORY (NZTIL)

REFERENCE LAB

CLINICAL OVERSIGHT

HOSPITALS + PATIENTS

ISSUE

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BLOOD BANK (PRE-TRANSFUSION TESTING)

SERUM EYE DROPS

MANUFACTURING MANUFACTURING MANUFACTURING MANUFACTURING SPECIAL COMPONENT PROCESSING

TESTING

TESTING TESTING TESTING

DONATION ACCREDITATION

DONATION DONATION DONATION ACCREDITATION ACCREDITATION ACCREDITATION

SPECIAL SPECIAL SPECIAL COMPONENT COMPONENT COMPONENT PROCESSING PROCESSING PROCESSING

HOLE OLEWHOLE BLOOD BLOOD BLOOD

ASMA SMA PLASMA

FRACTIONATION FRACTIONATION FRACTIONATION FRACTIONATION PLASMA

PLATELETS PLASMA PLASMA

RED BLOOD CELLS PLATELETS PLATELETS

RED BLOOD CELLS RED BLOOD CELLS

PLASMA

PLATELETS

RED BLOOD CELLS

ERAPEUTIC RAPEUTIC THERAPEUTIC HERESIS HERESIS APHERESIS ++ + NESECTION NESECTION VENESECTION

CSL BEHRIN G

GG G BEHRIN CSL CSLBEHRIN CSL BEHRIN

COMPONENT PROCESSING COMPONENT PROCESSING COMPONENT COMPONENT PROCESSING PROCESSING

PLASMA PRODUCTS

PLASMA PLASMA PLASMA PRODUCTS PRODUCTS PRODUCTS

DISTRIBUTION DISTRIBUTION DISTRIBUTION DISTRIBUTION

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E N O H O M ATATA P U M E T E M A H I W H A K A R I T E

Q U A L I T Y, R E G U L AT O R Y A F FA I R S A N D P R I VACY The Quality and Regulatory Affairs (QRA) team acts as NZBS’ internal regulator, working in collaboration with colleagues to provide safe services and products for donors, patients, and their whānau. This is achieved via a single, comprehensive electronic quality management system (QMS). This system helps the organisation to manage and oversee process and compliance documents, internal audits, incident investigations and management, change management, and equipment maintenance. Our processes also ensure that staff are adequately trained and competent.

NEW STRUCTURE AND ROLES

SA F E P R O D U C T S A N D S E RV I C E S

This year, following a review of the team’s capability and capacity, the Quality and Regulatory Affairs function introduced a new structure, new roles, and expertise to support NZBS as it grows into the future. We also strengthened some existing teams as their workloads developed and expanded.

This year we have also continued supporting NZBS’ operational areas to provide safe and compliant services and products. One way we do this is through our internal audit programme, via which we review our practices, premises, people, and procedures against required legislation and standards. During the year we preformed 55 internal (horizontal and vertical) audits, resulting in areas for improvement being identified across our collections, testing, manufacturing, blood banking and supply chain functions. Corrective active plans are in place to address these findings.

COMPLIANCE Due to the complexity and number of services NZBS provides, we are required to comply with a variety of regulations and legislation, including the New Zealand Code of Good Manufacturing Practice for Manufacture and Distribution of Therapeutic Goods, regulated by Medsafe. We also work to a number of international professional standards and accreditations, including: • ISO 15189 - Medical Laboratories, audited by International Accreditation New Zealand (IANZ) • American Society for Histocompatibility and Immunogenetics (ASHI) standards for our National Transplantation and Immunogentics Laboratory, and • Foundation for the Accreditation of Cellular Therapy (FACT) standards for our stem cell work.

With the New Zealand Bone Marrow Donor Registry joining NZBS in late 2022, NZBS is also now working to comply with the international standards of the World Marrow Donor Association (WMDA).

E X T E R N A L Q UA L I T Y AU D I T S NZBS has undergone 13 external audits by its regulators or accreditation bodies this year. Pleasingly, no critical findings were raised and two major non-conformances were ‘closed out’ in the timeframes set by the external regulator by taking corrective and preventative actions.

All other deficiencies or observations raised at audit were also addressed and closed. NZBS is committed to continue improving its safety and compliance in partnership with its external bodies.

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P R IVACY We have continued to work hard this year on ensuring our policies and processes are compliant with the Privacy Act 2020 and the Health Information Privacy Code 2020. NZBS is the kaitiaki of a large amount of sensitive personal information – information we are entrusted with to enable us to provide our services to New Zealanders. Our staff and contractors are expected to treat personal information as taonga and care for it as carefully and respectfully as they would if it was their own. We have done this through:

Privacy Impact Assessments

These are completed for all major system and policy changes to ensure that potential privacy impacts are understood, and appropriate mitigations implemented, before the changes are made. In the last year, we completed 17 Privacy Impact Assessments.

Privacy incident reporting

Incident reporting is managed and overseen by our Privacy Officer. All breaches are reported internally and reviewed by the Privacy Officer to ensure they are managed in line with Privacy Act requirements. This financial year, we managed eight privacy incidents, all of which we investigated, assessed for reporting to the Privacy Commissioner’s Office, and which were reviewed by NZBS’ Privacy Officer. All privacy incidents are documented, investigated, and recorded within our electronic QMS. These processes enable us to learn from each one to stop recurrence.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E T I K A N GA M Ō T E M A H I TA H I A N GĀ H I N O N GA H AU O R A K I N GĀ K I R I TA K I M E N GĀ W H Ā N AU

C O D E O F E X P E C TAT I O N S F O R H E A LT H E N T I T I E S ’ E N GAG E M E N T WITH CON S UME RS AN D WHĀNAU The Code of Expectations for health entities engagement with consumers and whānau (‘the code’) was introduced in July 2022 and is required by the Pae Ora (Healthy Futures) Act 2022.

• Continuing to identify new opportunities for co-design and to evolve existing co-design activities, whether well-embedded or in their formative stages.

The code sets the expectations for how health entities must work with consumers, whānau and communities in the planning, design, delivery and evaluation of health services.

• Preparing to appoint a new Consumer Engagement Manager, whose role will be to gather feedback from consumers, including developing restorative action plans where appropriate. This position will help give voice to our patients and donors, and enable process, systems’, and service improvements.

All health entities must act in accordance with the code and are required to report annually on how the code has been applied. New Zealand Blood Service will submit its first report early in the 2023/24 financial year.

During the 2022/23 financial year NZBS has embarked on, or continued, a range of activities ahead of this first submission, including:

• Continuing to foster cultural capability across the organisation. For example, a number of facilitated workshops have been held with staff to build our people’s understanding of Te Tiriti o Waitangi and why it matters for their work at NZBS.

• Being an active member of a group convened

by Te Tāhū Hauora Health Quality and Safety Commission to develop national guidance for Crown entities required to comply with the code.

• Preparing to appoint a Māori Cultural Capability Lead in the 2023/24 financial year. This role will report directly to the CEO. [NZBS also has an established Kapapa Manawa Māori Staff Advisory Group].

• Reviewing HQSC Quality Safety Markers (QSM) and reconciling these with NZBS’ current and/or future/planned activities that support compliance.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E M A H E R E M E T E W H A K A R AT O

PLANNING AND S U P P LY C H A I N The Planning and Supply Chain Directorate provides a nationally-integrated planning, supply chain and logistics solution to enable the safe delivery of the right blood products and services, to the right places, at the right times. It also leads organisational procurement activities.

The 2022/23 year has been one of both challenge and achievement for the Planning and Supply Chain Directorate.

N AV I GAT I N G T H E L I Q U I D CA R B O N D I OX I D E (C O 2 ) S H O R TAG E In December the Kapuni liquid carbon dioxide (CO2) plant - New Zealand’s only liquid CO2 manufacturer - closed after suffering a critical failure that created a 50-to-60 per cent shortfall in the supply of CO2 and CO2 products (dry ice) to the New Zealand market.

New Zealand Blood Service is the country’s largest health sector consumer of liquid CO2 and CO2 products, using it to safely store the frozen plasma we send to Australia for fractionation, and the products and medicines we distribute around New Zealand, including fresh frozen plasma, cryoprecipitate, and serum eye drops.

The significant potential risk posed by the shortage was successfully navigated by working closely with the crossgovernment Incident Management Team (IMT) established to manage the shortage. As a ‘critical customer’ supplying the healthcare sector NZBS was prioritised alongside other essential services to receive dry ice and liquid CO2.

We were consequently able to continue our operational activity without disruption.

In the medium term NZBS is reducing its reliance on the use of CO2 by moving to alternative transport methods for frozen plasma.

T H E I M PAC T O F S E V E R E W E AT H E R E V E N T S In early 2023, the severe weather events experienced around the country required us to use urgent and less conventional measures to keep our supply chain operating.

Flooding, road closures, slips, and downed communications in Tairāwhiti Gisborne meant we had to take to the sky to quickly get blood and blood products to our health sector colleagues in the region.

Chartering four helicopters over four days, we delivered blood and blood products (including platelets) and urgent

46

orders to Gisborne and Hawke’s Bay. In support of the wider health sector, we also transported Te Whatu Ora staff aboard the initial flight, enabling them to undertake a reconnaissance of the area and to visit Gisborne and Hawkes Bay hospitals, which had been uncontactable via phone and other methods. The emergency initiative was efficient and effective, ensuring our staff and healthcare colleagues had what they needed to continue delivering services.

T H E I M PAC T I N TĀ M AK I M AK AU R AU AU C K L A N D In Auckland, the treacherous Anniversary Weekend weather also resulted in flooding at our Epsom Donor Centre. This impacted our cleanrooms - the facilities we use to process our lifesaving stem cells. To maintain service delivery, we sent one batch of stem cells to our Palmerston North site for processing, while a second batch was flown with one of our trained scientists to Christchurch for processing. These contingencies ensured these precious cells remained viable and available to patients needing them as part of their treatments.

NEW ROLES AND NEW EQUIPMENT While the year has been challenging, we also made significant progress.

Our team grew with the addition of a new Procurement Specialist role. This increased our procurement capability and expertise to support the organisation’s various procurement projects.

We also went to market for a range of new equipment, including blood grouping analysers and haematology analysers – all vital tools to support the lifesaving work of our lab staff. Two of our three Donor Relations Team vehicles in Tāmaki Makaurau Auckland were upgraded and, reflecting our continuous commitment to organisational sustainability, all of the new vehicles are electric.

During the year we also began planning the transition from air freight to sea freight for transporting our plasma for fractionation. This will reduce our reliance on CO2 – a further sustainability win. We anticipate sending the inaugural sea freight container from Christchurch in the first quarter of the new financial year. Auckland will adopt sea freight transport after moving to our new Highbrook premises (read more about this on page 22).

WO R K I N G S M A R T E R N OT H A R D E R Other initiatives across the Directorate this year have included:

• The continued rollout of barcode technology in our warehouses to help with accurate tracking, stocktaking and productivity.

• Establishing a new, centralised, national inventory team to order the numerous consumables required to produce our blood products. The new team has freed up our operational staff to focus on their core work, and uses technology to forecast stock requirements and automatically replenish requirements for improved ordering efficiency.

• Implementing new or upgraded security systems at a number of our sites to achieve a single, consistent security system across our locations. This work will continue into next year and help to manage our security risks nationally.

• Implementing a standard building management system across our sites. This incorporates the technology and processes that keep our behindthe-scenes systems running – things like lighting, ventilation, and lifts. Controlling and managing these in a standardised ways helps us to be more efficient – for example, having the ability to measure and monitor our energy consumption.

Images courtesy of Helime.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N GĀ A H O O T E TAU R A

OUR PEOPLE The Human Resources and Organisational Development Directorate provides strategic people leadership to enable a highperforming culture among staff in support of NZBS’ single enduring outcome1.

C OV I D -19 R E S T R I C T I O N S E AS E

•

The easing of COVID-19 restrictions this year enabled us to shift our focus from pandemic emergency management to wellbeing and building sustainable workforce and employment practices.

Our people would like to see more opportunities for career advancement and development

•

Our people would like us to work on improving our communication about our goals and strategies

Our staff no longer had to self-isolate if they had been household contacts of a case, and mask-wearing and mandatory vaccination requirements also lifted. However, we continued to support staff by:

•

Our people would like NZBS to provide more support for their mental wellbeing.

•

Providing personal protective equipment (PPE) for anyone who still wished to use it

•

•

Providing COVID-19-specific advice on our staff intranet

Continuing to work within the pay parameters set by the Public Services Commission.

•

Encouraging and supporting our people to get COVID-19 booster shots

•

Publishing our ethnic and gender pay gaps

•

•

Continuing to provide paid special leave for those with COVID-19.

Planning to publish a remuneration philosophy and policy – a new approach for NZBS.

WELLBEING AND RECOGNITION

Based on this feedback, we embarked on the following actions: Reward

Career advancement and development •

Establishing a ‘Career Spotlight’ intranet series featuring staff who have successfully pursued opportunities for development and advancement. The intention is that other staff see the pathways that are possible.

•

Creating a toolkit that supports our managers to have meaningful conversations with their teams on development and career advancement.

Our Voices staff survey

Our intention is to create a positive employee experience throughout the entire employment lifecycle. Listening to our people is key to this and, after much planning, we launched the Our Voices staff survey in November using the online platform Peakon.

Eighty per cent of our people responded to the survey and we received 8366 ‘free text’ comments, providing us with rich insights into what our staff were thinking and feeling. They told us there are some things we do very well: •

Our people consider that the work they do is meaningful and contributes to positive outcomes for others.

•

Our people value their colleagues, believe that they are committed to doing quality work, and that they provide help when needed.

•

Our people tell us that their manager provides them with the support needed and that they care about their staff as people.

However, they also told us that there are some things we could do better: •

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Our people would like to know more about how remuneration is managed at NZBS and to see more transparency and engagement on decisions

Communication •

Reviewing our communication channels to share information in a more meaningful and engaging ways for people.

Mental wellbeing •

Agreeing to focus our next Our Voices staff survey on mental health and wellbeing, so that we can better understand what this means for our staff.

•

Re-organising our wellbeing resources so that they are all available in one online location for staff.

A key benefit of the survey tool is that it gives managers ongoing visibility of how their people feel about their work, their place in the team, and their work life. We will also be able to implement and monitor changes based on the data gathered.

We will review the ongoing benefits of using the survey tool in 2024.

Health needs of people in New Zealand are supported by the availability of safe and appropriate blood and tissue products and related services.

1

VITAL AWAR D S The Vital Awards are presented annually to acknowledge and showcase great work at NZBS across three broad categories: Excellence in Improvement and Innovation, Service Excellence, and Spirit of NZBS.

2 0 2 2 AWA R D R E C I P I E N T S

Excellence in Improvement and Innovation This award recognises individuals or teams who show leadership, enthusiasm and commitment to creating a culture of positive change, innovation and/or sustainable improvement at NZBS. Deborah Griffiths, Medical Laboratory Scientist Ramon Tan, Integration Data Analyst Bhumika Patel, IS Technical Advisor Deborah, Ramon and Bhumika worked on a project to establish the safe electronic transfer of clinical reports from the New Zealand Transplantation and Immunogenetics Laboratory (NZTIL) to Auckland and Northern region hospitals. The project took three years and significant NZBS and sector collaboration to achieve, and resulted in the enhanced privacy and security of patient data.

Service Excellence

EXCELLENCE IN IMPROVEMENT AND INNOVATION AWARD WINNERS (L-R): Deborah Griffiths, Ramon Tan, and Bhumika Patel.

For individuals or teams who promote a philosophy of service excellence by demonstrating an unwavering commitment to the community we serve both in and outside our organisation.

Christchurch Therapeutic Apheresis Team Registered Nurses Sarah Mannion, Liz Wood, Llloyd Smith, Dorothy Wee and Megan Stanbury and Antony Nalder, Supervising Scientist The Christchurch Team was recognised for consistently going ‘above and beyond’ to ensure the best care for patients, including rearranging their personal lives to accommodate patients’ needs or completing long shifts. They were acknowledged for demonstrating energy, optimism and skill, even during difficult times, to solve problems and overcome challenges.

A scientist in our Wellington Component Processing Team, Antony Nalder is also our Central Region Health and Safety (H&S) representative. He led an important overhaul of the Regional H&S Hazard Register to simplify the document and improve its clarity in relation to hazards, controls and risks.

SERVICE EXCELLENCE WINNERS (L-R): Sarah Mannion, Liz Wood, Lloyd Smith, Dorothy Wee, Megan Stanbury, and (inset) Antony Nalder.

Spirit of NZBS For individuals or teams who cultivate a community spirit, consistently make a social difference and help shape our work environment for the good of our organisation and our people.

Craig Phillips, Logistics Assistant Gustavo Duarte, Transfusion Medicine Specialist Craig Phillips was nominated three times for this award. He has a happy, helpful disposition which his mobile team and logistics colleagues appreciate, and conducts his work with a smile and good humour.

Gustavo Duarte was nominated for every award category in 2022, recognising his strong personal contribution to teamwork, both within NZBS and with our hospital partners. He was acknowledged for being forward-looking, supportive of colleagues, and focused on multidisciplinary working.

SPIRIT OF NZBS AWARD WINNERS: Craig Phillips (left) and Gustavo Duarte.

49

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

L E A D E R S H I P D E V E LO P M E N T Developing leaders and leadership skills is critical for both organisational success and employee wellbeing.

Over the past year NZBS has continued to invest in a Leadership Development Programme with a focus on its people managers. Eighty-six of these managers have now completed the programme, which focused on four key domains: •

Leadership intent: Desire to lead against vision and strategy

•

Lead for safety: safe product and safe team

•

Lead the team: mobilise and engage the team and collaborate across the business (one team)

•

Lead for delivery: focussing on efficiency and effectiveness and promoting innovation and change

Leadership Development now forms part of our induction programme for all people leaders and we have also expanded the programme to include those in our organisation who don’t manage people, but are nevertheless considered ‘Leaders with Influence’.

E M P LOY M E N T Bargaining Like other public sector organisations NZBS continues to operate in accordance with Te Kawa Mataaho Public Service Commission Pay Guidance.

NZBS has Single Employer Agreements (SEAs) with three unions: The New Zealand Nurses Organisation (NZNO), the Public Services Association (PSA), and the Association of Salaried Medical Specialists (ASMS).

50

Our agreements have been developed to reflect our particular working environment while also responding to changes in the wider labour market (in particular, recognising the settlements these unions have reached with Te Whatu Ora Health New Zealand).

In early 2023 we entered into bargaining with the NZNO on the expired Collective Employment Agreement; this work remained ongoing at the end of the financial year.

H O L I DAYS AC T P R O G R A M M E New Zealand’s Holidays Act 2003 sets out how payment for leave and final pay is to be calculated and paid. It came into effect in April 2004. While the Act is generally easy to follow for those working traditional hours (9am to 5pm), it’s proved complex for some employers to interpret and apply for shift work, variable days and hours, and flexible work patterns.

These work arrangements apply to many in the health workforce. As a result, some entitlements for annual leave, bereavement and sick leave, public holidays, and alternative holidays (including lieu days) have been incorrectly calculated.

This year we have reviewed and tested the payroll systems and processes NZBS has had in place since 2010 to identify any areas of Holidays Act noncompliance. And, as of June 19, we had fixed the issues we’d found. We will be embarking on the final stage of our programme, remediation, in the first half of the next financial year. This is when we will calculate and make any payments that may be owed to current and former staff.

E M P LOY E E D E M O G R A P H I C S FULL TIME PART TIME

S TA F F TEMPORARY FULL TIME TEMPORARY PART TIME CASUAL 45-54 35-44

55 -64 AGE 65+ UNKNOWN

25 -34

UNDER 25 GENDER DIVERSE FEMALE

MALE

GENDER WITH DISABILITY NOT STATED DISABILITIES WITHOUT DISABILITY

SAMOAN

MAORI

TONGAN

OTHER EUROPEAN

COOK ISLAND MAORI NIEUAN

ASIAN NFD *

FIJIAN SOUTHEAST ASIAN

CHINESE INDIAN

OTHER ASIAN

ETHNICITIES

NEW ZEALAND EUROPEAN

MIDDLE EASTERN LATIN AMERICA/HISPANIC

EUROPEAN NFD* NOT STATED

AFRICAN (OR OF AFRICAN ORIGIN) OTHER ETHNICITY

* NFD = No further details

51

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

TE P OAR I

TH E BOAR D F I O NA P I M M – BOAR D C HAI R

Fiona is an independent consultant and director with more than 40 years’ experience in the health sector and extensive governance experience. She previously worked in senior executive roles in primary care and District Health Board (DHB) management, as well as in Māori health with Ngāi Tahu. Fiona is currently a Te Aka Whai Ora Māori Health Authority board member, chairperson for Whai Rawa Fund Limited, and represents her Arowhenua marae on the board of Te Runanga o Ngāi Tahu. She has a Postgraduate Diploma in Public Health and an MBA from Massey University.

R AY L I N D O N Z M – D E P U T Y C H A I R

Ray has many years’ experience in health sector corporate management and a proven track record in results-driven leadership. Most recently, he spent seven years as CEO for Careerforce, an industry training organisation (ITO) for the health, mental health, youth work, disability, social services and cleaning sectors. Prior to this, Ray was Chief Operating Officer (COO) for one of New Zealand’s largest providers of home care, mental health and addictions, and residential disability support services, as well as COO for Hawke’s Bay District Health Board. Ray is an Officer of the New Zealand Order of Merit for services to industry training governance.

DR BART BAKER

Bart is a consultant haematologist at Palmerston North Hospital’s Regional Cancer Treatment Service. He is an active and experienced committee member, including for Leukaemia and Blood Cancer New Zealand. He is a member of the Haematology Society of Australia and New Zealand and the American Society of Hematology, and is registered with the New Zealand Medical Council as a specialist in internal medicine and in pathology (haematology).

NICOLE ANDERSON

Nicole Anderson (CMInstD) is a professional director and a chartered member of the Institute of Directors with a background in financial management and public health. She is a member of various public and private sector governance bodies, including being a director on the boards of Top Energy Ltd and Kainga Ora, and chair of the International Accreditation New Zealand (IANZ) Council.

Ko Ngāpuhi tōna iwi, nō Hokianga ia.

ANTHONY BOW

Anthony is an independent director and a principal of Waimana Capital, a business strategy and expansion capital firm. He has more than 30 years of investment management, banking and finance, and mergers and acquisitions’ taxation experience, and has held CEO and senior executive leader positions in financial services entities. Anthony is chair of Medical Sciences Secretariat Limited, deputy chair of the Medical Radiation Technologists Board, director of Whai Rawa Fund Limited and councillor of InternetNZ. He has a Bachelor of Commerce from the University of Auckland and holds Chartered Accountant designation from the professional accounting bodies of New Zealand and Singapore.

D R E D WA R D TA N E T OA H U T C H I N S

Edward is a consultant ophthalmologist at Wellington and Kenepuru hospitals, and at Wairau Hospital, Blenheim. He has a Bachelor of Medicine and a Bachelor of Surgery from the University of Auckland, and a postgraduate diploma in Ophthalmology from the University of Otago. He is a fellow of the Royal Australia and New Zealand College of Ophthalmologists, and has undertaken subspecialty fellowship training in corneal surgery, retinal surgery and ocular oncology.

Ko Ngāi Tahu / Waitaha toku iwi. Huirapa toku hapu, Puketeraki toku marae.

R O G E R J A R R O L D (APPOINTED 3 JULY 2023)

Roger Jarrold is a Chartered Accountant with more than four decades’ experience. He has worked across the engineering, construction and health sectors, including in chief financial officer roles in construction and health. Alongside a number of other positions Roger is currently chair of the Health Research Council’s Audit and Risk Committee, and adviser to the Deputy Director-General leading the monitoring team at Manatū Hauora. He is also a trustee of the Auckland Hospitals Research and Endowment Fund (AHREF) charitable trust.

E D I E M O K E – I N D E P E N D E N T C H A I R NZBS FINANCE AND AUDIT SUBCOMMITTEE

Edie is an independent director with more than 20 years’ governance experience across organisations related to health services, health funding, broadcasting, audio-visual archiving, regional development, philanthropy and kaupapa Māori community services delivery. Her business experience started with the Canterbury Area Health Board where she worked as an accountant, and at Healthlink South Ltd. She also worked for Ernst & Young as a principal consultant, and established their Māori health and Māori business development teams. Edie holds a Diploma in Business Studies (Accounting), a Bachelor of Business Studies (Management and Information Systems Management), a Postgraduate Diploma in Business Administration, and a Master of Business Studies (Health Service Management).

She has been a member of the NZ Institute of Management and Leadership for more than 25 years, and is a Chartered Member of the Institute of Directors NZ.

52

T E R A N GA I M AT UA

THE EXECUTIVE LEADERSHIP TEAM SAM CLIFFE

Chief Executive Officer As CEO Sam leads the Executive Leadership Team, has overall responsibility for organisational performance, and is accountable to New Zealand Blood Service’s Board. The Executive Leadership Team members act as partners to the CEO, providing critical advice and support to enable the organisation to perform effectively and deliver on its objectives.

DR SARAH MORLEY

Chief Medical Officer The Chief Medical Officer leads the Clinical Services Team, which plays a key role in ensuring that the products and services NZBS provides to patients are clinically appropriate and safe. The multiprofessional expert team provides transfusion and blood donation advice, clinical expertise in cellular therapies and apheresis, and organ and tissue donation. Sarah’s team works closely with clinicians across the health sector, and includes Organ Donation New Zealand and the New Zealand Bone Marrow Donor Registry.

JOS H UA BANKE R S

Director, Digital Technology and Information Management Josh provides vision and leadership for strategically developing and managing information, information resources, digital platforms, and technology. He is responsible for enabling New Zealand Blood Service’s business strategy through the smart application and management of technology and information, and is accountable for information services’ systems and infrastructure across all locations.

JOHN HARRISON

Director, Finance & Corporate Services The Director, Finance and Corporate Services plays a key role in ensuring New Zealand Blood Service meets its financial and legal obligations.

The role contributes to the strategic direction and overall performance of the organisation. John leads and is accountable for the Finance and Corporate Services function to deliver effective financial management, financial strategy, policy development, and operational analysis. Additionally, John’s role is to drive business improvement and enhanced performance through the use of analytics and business intelligence practices.

FIDELMA MURPHY

Director, Quality and Regulatory Affairs and NZBS Privacy Officer Fidelma is responsible for developing, maintaining, managing, and leading effective and co-ordinated quality and regulatory compliance processes.

This role ensures New Zealand Blood Service fully complies with all relevant statutory requirements and achieves high standards of collection, manufacturing, and laboratory practice – all of which are essential in providing a safe, timely and high quality service. Fidelma is also the organisation’s Privacy Officer, ensuring compliance with New Zealand’s Privacy Act 2020.

K AR E N D I DOVI C H

Director, Human Resources and Organisational Development The Director, Human Resources and Organisational Development is responsible for providing strategic leadership across these areas. The role ensures policies, programmes and HR services support a high-performing culture that is underpinned by NZBS’ values and contributes to NZBS’ ‘single enduring outcome’. Working in partnership with other ELT members and senior management teams, Karen’s team works towards attracting, selecting, motivating and retaining a highly qualified and diverse workforce; promoting effective leadership and management practices; managing salary and benefits; developing employee recognition programmes; promoting fair and equitable treatment of employees through employee relations services; leading health and safety, inclusive of wellbeing initiatives; and providing training and development.

D R M A N DY S U D D E S

Director, Technical Services Mandy leads and is accountable for the Technical Services function, from strategy development to operational service delivery, including managing major change programs. This work is central to ensuring we can meet the clinical demand for products and services, and deliver them in accordance with statutory and regulatory requirements. Technical Services functions include manufacturing and donation accreditation; operating six national blood banks, the National Reference Laboratory, and the New Zealand Transplantation and Immunogenetics Laboratory; and carrying out cellular therapy and tissue banking activities with support from NZBS’ Learning and Development and Technical Facilities and Equipment teams.

B R E T T PA R A D I N E

Director, Donor Services Brett leads and is accountable for the Donor Services’ function, from strategy development through to operational service delivery. This work is central to ensuring collection targets are achieved so that clinical demand for products and services can be met. Donor Services functions’ include donor strategy, planning, marketing, donor administration, donor recruitment and collections, training, the Donor Product and Safety (DaPS) and Transformation teams, therapeutic services, and contact centre oversight.

JUSTIN SCOTT

Director, Planning & Supply Chain Justin is accountable for providing strategic direction and oversight of NZBS’ Planning and Supply Chain function. He leads the operational activity that sees the timely distribution of blood and blood products to New Zealand hospitals and, with his team, heads up NZBS’ integrated planning process to ensure product demand can be met.

Justin’s role also manages the organisation’s facility, property, and procurement functions, and he is the lead executive for NZBS’ emergency planning management.

53

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

T E A N GA M E T E K AWA N ATA N GA

S TRUCTU R E & GOVE R NANCE N Z B S I S A C R OW N E N T I T Y E S TA B L I S H E D I N 19 98 U N D E R T H E N E W Z E A L A N D P U B L I C H E A LT H A N D D I SA B I L I T Y AC T 2 0 0 0 1 .

Its legislated primary purpose and core activity is the safe, timely, high quality and efficient provision of blood, blood products and services to clinicians for the people of New Zealand. In addition to this, NZBS provides services for matching patients and donors prior to organ/tissue transplantation, tissue banking (skin and bone) and stem cell services.

These activities contribute to the organisation achieving its single Enduring Outcome: The health needs of people in New Zealand are supported by the availability of safe and appropriate blood, blood products, tissues and related services.

NZBS is required under the Crown Entities Act 2004 (the Act) to give effect to Government policy as directed by the responsible Minister, the Minister of Health. The NZBS Board is appointed by and responsible to the Minister of Health and performs strategic and governance functions for the organisation in accordance with the Act. The collective duties of the Board under the Act include ensuring that NZBS acts consistently with its objectives, functions, Statement of Intent and Annual Statement of Performance Expectations; performs its functions efficiently, effectively and consistently with the spirit of service to the public; and operates in a financially responsible manner.

Board members who have a range of appropriate and complementary skills and experience to govern this complex collections, manufacturing and distribution organisation also have individual duties to: comply with the Act (including with respect to disclosure of information); act with honesty and integrity; act in good faith and not at the expense of NZBS’ interests; and act with reasonable care, diligence and skill.

The NZBS Board appoints the Chief Executive Officer (CEO) who reports directly to them. An Executive Leadership Team (see page 53) supports the CEO. The NZBS Board ensured that the organisational activities supported NZBS to achieve the following three Strategic Objectives for the 2022/23 year: 6 Building Foundations for Growth 6 Delivering Operational Effectiveness 6 Providing Exceptional Service

1

54

Replaced by the Pae Ora Healthy Futures Act from 1 July 2022.

S TAT E M E N T O F T R E N D S – AC T UA L O U T C O M E S A N D F O R WA R D O U T L O O K 1 J U LY 2 0 1 8 - 3 0 J U N E 2 0 2 6

Actual outcomes

Key indicators Collections & production volumes Donor population

Year 2018/19

Year 2019/20

Year 2020/21

Forward outlook

per 2023/24 Statement of Performance expectations

Year 2021/22

Year 2022/23

Year 2023/24

Year 2024/25

Year 2025/26

Active donors at 30 June each year

108,588

110,765

112,388

115,428

119,136

123,222

124,778

131,856

New Zealand population - stated in 000s

4,917.00

4,9 66.17

5,122.60

5,127.10

5,228.10

5,202.63

5,241.64

5,280.96

Active donors as a % of the total population

2.21%

2.23%

2.19%

2.25%

2.28%

2.37%

2.38%

2.50%

175,347

193,348

220,335

227,163

225,324

229,846

229,122

261,603

1.61

1.75

1.9 6

1.97

1.89

1.87

1.84

1.98

Red cells - units

106,418

106,600

109,662

110,427

114,215

113,9 22

115,79 6

118,113

Platelets - adult doses

19,370

19,762

17,413

23,876

25,027

20,718

20,998

21,413

Cryoprecipitate - units

7,169

6,851

7,209

7,19 5

8,106

7,440

7,682

7,9 51

Plasma - units

16,001

16,490

14,714

14,571

18,056

13,567

13,579

13,596

Source plasma issued for fractionation manufacturing - kgs

71,273

83,243

101,634

102,643

106,178

111,39 8

109,607

133,443

Collection volumes

Donation collection volumes Donor to donation ratio - average donation frequency per donor Production volumes

Key product & service demand volumes Key blood product volumes – as issued fresh products Total red cells - units

102,179

102,753

106,685

107,203

110,786

113,164

116,559

120,055

Total platelets - adult doses

15,882

14,653

15,526

15,717

16,235

15,605

15,800

16,018

Cryoprecipitate - units

6,725

6,620

7,477

6,996

7,862

8,138

8,423

8,718

Total clinical FFP plasma - units

17,19 2

15,155

13,622

12,921

16,359

16,775

17,109

17,278

Total fresh product units issued per 1000 head of population

28.87

28.03

27.98

27.86

28.93

29.55

30.14

30.71

328,683

367,869

391,680

412,368

448,236

150,819

0

0

0

372,500

560,410

616,460

50,970

24,153

0

0

0

6,860

73,392

94,968

Fractionated product

Immunoglobulin - Intragam P – grams

Immunoglobulin - Privigen NZ (replacing Intragam P and Privigen) - grams Immunoglobulin – Evogam – grams

50,016

55,358

54,713

55,240

Immunoglobulin - Hizentra NZ (replacing Evogam and Hizentra) - grams Immunoglobulin – Privigen – grams

52,815

52,225

66,565

68,500

97,485

56,730

59,125

54,540

Immunoglobulin – Hizentra – grams

1,348

1,312

1,69 6

6,480

15,776

25,592

9,000

8,000

30

25,080

25,980

26,730

432,862

476,764

514,654

542,588

612,497

661,734

727,907

800,698

88.03

96.00

100.47

105.83

117.15

127.24

138.94

151.72

275,19 0

289,706

307,008

299,920

317,910

327,19 0

354,470

381,750

6,658

5,474

5,371

5,731

5,689

5,750

6,177

6,400

Immunoglobulin – Gamunex – grams Total immunoglobulin product issues – grams Total immunoglobulin product issued per 1000 head of population – grams Albumin issues – grams Biostate (Factor VIII) – 500iu equivalent vials Key service volumes – as supplied Patient antibody screens

149,888

151,466

163,372

158,305

163,749

161,000

162,000

163,000

Patient blood groupings

155,688

157,224

169,514

164,079

169,649

167,500

170,000

172,500

Patient compatibility testing

114,9 42

110,633

117,479

116,79 4

122,921

123,000

124,000

125,000

2,807

2,443

2,455

3,433

3,701

4,275

4,525

4,775

Tissue typing NGS testing for solid organ & bone marrow transplants

Taxpayer value - Cost of NZBS for a family of four Total NZBS operating cost net of unrealised exchange movements ($000’s)

132,527

144,039

153,944

171,592

198,839

196,989

213,025

227,235

Annual operating cost of NZBS per Head of Population ($)

26.95

29.00

30.05

33.47

38.03

37.88

40.66

43.06

Cost of New Zealand Blood Service for a family of 4 ($)

107.80

116.00

120.20

133.88

152.12

151.52

162.64

172.24

2.07

2.23

2.31

2.57

2.93

2.91

3.13

3.31

Cost of New Zealand Blood Service per week for a family of 4 ($)

55

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

S TAT E M E N T O F T R E N D S – AC T UA L O U T C O M E S A N D F O R WA R D O U T L O O K 1 J U LY 2 0 1 8 - 3 0 J U N E 2 0 2 6

Actual outcomes

Forward outlook per 2021/22 Statement of Performance Expectations

Key indicators

Year 2018/19

Year 2019/20

Year 2020/21

Year 2021/22

Year 2022/23

Year 2023/24

Year 2024/25

Year 2025/26

Earnings performance Total blood product revenue ($000s)

105,674

112,502

126,025

139,753

165,430

196,604

231,974

262,994

Total services revenue ($000s)

25,834

27,239

29,792

28,982

32,196

33,977

36,990

38,973

Overseas revenue ($000s)

1,261

1,290

1,719

1,426

529

100

100

100

306

544

5,721

3,697

6,329

9,491

8,999

9,075

133,075

141,575

163,257

173,857

202,484

240,172

278,063

311,142

Other revenue (including interest earned) ($000s) Total revenues - pre DHB price rebates ($000s) Revenue growth %

9.42%

6.39%

15.31%

6.49%

16.47%

18.61%

15.78%

11.9 0%

Full time equivalent employees with vacancy allowance - FTEs

533.45

602.83

677.89

711.47

801.34

792.41

834.41

858.41

Revenue per full time equivalent employee ($000s)

249.46

234.85

240.83

244.36

252.68

303.09

333.25

362.46

Reported surplus / (deficit) ($000s)

(593)

(4,847)

2,739

(2,365)

(3,039)

19,649

24,543

27,247

Total equity

38,239

33,391

43,130

40,765

102,726

140,066

164,609

191,856

Total non-current borrowings

10,071

14,929

18,131

26,674

26,590

27,571

29,935

25,396

Total assets

82,363

91,281

107,483

126,756

192,766

239,810

268,809

289,982

Working capital

32,444

30,023

39,833

36,916

86,197

82,314

94,003

9 6,101

Inventory stock turn (times per annum)

3.46

3.15

2.74

2.41

2.00

1.73

1.85

2.15

Receivables - days sales outstanding (days)

27.32

28.10

31.95

34.28

33.09

25.39

25.14

25.18

Financial position ($000S)

Debt / Equity gearing Equity ratio %

78.21%

67.64%

69.10%

59.04%

77.58%

82.60%

83.53%

87.61%

Debt ratio %

21.79%

32.36%

30.90%

40.96%

22.42%

17.40%

16.47%

12.39%

Cash flow derived from operating activities

4,317

(1,808)

(1,680)

114

(19,471)

11,564

25,654

43,487

Investing activities - investments & capital expenditure

(4,981)

(5,617)

(6,477)

(10,607)

(42,916)

(28,822)

(29,108)

(38,042)

Financing related activities - borrowing & debt repayment

1,848

4,972

10,133

8,394

64,345

18,258

3,445

(4,954)

Cash movement in the financial year - (xxx) = cash reduction

1,184

(2,453)

1,975

(2,099)

1,958

1,000

(8)

492

Cash position at balance date ($000s)

5,145

2,692

4,668

2,569

4,527

2,023

2,015

2,507

44.47%

36.54%

41.89%

34.07%

56.00%

61.64%

64.49%

69.20%

10.93

2.20

16.27

3.91

3.83

19.27

22.25

26.84

Cash flows ($000S)

Banking covenant compliance Bank equity ratio % - requirement of a minimum 30% of adjusted TTA Interest cover ratio - minimum 1 times cover of EBITDA

56

S TAT U T O RY D I S C L O S U R E S For the year ended 30 June 2023

Your Board members take pleasure in presenting their Annual Report, including the Financial Statements of New Zealand Blood and Organ Service, for the year ended 30 June 2023.

The presented Annual Report is also published on the NZBS website - nzblood.co.nz

Principal activity

New Zealand Blood Service (NZBS) was established in 1998 to ensure the safe, quality supply of blood and blood products and services to the New Zealand health sector. It has responsibility for all aspects of the transfusion process in New Zealand; from the collection of blood from volunteer donors to the transfusion of blood components and products to recipients - a ‘vein-to-vein’ transfusion service. Following the passing of the Organ Donation and Related Matters Act (2019) NZBS’ functions were expanded to include oversight of Organ Donation New Zealand (ODNZ) from 30 November 2020.

The planned broader strategy for organ donation and transplantation will be progressed as funding is made available to NZBS. NZBS also assumed responsibility for the National Heart Valve Bank in October 2021, and the New Zealand Bone Marrow Registry (NZBMDR) - previously administered by Leukaemia & Blood Cancer New Zealand - from 1 December 2022.

Financial performance The New Zealand Blood and Organ Service Board sets financial targets for the entity at the beginning of each financial year and continuously monitors actual performance against these targets during the course of each financial year. The 2022/23 year delivered a very good overall volume growth of 7.3 per cent compared with last year’s growth of 2.2 per cent. This level of growth reflects the return to a more normalised demand following the effects of COVID-19. The year’s growth occurred broadly in fresh product and immunoglobulin product (Ig). Immunoglobulin growth increased for this major product to 12.88 per cent compared with last year’s 5.43 per cent volume growth. NZBS is reporting a deficit of -$3.04 million for the 2022/23 financial year compared with a budgeted surplus of $2.67m and last year’s deficit result of $-2.37m. At the operational level, the result was a surplus of $3.88m compared to a budgeted operational surplus of $4.74m and last year’s operational deficit of -$1.34m.

The Board confirms NZBS complied at all times with its banking covenants in the 2022/23 financial year.

Key financial performance metrics for the 2022/23 financial year are set out below.

2022/23

2022/23

2021/22

Financial Performance Indicators

Actual

Budget

Last Year

Total Revenue pre DHB Price Rebates ($000s)

204,484

200,203

173,857

356

4,742

(1,344)

Operational Earnings ($000's) Declared Price Rebate to District Health Boards ($000s)

-

-

-

Total Expenses ($000s)

207,523

197,533

176,223

Reported Surplus / (Deficit) ($000s)

(3,039)

2,669

(2,365)

Capital charge (5% on equity) paid to the Crown ($000s)

3,694

3,715

2,350

Total Assets ($000s)

192,766

186,987

126,756

Cash generated from Operating Activities ($000s)

(19,471)

(11,481)

114

Capital investment excluding capitalised finance leases ($000's)

18,320

38,132

3,009

Equity plus current and non-current Borrowings ($000s)

132,412

134,637

69,047

Equity Ratio %

77.58%

81.11%

59.04%

Debt Ratio % (based on non-current external borrowings)

22.42%

18.89%

40.96%

Banking Ratio - times EBITDA (minimum 1 times) Banking Ratio - Bank defined Equity to Total Tangible Assets (minimum 30%)

4.11

8.12

3.91

54.40%

60.26%

34.07%

Auditor

Audit New Zealand on behalf of the Auditor-General is appointed in accordance with Sections 14 and 15 of the Public Audit Act 2001 and Section 156 of the Crown Entities Act 2004. Remuneration of the auditor was as follows:

Description

Audit Year

30 June 2023

Audit fees for financial statement audit

2023

172,700

30 June 2022 -

Audit fees for financial statement audit

2022

9,300

128,852

57

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

S TAT U T O RY D I S C L O S U R E S For the year ended 30 June 2023

Board members

All Board members are appointed by the Crown.

Board members’ remuneration

The following Board members held office during the period under review and were paid fees accordingly:

Board members’ remuneration

Date of original appointment

Fiona Pimm

Appointed 15 June 2016. Board Chair from September 2021

32,000

29,244

Mr Raymond Lind

Appointed 19 October 2018. Deputy Chair from 13 July 2022

19,866

16,000

Dr Bart Baker

Appointed 15 June 2016

16,000

16,000

Edie Moke

Appointed 28 April 2020

16,000

16,000

Nicole Anderson

Appointed 1 September 2021

15,467

13,245

Anthony Bow

Appointed 13 July 2022

16,000

-

Dr Edward Hutchins

Appointed 13 July 2022

15,467

-

Dr Jackie Blue

Appointed 19 October 2018, resigned 12 July 2022

667

20,000

Dr Paula Martin

Appointed 19 October 2018, resigned 31 October 2021

-

5,333

Mr David Chamberlain

Board Chairman up to 31 August 2021

-

5,511

131,467

121,333

Total Board members’ remuneration

30 June 2023

30 June 2022

Board members’ interests – related party transactions

NZBS operates an Interest Register under a continuous disclosure regime with the Register reviewed at every board meeting. The Board has assessed these potential related party transactions under the International Public Sector Accounting Standards (IPSAS) and concluded the transactions do not satisfy the ‘control’ requirement as defined in those Standards, consequently disclosure is not required.

Board members’ interests

No payments were made to Board members other than total remuneration received or due and receivable by Board members shown in Remuneration of Board members.

Statement of use of Entity Information

There were no notices from Board members of the entity requesting to use entity information received in their capacity as Board members which would not otherwise have been available to them.

Directions issued by Ministers

New Zealand Blood and Organ Service received no ministerial directives under s107 of the Crown Entities Act 2004 in the 2021/22 financial year. NZBS continues to operate under two ministerial directives namely; (1) mandatory compliance with Procurement rules of sourcing (2015) and (2) the public sector implementation of the New Zealand business number (2016).

Donations

No donations were made by the entity during the year ended 30 June 2023 (2022: $nil).

Disclosure of ‘ultra vires’ transactions

New Zealand Blood and Organ Service confirms in accordance with Section 151 (1) of the Crown Entities Act 2004 that no ‘ultra vires’ transactions occurred in the 2022/23 financial year.

Insurance

New Zealand Blood and Organ Service carries insurance cover to protect Board members and its employees from legal liability arising from the carrying out of their duties. NZBS has provided Board members with a Deed of Indemnity when acting in pursuance of the functions of the organisation. The issuing of Deeds of Indemnity has been recorded in each Board member’s Interests Register.

58

Employee remuneration range

Employee remuneration range

30 June 2023 No. Employees

30 June 2022 No. Employees

$100,000 - 109,999

80

67

$110,000 - 119,999

63

40

$120,000 - 129,999

41

18

$130,000 - 139,999

23

8

$140,000 - 149,999

12

7

$150,000 - 159,999

8

7

$160,000 - 169,999

5

3

$170,000 - 179,999

4

2

$180,000 - 189,999

1

2

$190,000 - 199,999

1

1

$200,000 - 209,999

1

5

$210,000 - 219,999

2

1

$220,000 - 229,999

0

2

$230,000 - 239,999

1

1

$240,000 - 249,999

0

1

$260,000 - 269,999

2

1

$270,000 - 279,999

2

0

$280,000 - 289,999

2

3

$290,000 - 299,999

1

2

$300,000 - 309,999

3

0

$310,000 - 319,999

1

0

$320,000 - 329,999

1

1

$340,000 - 349,999

1

0

$380,000 - 389,999

0

1

$390,000 - 399,999

0

1

$400,000 - 409,999

1

0

$410,000 - 419,999 *

0

1

$450,000 - 459,999 *

1

0

257

175

* Chief Executive Officer

Employee remuneration includes the following elements; base salary, cash allowances, bonuses and incentive payments, non-monetary benefits, any Fringe Benefit Tax paid on any element of the remuneration package and any termination, severance or end of contract payments.

Termination payments

During the 2022/2023 financial year no employees (2021/2022: three employees) were made redundant and received a total amount of $ nil (2021/2022: $160,979) in redundacy payments.

Fiona Pimm Board Chair 26 October 2023

Mr Raymond Lind Board Deputy Chair 26 October 2023

59

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

PURONGO PUTEA

F I N A N C IAL S TAT E M E N T S FOR THE YEAR ENDED 30 JUNE 2022

Statement of Comprehensive Revenue and Expense

61

Statement of Financial Position

62

Statement of Changes in Equity

63

Statement of Cash Flows

64

Notes to the Financial Statements

65

1/

Statement of accounting policies

19/ Lease incentive liability

2/

Revenue from overseas sales and other revenue

20/ Borrowings

3/

Cost and consumables and changes in inventory

21/ Equity

4/

Employee benefit expenses

5/

Other expenses

22/ Reconciliation of net surplus / (deficit) to net cash from operating activities

6/

Finance costs

23/ Capital commitments and non-cancellable operating leases

7/

Revaluation of derivative financial instruments

24/ Contingencies

8/

Cash and cash equivalents

9/

Trade and other receivables

25/ Related party transactions and key management personnel

10/ Investments 11/ Inventories 12/ Derivative financial instruments 13/ Property, plant and equipment 14/ Intangible assets 15/ Trade and other payables 16/ Premises reinstatement provision 17/ Employee benefit entitlements 18/ Rent accrued

26/ Board members’ remuneration 27/ Employee remuneration range 28/ Termination payments 29/ Events after the balance date 30/ Segmental reporting 31/ Financial instrument categories 32/ Fair value hierarchy disclosures 33/ Financial instruments risks 34/ Capital management 35/ Major variances against budget

60

Statement of Performance

90

Independent Auditor’s Report

102

S TAT E M E N T O F C O M P R E H E N S I V E R E V E N U E A N D E X P E N S E For the year ended 30 June 2023

Note

Actual 2023

Budget 2023

Actual 2022

165,430,338

162,532,141

139,752,544

32,195,765

32,189,859

28,981,596

528,619

100,000

1,426,170

2,222,772

3,025,827

2,270,397

1,030,807

345,654

63,496

Revenue Revenue from supplying blood products Revenue from supplying services Revenue from overseas sales

2

Organ Donation Funding

2

Interest revenue Other revenue

2

Total revenue

3,075,478

9,077

1,363,296

204,483,779

198,202,558

173,857,499

Expenditure Cost of consumables and changes in inventory

3

63,117,788

62,340,575

58,098,455

Employee benefit expense

4

83,485,368

78,011,011

71,710,012

13 & 14

6,007,619

7,524,446

5,292,049

Other expenses

5

52,236,102

46,003,723

41,782,335

Finance costs

6

1,508,582

1,547,176

860,408

Revaluation of derivative financial instruments

7

1,167,756

106,427

(1,520,969)

Total expenses

207,523,215

195,533,358

176,222,290

Surplus / (deficit) for the period

(3,039,436)

2,669,200

(2,364,791)

Other comprehensive revenue and expense

-

-

-

Total other comprehensive revenue and expense

-

-

-

(3,039,436)

2,669,200

(2,364,791)

Depreciation and amortisation and impairment of fixed assets

Total comprehensive revenue and expense for the period

Explanations of significant variances against budget are detailed in Note 35.

61

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

S TAT E M E N T O F F I N A N C I A L P O S I T I O N As at 30 June 2023

Note

Actual 2023

Budget 2023

Actual 2022

Assets Current assets Cash and cash equivalents

8

4,527,123

3,143,451

2,568,740

Trade and other receivables

9

23,218,717

18,243,863

19,842,848.53

Investments

10

26,500,000

8,000,000

2,000,000

Inventories

11

85,768,809

81,810,303

61,797,532

Derivative financial instruments

12

Total current assets

561,515

1,408,449

1,314,686

140,576,164

112,606,066

87,523,807

Non-current assets Derivative financial instruments

12

172,765

-

576,574

Property, plant and equipment

13

45,474,309

67,094,192

33,584,931

Intangible assets

14

6,542,375

7,286,951

5,070,783

Total non-current assets

52,189,449

74,381,143

39,232,289

Total assets

192,765,613

186,987,209

126,756,095

Liabilities Current liabilities Trade and other payables

15

34,648,775

27,925,383

33,653,044

Premises reinstatement provision

16

290,687

52,071

339,660

Employee benefit entitlements

17

17,788,048

14,929,520

14,981,270

Derivative financial instruments

12

8,072

-

-

Lease incentive liability

19

25,955

85,692

25,955

Borrowings

20

1,617,193

2,975,805

1,607,627

54,378,730

45,968,471

50,607,556

-

-

Total current liabilities Non-current liabilities Derivative financial instruments

12

2,704

Premises reinstatement provision

16

1,422,256

1,474,913

1,226,985

Employee benefit entitlements

17

1,657,582

1,589,190

1,569,813

Rent accrued

18

5,863,429

6,378,723

5,761,393

Lease incentive liability

19

125,452

1,059,966

151,407

Borrowings

20

26,589,773

21,313,333

26,673,818

Total non-current liabilities

35,661,196

31,816,125

35,383,416

Total liabilities

90,039,926

77,784,596

85,990,972

102,725,687

109,202,613

40,765,123

Crown equity

87,716,696

89,716,696

22,716,696

Accumulated comprehensive revenue and expense

15,008,991

19,485,917

16,048,427

-

-

2,000,000

102,725,687

109,202,613

40,765,123

Net assets

Equity

21

Adverse event reserve Total equity

Explanations of significant variances against budget are detailed in Note 35.

For and on behalf of the Board members of New Zealand Blood and Organ Service.

Fiona Pimm Board Chair 26 October 2023 62

Mr Ray Lind Deputy Board Chair 26 October 2023

S TAT E M E N T O F C H A N G E S I N E Q U I T Y For the year ended 30 June 2023

Note

Actual 2023

Budget 2023

Actual 20221

40,765,123

41,533,413

43,129,914

-

-

-

Comprehensive income for the year

(3,039,436)

2,669,200

(2,364,791)

Contribution from owners

65,000,000

65,000,000

-

102,725,687

109,202,614

40,765,123

Opening balance Transfer from accumulated comprehensive reserve and expense to adverse event reserve

Closing balance

21

Explanations of significant variances against budget are detailed in Note 35.

63

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

S TAT E M E N T O F CA S H F L OW S FOR THE YEAR ENDED 30 JUNE 2023

Note

Actual 2023

Budget 2023

Actual 2022

195,560,459

196,695,495

167,369,223

Cash flows from operating activities Receipts from blood products and services revenue Interest received

292,414

359,109

25,368

Receipts from other revenue

3,090,093

2,933,960

2,708,871

Receipts from Crown

1,988,000

1,988,000

1,988,000

Payments to employees

(80,409,716)

(80,288,092)

(68,867,188)

Payments to suppliers

(135,215,686)

(127,69 6,024)

(100,263,687)

-

-

-

Interest paid

(1,507,675)

(1,493,082)

(859,691)

Capital charge payments

(3,694,304)

(3,714,856)

(2,349,925)

425,310

(265,740)

363,333

(19,471,105)

(11,481,230)

114,304

473,478

217,455

32,859

-

-

-

Acquistion of investments - term deposits

(66,500,000)

(8,000,000)

(6,000,000)

Receipts from maturity of investments - term deposits

42,000,000

2,000,000

8,000,000

Proceeds from sale of property, plant and equipment

10,781

-

1,058

-

-

-

(2,674,302)

(3,949,478)

(1,103,542)

Distribution of price rebate to District Health Boards

Net GST received from / (paid to) IRD Net cash from operating activities

22

Cash flows from investing activities Interest received Acquistion of adverse event reserve - term deposits

Receipts from Landlord for contribution to fitout of premises Purchase of intangible assets Purchase of property, plant and equipment

(16,225,659)

(39,300,396)

(11,537,516)

Net cash from investing activities

(42,915,702)

(49,032,419)

(10,607,141)

14,300,000

-

3,400,000

580,329

5,118,268

6,830,310

(13,300,538)

(6,500,538)

(1,836,522)

Cash flows from financing activities Proceeds from borrowings - term credit facility Proceeds from borrowings - finance lease and term financing Repayment of borrowings - term credit facility Repayment of borrowings - finance lease and term financing

(2,234,601)

(2,521,500)

Equity Injection from the Crown

65,000,000

65,000,000

-

Net cash from financing activities

64,345,190

61,096,230

8,393,788

Net increase / (decrease) in cash, cash equivalents and bank overdraft

1,958,383

582,581

(2,099,049)

Cash, cash equivalents and bank overdraft at the beginning of the year

2,568,740

2,560,870

4,667,789

4,527,123

3,143,451

2,568,740

Cash, cash equivalents and bank overdraft at the end of the year

8

The GST (net) component of operating activities reflects the net GST paid to and received from the Inland Revenue Department.

The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes and to be consistent with the presentation basis of the other primary financial statements.

Explanations of significant variances against budget are detailed in Note 35.

64

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

1

Statement of accounting policies

(1) Reporting entity

New Zealand Blood and Organ Service (NZBS) is primarily responsible for performing functions that enable the donation, collection, processing and supply of blood and controlled human substances, and for facilitating organ donation-related activities in New Zealand (under the New Zealand Public Health and Disability Act 2000 and the Human Tissue Act 2008).

NZBS is a Crown entity under the New Zealand Public Health and Disability Act 2000 and, more specifically, a Statutory Entity and Crown agent under the Crown Entities Act 2004. NZBS’ ultimate parent is the New Zealand Crown.

NZBS is a public benefit entity and its primary functions are to support the New Zealand healthcare community by: (a) managing the donation, collection, processing and supply of blood and controlled human substances, and (b) providing oversight and clinical governance of the organ donation and transplantation systems.

Accordingly, NZBS has designated itself as a public benefit entity (PBE) for the purposes of applying the Public Benefit Entities Accounting Standards (PBE Standards), issued by the External Reporting Board (XRB).

The financial statements for NZBS are for the year ended 30 June 2023 and were approved by the Board on 26 October 2023.

(2) Basis of preparation

Except as disclosed in note 36 to the financial statements, NZBS’ financial statements have been prepared in accordance with: • The requirements of the Crown Entities Act 2004 and the Pae Ora Healthy Futures Act 2022, and • New Zealand generally-accepted accounting practice (NZ GAAP), in accordance with Tier 1 PBE Standards.

They comply with PBE Standards, as appropriate for PBEs. There were no changes to the accounting policies for the 2023 financial year.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

The financial statements have been prepared on a historical cost basis, with the exception of certain items identified in specific accounting policies.

The financial statements are presented in New Zealand dollars. The functional currency of NZBS is New Zealand dollars.

(3) New or amended standards adopted PBE IPSAS 41 Financial Instruments In March 2019, the External Reporting Board (XRB) issued PBE IPSAS 41 Financial Instruments, which supersedes both PBE IFRS 9 Financial Instruments and PBE IPSAS 29 Financial Instruments: Recognition and Measurement. NZBOS has adopted PBE IPSAS 41 for the first time this year.

There has been little change as a result of adopting the new standard, because the requirements are similar to those contained in PBE IFRS 9.

PBE FRS 48 Service Performance Reporting This Standard establishes new requirements for the selection and presentation of service performance information. NZBOS has adopted PBE FRS 48.

The main change between PBE FRS 48 and PBE IPSAS 1 Presentation of Financial Statement is that PBE FRS 48 requires additional information to be disclosed on the judgements that have the most significant effect on the selection, measurement, aggregation, and presentation of service performance information. This is disclosed on page 90 of the Annual Report.

(4) Significant Accounting Policies

Revenue Revenue is measured at the fair value of consideration received or receivable. The specific accounting policies for significant revenue items are explained below: Sale of products Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

Revenue is measured net of returns, trade discounts and volume or price rebates. NZBS considers annually, in accordance with its financial guidelines policy, price rebates to Te Whatu Ora Health New Zealand which, if elected by the Board to be paid, are recognised at the point of decision and deducted from the amount of revenue received or receivable.

Provision of services Revenue from rendering services is recognised as the services are provided. NZBS does not recognise revenue on a percentage of completion basis and only recognises revenue from the provision of services once the service has been delivered.

Interest income Interest income is recognised using the effective interest method. Interest is earned on surplus cash held in the bank and term deposits. Interest income is recognised in the Statement of Comprehensive Revenue and Expense as it is earned. The effective interest rate exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. The method applies this rate to the principal outstanding to determine interest revenue each period.

Funding from the Crown NZBS receives approved funding from the Crown for specific service delivery e.g. organ donation services. In some instances, funding could be approved by the Crown if there is reason to believe that NZBS suffered significant financial loss due to unforeseen adverse events. In all instances funding from the Crown gets recognised as Other Income and is recognised as Other Income when it becomes receivable from the Crown.

Capital charge The capital charge is recognised as an expense in the financial year to which the charge relates.

65

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

1

Statement of accounting policies (continued)

Leases

Finance leases A finance lease is a lease that transfers to the lessee substantially all the risks and rewards incidental to ownership of an asset, whether or not title is eventually transferred.

At the start of the lease term, NZBS recognises finance leases as assets and liabilities in the statement of financial position at the lower of the fair value of the leased item or the present value of the minimum lease payments. The finance charge is charged to the Statement of Comprehensive Revenue or Expense over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability.

The amount recognised as an asset is depreciated over its useful life. If there is no certainty as to whether NZBS will obtain ownership at the end of the lease term, the asset is fully depreciated over the shorter of the lease term or its useful life.

Some leases provide for periodic fixed rent increases. Where the rent increase is based on a fixed dollar amount or percentage increase, the contractual increase is reflected in the determination of the lease income and recognised on a straight-line basis over the lease term. Where the contractual increase is based on movements in the consumer price index this is accounted for as contingent rent and recognised as income in the period the increase occurs.

Operating leases An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset.

Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised as an expense on a straight-line basis over the lease term.

Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term.

Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Cash and cash equivalents are classified and measured at amortised cost in the Statement of Financial Position. These financial instruments are short term in nature and the carrying amount is considered to be a reasonable approximation of fair value.

Bank overdrafts are shown within borrowings in current liabilities in the Statement of Financial Position. Bank overdrafts are classified and measured at amortised cost. As these are short term in nature the carrying amount is considered to be a reasonable approximation of fair value.

Trade and other receivables Trade and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any loss allowance. Trade and other receivables are short term in nature and the carrying amounts are considered to be a reasonable approximation of fair values.

A provision for impairment of receivables is established when there is objective evidence that NZBS will not be able to collect all amounts due according to the original terms of receivables. NZBS has applied the simplified approach to measure the loss allowance for trade and other receivables. Under this approach the loss allowance is the lifetime expected credit loss.

Trade receivables which are significant on an individual basis are evaluated on a line-by-line basis. For those that are not determined to be significant individually, the loss allowance is assessed on a portfolio basis, taking into account days past due and historical loss experience in portfolios with shared characteristics. Historical loss rates are adjusted for forward-looking indicators and relevant macro-economic factors.

Inventories Inventories are measured at cost upon initial recognition. To the extent that inventory was received through non-exchange transactions (i.e. donated goods) for no cost or for a nominal cost, the cost of the inventory is its fair value at the date of acquisition.

However, as NZBS is not legally permitted to purchase blood from the public, the fair value for accounting purposes of blood from donors is considered to be nil. Therefore, the cost of inventories comprises all costs of collection, costs of conversion, and any other costs incurred in bringing the inventories to their present location and condition.

After initial recognition, inventory is measured at the lower of cost and net realisable value. The cost of inventory is determined using the FIFO or weighted average methods. The valuation includes allowance for slow moving items. Obsolete inventories are written off.

The write-down from cost to net realisable value is recognised in the surplus or deficit except for fractionated derived products manufactured from New Zealand-sourced plasma (refer below).

66

1

Statement of accounting policies (continued)

Inventories are recognised as an expense when deployed for utilisation or consumption in the ordinary course of NZBS’ operation.

Fractionated derived products manufactured from a principal plasma pool Fractionated derived products are manufactured into finished blood products by a third party manufacturer on a “toll” manufacturing basis using NZBS-provided source plasma. Since the 2019 financial year, fractionated derived products have been predominantly manufactured from plasma pools ranging in size from a minimum nine tonnes through to a maximum 13.0 tonnes. The NZBS rolling manufacturing programme generally allows for a minimum five production pools in a financial year. The driver product group within the manufacturing process is the immunoglobulin product represented by Intragam P and Evogam.

The principal pool work in progress (WIP) is included at full standard cost, as the final output that the manufacturer must produce is locked in via the agreed production plan for a pool, and contract yields per the toll manufacturing agreement. This high level of certainty enables the WIP to be viewed in the same light as finished fractionation product for the purposes of inventory valuation.

Valuation of fractionated derived products from these plasma pools, both finished goods and WIP, is based on allocating the actual input cost of manufacturing a plasma pool (NZBS source plasma input plus third party toll fractionation manufacturing fee) to prorated finished/WIP product output using actual product plasma yield, as reported by the manufacturer.

Post this product cost allocation, if there are any products where cost exceeds the net realisable value, then that cost excess is reallocated to the driver immunoglobulin product group.

Financial assets

NZBS classifies its financial assets within the scope of PBE IPSAS 41 Financial Instruments according to the following three categories: (1) Financial assets at fair value through surplus or deficit, (2) Financial assets at amortised cost, and (3) Financial assets at fair value through other comprehensive revenue or expense.

Financial assets are initially measured at fair value plus transaction costs unless they are carried at fair value through surplus or deficit, in which case they are initially measured at fair value and the transaction costs are recognised in the surplus or deficit. Financial assets are not reclassified subsequent to their initial recognition unless NZBS changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

Purchases and sales of investments are recognised on trade date, the date on which NZBS commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and NZBS has transferred substantially all the risks and rewards of ownership.

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance date. The quoted market price used is the current bid price.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. NZBS uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The subsequent measurement of financial assets depends on their classification. NZBS classifies financial assets into three categories depending on their contractual cash flow characteristics and NZBS’ business model for managing financial assets. The categories of financial assets are: Category (1) Financial assets at fair value through surplus or deficit This category has two sub-categories: financial assets held for trading, and those designated at fair value through surplus or deficit at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management to eliminate or significantly reduce an accounting mismatch.

Derivatives are also categorised as ‘held for trading’ unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance date.

After initial recognition they are measured at their fair values. Gains or losses including any interest or dividend income are recognised in the surplus or deficit.

67

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

1

Statement of accounting policies (continued)

Category (2) Financial assets at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: • It is held within a business model with an objective to hold assets in order to collect contractual cash

flows; and

• The contractual terms of the financial asset give rise to cash flows that are solely payments of principal

and interest.

After initial recognition they are measured at amortised cost using the effective interest method, less impairment.

Interest income, foreign exchange gains and losses, and impairment are recognised in surplus or deficit.

Category (3) Financial assets at fair value through other comprehensive revenue or expense A financial asset is measured at fair value through other comprehensive revenue or expense if both the following conditions are met: • The financial asset is held within a business model whose objective is achieved by both collecting

contractual cash flows and selling financial assets; and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely

payments of principal and interest on the principal amount outstanding.

Impairment of financial assets At each balance date NZBS assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. Any impairment losses are recognised in the surplus or deficit. The loss allowance is measured based on expected credit losses, taking into account external factors and forward looking indicators.

Financial liabilities NZBS classifies its financial liabilities within the scope of PBE IPSAS 41 Financial Instruments: as either financial liabilities at fair value through surplus or deficit, or financial liabilities at amortised cost. The classification of financial liabilities is determined on initial recognition. NZBS may choose at initial recognition to designate a financial liability as at fair value through surplus or deficit if doing so eliminates or significantly reduces an accounting mismatch.

All financial liabilities of NZBS are measured at amortised cost except derivative financial instruments which are measured at fair value. Gains or losses on re-measurement are recognised in the surplus or deficit.

All financial liabilities are recognised initially at fair value, and in the case of loans and borrowings, at fair value plus directly attributable transaction costs.

NZBS’ financial liabilities include trade and other payables, loans and borrowings. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any noncash assets transferred or liabilities assumed) is recognised in surplus or deficit.

Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Transactions denominated in foreign currency are reported at the reporting date by applying the exchange rate on that date. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the surplus or deficit

Accounting for derivative financial instruments and hedging activities NZBS uses derivative financial instruments to manage exposure to foreign exchange risks arising from operational activities. In accordance with its treasury management policy, NZBS does not hold or issue derivative financial instruments for trading purposes. NZBS has not adopted hedge accounting.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at each balance date. The resulting gain or loss is recognised in the surplus or deficit.

Property, plant and equipment Property, plant and equipment consists of operational assets which include plant and equipment, computer hardware, motor vehicles, furniture and fittings/office equipment and leasehold improvements.

Property, plant and equipment is shown at cost less accumulated depreciation and impairment losses.

68

1

Statement of accounting policies (continued)

Additions

The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to NZBS and the cost of the item can be measured reliably.

Property, plant and equipment is initially recognised at cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition.

Work in progress is recognised at cost less impairment and is not depreciated.

Disposals Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset.

Gains and losses on disposals are included in the surplus or deficit.

Subsequent costs The cost of replacing or improving part of an item of property, plant and equipment is recognised in the carrying amount of an item. The costs of day-to-day servicing of property, plant and equipment are recognised as incurred in the surplus or deficit.

Depreciation Depreciation is provided on a straight-line basis on all property, plant and equipment, at rates that will write off the cost of the assets to their estimated residual values over their useful lives.

The useful lives of major classes of assets have been estimated as follows: Computer equipment Furniture and fittings Motor vehicles Plant and equipment Leasehold improvements

3 to 10 years 5 to 10 years 8 to 12 years 3 to 20 years Shorter of term of lease or useful life

The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

Intangible assets

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs associated with maintaining computer software are recognised as an expense when incurred.

Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life.

Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit.

The useful lives of major classes of intangible assets have been estimated as follows: Computer software Computer software - blood management system (eProgesa) Computer software - blood bank system (eTraceline)

3 to 5 years 10 years 10 years

Changes in the expected useful life or the expected pattern of consumption are treated as changes in accounting estimates. Intangible assets with a finite useful life are assessed for impairment whenever there is an indication that the asset may be impaired.

Impairment of non-financial assets

NZBS does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return.

69

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023 2022

1

Statement of accounting policies (continued)

Non-cash-generating assets

Property, plant and equipment, and intangible assets held at cost that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable service amount. The recoverable service amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is determined using an approach based on either a depreciated replacement cost approach, restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information.

If an asset’s carrying amount exceeds its recoverable service amount, the asset is regarded as impaired and the carrying amount is written-down to the recoverable amount. The total impairment loss is recognised in the surplus or deficit.

The reversal of an impairment loss is recognised in the surplus or deficit.

Creditors and other payables Creditors and other payables are classified as financial liabilities measured at amortised cost. As these are short term in nature the carrying amount is considered to be a reasonable approximation of fair value.

Employee benefits Short-term benefits Employee benefits that NZBS expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned to, but not yet taken, at balance date, retiring and long service leave entitlements expected to be settled within 12 months, and sick leave.

NZBS recognises a liability for sick leave to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that NZBS anticipates it will be used by staff to cover those future absences. Any sick leave taken during the current year related to COVID-19, has been treated as paid special leave and did not affect any sick leave balance.

NZBS recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a constructive obligation.

Long-term benefits Long service leave and retirement leave Entitlements that are payable beyond 12 months, such as long service leave and retirement gratuities, have been calculated on an actuarial basis. The calculations are based on: • likely future entitlements accruing to staff, based on years of service to entitlement, the likelihood that staff

will reach the point of entitlement and contractual entitlements information; and

• the present value of the estimated future cash flows. The discount rate is based on the weighted average

of government interest rates for stock with terms to maturity similar to those of the relevant liabilities. The inflation factor is based on the expected long-term increase in remuneration for employees.

Superannuation schemes Defined contribution schemes Obligations for contributions to defined contribution superannuation schemes are recognised as an expense in the surplus or deficit.

Defined benefit schemes NZBS belongs to the Defined Benefit Plan Contributors Scheme (the scheme), which is managed by the Board of Trustees of the National Provident Fund. The scheme is a multi-employer defined benefit scheme.

Insufficient information is available to use defined benefit accounting, as it is not possible to determine from the terms of the scheme, the extent to which the surplus/deficit will affect future contributions by individual employers, as there is no prescribed basis for allocation. The scheme is therefore accounted for as a defined contribution scheme. Further information on this scheme is disclosed in note 24 - Contingencies.

70

1

Statement of accounting policies (continued)

Provisions

NZBS recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expected expenditures required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time, value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.

Contingencies

NZBS does not recognise contingent liabilities, but discloses details of any contingencies in the notes to the financial statements, unless the possibility of an outflow of resources embodying economic benefits or service potential is remote.

NZBS does not recognise contingent assets, but discloses details of a possible asset whose existence is contingent on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group in the notes to the financial statements. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits or service potential will arise and the asset’s value can be measured reliably, the asset and the related revenue are recognised in the financial statements of the period in which the change occurs.

Borrowings Borrowings are initially recognised at their fair value. After initial recognition, all borrowings are measured at amortised cost using the effective interest method.

Borrowings are classified as current liabilities unless NZBS has an unconditional right to defer settlement of the liability for at least 12 months after balance date.

Adverse event reserve and matching investment fund

NZBS collects source plasma and contracts a third party to manufacture that source plasma, via a complex series of processes known as fractionation, into a range of derived fractionation products for use within the New Zealand health sector. The manufacturing contract clearly defines the party’s respective risks and responsibilities inclusive of financial risk attribution should certain of those risks inherent in the manufacturing process actually occur.

NZBS’ attributed financial risks have, based on historical performance, been classified as being of low frequency but with a potentially high financial impact if an event did occur.

Accordingly, NZBS has elected to mitigate this manufacturing financial risk by establishing the Adverse Event Policy that mandates including an adverse event reserve within the equity section of the statement of financial position.

This is complemented by a matching term deposit fund to ensure access to liquidity in the event of an adverse event occurring.

Under this policy NZBS is required to assess, on an annual basis, the upper level of potential financial risk, the current level of the reserve and whether further funds should be transferred to the reserve with matching liquidity also required to then be set aside.

Equity

Equity is the Crown’s interest in NZBS. The components of equity are: • Crown equity. This is the net asset and liability position at the time NZBS was established, plus any

subsequent equity injections.

• Accumulated comprehensive revenue and expense. This is the accumulated surplus/deficit since NZBS’

establishment.

• Adverse event reserve. This is the transfer from accumulated comprehensive revenue and expense

commencing financial year ending 30 June 2015. The reserve has been established to mitigate the financial manufacturing risk associated with the production of fractionated derived products and any other adverse events.

71

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

1

Statement of accounting policies (continued)

Goods and services tax (GST)

All items in the financial statements are stated exclusive of GST, except for receivables and payables, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax then it is recognised as part of the related asset or expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to, or received from, the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Taxation

NZBS is a statutory entity (pursuant to the New Zealand Public Health & Disability Act 2000 and schedule 1 of the Crown Entities Act 2004) and is exempt from income tax under Section CW38 of the Income Tax Act 2007.

Budget figures

The budget figures are those approved by the NZBS Board at the beginning of the year as presented in the Annual Statement of Performance Expectations. The budget figures have been prepared in accordance with NZ GAAP and comply with NZ GAAP, using accounting policies that are consistent with those adopted by the Board for the preparation of the financial statements.

Critical accounting estimates and assumptions In preparing these financial statements NZBS has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. Where this is the case the basis of those assumptions is detailed in the relevant accounting policy.

Main accounting estimates and assumptions: • Impairment test and fair values of assets. Further detail to estimates and assumptions mentioned in Notes

13 and 14.

• Recognition and measurement of provisions. Further detail to the estimates and assumptions mentioned

in Note 16.

• Year-end valuation of Inventory and the provision raised for obsolescent Inventory items. Further detail to

the estimates and assumptions mentioned in Note 11.

• Liabilities recognised in relation to remediation of non-compliance of the Holidays Act 2003. Further detail

to the estimates and assumptions mentioned in Note 17.

Critical judgements in applying New Zealand Blood and Organ Services accounting policies

In preparing these financial statements NZBS management has made judgements in applying the NZBS accounting policies. These judgements have been applied consistently to all periods presented in these financial statements. There are no material judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities that need disclosing.

Main judgements: • Leases classification and assessing whether an arrangement contains a lease. Further detail of the

judgements in Note 23.

• Discount rate used in calculating the liability relating to the employee benefit scheme. Further detail on the

employee benefits in Notes 4 and 17.

72

2

Revenue from overseas sales and other revenue

Revenue from overseas sales - exchange revenue Revenue from overseas sales - non-exchange revenue Total revenue from overseas sales

30 June 2023

30 June 2022

509,949

1,425,084

18,670

1,086

528,619

1,426,170

The non-exchange revenue from overseas sales relates to sponsorship of conferences by overseas domiciled suppliers.

Other revenue - exchange revenue Other revenue - non-exchange revenue Total other revenue

2,336,280

858,873

739,198

504,423

3,075,478

1,363,296

The ‘non-exchange Other revenue’ mainly relates to the insurance monies associated with a flooding incident in Auckland in January 2023 amounting to $440,429. For the 2022 year it was represented by donated heart valves from Auckland Hospital $260,000 following NZBS taking over the management of the Heart Valve Inventory in the 2022 financial year. The balance was donated masks from the Ministry of Health valued at $220,000.

Organ Donation Funding Organ Donation appropriation funding received from the Ministy of Health Amount treated as Income in Advance Total Organ Donation Funding

1,988,000

1,988,000

234,772

282,397

2,222,772

2,270,397

On 30 November 2020, NZBS assumed responsibility for Organ Donation New Zealand (ODNZ) from Auckland DHB. Consequently, NZBS received $1,988,000 (2022: $1,988,000) in annual financial year appropriation funding from the Ministry of Health.

3

Cost of consumables and changes in inventory

30 June 2023

30 June 2022

Consumables

28,220,211

27,068,961

Changes in inventory

30,923,081

28,131,393

Expired product

3,974,496

2,898,101

Total cost of consumables and changes in inventory

63,117,788

58,098,455

Consumables - the cost of consumables for the period ending 30 June 2023 at $28,220,210 was $1,151,250 higher than the June 2022 cost of $27,068,961. This was mainly due to the medical gas cost increase of dry ice from supplier BOC Gas (equating to an increase of $983,109 or 200%) caused by a NZ wide shortage over FY23. At NZBS dry ice is used mainly for transporting frozen plasma to CSL Behring in Melbourne Australia.

Changes in inventory - is an aggregated reporting figure comprising ‘cost of goods sold, production recoveries and inventory valuation adjustments’ consistent with the application of manufacturing standard costing methodologies and generally accepted inventory valuation principles. Changes in inventory for the period ending 30 June 2023 at $30,923,081 was $2,791,688 higher than the June 2022 cost of $28,131,393. This is primarily due to the increased product demand, in particular immunoglobulin (IVIG) product sales (gram equivalent) being 12.88 per cent higher than prior year. this increase in demand was offset by the mix of finished fractionated products derived from the production pools.

Expired product - to guarantee the supply of product for any situation NZBS must maintain levels of stocks in excess of normal usage. NZBS carefully manages its inventory of products to minimise expiry, due to the short life of the fresh products in particular, there will be a certain amount of product that will expire before it can be utilised. There has been an increase overall to the expiries of $1,076,395 made up of a reduction in actual expiry of $286,582, but an increase of $1,362,978 to the P&L per movement in fractionated obsolescence provision between FY22 & FY23.

4

Employee benefit expenses

30 June 2023

30 June 2022

Salaries and wages

77,666,194

68,005,388

Defined contribution plan employer contributions

2,157,468

1,787,346

Increase/(Decrease) in employee benefit liabilities

3,661,706

1,917,278

83,485,368

71,710,012

Total employee benefit expenses

Employee benefit expenses at 30 June 2023 totalled $83,485,368 and was $11,775,356 higher compared to the June 2022 year of $71,710,012.

The main reasons for the increase in employee benefits are as follows: (1) Salary and wages $9,660,805 higher due to a combination of the following: (a) FTE increases, year-on-year salary increases driving from a combination of automatic increment increases per collective agreements, staff mix changes and rate of pay increases on Individual Employment agreements, and (b) higher spend on Call Centre costs relating to booking appointments for donors to donate at collection sites.

(2) Increase in employee benefit liabilities movement of $1,744,428 due to the following: (a) higher accrued salary and wages at 30 June 2023 (timing on the fortnightly payment cycles at year-end), (b) a increase in Long Service Leave and Gratuity Leave liabilities mainly due to movement in discount rates and inflation factor used by the external actuary to calculate the estimated liability at balance date and (c) increase in sick and annual leave entitlements.

73

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

5

Other expenses

30 June 2023

30 June 2022

Fees to principal auditor: Audit fees for financial statement audit 2023

172,700

-

Audit fees for financial statement audit 2022

9,300

128,852

-

-

3,694,304

2,349,925

131,467

121,333

(1,109,194)

410,448

Audit fees for other services Capital charge * Board members' fees Net foreign exchange losses / (gains) ** Impairment of Property Plant and Equipment

804,79 3

-

ODNZ retrieval costs

1,000,833

851,376

NZBMDR Collection costs

1,378,824

-

(Gains) / losses on disposal of property, plant and equipment

100,921

3,197

Changes in premises reinstatement provision (note 16)

29,723

(1,075,447)

-

-

8,240,608

7,607,809

Impairment of intangible assets (note 14) Minimum lease payments under operating leases *** Other operating expenses: Distribution

4,457,620

3,975,170

General administration including insurance costs

2,108,915

1,588,500

IT systems and telecommunication

10,381,858

8,165,751

Marketing

4,352,457

3,506,615

Repairs and maintenance

3,707,468

2,778,212

All other operating expenses

12,773,505

11,370,595

Total other operating expenses

37,781,823

31,384,843

Total other expenses

52,236,102

41,782,335

* The New Zealand Blood and Organ Service pays a capital charge to the Crown twice a year. The first payment is based on its actual closing equity from the prior June financial year and the second payment is based on the actual closing equity from the current year December six-monthly result.

The capital charge rate for the period ended 30 June 2023 was 5.0 per cent (30 June 2022: 5.0%). ** Net foreign exchange losses / (gains) reflect foreign exchange losses / (gains) excluding the impact of the revaluation of derivative financial instruments (refer note 7). *** Minimum lease payments in June 2023 totalling $8,240,608 were $632,800 higher when compared to the June 2022 spend of $7,607,809 .”

6

Finance costs

Interest on bank borrowings Interest on Dilworth Trust finance leases

30 June 2023

30 June 2022

392,077

150,971

5,550

15,347

Interest on Ngāi Tahu Property Limited finance lease

218,040

221,405

Interest on Dilworth House redevelopment finance lease

645,392

311,297

Interest on other property, plant and equipment finance leases

92,120

87,286

Discount unwind (note 16)

116,575

61,904

Interest other

38,828

12,198

1,508,582

860,408

30 June 2023

30 June 2022

Foreign exchange forward selling contracts - (gain) / loss

1,167,756

(1,520,969)

Total revaluation of derivative financial instruments - (gain) / loss

1,167,756

(1,520,969)

Total finance costs No borrowing costs were capitalised during the period (2022: nil).

7

Revaluation of derivative financial instruments

The revaluation of derivative financial instruments gain/(loss) reflects the movement between the opening and closing balance date positions of derivative financial instruments as shown in the statement of financial position.

74

8

Cash and cash equivalents

30 June 2023

30 June 2022

Cash on hand

3,911

3,591

Cash at bank

4,523,212

2,565,149

Total cash and cash equivalents for the purpose of the statement of cash flows

4,527,123

2,568,740

Cash at bank is deposited with counterparties with Standards & Poor’s credit rating of AA- or better. The carrying value of cash at bank, cash on hand and short-term deposits with maturities less than three months from the date of acquisition approximates their fair value.

9

Trade and other receivables

Trade receivables Sundry receivables

30 June 2023

30 June 2022

20,583,680

18,254,914

736,821

520,527

21,320,501

18,775,441

Less: provision for impairment of receivables

-

-

21,320,501

18,775,441

Prepayments

1,619,847

1,053,952

Interest receivable accrued - term deposits

278,369

13,456

23,218,717

19,842,849

Net receivables

Total trade and other receivables There were no trade and other receivables from non-exchange transactions in 2023 and 2022.

The carrying value of receivables approximates their fair value.

As at 30 June 2023 and 2022 all overdue receivables have been assessed for impairment and appropriate provisions applied, as detailed below:

2023 Receivables aging

2022

Gross

Expected credit loss %

Net

Gross

Expected credit loss %

Net

20,615,780

0%

20,615,780

18,058,752

0%

18,058,752

31 - 60 days

295,321

0%

295,321

716,499

0%

716,499

61 - 90 days

228,328

0%

228,328

190

0%

190

> 90 days

181,072

0%

181,072

-

0%

-

21,320,501

0%

21,320,501

18,775,441

0%

18,775,441

Current Past due :

Total receivables

All receivables greater than 30 days in age are considered to be past due.

The expected credit losses percentage is calculated based on expected non-payment of long outstanding or disputed invoices. Expected credit losses are determined based on an analysis of NZBS’ losses in previous periods, and review of specific debtors.

10

Investments

30 June 2023

30 June 2022

Current portion General term deposits

26,500,000

-

-

2,000,000

26,500,000

2,000,000

General term deposits

-

-

Adverse event reserve term deposits

-

-

Adverse event reserve term deposits Total current portion

Non-current portion

Total non-current portion Total investments

-

-

26,500,000

2,000,000

Term deposits at 30 June 2023 have maturities ranging between 107 to 350 days from acquisition date. Term deposits at 30 June 2022 had maturities between 60 to 90 days from acquisition date. The carrying amounts of term deposits with maturities less than 12 months approximate their fair value.

The remaining $2m of the adverse event term deposits was released to working capital in the 2022/23 financial year (refer note 21).

75

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

11

Inventories

30 June 2023

30 June 2022

10,740,507

7,983,793

Raw materials - fresh frozen plasma Work in process - fractionated components

13,219,574

16,199,965

Fractionated components

55,423,186

30,632,381

Fresh components

3,340,994

3,193,911

Consumables

4,746,788

4,607,246

87,471,049

62,617,296

(1,702,240)

(819,764)

(1,702,240)

(819,764)

85,768,809

61,797,532

30 June 2023

30 June 2022

8,072

-

Provision for expired inventory

Total Inventories No inventories are pledged as security for liabilities nor are any inventories subject to retention of title clauses.

No NZBS inventory is carried at fair value less cost to sell.

12

Derivative financial instruments

Forward foreign exchange contracts Current liabilities portion Term liabilities portion

2,704

-

Total liability portion

10,776

-

561,515

1,314,686

Forward foreign exchange contracts Current assets portion Term assets portion

172,765

576,574

Total assets portion

734,280

1,891,260

The fair values of forward foreign exchange contracts have been determined using a discounted cash flow valuation technique based on quoted market prices ruling at balance date. The inputs into the valuation model are from independently sourced market parameters such as currency rates. Most market parameters are implied from derivative financial instrument prices.

13

Property, plant and equipment

1 July 2021 Cost or valuation

Leasehold improvements

Plant and equipment

Computer equipment

Furniture and fittings

Motor vehicles

Office equipment

Total

Opening balance

26,994,783

27,054,761

5,259,173

2,541,253

179,946

151,652

62,181,568

Additions

8,076,000

2,407,935

1,517,518

134,060

-

-

12,135,513

Disposals

-

(1,59 6,341)

(27,643)

(19,253)

-

(1,520)

(1,644,757)

35,070,783

27,866,355

6,749,048

2,656,060

179,946

150,132

72,672,324

Leasehold improvements

Plant and equipment

Computer equipment

Furniture and fittings

Motor vehicles

Office equipment

Total

Opening balance

35,070,783

27,866,355

6,749,048

2,656,060

179,946

150,132

72,672,324

Additions

11,558,337

3,557,143

1,318,412

368,375

-

3,724

16,805,991

Disposals

(3,498,930)

(1,117,455)

(40,158)

(30,082)

(16,800)

(2,714)

(4,706,139 )

30 June 2023

43,130,190

30,306,043

8,027,302

2,994,353

163,146

151,142

84,772,176

30 June 2022

1 July 2022 Accumulated depreciation and impairment losses

The leasehold improvements addition of $11,558,337 at 30 June 2023 includes $10,855,213 relating to the redevelopment of a number of facilities, including, 71 Great South Road Auckland, Highbrook Auckland, Tauranga Donor Centre, Waikato hub site, Christchurch Blood Bank and Tuam Street Donor Centre in Christchurch (2022: $7,908,238).

76

13

Property, plant and equipment (continued)

1 July 2021 Accumulated depreciation and impairment losses

Leasehold improvements

Plant and equipment

Computer equipment

Furniture and fittings

Motor vehicles

Office equipment

Total

11,453,264

19,616,367

4,024,702

1,721,098

138,531

145,384

37,099,346

1,176,100

1,633,310

676,210

125,774

15,178

1,978

3,628,550

Opening balance Depreciation Impairment losses

-

-

-

-

-

-

-

Disposals

-

(1,592,087)

(27,643)

(19,253)

-

(1,520)

(1,640,503)

12,629,364

19,657,590

4,673,269

1,827,619

153,709

145,842

39,087,393

Leasehold improvements

Plant and equipment

Computer equipment

Furniture and fittings

Motor vehicles

Office equipment

Total

30 June 2022 1 July 2022 Accumulated depreciation and impairment losses Opening balance

12,629,364

19,657,590

4,673,269

1,827,619

153,709

145,842

39,087,393

Depreciation

1,379,131

1,713,355

747,530

144,344

13,778

1,978

4,000,116

Impairment losses

804,793

-

-

-

-

-

804,793

Disposals

(3,416,114 )

(1,097,016 )

(38,082)

(23,709)

(16,800)

(2,714)

(4,594,435)

30 June 2023

11,397,174

20,273,929

5,382,717

1,948,254

150,687

145,106

39,297,867

Leasehold improvements

Plant and equipment

Computer equipment

Furniture and fittings

Motor vehicles

Office equipment

Total

Carrying amounts At 30 June and 1 July 2022

22,441,419

8,208,765

2,075,779

828,441

26,237

4,290

33,584,931

At 30 June 2023

31,733,016

10,032,114

2,644,585

1,046,099

12,459

6,036

45,474,309

Capital work in progress included in property, plant and equipment additions At 30 June and 1 July 2022

7,300,668

649,370

746,413

-

-

-

8,696,451

At 30 June 2023

10,183,694

1,666,358

1,029,856

59,024

-

-

12,938,932

There are no restrictions or pledges over property, plant and equipment.

The net carrying amount of assets held under finance leases is $15,022,169 for leasehold improvements (2022: $16,398,505) and $1,948,307 for plant and equipment (2022: $1,822,603).

The leasehold improvements capital work in progress amount of $11,558,337 at 30 June 2023 includes $8,959,057 relating to the redevelopment of a number of our facilities, including, 71 Great South Road Auckland, Highbrook Auckland, Tauranga Donor centre, Waikato hub site, Christchurch and Waikato Blood Banks (June 2022: $6,787,679). There was a change from the work in progress figure disclosed in the 2022 Annual Report to the comparative year work in progress amounts disclosed in this Annual Report, the reason for the difference is a change in view to what qualifies as work in progress. Previously all assets purchased but not capitalised was disclosed as work in progress, but in this report, it changed and now only true work in progress are being disclosed as such in the Annual Report. All other fixed asset additions are being disclosed in the different asset classes as additions.

14

Intangible assets

30 June 2023

30 June 2022

Balance at beginning of year

19,838,227

18,734,687

Additions

2,674,302

1,103,540

Computer software cost

Disposals

-

-

22,512,529

19,838,227

Balance at beginning of year

14,767,444

13,103,945

Amortisation expense

1,202,710

1,663,499

-

-

15,970,154

14,767,444

At beginning of year

5,070,783

5,630,742

At year end

6,542,375

5,070,783

Balance at end of year

Accumulated amortisation expense and impairment losses

Disposals Balance at end of year

Carrying amounts

There are no restrictions over the title of the NZBS intangible assets, nor are any intangible assets pledged as security for liabilities.

The remaining amortisation period on computer software ranges from less than one year to four years with the exception of the eTraceline blood bank software which is seven years.

Intangible asset additions include $2,197,391 of capital work in progress projects at 30 June 2023 (2022: $311,482).

77

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

15

Trade and other payables

30 June 2023

30 June 2022

Trade payables

19,560,887

22,385,041

Accrued expenses

12,105,500

8,588,599

Board members' fees payable

7,200

14,667

Taxes payable - PAYE and FBT

1,009,389

795,025

Taxes payable - GST

1,836,306

1,410,9 9 6

129,493

458,716

34,648,775

33,653,044

Other Total trade and other payables

Trade and other payables are non-interest bearing and are normally settled on 30 day terms, therefore the carrying value of trade and other payables approximates their fair value.

16

Premises reinstatement provision

Balance as at 1 July

30 June 2023

30 June 2022

1,566,645

2,580,188

Changes in provisions made during the year (note 5)

29,723

-1,075,447

Discount unwind (note 6)

116,575

61,904

1,712,943

1,566,645

Total premises reinstatement provision Comprising: Current

290,687

339,660

Non-current

1,422,256

1,226,985

Total premises reinstatement provision

1,712,943

1,566,645

The premises reinstatement provision represents the present value of management’s best estimate of the future sacrifice of economic benefits that will be required to remove leasehold improvements from leasehold property and reinstate those properties on the expiry of the lease. The estimated cost (using the premises at 71 Great South Road, Newmarket, Auckland as the indicator) has been calculated on a cost per square metre rate for reinstatement based on the advice received from an independent registered valuer.

The unexpired term of the leases concerned ranges from one year to 50 years. NZBS leases premises from Te Whatu Ora Health New Zealand and commercial landlords. Leases which expire within one year for commercial tenancies are classified as current liabilities. Te Whatu Ora Health New Zealand tenancies expiring within one year are classified as non-current on the basis that the leases will be renewed given the essential nature of the service performed within those locations.

17

30 June 2023

30 June 2022

Accrued salaries and wages

Employee benefit entitlements

5,217,222

3,847,958

Annual leave

11,850,240

10,575,800

Long service leave

1,264,129

1,094,844

Retirement gratuities

9 43,139

892,781

Sick leave

170,900

139,700

19,445,630

16,551,083

17,788,048

14,981,270

Total employee benefit entitlements

Comprising: Current Non-current Total employee benefit entitlements

1,657,582

1,569,813

19,445,630

16,551,083

Liabilities for retirement gratuities and long service leave at 30 June 2023 have been calculated by an external actuary resulting in an overall increase in the estimated liabilities existing at balance date, compared to the position reported at 30 June 2022.

The discount rates used by the external actuary to calculate the estimated liabilities existing at balance date are as follows: Long service leave 4.63 per cent (2022: 3.81%), retirement leave 4.70 per cent (2022: 3.94%), and an inflation factor of 1.75 per cent (2022: 1.75%).

78

Compliance with Holidays Act 2003 A number of New Zealand’s public and private organisations have identified issues with the calculation of leave entitlements under the Holidays Act 2003 (“the Act”). Work has been ongoing since 2016 on behalf of Te Whatu Ora and the New Zealand Blood and Organ Service (NZBS), with the Council of Trade Unions (CTU), health sector unions and Ministry of Business Innovation and Employment (MBIE) Labour Inspectorate, for an agreed and national approach to identify, rectify and remediate any Holidays Act non-compliance by NZBS and Te Whatu Ora. NZBS and Te Whatu Ora have agreed to a Memorandum of Understanding (MOU), which contains a method for determining individual employee earnings, for calclating liability for any historical non-compliance. For employers such as Te Whatu Ora and NZBS that have workforces that include differential occupational groups with complex entitlements, non-standard hours, allowances and/or overtime, the process of assessing non-compliance with the Act and determining any additional payment is time-consuming and complicated.

The remediation project associated with the MOU is a significant undertaking and work to assess all non-compliance will continue through the 2022/23 financial year. The final outcome of the remediation project and timeline addressing any non-compliance will not be determined until this work is completed.

However, during the 2022/23 financial year the review process agreed as part of the MOU has continued and has reached the stage where NZBS’s payroll system has been fully rectified after the final pay period of 2023 to avoid further non-compliance with the Holidays Act 2003.

NZBS has made further progress in its review and now believes it can determine a reliable estimate of its obligation to address historic non-compliance under the MoU, as at 30 June 2023. In preparing these financial statements, NZBS recognises it has an obligation to address any historical noncompliance under the MOU and using this framework NZBS has estimated its liability at 30 June 2023 to be $4,494,345 (2022: $4,001,594).

NZBS has made estimates and assumptions to determine a potential liability based on its review of payroll processes for instances of non-compliance with the Act and against the requirements of the MOU. The liability has been estimated by:

• Selecting a sample of current and former employees • Calculating the underpayment for these employees over the full period of liability, and • Extrapolating the result across all current and former employees This liability amount is NZBS’ best estimate at this stage of the review process. However, until the project has progressed further, there remain uncertainties as to the actual amount NZBS will be required to pay to current and former employees.

The estimates and assumptions may differ to the subsequent actual results as further work is completed. This may result in further adjustment to the carrying amount of the provision within the next financial year or payments to employees that differ significantly from the estimation of liability.

18

Rent accrued

30 June 2023

30 June 2022

Rent accrued

5,863,429

5,761,393

Total rent accrued

5,863,429

5,761,393

Christchurch

In December 2012, NZBS entered into an agreement to construct and lease, from Ngāi Tahu Property Limited, a new purpose-built facility at Lester Lane, Christchurch, to be occupied by NZBS upon completion by way of lease to accommodate all of the NZBS operations in Christchurch. 10 November 2014 was the operational date of this new facility.

NZBS has determined the lease of the new facility at Lester Lane, Christchurch to be predominately an operating lease. The specialist fit-out component relating to the facility has been classified in the 2016 financial year as a finance lease (refer note 20). Under the leasing arrangement, the initial fixed term of the lease is 30 years, with two further rights of renewal of 12 years each. The agreed lease payment per annum is adjusted every three years in line with the greater of the Consumer Price Index (CPI) or a minimum increase of 2.5% at compound rate. At the end of 15 years from the commencement of the lease, there is a market rent review undertaken.

The minimum annual increase of 2.5 per cent compound has been included in the minimum operating lease payment expense recognised in the surplus or deficit. In the first 15 years of the lease the actual rent payable per annum will be less than the straight-lined amount of expense recognised in the surplus or deficit, creating an accrued rent liability. By Year 15 the actual amount of rent payable per annum will exceed the straight-lined amount charged to the surplus or deficit, effectively reversing the accrued rent liability over the remaining 15 year period of the initial lease term.

Any additional increase in the CPI which exceeds the minimum amount of 2.5 per cent increase will be charged to the surplus or deficit as contingent rent expense in the period incurred.

71 Great South Road, Auckland

In November 2019 NZBS entered into an agreement with Dilworth Trust Board to lease a facility situated at 71 Great South Road, Auckland, to be occupied by NZBS to accommodate its National office and Auckland Central Donor Centre. The effective date of the agreement was 1 November 2018 and 1 March 2019 was the operational date of the new facility.

NZBS has determined this lease of the new facility at 71 Great South Road, Auckland to be predominantly an operating lease. Under the leasing agreement the initial fixed term of the lease is 20 years, with three further rights of renewal on 28 October 2038, 28 October 2041 and 28 October 2044.

The final date of expiry is 27 October 2047 if all renewals are exercised. The agreed lease payment per annum is adjusted every year by two per cent of the then annual rent payable immediately preceding the relevant review date. At the end of 10 years from the commencement of the lease, there is a market review undertaken.

The agreed annual increase of two per cent compound has been included in the minimum operating lease payment expense recognised in the surplus or deficit. In the first 10 years of the lease the actual rent payable per annum will be less than the straight-lined amount of expense recognised in the surplus or deficit, creating an accrued rent liability. By year 10 the actual amount of rent payable per annum will exceed the straight lined amount charged to the surplus or deficit, effectively reversing the accrued rent liability over the remaining 10 year period of the initial lease term.

Any additional increases following the market review which exceeds the minimum amount of two per cent increase will be charged to the surplus or deficit as contingent rent expense in the period incurred.

79

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

19

Lease incentive liability

30 June 2023

30 June 2022

Current

25,955

25,955

Non-current

125,452

151,407

Total lease incentive liability

151,407

177,362

In May 2017, NZBS opened its new donor centre at 170 Crawford Street, Dunedin. As part of the leasing arrangements the landlord contributed $311,465 towards the fitout of the premises and this receipt has been recognised as a lease incentive liability which is being released to the minimum operating lease payment expense on a straight-line basis over the initial 12-year term of the lease.

20

Borrowings

30 June 2023

30 June 2022

Current borrowings are represented by: Finance lease

551,292

585,962

Term financing

1,065,901

1,021,665

Term credit facility

-

-

1,617,193

1,607,627

3,724,983

3,742,590

Term financing

12,864,790

13,930,690

Term credit facility

10,000,000

9,000,538

Total non-current portion

26,589,773

26,673,818

Total borrowings

28,206,966

28,281,445

Total current portion Non-current borrowings are represented by: Finance lease

Carrying amount

Total borrowings

Fair value

30 June 2023

30 June 2022

30 June 2023

30 June 2022

28,206,966

28,281,445

27,346,533

30,323,072

Fair value

Due to interest rates on debt resetting to the market rate every three months, the carrying amount of the term credit facility approximates the fair value.

The fair value of finance leases in 2023 has been determined using contractual cash flows discounted using a rate based on the NZBS market borrowing rate at balance date of 6.6 per cent (2022: 3.71%).

80

Maturity analysis

30 June 2023

30 June 2022

Less than one year

2,515,616

2,552,170

Later than one year but not more than five years

8,958,375

8,951,043

Later than five years

13,335,372

15,232,063

Total minimum lease payments

24,809,364

26,735,276

Future finance charges

(6,602,398)

(7,454,369)

Present value of minimum lease payments

18,206,966

19,280,907

1,617,203

1,607,626

The following is a maturity analysis of the NZBS finance lease component of borrowings: Total minimum lease payments payable

Present value of minimum lease payments payable Less than one year Later than one year but not more than five years

6,116,664

5,901,409

Later than five years

10,473,099

11,771,872

Total present value of minimum lease payments

18,206,966

19,280,907

Less than one year

-

-

Later than one year but not more than five years

-

-

The following is a maturity analysis of the NZBS term credit facility:

Later than five years

10,000,000

9,000,538

Total term credit facility

10,000,000

9,000,538

Total borrowings

28,206,966

28,281,445

Reconciliation of liabilities arising from financing activities Borrowings

2022

Cash Flows

Non-cash changes

2023

Acquisitions

New Leases

Finance leases

4,328,552

(632,606)

-

580,329

4,276,275

Term financing

14,955,355

(1,024,664)

-

-

13,930,691

Term Credit facility

9,000,538

999,462

-

-

10,000,000

Long Term Debt

28,284,445

(657,808)

-

580,329

28,206,966

Weighted average effective interest rate for the Westpac term credit facility is 5.26 per cent (2022: 2.33%), the Dilworth Trust Board loan negotiated in the 2012/2013 and settled in the 2022/23 financial year 7.5 per cent, the Ngai Tahu Property Limited loan relating to the specialist fit-out component recognised in 2020 financial year 8.375 per cent, and the finance leases relating to plant and equipment range from 1.24 per cent to 9.40 per cent (2021: range from 1.24% to 9.40%) andbetween 2.77 per cent and 6.12 per cent on the Westpac Master Lease Agreement.

Finance leases are classified as current for the balance repayable within 12 months and non-current for the remaining balance for both the 2023 and 2022 years. In 2023 and 2022 the Westpac borrowing is classified as non-current liabilities as the facility maturity date is greater than 12 months.

The Westpac New Zealand Limited borrowing is unsecured and operates via a negative pledge undertaking. The maximum amount available under the Multi Option Credit Line facility (MOCL) is $10,000,000, all of which is a committed funding line on a term facility (2022: $16,000,000).

The MOCL borrowing facility provides construction phase funding to the multi-year redevelopment of the Auckland site at 71 Great South Road Auckland. On completion of each redevelopment construction stage the cost will transfer from the MOCL to the long term Westpac Master Lease Agreement (MLA) that provides a 10-year funding and repayment facility with interest rates struck off the 10-year swap rate ruling at each stage’s MLA execution.

The specific requirements of the negative pledge are stated below: (a) NZBS must not grant a security interest over more than 5per cent of it’s adjusted tangible assets (defined as total assets less intangible assets) to any third party without the prior consent of Westpac New Zealand Limited. (b) NZBS will ensure that it maintains shareholder funds of not less than 30 per cent of adjusted tangible assets (defined as total assets less intangible assets). (c) NZBS adjusted surplus (defined as the net surplus adjusted for external debt interest cost, depreciation, accrued rental charge and the mark to market unrealised movement) must not be less than the cost of funding.

The Westpac New Zealand Limited unsecured loan becomes repayable on demand in the event the New Zealand Blood Service breaches any of the obligations under the negative pledge and ratio’s undertaking. New Zealand Blood Service has complied with all negative pledge undertakings and borrowing obligations during the financial year. Current facility arrangements operate to 30 September 2023 with a renewal offer through to 30 September 2024.

The liabilities of the New Zealand Blood and Organ Service are not guaranteed in any way by the Government of New Zealand.

81

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

21

Equity

30 June 2023

30 June 2022

87,716,696

22,716,696

As at 1 July

16,048,427

16,413,218

Surplus for the year

(3,039,436)

(2,364,791)

Transfer from adverse event reserve

2,000,000

2,000,000

15,008,991

16,048,427

2,000,000

4,000,000

Crown equity Total crown equity Accumulated comprehensive revenue and expense

Total accumulated comprehensive revenue and expense Adverse event reserve As at 1 July Additional funds received Funds utilised - net of recoveries

-

-

(2,000,000)

(2,000,000)

-

2,000,000

102,725,687

40,765,123

Total adverse event reserve Total equity as at 30 June

The adverse event reserve was established in the financial year ending 30 June 2015 to mitigate those NZBS attributed financial risks deriving from the service’s fractionated product manufacturing programme. The level of the reserve is required to be reviewed annually with any further additions to the reserve balance of $4.0 million funded through accumulated comprehensive revenue and expense. In the 2023 financial year the board elected to further reduce the adverse event reserve to $nil and to make the remaining $2m available for operational requirements (refer to Notes 13 and 14).

22

Reconciliation of net surplus/(deficit) to net cash from operating activities

Net surplus / (deficit) from the statement of comprehensive income

30 June 2023

30 June 2022

(3,039,436)

(2,364,791)

Add / (less) non-cash items: Depreciation and amortisation (note 13 and 14)

5,202,826

5,292,050

Changes in premises reinstatement provision (note 16)

146,298

(1,013,543)

Changes in lease incentive liability (note 19)

(25,955)

(25,955)

100,921

3,196

Add / (less) items classified as investing or financing activities: (Gains) / losses on disposal of property, plant and equipment Impairment losses (note 13)

804,793

-

Interest received on investments - term deposits

(473,479)

(32,859)

Add / (less) movements in working capital items: Trade and other receivables

(3,375,870)

(9 57,526)

Inventories

(23,971,276)

(12,994,463)

Trade and other payables

1,097,767

10,886,341

Employee benefit liabilities

2,894,550

2,842,824

Revaluation of derivative financial instruments (note 7)

1,167,756

(1,520,969)

(19,471,105)

114,304

Net cash from operating activities

Creditors and accruals for capital expenditure are excluded from the trade and other payables increase or decrease.

82

23

Capital commitments and non-cancellable operating leases

30 June 2023

30 June 2022

Leasehold improvements

13,347,609

3,294,813

Plant and equipment

2,973,476

2,073,713

Computer equipment

395,498

767,295

Capital commitments

Furniture and fittings

476,858

425,237

Intangible assets

1,844,686

1,706,172

Capital expenditure contracted for at balance date but not yet incurred for property, plant and equipment plus intangibles

19,038,127

8,267,230

Leasehold improvements in 2023 include $12,741,360 (2022: $2,976,532) relating to the redevelopment of a number of facilities including 71 Great South Road Auckland, Highbrook Auckland. These redevelopments have multi-year timelines.

Operating leases as lessee NZBS leases property, plant and equipment in the normal course of its operations. The future aggregate minimum lease payments to be paid under non-cancellable operating leases are as follows: Future minimum lease payments

30 June 2023

30 June 2022

Not later than one year

8.270,348

5,995,164

Later than one year and not later than five years

30,207,941

19,554,817

Later than five years

153,790,869

75,705,664

Total non-cancellable operating leases

192,269,158

101,255,645

The 30 June 2023 and 2022 operating lease cost component for premises include rental increases based on rental review dates per contracts and, dependent on the lease an assumed market or CPI increase at compound rate.

The 30 June 2023 and 2022 non-cancellable operating leases include the commitment to lease both Level 1 and 2 of the Auckland facility at 71 Great South Road. At 30 June 2023 the estimated cost of this lease commitment is $57,238,660 which covers the remaining fixed term period of the lease being 15 years. The estimated cost of this lease at 30 June 2022 was a commitment of $32,285,226.

NZBS has not entered into any sublease arrangements as at 30 June 2023.

24

Contingencies

Contingent liabilities

There are no contingent liabilities as at 30 June 2023 (2022: Nil).

Contingent assets

There are no contingent assets as at 30 June 2023 (2022 : Nil).

83

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

25

Related party transactions and key management personnel

(a) Controlled entities NZBS is controlled by the Crown and it does not control any other for-profit or public benefit entity. (b) Key management personnnel NZBS’ key management personnel, as defined by PBE IPSAS 20 Related Party Disclosures, are the NZBS Board members and members of the Executive Leadership Team. The Board consists of members appointed by the Crown. The Chief Executive Officer and the Director, Finance and Corporate Services attend meetings of the Board but are not members of the Board.

The senior management group consists of NZBS’ chief executive officer and the remaining eight members (2022: 8) of the Executive Leadership Team.

The aggregate remuneration and the number of members determined on a full-time equivalent basis receiving remuneration are:

30 June 2023

30 June 2022

131,467

121,333

0.47

0.43

2,535,953

2,740,588

9

10

2,667,420

2,861,921

9.47

10.43

Board members Remuneration Full-time equivalent members

Leadership team Remuneration Full-time equivalent members

Total Board and Leadership Total key management personnel remuneration Total full time equivalent personnel

(c) Related party transactions Capital charge During the period the New Zealand Blood and Organ Service paid the Ministry of Health a capital charge of $3,694,304 (2022: $2,349,925). The amount outstanding at the end of the period was nil (2022: Nil).

Equity injection During the period the New Zealand Blood and Organ Service received $65,000,000 as an equity injection from the Ministry of Health (2022: $nil).

Other income During the period the New Zealand Blood and Organ Service received $1,988,000 (2022: $1,988,000) from the Ministry of Health related to Organ Donation New Zealand. (d) Other During the reporting period, there were no loans advanced that are not widely available (and/or not widely known) to persons outside the key management personnel that were advanced.

26

Board members’ remuneration

30 June 2022

Fiona Pimm Appointed 15 June 2016. Board Chair from September 2021

32,000

29,244

Mr Raymond Lind Appointed 19 October 2018. Deputy Chair from 13 July 2022

19,866

16,000

Dr Bart Baker Appointed 15 June 2016

16,000

16,000

Edie Moke Appointed 28 April 2020

16,000

16,000

Nicole Anderson Appointed 1 September 2021

15,467

13,245

Anthony Bow Appointed 13 July 2022

16,000

-

Edward Hutchins Appointed 13 July 2022

15,467

-

667

20,000

Dr Paula Martin Appointed 19 October 2018, resigned 31 October 2021

-

5,333

Mr David Chamberlain Board Chairman up to 31 August 2021

-

5,511

131,467

121,333

Dr Jackie Blue Appointed 19 October 2018, resigned 12 July 2022

Total Board members' remuneration

84

30 June 2023

27

Employee remuneration range

30 June 2023

30 June 2022

No. Employees

No. Employees

$100,000 - 109,999

80

67

$110,000 - 119,999

63

40

$120,000 - 129,999

41

18

$130,000 - 139,999

23

8

$140,000 - 149,999

12

7

$150,000 - 159,999

8

7

$160,000 - 169,999

5

3

$170,000 - 179,999

4

2

$180,000 - 189,999

1

2

$190,000 - 199,999

1

1

$200,000 - 209,999

1

5

$210,000 - 219,999

2

1

$220,000 - 229,999

-

2

$230,000 - 239,999

1

1

$240,000 - 249,999

-

1

$260,000 - 269,999

2

1

$270,000 - 279,999

2

-

$280,000 - 289,999

2

3

$290,000 - 299,999

1

2

$300,000 - 309,999

3

-

$310,000 - 319,999

1

-

$320,000 - 329,999

1

1

$340,000 - 349,999

1

-

$380,000 - 389,999

-

1

$390,000 - 399,999

-

1

$400,000 - 409,999

1

-

$410,000 - 419,999 *

-

1

$450,000 - 459,999 *

1

-

257

175

* Chief Executive Officer Employee remuneration includes the following elements; base salary, cash allowances, bonuses and incentive payments, non-monetary benefits, any Fringe Benefit Tax paid on any element of the remuneration package and any termination, severance or end of contract payments.

28

Termination payments

During the 2022/2023 financial year 0 employees (2021/2022: 3 employees) were made redundant and received a total amount of $ nil (2021/2022: $160,979) in the redundancy payments.

29

Events after the balance date

Subsequent to 30 June 2023 NZBS received the remaining $15,000,000 of the approved $60,000,000 equity injection, approved in December 2022. Initially $45,000,000 of this $60,000,000 was received in December 2022. These injections are to enable NZBS to fund a major infrastructure investment programme.

This is a non-adjusting event which has not been reflected in any way in the 2022/23 financial statements.

30

Segmental reporting

New Zealand Blood and Organ Service (NZBS) operates solely within New Zealand. This is considered to be one geographical segment for financial reporting purposes.

NZBS activities are vertically integrated. These activities include collection, processing, accreditation testing and supply of blood, and they are considered to be an integrated segment for reporting purposes.

85

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

31

Financial instrument categories

The accounting policies for financial instruments have been applied to the line items below:

FINANCIAL ASSETS

30 June 2023

30 June 2022

4,527,123

2,568,740

Trade and other receivables (note 9)

23,218,717

19,842,849

Investment - term deposits (note 10)

26,500,000

2,000,000

Total loans and receivables

54,245,840

24,411,589

Derivative financial instruments (note 12)

734,280

1,891,260

Total fair value through surplus or deficit

734,280

1,891,260

32,812,469

32,242,048

Loans and receivables Cash and cash equivalents (note 8)

Fair value through surplus or deficit

FINANCIAL LIABILITIES Financial liabilities measured at amortised cost Trade and other payables (note 15) - excluding GST payable to the Inland Revenue Borrowings (note 20)

28,206,956

28,281,445

Total financial liabilities measured at amortised cost

61,019,425

60,523,493

Fair value through surplus or deficit Derivative financial instruments (note 12)

10,776

-

Total fair value through surplus or deficit

10,776

-

32

Fair value hierarchy disclosures

30 June 2023

Total

Quoted

Observable

Significant non-

market price

inputs

observable inputs

734,280

-

734,280

-

10,776

-

10,776

-

1,891,260

-

1,891,260

-

-

-

-

-

Financial assets Derivatives - forward foreign exchange contracts Financial liabilities Derivatives - forward foreign exchange contracts

30 June 2022 Financial assets Derivatives - forward foreign exchange contracts Financial liabilities Derivatives - forward foreign exchange contracts There were no transfers between the different levels of the fair value hierarchy.

33

Financial instruments risks

New Zealand Blood and Organ Service is party to financial instruments as part of its everyday operations. These include instruments such as bank balances, investments in the form of term deposits, accounts receivable, trade creditors and loans.

The entity has a series of policies providing risk management for interest rates and the concentration of credit. The entity is risk averse and seeks to minimise exposure from its treasury activities. NZBS policies do not permit any transactions which are speculative in nature.

Interest rate risk Fair value interest rate risk Fair value interest risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. Borrowings and investments issued at fixed rates of interest create exposure to fair value interest rate risk. NZBS manages its interest rate risk through the Treasury Management Committee that meets monthly and considers interest rate risk as part of its agenda.

86

Cash flow interest rate risk It is estimated that a general increase or decrease in interest rates on borrowings of one per cent would increase or decrease the NZBS surplus / deficit by approximately $296,862 at 30 June 2023 (2022: $282,810).

There are no interest rate options or interest rate swap agreements in place as at 30 June 2023 (2021: Nil).

Cash and cash equivalents include deposits at call which are at floating rates and short term deposits at fixed rates totalling $4,523,213 (2022: $2,565,149). A movement in interest rates of plus or minus one per cent has an effect on interest income of $45,232 (2022: $25,652).

Currency risk

Trade payables include AUD$17,044,111 of Australian dollar denominated payables (2022: AUD$19,152,272) in relation to inventory purchases. Currency risk has been mitigated on these payables as they are covered by Fixed Forward Foreign Exchange selling contracts.

The NZD equivalent of unhedged amounts owing in foreign currency at balance date is $112,319 (2022: $19,452). The NZD equivalent of unhedged amounts owing to NZBS in foreign currency at balance date is $47,281 (2022: $560).

Forward foreign exchange contracts Total forward foreign exchange contracts (stated in NZD)

30 June 2023

30 June 2022

60,762,723

48,679,149

The foreign currency principal amounts were AUD$60,762,723 (2022: AUD $45,522,576).

The fair values of forward exchange contracts have been determined using a discounted cash flows valuation technique based on quoted market prices. The inputs into the valuation model are from independently sourced market parameters such as currency rates. Most market parameters are implied from forward foreign exchange contract prices.

Financial assets

At 30 June 2023 derivative financial assets consisted of forward foreign exchange contracts with a fair value totalling $723,504. At 30 June 2023, a movement in foreign exchange rates of plus 10 per cent has an adverse impact of $5,656,887, and minus 10 per cent has a favourable impact of $6,913,973, based on a derivative valuation model using hypothetical forward rates. At 30 June 2022 derivative financial assets consisted of forward foreign exchange contracts with a fair value totalling $1,891,260. At 30 June 2022, a movement in foreign exchange rates of plus 10 per cent has an adverse impact of $4,597,310, and minus 10 per cent has a favourable impact of $5,618,934, based on a derivative valuation model using hypothetical forward rates.

Financial liabilities

At 30 June 2023 derivative financial liabilities consisted of forward exchange contracts with a fair value totalling $10,776. At 30 June 2023, a movement in foreign exchange rates of plus 10 per cent has an adverse impact of $393,834, and minus 10 per cent has a favourable impact of $481,353, based on a derivative valuation model using hypothetical forward rates. There were no derivative financial liabilities at 30 June 2022.

Credit Risk Maximum exposure to credit risk at balance date are:

Cash on hand

30 June 2023

30 June 2022

3,910

3,590

4,523,213

2,565,150

Receivables

21,320,501

18,775,441

Investments - term deposits

26,500,000

2,000,000

Call deposits and short term deposits

Derivative financial instruments Total credit risk

Credit quality of financial assets

723,504

1,891,260

53,071,128

25,235,441

30 June 2023

30 June 2022

31,023,213

4,565,150

723,504

1,891,260

21,320,501

18,775,441

-

-

21,320,501

18,775,441

COUNTERPARTIES WITH CREDIT RATINGS Total cash at bank and term deposits AADerivative financial instrument assets AA-

COUNTERPARTIES WITHOUT CREDIT RATINGS Debtors and other receivables Existing counterparty with no defaults in the past Existing counterparty with defaults in the past Total debtors and other receivables

Concentration of credit risk Concentrations of credit risk from accounts receivable are limited due to the majority of NZBS' revenue being from Te Whatu Ora. Te Whatu Ora make up approximately 95.5 per cent (2022:99.1%) of the total receivables outstanding at balance date. Te Whatu Ora is assessed to be low risk, a high quality entity due to its nature as a government organisation responsible for providing New Zealand's public health services.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

N O T E S T O A N D F O R M I N G PA R T O F T H E F I N A N C I A L S TAT E M E N T S For the year ended 30 June 2023

33

Financial instruments risks (continued)

Liquidity risk The maximum amount available to New Zealand Blood and Organ Service under existing banking arrangements is $10,000,000 (2022: $16,000,000) on term facilities of which $10,000,000 was drawn down at balance date (2022: $9,000,538). A negative pledge obligation exits with this facility (refer Note 20).

Contractual maturity analysis of financial liabilities 30 June 2023

Liability carrying amount

Contractual cash flows

Less than 1 year

1-2 years

2-5 years

More than 5 years

Trade and other payables (note 15) - excluding GST

32,812,469

32,812,469

32,812,469

-

-

-

Borrowings - finance lease (note 20)

4,276,265

9,472,580

1,052,285

983,837

2,121,268

5,315,190

Borrowings - Term financing (note 20)

13,930,691

17,374,008

1,667,041

1,667,041

5,001,124

9,038,802

Borrowings - term credit facility (note 20)

10,000,000

13,355,000

660,000

660,000

1,980,000

10,055,000

Liability carrying amount

Contractual cash flows

Less than 1 year

1-2 years

2-5 years

More than 5 years

Trade and other payables (note 15) - excluding GST

32,242,043

32,242,043

32,242,043

-

-

-

Borrowings - finance lease (note 20)

4,328,551

7,694,216

885,128

730,689

1,552,190

4,526,209

Borrowings - Term financing (note 20)

14,952,355

19,041,050

1,667,041

1,667,041

5,001,124

10,705,844

Borrowings - term credit facility (note 20)

9,000,538

10,674,585

329,040

329,941

987,120

9,028,484

30 June 2022

Contractual maturity analysis of derivative financial instruments 30 June 2023

Liability carrying amount

Asset carrying amount

Contractual cash flows

Less than 6 months

Between 6 months and 1 year

1-2 years

2-5 years

outflow

-

723,504

65,834,426

24,520,064

17,310,433

24,003,929

-

inflow

-

-

66,557,930

24,851,922

17,532,018

24,173,991

-

Liability carrying amount

Asset carrying amount

Contractual cash flows

Less than 6 months

Between 6 months and 1 year

1-2 years

2-5 years

outflow

-

1,891,260

48,679,148

13,315,526

20,383,710

14,979,912

-

inflow

-

-

50,570,409

13,893,698

21,120,225

15,556,486

-

Forward foreign exchange contracts

30 June 2022

Forward foreign exchange contracts

34

Capital management

NZBS’ capital is its equity comprising crown equity, accumulated funds and the adverse event reserve. Equity is represented by net assets.

NZBS is subject to the financial management and accountability provisions of the Crown Entities Act 2004 which imposes restrictions in relation to borrowings, acquisition of securities, issuing of guarantees and indemnities and the use of derivatives.

NZBS manages its equity by managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure it effectively achieves its objectives and purpose, whilst behaving in a financially responsible manner in accordance with the financial management obligations imposed by the Crown Entities Act 2004.

88

35

Major variances against budget

The reported deficit result of $3,039,436 was $5,708,636 adverse to the budgeted surplus of $2,669,200. The reported deficit result was influenced by the following factors:

1. Gross revenues of $204,483,779 were +$4,281,221 (+2.09%) favourable to budget, mainly due to a mixed demand pattern that saw +12.88 per cent growth in immunoglobulin (Ig) demand (last year 5.43%). Plasma collections declined by five per cent from prior year, indicating the greater need to grow source plasma collection volumes to ensure NZBS continue to meet Ig production requirements. Other growth metrics saw fresh product demand increase by 13.8 per cent overall, total blood products usage grew +18.23 per cent, driven mainly by Ig growth.

Overall, services saw stronger demand $2,840,891 (+10.42%) increase. Interest revenue is $685,153 favourable which is mainly due to $65M additional funding received from the Ministry of Health in 2022/2023 financial year.

2. The cost of consumables and changes in inventory at $63,117,788 were $777,213 unfavourable to the budget. The main reasons for the unfavourable variances were:

- A higher cost of goods sold of $2,332,167 due to overall blood product revenue being higher than budget.

- Consumables cost overall exceeded budget by $339,803. With the lower-than-budget collection volumes this is an indication of the effect the inflationary pressures had on the cost of consumable items, and

- Fractionated blood product production variances totalling $1,894,757 favourable to budget. This was mainly due to inventory valuation movements and value of product out of the production process exceeding the budget expectations.

3. The mark to market revaluation movement of $1,167,756 exceeded the budgeted revaluation movement of $106,427 on the derivative financial instruments by $1,061,329. At balance date NZBS was holding AUD $60,763,723 in forward exchange cover at a weighted holding rate of 0.91245. This is the effect of the weakening cross rate between the NZD and AUD over the financial year.

4. Employee benefit expense exceeded budget by $3,474,357 overall. This was due to the rate of pay increasing by greater amount when compared to what has been budgeted. The rate increase primarily related to staff members on collective employment agreements where wage negotiation outcomes exceeded budgeted expectations. In addition to this the cost of contractors working on various projects exceeded budget by $712,469 and, due to the tight labour market, the overall spend on staff overtime exceeded budget by $876,563.

5. The balance of other variances was unfavourable to budget by $6,232,379 and was represented by a combination of:

- Higher IT systems and telecommunications spend, exceeding budget by $1,029,917 mainly due to higher computer facilities and maintenance expenditures, and computer software costs and budgeted capital spend needing to be expensed due to the application of PBE IPSAS 31.

- Higher distribution costs exceeding budget by $1,487,789 - mainly due to increased freight costs and Waikato collections all distributed to Auckland from the 2022 financial year exceeding budget expectations.

- Higher travel and accommodation costs $576,178 and higher employee expenses $528,844 due to additional staff returning to both domestic and overseas travelling and attending training courses in the 2023 financial year.

- New Zealand Bone Marrow Donor Registry (NZBMDR) collection cost of $1,378,824 not included in the budget as this cost is fully recoverable but shown separately in the Statement of Comprehensive Revenue and Expenses.

- Exchange rate variances in realised and unrealised foreign exchanges gains / losses differing to what was expected in the budget, totalling $913,700.

- Marketing costs exceeding budget by $550,747 - mainly due to the ongoing need to attract new donors to cover the increasing demand in blood products.

Note when comparing the Financial Statements to the Statement of Service Performance, the budget numbers shown in the Statement of Service Performance are recorded at an aggregated level whereas budget figures shown in the financial statements are broken out at a more detailed level.

The overall cash flow movement for 2022/23 was an increase in cash position of $1,958,385 resulting in a closing cash position at 30 June 2023 of $4,527,125 compared with the opening position of $2,568,740. The cash flow categories are commented upon as detailed below: (a) Cash outflow from Operating Activities at -$19,471,105 was $7,989,875 unfavourable to budget. Key factors influencing this outcome were: (i) Lower receipts from revenue of blood products and services as well as other revenue of $1,135,036 (ii) Higher supplier payments of $7,519,662 (ii) Higher payments to employees of $121,624 mainly due to higher staffing levels and FTE rate increases overall compared to budget, as already commented upon above. (iii) Other payments in total being favourable to budget by $786,447 overall. (b) Cash flows from Investing Activities at $44,394,878 were $4,637,541 favourable to budget mainly due to timing on capital expenditure, particularly the various property redevelopment programmes - in total a favourable variance to budget of $22,870,735 and an unfavourable variance to budget of -$18,500,000 due to the term deposits being maintained at $24,500,000 (as opposed to reflecting a Term Deposit closing balance of $6,000,000). (c) Cash flows from Financing Activities at +$65,824,368 were higher than anticipated in the budget by $4,728,138, this was mainly due to changes in funding requirement compared to what had been anticipated in the budget.

The equity position at 30 June 2023 totalled $102,725,687 (budget $109,202,613) representing an equity ratio of 77.58 per cent (budget 81.11%) and a debt ratio of 22.42 per cent (budget 18.89%). Tangible assets totalled $187,691,638 (budget $179,700,257) compared to last year’s $121,685,310.

89

NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

S TAT E M E N T O F P E R F O R M A N C E

Incorporating an assessment of NZBS’ Statement of Intent strategic goal delivery

Statement of Compliance with PBE FRS48 This Statement of Performance has been prepared in accordance with PBE FRS48 and is considered compliant with GAAP and Tier 1 Public Benefit Entity (PBE) standards.

The Statement of Performance is presented in this Annual Report on pages 90 to 99 and covers the reporting period from 1 July 2022 to 30 June 2023.

Cost Allocation Policy The associated costs of supplying blood and blood-related products and services are allocated to NZBS’ Output activities. This is achieved by using a set of predefined Activity Based Costing (ABC) measures and principles, and mapping the costs over the period to these drivers - ultimately allocating the costs to the individual activities. All direct production costs are allocated on this basis. These non-production costs are not allocated and remain as costs in the non-production responsibility centres.

Disclosure of judgement The Statement of Performance contains the performance indicators New Zealand Blood and Organ Service (NZBS) considers appropriate in monitoring its collective performance over the reporting period. Where performance indicators have either changed or are new indicators these will be clearly identified in the document.

The majority of the organisation’s performance indicators are objective in nature, being based on hard data outcomes provided by the organisation’s very comprehensive information systems. Subjective assessment has been applied in two instances; indicators 2.1 and 8.1.

New Zealand Blood Service - One output class and outcome Output

Outcome

NZBS’ primary revenue-generating activities are the sale of blood and blood-related products and the delivery of services related to these products. The revenue associated with the core output/activities represent one overall Output Class, comprising three interrelated outputs related to: • Donors (and patients) • Products and services • Demand management Each of which collectively contributes to the achievement of the NZBS Outcome.

Performance measures stated in financial years

Provision of a safe and effective blood service for all New Zealanders through supply and delivery of: • Fresh blood components;

• Fractionated Blood Products; and

• Other products and

Health needs of people in New Zealand are supported by the availability of safe and appropriate blood and tissue products and related services.

Target set

Historical trend line of actual outcomes

Outcome

2022/23

2020/21

2021/22

2022/23

Revenue of $198.20m with no price rebate to DHBs planned.

Revenue of $163.26 with no price rebate declared to DHBs.

Revenue of $173.86m with no price rebate declared to hospitals.

Revenue of $204.48m with no price rebate declared to DHBs.

Expenses of $195.53m

Expenses of $160.52m

Expenses of $176.22m

Expenses of $207.52m

Surplus of $2.67m

Surplus of $2.74m

Deficit of $2.36m

Deficit of -$3.04m

related services.

Financial performance commentary The 2022/23 financial year reported a deficit of $3.04m against a budgeted surplus of $2.67m, a $5.71m unfavourable outcome as compared to budget. This result was delivered off revenues of $204.48m which were +3.17 per cent favourable to budget but 17.61 per cent up on last year revenue levels.

This reported result was achieved in a financial year that was largely free of COVID-19 pandemic impact both in hospital demand trends and operationally.

The 2022/23 financial year saw a +12.88 per cent growth in immunoglobulin (Ig) demand (last year +5.43%) requiring plasmapheresis collection volumes of 101,448 collections underpinned by a solid buffer plasma level of 37.88 tonnes held at the start of the financial year.

Other growth metrics saw fresh product demand increase 5.43 per cent overall, total blood product volume growth of +7.91 per cent, Ig growth the primary driver. For the first time in a number of years services enjoyed a 4.21 per cent growth, attributable to hospitals now in a post-COVID pandemic environment.

In the 2022/23 financial year fractionated product production volumes totalled 104,377 kilograms of source plasma compared with last financial year’s 102,643 production kilograms. In 2022/23 NZBS lifted its commercial product use as a risk mitigation in managing the process migration to a new CSL Behring manufacturing facility in Melbourne Australia. Commercial product usage of Ig equated 18.50 per cent of total Ig issues, up from 13.8 per cent in the 2021/22 financial year.

Other factors contributing to the reported deficit result as compared to budget are further commented on below: • While the stronger revenues delivered a 1.2 per cent increase in gross margin as against budget, it was more than offset by cost increase pressures within the consumables mix (CO2 dry ice a major increase item) combined with a significant increase in distribution costs which were $1.30m above budget.

• Favourable inventory and manufacturing adjustments arising over the financial year resulted in an overall favourable outcome of +$13.61m. This compared with last year’s +$8.2m of inventory adjustments.

• Labour costs had a major impact as various awards were settled and pay equity impacts were crystallised. Labour costs were $3.47m above budget and $11.78m up on last year.

• Operational expenditure excluding labour, consumables, distribution, and production related expenditures totalled $52.24m which

was $6.24m above budget and $10.46m up on last year. Strong investment in IT infrastructure continued over the financial year with cybersecurity remaining a strong focus. Marketing expenditure was $550k up on budget and was $845k over the prior year as a major focus was targeting the maintenance and growth, where possible, of donor panels in a post-COVID donation environment. In December 2022 NZBS assumed responsibility for the New Zealand Bone Marrow Donor Registry which added $1.38m in costs not previously budgeted for.

• Expiry cost at $3.97 was unfavourable to budget by -$1.11m, a reflection of the ongoing challenge of endeavouring to align collections to usage tensioned by the need to ensure hospital supply needs can be met 24/7 anywhere in New Zealand.

• Unrealised foreign exchange movements when marked to market at balance date were unfavourable to budget by -$1.09m, reflecting the movement in opening/closing positions in the AUD:NZD cross rates due to weakening of the NZD over the financial year.

• In the current operating environment and having regard to the forward outlook, the Board elected not to declare a price rebate to hospitals for the 2022/23 financial year.

Also refer to Note 35 of the Financial Statements for further commentary on the financial result.

90

1. External output measures reported in this section of the Statement of Service Performance relate to key products and services which contribute to achievement of NZBS’ Enduring Outcome to provide a range of products and services which are appropriate to New Zealanders health needs and priorities.

Performance Measures stated in Financial Years Product and service availability 1.1 Key products and services are available at all times (24 x 7). Measure is instances when 24/7 is not achieved, and which had a negative clinical outcome.

Target Set

Historical Trend Line of Actual Outcomes

Result

2022/23

2020/21

2021/22

2022/23

TARGET 0

OUTCOME 0

OUTCOME 0

OUTCOME 0

Note for clarification For a failure to happen, it must have occurred within the control of the New Zealand Blood and Organ Service (NZBS) and be attributable to NZBS managed systems and processes.

2. External output measures related to Demand Management and the relationship with DHBs which contribute to achieving Strategic Goal 4 – NZBS relationships with other health sector entities are mutually supportive and productive.

Performance measures stated in financial years 2.1 Planning and communication with Te Whatu Ora hospitals NZBS will demonstrate a productive and supportive relationship with Te Whatu Ora at all levels, whether hospital, regional or national office, consistent with maintaining a strategic partnership, including proactively engaging with appropriate Te Whatu Ora personnel to ensure they are fully informed around all relevant matters in what NZBS assesses as a strategic relationship.

NOTE: this measure has changed over recent years.

Target set

2020/21 OUTCOME

OUTCOME

OUTCOME

NZBS demonstrates a productive and supportive relationship with Te Whatu Ora at all levels of the strategic partnership, underpinned by the timely and relevant provision of information over the course of the 2022/23 financial year.

NZBS received the following feedback from the Lead DHB CEO on meeting this target.

It is my pleasure to reaffirm the positive and proactive partnership between NZBS and the District Health Boards across Aotearoa. I’d like to acknowledge the leadership of Rosemary Clements over a number of years as the lead CE, a role which has now passed to me. While this has been a challenging year in unexpected ways NZBS, through Sam Cliffe (CE) has remained accessible, available and attentive to the challenges faced by both NZBS and the DHB and is always available to support and guide the sector in a positive and constructive way.

The pricing discussion between NZBS and the DHBs was amicable and both parties have come to a mutually acceptable outcome very much driven by the established relationship between us.

I look forward to another year’s involvement in this complex environment of NZBS. Attributed to Lead DHB CEO Pete Chandler

NZBS has maintained contact with the Lead DHB CEO over the 2021/22 financial year.

The announcement of the health reforms disrupted the normal engagement process in Q4 making this measure difficult to meet as originally set.

However, NZBS has, since balance date, established a CEO to CEO relationship with Te Whatu Ora Health New Zealand - noting this will be the basis for ongoing dialogue as the New Zealand Blood and Organ Service is committed to working for the benefit of the health sector in the broadest sense.

NZBS has strived to establish working relationships across Te Whatu Ora at the: • Clinical level, including with hospital transfusion committees • Procurement level, with detailed monthly volumes and purchase information provided. Some tailored reports are a work in progress.

• CEO level, with communications setting out strategic direction and planned initiatives along with annual price setting considerations.

The relationship post-the health reforms remains a work in progress with NZBS committed to working for the benefit of the health sector in a collective sense.

2.2 NZBS reports for Te Whatu Ora hospitals Monthly demand management reports outlining purchase volumes by key product line are provided to Te Whatu Ora hospitals to help them manage local usage and costs.

Target set

2021/22

Outcome

2022/23

Measured at CEO to CEO level.

Performance measures stated in financial years

Historical trend line of actual outcomes

Historical trend line of actual outcomes 2021/22

2022/23

Outcome

2022/23

2020/21

2022/23

Reports are provided to Te Whatu Ora hospitals by the 10th working day of the following month.

OUTCOME

OUTCOME

OUTCOME

Monthly reports detailing product use and expiry information were all provided within set timeframes to all 20 DHBs throughout the 2020/21 financial year.

Monthly reports detailing product use and expiry information were all provided within set timeframes to all 20 DHBs throughout the 2021/22 financial year

Monthly reports detailing product use and expiry information were all provided within the set timeframes to all Te Whatu Ora hospitals throughout the 2022/23 financial year**

** The average days to distribute the monthly Demand Management Report package by hospital over the course of the 2022/23 financial year was four working days (last year four working days).

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2.3 Clinical Oversight Programme All Blood Banks located in main Te Whatu Ora hospitals (other than the six regions where NZBS is responsible for blood bank provision) will receive at least one NZBS Clinical Oversight visit (and audit report) per year to enable them to meet the requirements of ISO 15189 for IANZ accreditation.

2.4 Organ Donation New Zealand (ODNZ) – performance monitoring NZBS to provide an ODNZ performance monitoring report to Manatū Hauora Ministry of Health on a quarterly basis or as agreed with them.

Haemovigilance - Patient safety (measured in calendar years)

2022/23

2020/21

2021/22

100% To achieve a minimum one clinical oversight visit and report per year for all non NZBS managed blood banks located in main Te Whatu Ora hospitals

The 2020/21 financial year was a catch-up year post COVID-19 delayed oversight visits from 2019/20. All planned oversight visits were undertaken and reported upon during the 2020/21 financial year..

COVID-19 impacted outcome Northland hospitals 2021/22 oversight visits were impacted by COVID-19 lockdowns and the Northland / Auckland border restrictions.

All other planned visits were made.

2022/23

2020/21

2021/22

2022/23

Performance monitoring reports, as agreed, to be provided to Manatū Hauora Ministry of Health on a quarterly basis.

OUTCOME NZBS assumed responsibility for ODNZ from 30 November 2020 and has maintained reporting requirements to the Manatū Hauora Ministry of Health over the balance of the financial year.

OUTCOME Performance monitoring reports were provided to Manatū Hauora Ministry of Health on a quarterly basis.

The 2021 calendar year ODNZ Annual Report was published in April 2022 on the ODNZ website.

OUTCOME Performance monitoring reports were provided to the Manatū Hauora Ministry of Health on a quarterly basis. The 2022 calendar year ODNZ Annual Report was completed in the June 23 Quarter and published in July 2023 on the ODNZ website.

Target set

CALENDAR YEARS

2022/23 OUTCOME During the 12 months to 30 June 2023 NZBS undertook 31 clinical oversight visits, in accordance with the Clinical Oversight programme, around New Zealand’s hospital blood banks.

100% of planned visits were made over the financial year.

Outcome

2021

2019 OUTCOME

OUTCOME

OUTCOME

2.5.1 To promote risk awareness and best practice in transfusion, NZBS will publish, in any given financial year, an annual Haemovigilance Report for the nominated calendar year and will share this information with all hospitals to assist them to reduce the incidence of adverse transfusion related events.

2021 Annual Haemovigilance Report published and provided to all hospitals within the financial year and posted on NZBS website.

The 2019 Annual Haemovigilance Report was distributed in November 2020 to all DHBs and made available on the NZBS website.

2020 Annual Haemovigilance Report was published and distributed to all hospitals in December 2021.

The 2021 calendar year Haemovigilence report was provided to Te Whatu Ora hospitals in September 2022.

The 2021 report was also published on the NZBS website at that same time.

2.5.2 Number of transfusion-related adverse events occurring as a result of an NZBS “system failure” reported to the National Haemovigilance Programme, with a severity score greater than 1 and an imputability score classified as likely/ probable or certain

Relates to adverse recipient reactions in calendar year 2021. While zero is always the desired outcome it not considered appropriate to set an advance target for this measure.

OUTCOME

OUTCOME

OUTCOME

0

0

0

2.5 Haemovigilance Reporting - Patient Safety

2020

2021

The wording for this measure was refined in the 2020/21 financial year. The changes made continue to reflect the intent of the original measure.

3. Internal measures related to Products and Service Quality which contribute to achievement of Strategic Goal 2 – NZBS achieves the highest possible Safety and Quality standards in all that it does.

Performance measures stated in financial years 3.1 Donation testing Each donation will be tested prior to use in accordance with the NZBS Manufacturing Standards (as approved by Medsafe).

Target set

Historical trend line of actual outcomes

Outcome

2022/23

2020/21

2021/22

2022/23

Target set

OUTCOME

OUTCOME

OUTCOME

To maintain 100% tested donation Testing

100% of donations tested

100% of donations tested

Over the 12 months to 30 June 2023 NZBS tested 100% of its donations

No product is released for issue to a patient until it has completed mandatory testing or is released under the exceptional release protocol.

3.2 Regulatory compliance - Medsafe NZBS will ensure it maintains Medsafe licences for its six hub sites 100 per cent of the time, to provide an assurance of GMP compliance.**

Target set

OUTCOME

OUTCOME

OUTCOME

To maintain 100% GMP Licensing Compliance

100% GMP Licensing compliance maintained over the financial year

100% GMP Licensing compliance maintained over the financial year

100% GMP Licensing compliance maintained over the financial year

**Note: NZBS is required to maintain a Medsafe licence in order to manufacture medicines. The Medsafe licence imposes on NZBS the requirement to maintain, at all times, a mandatory compliance status with its GMP licencing requirements.

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3.3 Regulatory compliance – IANZ (International Accreditation New Zealand) NZBS will ensure it maintains IANZ accreditation 100 per cent of the time, at all of its diagnostic laboratories.

Target set

OUTCOME

OUTCOME

OUTCOME

To maintain 100% IANZ accreditation

100% IANZ accreditation maintained

100% IANZ accreditation maintained

100% IANZ accreditation maintained

Note: IANZ is the national authority for accreditation of testing and calibration laboratories, inspection bodies and radiology services.

3.4 Regulatory compliance – ASHI (American Society of Histocompatibility and Immunogenetics) NZBS will maintain ASHI accreditation 100% of the time at the New Zealand Transplantation and Immunogenetics laboratory (NZTIL).

• ASHI accreditation is a programme to evaluate

laboratory personnel, procedures and facilities to determine compliance with published ASHI standards. Maintaining ASHI accreditation is a mandatory NZBS requirement.

Target set

OUTCOME

OUTCOME

OUTCOME

100% ASHI accreditation maintained.

100% ASHI accreditation maintained.

100% ASHI accreditation maintained.

Biennial on-site audit to be completed and 100% ASHI accreditation to be maintained

Biennial on-site audit was completed and 100% ASHI accreditation has been maintained

A virtual on-site audit was successfully completed in May 2022.

NZTIL successfully demonstrated 100% compliance with all mandatory ASHI standards.

NZTIL now holds a new ASHI accreditation certification from 1 September 2022 to 31 August 2024.

4. Internal measures related to donors which contribute to achievement of Strategic Goal 3 – NZBS maintains a sustainable donor population capable of supporting ongoing product demand in New Zealand.

Performance measures stated in financial years 4.1 Donor population NZBS maintains a donor population capable of meeting the ongoing demand for blood and blood products.

• Active whole blood and apheresis donor panels

Target set 2022/23

Historical trend line of actual outcomes 2020/21

2021/22

Outcome 2022/23

These reported donor numbers represent the donor population required to meet demand, noting that within any given year this flexes constantly to ensure demand alignment and minimise expiry.

123,222

112,388

115,428

119,136

Note: NZBS actively manages its donor population of whole blood and apheresis donors at levels required to support ongoing demand, meaning the panels may be above or below the original target set. The closing donor panel numbers as at 30 June 2023 reflected the focus on growing the plasmapheresis panel +8.06 per cent over last year to meet the need for source plasma. The latter is essential to keep pace with the demand for immunoglobulin product (+12.9% growth) experienced over the 2022/23 financial year. Also see Section 4.4.

Performance measures stated in financial years 4.2 Donor satisfaction Measure of overall satisfaction with the quality of service experienced at the time of donation.

• 90% of donors rated their experience/satisfaction with the service as 8 or higher out of 10

Target set 2022/23

Greater than 90% satisfaction with the NZBS service

Outcomes

Outcome

2020/21

2021/22

2022/23

OUTCOME

OUTCOME

OUTCOME

94.6% versus a target set of greater than 90% surveyed satisfaction.

94.8% versus a target set of greater than 90% surveyed satisfaction.

96% versus a target set of greater than 90% surveyed satisfaction.

Note: This satisfaction metric is ascertained by internal NZBS donor surveys conducted six-monthly by the Marketing function over the financial year. The surveys for the 2022/23 financial year were undertaken in November 2022 (96.90%) and May 2023 (95.13%). The reported donor satisfaction figure is the average of the two conducted surveys.

Performance measures stated in financial years

Target set 2022/23

4.3 Targeted donor recruitment strategies 4.3.1 Recruit 2,900 new and reinstated Māori donors to the active donor panel (each year measure).

2,900

Historical trend line of actual outcomes

Outcome

2020/21

2021/22

2022/23

OUTCOME

OUTCOME

OUTCOME

COVID-19 impacted 2,691 (92,79% of target set)

COVID-19 impacted 2,710 (93.34% of target set)

COVID-19 impacted 3,003 (103.6% of target set)

Note: The measures targeting new and reinstated donor levels is considered the most appropriate performance monitoring metric for these target donor categories.

2022/23 is the first financial year in three years that is being reported largely free of any COVID-19-related impacts.

4.3.2 Recruit 11,000 new and reinstated youth donors between the ages of 16-25 on the active donor panel - attracting youth donors helps to futureproof the service, encouraging new donors to replace those retiring.

11,000

OUTCOME

OUTCOME

OUTCOME

COVID-19 impacted 9,820 (89.27% of target set)

COVID-19 impacted 7,552 (68.65% of target set)

8,469 achieved which was better than last year but only 77.0% of the target set **

** The level of target achievement, while better than last year, did not meet the set target as NZBS continued to see remnants of COVID-19 impacting this area (secondary school and university mobile drives having not yet returned to pre-COVID-19 levels).

Note: For clarity, the definition of a new donor is a donor who has made a valid donation for the very first time in New Zealand. The definition of a reinstated donor is a person who has made at least two donations, of which one blood donation was made within the last 12 months and the interval between that donation and the prior donation is more than 24 months - excluding autologous and therapeutic donations.

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4.4 Raw material (Collections) inputs – based on demand outcomes and forecasts

Target 2022/23

Outcome 2020/21

Outcome 2021/22

Outcome 2022/23

4.4.1 Total Whole Blood donations

119,098

115,717

117,535

121,117

4.4.2 Total Plateletpheresis donations

2,748

2,793

2,739

2,759

4.4.3 Total Plasmapheresis donations

108,000

101,826

106,890

101,448

4.4.4 Total donations

229,846

220,336

227,164

225,324

Comment:The target level for collected donations is not fixed, rather it is flexed to meet the demand profile as monitored over the course of the financial year. In the current financial year NZBS increased whole blood collections by +3.0 per cent but saw a decrease of -5 per cent in plasmapheresis collections, which required the use of plasma buffer stock held at CSL Behring’s Melbourne facilities.

5. Internal measures related to People which contribute to achievement of Strategic Goal 5 – NZBS has a sustainable, competent and engaged workforce.

Performance measures stated in financial years

Target set 2022/23

5.1 Annual employee turnover 14.0% 5.2 Employee Engagement Index Score from biennial Staff Engagement Survey

Survey planned utilising new software platform to reset benchmark

Historical trend line of actual outcomes

Outcome

2020/21

2021/22

2022/23

OUTCOME

OUTCOME

OUTCOME

11.76%

16.69%

19.19%

No Survey

COVID-19 Impacted

OUTCOME

Reset for FY23

The ‘Our Voices’ engagement survey used the Peakon Employee Voice tool using Peakon standard engagement questions and measures.

The Peakon tool was considered a good fit with the organisation and was easy to use. There was an 80% survey participation rate (639 employees) with an overall score of 7.0 out of a maximum 10. This was assessed as a good result given the recent challenges faced in the health sector.

6. Internal measure related to Development which contributes to achieving Strategic Goal 6 – NZBS uses international ‘best practices’ and internal research and development capabilities to improve and develop services for the New Zealand health and disability sector.

Performance measures 6.1 Auckland Facility Redevelopment Project – 71 Great South Road Site Successful completion of key project milestones in accordance with the project’s rolling work programme, as set at the start of a given financial year.

Delivery focus, financial year-to-financial year, is on those stages targeted for completion within the financial year under review, acknowledging the 71 Great South Road redevelopment is a complex multi-year undertaking.

Target set

Historical trend line of actual outcomes

2022/23

2020/21

Key milestones achieved by 30 June 2023 in accordance with the project’s work programme as set at the start of the financial year.

Outcome

2021/22

2022/23

OUTCOME

OUTCOME

OUTCOME

During the 2019/20 During the 2020/21 financial year good progress continued to be made over the financial year with all preStage 3 works completed in accordance with work programme prior to 30 June 2021.

Refer to the additional commentary below for more detail.

Despite some COVID-19 response disruption the work programme had sufficient flexibility to ensure the completion of all pre stage 3 works prior to 30 June 2021 was achieved.

COVID-19 impacted Stage 3, Phase 1 sub-stages 3A-3C -construction activity started 15 November 2021.

Stage 3, Phase 1 sub-stage 3A has been impacted by COVID-19 and industry issues and will be finished some eight weeks later than original programme - in mid-July 2022.

Stage 3, Phase 1 comprises Stages 3A, 3B and 3C. Stage 3C targeted for completion by 30 November 2023.

Stage 3B became operational in April 2023 Stage 3C works started 29 April 2023 and are tracking to programme with completion expected early October 2023.

Additional Commentary on 2020/21 Financial year Outcome: Works successfully completed in the 2020/21 financial year were; stage 1B – Atrium Courtyard, Stage 2B – Ambient Store Facilities and Staff amenities, Stage 2C – Service yard strengthening for heavy vehicle traffic, Stage 2D – Training Facilities, Stage 2E – Generator facilities with a new higher specification generator, Stage 2A – civil works – southern driveway realignment for improved safety of on-site traffic management.

6.2 Other major infrastructure investments 6.2.1 New Highbrook National Facility Stage 1 comprises a Logistics facility accommodating refrigerated containers, plasma processing and handling, national refrigerated storage, and administration functions Stage 2 comprises the advanced cellular therapies and tissue bank laboratories and multiple cleanroom facilities.

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Target 2022/23

Outcome 2020/21

Outcome 2021/22

New Measure

New Measure

TARGET To have completed the Stage 1 build by no later than 30 June 2023.

Outcome 2022/23 OUTCOME Stage 1 fit-out started late in the June 2023 quarter under the appointed primary contractor Savory Construction Limited.

6.2.2 New Waikato Hub An integrated facility comprising a donor centre, therapeutic facilities, logistics, administrative support, and storage hub - servicing the Waikato region

6.2.3 New Tauranga Donor Centre Establishing a new Tauranga donor centre at 93 Cameron Road Tauranga

7.

TARGET To have completed the Stage 1 build by no later than 30 June 2023.

OUTCOME New Measure

New Measure

New Measure

New Measure

TARGET To have met key milestones in accordance with the agreed work programme.

The Hub facility programme saw delays outside NZBS’ control. The adjusted timeline has the new donor centre set to open 14 August 2023 and NZBS fully vacated from its existing site prior to 31 December 2023.

OUTCOME The new Tauranga donor centre development experienced delays over 2022/23. A reset fit-out programme still has completion inside the existing site exit date of 31 March 2024.

Internal measures related to Financial Sustainability contributing to achievement of Strategic Goal 7 – NZBS is a financially sustainable organisation operating effectively and efficiently.

Performance measures stated in financial years

7.1 Financial management Assure cost efficiency and value for money management by maintaining financial sustainability in a demand-driven environment (i.e. changes in product demand - mix and volume by the hospitals, impacts on NZBS’ financial result).

Target set

Historical trend line of actual outcomes 2021/22

Outcome

2022/23

2020/21

2022/23

Achievement of budget or better.

Budget set as a surplus of $2.67m on revenue of $198.20m.

OUTCOME

OUTCOME

OUTCOME

A better than budget reported surplus of $2.74m on revenues of $163.26m..

A worse than budget reported deficit of $2.36m on revenues of $173.9m.

A worse-than-budget reported deficit of $3.04m on revenues of $204.48m.

No rebate planned to hospitals

No rebate paid to hospitals

No rebate paid to hospitals

No rebate paid to hospitals

8. Meeting government expectations – commitment to Government’s sustainability targets Performance measures stated in financial years 8.1 Sustainability – Carbon Reduction Initiative NZBS is committed to reducing its greenhouse gas (CHC) emissions and has set a target of a reduction in carbon footprint intensity of 15 per cent within five years of the baseline measurement being established (in accordance with rule 59b of the Government’s reduction programme).

Target set 2022/23 In the 2022/23 financial year NZBS will commence reduction initiatives towards a 21% reduction from baseline by the 2025/26 financial year.

Historical trend line of actual outcomes 2020/21

2021/22

Outcome 2022/23

OUTCOME

OUTCOME

OUTCOME

In the 2020/21 financial year NZBS established its baseline carbon footprint measurement for future monitoring.

In the 2021/22 financial year NZBS captured its second year of carbon reduce certification and carbon footprint measurement.

In the 2022/23 financial year NZBS firmed up its strategic approach to sustainability and established its sustainability ambitions.

It also captured its third year of carbon reduce certification along with its carbon footprint measurement.

Additional commentary is provided below.

Additional commentary on sustainability: NZBS has aligned carbon emissions reporting timeframes, reduction ambitions, and amended base year reporting with the Carbon Neutral Government Programme (CNGP). This means that NZBS has captured and reported unaudited data for a fourth year of reporting and will be using the 2022/23 financial year as the base year to monitor future reductions against its performance measure. The data will be audited and included in NZBS’ Emissions Reduction Plan in the 2023/24 financial year (in line with the guidance of CNGP). Based on CNGP guidance, NZBS has amended its ambition targets to reducing 42 per cent of carbon intensity by 2030.

Overall assessment of the 2022/23 financial year performance NZBS delivered on its core responsibilities of ensuring the supply of critical services, blood and blood products to the people of New Zealand throughout the course of the 2022/23 financial year - often in the face of adverse weather events, with Cyclone Gabrielle being the major weather event.

During the year NZBS also assumed, from 1 December 2022, responsibility for the New Zealand Bone Marrow registry (NZBMDR). This function adds to others that have recently come under the NZBS umbrella, including Organ Donation New Zealand (ODNZ) and the National Heart Valve Bank. All of these services have a natural alignment with NZBS’ core capabilities and deliverables.

NZBS has maintained its focus on its major infrastructure investment programme – the planning, development, and execution of which has already been referenced in this document (Section 6). The four major development projects referred to above will, over the next two financial years, deliver facilities of a standard and capability that ensures NZBS’ facilities’ network is increasingly fit-for-future-purpose over the medium term.

As the Annual Statement of Performance details, NZBS achieved all of its core deliverables throughout the 2022/23 financial year. In other KPIs, one target was identified as being impacted by the remnants of COVID-19 but, by and large, the organisation’s broad service delivery responsibilities operated free of any pandemic-related impacts for the first time in three financial years. While it was disappointing that not all KPIs were met, it did not detract from the overall assessment that NZBS had another year of overall satisfactory performance, delivering across all its service touch points with the New Zealand health sector.

The next section of the Statement of Performance assesses NZBS’ performance in delivering the strategic goals contained in the Statement of Intent (SOI) 2020-2024.

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Strategic Goal 1 – Building foundations for growth The contributing elements to building strong foundations are People and Capability and Infrastructure.

People and capability The 2022/23 financial year saw NZBS emerge from COVID-19’s shadow. Our staff no longer had to self-isolate if they had been household contacts of a case, and mask-wearing and mandatory vaccination requirements also lifted. This easing of COVID-19 restrictions enabled us to shift our focus from pandemic emergency management to wellbeing and building sustainable workforce and employment practices.

• NZBS’ 2022/23 financial year turnover remained elevated at a whole-of-year average of 19.2 per cent. However, by the June 2023 quarter turnover was, positively, trending down and sitting at 16.5 per cent.

• Recruitment agency costs decreased significantly from an annual $269K (FY20) to $48K (FY21). This reduction was in part due to NZBS no longer

using recruitment agencies for core business needs in the primary recruitment areas of nurses and scientists. This change in practice coincided with a sharp reduction in recruitment activity over the COVID-19 pandemic period.

NZBS continues to use recruitment agencies for hard-to-recruit positions, e.g. executive director, information services’, project management, finance, donor relations coordinator, and logistics team leader roles.

The recruitment spend since FY21 increased to $192K in FY23, which is 28.6 per cent lower than FY20, exceeding the original 25 per cent reduction target.

• NZBS has successfully managed its staffing needs, associated with delivering the Plasma Strategy. The latter aims to maintain a high level of selfreliance for plasma-based fractionated products in New Zealand. The strategy document forecast a potential net increase of 105 FTE across all NZBS functions to meet the forecast target of 125,000 collections by FY23.

Actual collections in FY23 totalled 225,324 with FTEs totalling 801.34, delivering a self-reliance metric of 81.80 per cent for plasma-based fractionated products supplied to New Zealand hospitals.

Listening to our people and creating a positive employee experience throughout the entire employment lifecycle has been a key focus over the financial year, as evidenced by a number of initiatives including:

• The Our Voices staff survey held in November. Eighty per cent of staff responded to the survey and the 8,366 ‘free text’ comments received provided a rich source of feedback and ideas to further explore and develop.

• With leadership development identified as a critical activity for organisational success and employee wellness and wellbeing at work, the NZBS

Foundations of Leadership Programme began in November 2021. The programme comprised six cohort groups who completed an eight-module leadership programme over a rolling eight-month period. The pace of the roll-out was impacted by COVID-19 lockdowns and associated travel restrictions. However, by July 2023, 69 (80%) of our people leaders had completed all eight leadership programme modules. The remaining 17 participants (20%) were set to complete their programme modules by August 2023.

The Foundations of Leadership programme is now embedded as a rolling programme of training with all new managers beginning this course within 12 months of starting in their roles.

• We also recognised excellence and achievement via our annual Vital Awards. Nominations are submitted by staff, for staff, across three categories; Service Excellence, Excellence in Improvement and Innovation, and Spirit of NZBS. These awards are coveted and showcase outstanding work across the organisation.

Employment bargaining activities were a dominant feature of the financial year. NZBS has single employer agreements with three health sector unions: New Zealand Nurses Organisation (NZNO), Public Service Association (PSA), and the Association of Salaried Medical Specialists (ASMS).

Our agreements with them are tailored to reflect our working environment, while also recognising the wider labour market conditions to ensure NZBS remains an attractive employer within the broader health sector.

Overall, NZBS considers good progress has been made in the development of our people and their capabilities.

Infrastructure

NZBS’ infrastructure investment journey continued over the 2022/23 financial year as redevelopment works continued apace. This work is to ensure identified future capacity requirements are aligned with the forecast demand outlook.

The development works being undertaken in the last financial year continued to progress in the 2022/23 financial year, including:

• The ongoing multi-year redevelopment of 71 Great South Road (71GSR) Auckland. This saw Stage 3, Phase 1 executed to programme with sub-

stages 3A and 3B becoming operational in the 2022/23 financial year. Staff are delighted to now be working in these modern, fit-for-purpose facilities.

Sub-stage 3C remains on track to become operational in late December 2023.

• The 71 GSR redevelopment has been a multi-year project that started in November 2018. Since that time the programme has delivered a donor centre, manufacturing facilities, specialist laboratories, some logistics functions, and general administration requirements.

• At the end of Stage 3, Phase 1, there will be a redevelopment pause pending the completion of Stage 1 of the Highbrook satellite site. Highbrook Stage 1 is planned to be operational in April 2024, enabling at least two sub-stages of Stage 3, Phase 2 to be completed within the 2024/25 financial year.

• The development of the Highbrook satellite site made real progress in the latter part of the 2022/23 financial year. This accelerated Stage 1 progress will see logistics, storage and plasma processing functions operational by April 2024.

The completion of the more complex Stage 2 works, encompassing cleanrooms and advanced cellular tissue laboratories, will be operational by December 2025.

The new Highbrook facility will be capable of handling refrigerated containerisation for the efficient shipping of source plasma to Australia for the manufacture of fractionated products.

NZBS is committed to ensuring fractionated product demand in New Zealand continues to be ‘supply chain-protected’ via a high level of locallysourced plasma being provided for fractionated product manufacture.

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The move away from air freight to containerisation and shipping positively impacts the supply chain, delivering benefits that include:

- More cost-effective shipping - Eliminating the use of polystyrene boxes, with a switch to cardboard cartons - Increasing freezer capacity utilisation due to the use of smaller cartons - Eliminating some 77 tonnes of dry ice from the NZBS supply chain. This significantly reduces the organisation’s carbon footprint and represents the delivery of a major sustainability initiative.

The first container shipment is planned from Christchurch in the September 2023 quarter.

• A new Waikato hub facility at 109 London Street Hamilton progressed well over the 2022/23 financial year and a progressive exit from our current site on the Waikato Hospital campus is planned. The new Donor Centre is on track to open in early August 2023. The remaining functions at the existing Ohaupo Road site will transition in the first half of the 2023/24 financial year, enabling the site to be handed back to Te Whatu Ora – Waikato Hospital, prior to the agreed exit date of 31 December 2023.

• The new Tauranga donor centre located at 93 Cameron Road Tauranga saw slow progress in the early part of 2022/23 but accelerated in the second half with its planned fit-out expected to start early in the December 2023 quarter. The fit-out programme has tight timelines as the existing donor centre site is required to be vacated by 31 March 2024. NZBS is working to avoid a ‘double decant’ situation.

• NZBS successfully completed its capital works at Waikato and Canterbury hospitals with new blood banks opened as follows: - The Christchurch hospital blood bank became operational in July 2022, - The Waikato hospital blood bank became operational in November 2022.

In summary, the 2022/23 financial year represented a high-activity year for infrastructure development. Good progress was made in executing the multiyear capital plan, designed to ensure the collection network is suitably equipped to meet New Zealand’s future demand.

Strategic Goal 2 - Delivering operational effectiveness The four contributing elements delivering operational effectiveness comprise Clinical Excellence, Products and Services’ Expansion, and Process-driven decision-making incorporating Environmental Sustainability - all underpinned by Fiscal Responsibility.

Clinical excellence

• NZBS met 100 per cent of demand, 24-hours-a-day, seven-days-a-week, in often challenging circumstances - including severe weather events such as Cyclone Gabrielle - during the 2022/23 financial year.

• NZBS worked to maintain its self-reliance Plasma Strategy. This requires that enough plasma be collected to enable 85 per cent of New Zealand’s

immunoglobulin product to be manufactured from locally-sourced plasma. This target level is assessed as the baseline that safeguards New Zealand’s immunoglobulin product supply.

In the 2022/23 financial year the baseline target was flexed as the process migration to a new manufacturing facility at CSL Behring was carefully managed, mitigated in part by higher use of commercial product. In the 2022/23 financial year 18.8 per cent of total immunoglobulin issued was commercial product.

• We have continued the roll-out and refinement of IgO – a mobile phone app to monitor the appropriate use of high-value immunoglobulin products throughout New Zealand hospitals.

• NZBS continued its implementation of the ISBT 128 international labelling project. ISBT 128 is an international labelling convention which, on

completion, will benefit the whole health sector. It is of particular importance in maintaining accreditation for those hospitals who participate in certain international clinical trials for the benefit of patient health outcomes. Current planning anticipates a go-live date in March 2024.

• In 2022/23 NZBS maintained its accreditation and compliance obligations with all pertinent regulatory bodies across its laboratories, manufacturing, and testing operations.

• 100 per cent testing was maintained for all blood donations.

• Work continued on developing a comprehensive, multi-disciplinary clinical governance framework.

• NZBS was delighted to firstly see the level of funding commitment in the 2023 Crown budget for both the ongoing operation of Organ Donation New Zealand (ODNZ) and, in the 2023/24 financial year, the establishment of the National Agency for Organ Donation.

Products and services expansion

• On 1 December 2022 the New Zealand Bone Marrow Donor Registry (NZBMDR) transferred from Leukaemia and Blood Cancer New Zealand (LBC) to the New Zealand Blood and Organ Service (NZBS). The integration went very smoothly with no interruption to the excellent work undertaken by this service.

• The June 2023 quarter saw the Process Migration Project culminate in the initial manufacture of New Zealand immunoglobulin product in the new CSL Behring facilities in Melbourne, Australia.

This project represents a one-in-50-year change event culminating, over the next two years, in a full change and rebranding of NZBS-manufactured fractionated products, with some low-volume product switching to commercial equivalents.

The planned new products include:

- Privigen NZ (formerly Intragam P), - Hizentra NZ, (formerly Evogam), - Alburex NZ, (formerly Albumex) and - Beriplex NZ (formerly Prothombinex) The new commercial products will be Gammunex (third-line alternate Ig product) and Kybernin P (commercial ATlll product replacing Thrombotrol).

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S TAT E M E N T O F P E R F O R M A N C E

Incorporating an assessment of NZBS’ Statement of Intent strategic goal delivery

• All supply agreements have been updated between 2020 and 2022 for Te Whatu Ora (previously DHBs) and private hospitals.

• The implementation of a national process and quality standards for therapeutic products to align them with other NZBS services is progressing as planned, with steady alignment of laboratory and clinical processes. This process is expected to be completed in the 2025/26 financial year.

• The delivery of consistent therapeutic service provision throughout the country, providing a solid baseline to constantly improve service, remains in

progress. This internal work is progressing in parallel with the therapeutic products work. Increasing service provision to more hospitals will reflect the requirements of Te Whatu Ora.

• Funding to start implementing the Increasing Deceased Organ Donation and Transplantation: a National Strategy (2017) becomes available from 1 July 2023. A plan for the 2023/24 financial year has been agreed with the NZBS Board and Manatū Hauora.

Process-driven In the 2022/23 financial year NZBS firmed its strategic approach to sustainability and established its sustainability outcomes and goals, as detailed below: Outcome 1 - Meet governmentmandated decarbonisation targets

Outcome 2 - Develop a common language

Outcome 3 - Embed sustainability into decision making

Outcome 4 - Ethically and sustainably source from our providers

Goal 1 Reduce emissions without compromising operational effectiveness/capability

Goal 2 Develop a common language

Goal 3 Embed sustainability into decision making

Goal 4 Ethically and sustainability source from our providers

Identify where emissions reductions can be made

Clearly define sustainability and the importance of NZBS’ sustainability work programme

Identify how and where we can improve and embed sustainable practices

Assess third party contracts to deliver value for money and support sustainability outcomes for NZBS and New Zealand.

Begin where largest reduction can be made

Build knowledge and understanding of sustainability

Work with our NZBS partners to leverage sustainable outcomes

Support business units to identify initiatives that work for them.

Leverage funding opportunities to transition faster where possible Circular economy thinking to become business as usual (BAU).

The organisation also:

• Captured its third year of carbonreduce certification and carbon footprint measurement.

• Aligned its carbon emissions’ reporting timeframes, reduction ambitions and amended base year reporting for the Carbon Neutral Government

Programme (CNGP). This means NZBS has captured and reported unaudited data for its fourth year of reporting and will be using the 2022/23 financial year as the base year to monitor its future reductions against. The data will be audited and included in NZBS’ Emissions Reduction Plan in the 2023/24 financial year (in line with the guidance of CNGP).

• Based on CNGP guidance, NZBS has amended ambition intensity targets to reducing 42 per cent carbon intensity by 2030.

Other monitoring metrics within this area are reported below:

• Implementation of capacity and productivity planning models have ceased due to their bespoke design and the level of complexity involved in

maintaining the models. However, the Sales and Operational Planning (SoP) process is now well established and enables key planning oversight across the operational units.

A review of potential Enterprise Resource Planning (ERP) systems is planned for the 2024 calendar year.

• A set of organisational KPIs are being developed at functional/Directorate level with the expectation that they be progressively integrated into an

organisational master set of KPIs, and regularly monitored. Importantly, the Sales and Operational Planning framework provides a clear set of KPIs that are monitored monthly by the Executive).

Fiscal responsibility

• NZBS has continued to align with the Minister’s expectation of maintaining financial sustainability. This is required under the Crown Entities Act 2004, which mandates financial responsibility being maintained at all times.

• NZBS has continued to meet New Zealand’s requirements for a high quality, safe, cost effective and financially-sustainable service, capable of flexing its service delivery to meet changing health sector demand.

• In recent years NZBS has consistently demonstrated its financial resilience and met the key deliverables contained in its annual Statement of Performance Expectations.

• Development of a new costing model was successfully completed in the December 2022 quarter and has informed costing information provision since that time.

• In a very positive move for NZBS, the Crown elected to commit a further $80m of equity to underpin the major infrastructure investment programme referenced earlier. The Crown equity payment timeline comprised:

- $20m paid in August 2022 - $45m paid in December 2022 - $15m to be paid in August 2023.

• NZBS maintained all of it banking obligations, including required banking ratios, throughout the 2022/23 financial year.

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Strategic Goal 3 - Providing exceptional service The elements that contribute to delivering exceptional service include the Donor Experience, Working closely with healthcare partners, and Improving Patient Outcomes.

Donor experience

• More than 90 per cent of donors continued to give an ‘8’ or higher score out of 10 for their experience of/satisfaction with donating at our donor centres.

• NZBS worked hard over the financial year to meet its flexed collection targets for whole blood and plasma: - 121,117 whole blood units were collected against a target of 119,098 and last year’s total of 117,535. This increase was a clear indication of growing demand for whole blood product, whether it be red cells, platelets, FFP plasma or cryoprecipitate.

- 101,448 plasma units collected against a target of 108,000 and last year’s 106,890 plasma units. As this performance indicates, plasma collects over the 2022/23 financial year have proven challenging in the emerging post-pandemic environment.

• NZBS continued to grow its overall active donor panel by 3.2 per cent in the 2023/23 financial year. The active donor panel stood at 119,136 (last

year 115,428) - of which 25,854 (last year 23,925) comprised the plasmapheresis panel. Growth in the plasma donor panel (+8.1% over prior year) is essential in meeting growing immunoglobulin product demand and maintaining New Zealand’s high level of domestic self-reliance for plasma-based immunoglobulin products.

• NZBS was very pleased to meet its donor recruitment micro target for new and reinstated Māori donors after failing to do so over the previous two

financial years, primarily due to the impact of COVID-19 pandemic restrictions. However, it was disappointing to again fail to meet the new and reinstated youth donor target of 11,000 youth donors. It’s believed that the level achieved (8,469), while better than last year, was still impacted by the remnants of COVID-19 (given secondary school and university mobile drives had not yet returned to pre-pandemic levels).

• NZBS continued developing its new Donor Relationship Management (DRM) software over the 2022/23 financial year. This is a cloud-based, custombuilt system using Microsoft Dynamics software tools that support Donor Services’ operations, enabling NZBS to recruit, retain and convert donors, and to manage all interactions with donors. Reflecting the level of complexity involved, this project is taking longer than originally anticipated and its completion is now expected in the March 2024 quarter of the 2023/24 financial year.

Working closely with healthcare partners

• Progress on establishing our working relationships with Te Whatu Ora continued this year, at multiple levels. Both parties recognised the importance

of the two primary Crown entities within the health sector needing to be better aligned in their collective delivery of outcomes to the health sector.

Relationship development is taking place at (1) the senior CEO and equivalent level, (2) the procurement level, with NZBS providing monthly purchase data to Te Whatu Ora, and (3) the well-established hospital transfusion committee level.

• Close working relationships have been maintained with Asia Pacific Blood Network (APBN) members, with NZBS’ Chief Executive Officer the current Chair of APBN.

• As a member of the Alliance of Blood Operators (ABO) NZBS has this year been part of, and contributed to, ABO’s Cost Modelling Working Group.

ABO is an international grouping of not-for-profit blood services and provides NZBS with rich financial metric benchmarking data that is drawn from a broad international blood service grouping.

Improving patient outcomes

• Provision of monthly clinical product utilisation data was delivered in a timely manner to hospitals every month throughout the 2022/23 financial year.

• The annual 2021 calendar year Haemovigilance Report was made available to all New Zealand hospitals in September 2022.

• The Clinical Oversight Programme for all blood banks not directly managed by NZBS was maintained throughout the year, with 31 clinical oversight visits to hospital blood banks.

• NZBS has worked closely with hospitals to ensure that ‘Process Migration’ of the CSL Behring plasma product portfolio, driven by manufacturing

changes at CSL Behring in Melbourne, has been well communicated. The changes for patients will start in the July 2023 quarter, and NZBS will be actively managing and supporting the change, with blood banks, clinicians and patients.

• As noted under Products and Services Expansion, the 1 July 2023 commencement of funding will enable work to begin on the actions set out in the Increasing Deceased Organ Donation and Transplantation strategy document.

• NZBS has updated the Transfusion Medicine Handbook, the national guideline on transfusion matters for clinical teams. It will be released in the September 2023 quarter in a web-based, mobile-friendly format.

• Ongoing and productive relationships continue to be developed and maintained with other central Crown agencies and representative groups working in the broader health sector.

Meeting the strategic goals (1 July 2022 to 30 June 2023): Overall assessment NZBS considers it made very solid progress in the broad delivery of its strategic goals as contained in its Statement of Intent (SOI) covering the 2022/23 financial year.

This is the third and final assessment under the current Statement of Intent, which took effect on 1 July 2020 and aimed to reset the organisation’s strategic intent for the four financial years to 30 June 2024.

Acknowledging the rate of change over the last three financial years, the Minister responsible for NZBS requested a refresh of the current SOI. The new iteration covers the period 1 July 2023 to 30 June 2027 Future annual assessments of progress will be benchmarked against this new Statement of Intent.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

FOR THE FINANCIAL YEAR E N DE D 30 JUNE 2 023

S TATE M E NT O F R E S P O N S I B I LIT Y

1/ The Board and Management of New Zealand Blood and Organ Service accept responsibility for the preparation of the annual Financial Statements and Statement of Service Performance and the judgements used in them.

2/ The Board and Management of New Zealand Blood and Organ Service accept the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial and non-financial reporting.

3/ In the opinion of the Board and Management of New Zealand Blood and Organ Service, the annual Financial Statements For the year ended 30 June 2023 fairly reflect the financial position and operations of NZBS.

Fiona Pimm Board Chair 26 October 2023

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Mr Ray Lind Deputy Board Chair 26 October 2023

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

I N DE PE N DE NT AU DITOR ’ S R E POR T FOR THE YEAR ENDED 30 JUNE 2023

To the readers of New Zealand Blood and Organ Service’s financial statements and performance information for the year ended 30 June 2023 The Auditor-General is the auditor of New Zealand Blood and Organ Service. The Auditor-General has appointed me René van Zyl, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and the performance information of New Zealand Blood and Organ Service on his behalf.

OPINION We have audited:

• the financial statements of the New Zealand Blood and Organ Service on pages 61 to 89, that comprise the statement of financial position as at 30 June 2023, the statement of comprehensive revenue and expenses, statement of changes in equity and statement of cash flows for the year ended on that date and the notes to the financial statements including a summary of significant accounting policies and other explanatory information; and

• the performance information which reports against the New Zealand Blood and Organ Service ’s statement of performance expectations for the year ended 30 June 2023 on pages 90 to 99.

In our opinion:

• the financial statements of the New Zealand Blood and Organ Service:

– present fairly, in all material respects: - its financial position as at 30 June 2023; and - its financial performance and cash flows for the year then ended; and

– comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Reporting Standards; and

• the New Zealand Blood and Organ Service’s performance information for the year ended 30 June 2023:

– presents fairly, in all material respects, for each class of reportable outputs:

• its standards of delivery performance achieved as compared

with forecasts included in the statement of performance expectations for the financial year; and

• its actual revenue and output expenses as compared with the

forecasts included in the statement of performance expectations for the financial year;

– complies with generally accepted accounting practice in New Zealand.

Our audit was completed on 26 October 2023. This is the date at which our opinion is expressed.

The basis for our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities relating to the financial statements and the performance information, we comment on other information, and we explain our independence.

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Basis for our opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board.

Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report.

We have fulfilled our responsibilities in accordance with the AuditorGeneral’s Auditing Standards.

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

Responsibilities of the Board for the financial statements and the performance information The Board is responsible on behalf of the New Zealand Blood and Organ Service for preparing financial statements and performance information that are fairly presented and comply with generally accepted accounting practice in New Zealand. The Board is responsible for such internal control as it is necessary to enable it to prepare financial statements and performance information that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements and the performance information, the Board is responsible on behalf of the New Zealand Blood and Organ Service for assessing the New Zealand Blood and Organ Service’s ability to continue as a going concern. The Board is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the New Zealand Blood and Organ Service, or there is no realistic alternative but to do so.

The Board’s responsibilities arise from the Crown Entities Act 2004.

Responsibilities of the auditor for the audit of the financial statements and the performance information Our objectives are to obtain reasonable assurance about whether the financial statements and the performance information, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the AuditorGeneral’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of these financial statements and the performance information.

For the budget information reported in the financial statements and the performance information, our procedures were limited to checking that the information agreed to the New Zealand Blood and Organ Service’s statement of performance expectations.

We did not evaluate the security and controls over the electronic publication of the financial statements and the performance information.

As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

• We identify and assess the risks of material misstatement of the

financial statements and the performance information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• We obtain an understanding of internal control relevant to the audit

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 New Zealand Blood and Organ Service’s internal control.

• We evaluate the appropriateness of accounting policies used and

the reasonableness of accounting estimates and related disclosures made by the Board.

• We evaluate the appropriateness of the performance information

which reports against the New Zealand Blood and Organ Service’s statement of performance expectations.

• We conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the New Zealand Blood and Organ Service’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements and the performance information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the New Zealand Blood and Organ Service to cease to continue as a going concern.

• We evaluate the overall presentation, structure and content of the

financial statements and the performance information, including the disclosures, and whether the financial statements and the performance information represent the underlying transactions and events in a manner that achieves fair presentation.

Other information The Board is responsible for the other information. The other information comprises the information included on pages 2 to 60, and 100 to 104, but does not include the financial statements and the performance information, and our auditor’s report thereon.

Our opinion on the financial statements and the performance information does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon.

In connection with our audit of the financial statements and the performance information, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial statements and the performance information, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence We are independent of the New Zealand Blood and Organ Service in accordance with the independence requirements of the AuditorGeneral’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1: International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board.

Other than in our capacity as auditor, we have no relationship with, or interests, in the New Zealand Blood and Organ Service.

Rene van Zyl Audit New Zealand On behalf of the Auditor-General Auckland, New Zealand

We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Our responsibilities arise from the Public Audit Act 2001.

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NEW ZEAL AND BLOOD S ERVICE / ANNUAL REPORT 2022/23

WA H A N GA T O H U T O H U

DIRECTORY N Z B S BOAR D M E M B E R S Fiona Pimm (Board Chair) DipAppSci, DPH, MBA Ray Lind (Deputy Chair) ONZM Dr Bartrum Baker MBChB, FRACP, FRCPA Edie Moke DBS, BBS, DBA, MBS, CMInstD Nicole Anderson DBS, DipBus, DipMgt, PDGPH Roger Jarrold B.Com FCA Dr Edward Tanetoa Hutchins BHB, MBChB, PGDipOphthBS, FRANCO Anthony Bow BCom, CA, CA (Singapore)

AU DITOR Audit New Zealand (on behalf of the Auditor-General) Level 14, Shortland & Fort, 88 Shortland Street, CBD, Auckland 1010

P R I N C I PA L BA N K E R S Westpac New Zealand Limited Level 6, 16 Takutai Square Auckland

Chief Executive Officer Sam Cliffe BSc (Hons) Director Human Resources and Organisational Development Karen Didovich BA; MA (Political Studies); MA (Information Management and Finance) Director Donor Services Brett Paradine PG Dip HSM, Master of Management (Dist) Director Finance and Corporate Services John Harrison BCom, CA Chief Medical Officer Dr Sarah Morley MBBS, FRCPCH, FFICM, PhD Director Planning and Supply Chain Justin Scott B.Com, MInstD, Ngāi Tahu Director, Quality and Regulatory Affairs Fidelma Murphy MSc Distinction – Medical Ethics; BSc (Hons) – Health Studies and Health Care Management; Diploma in Professional Studies in Nursing Director Technical Services Dr Mandy Suddes PhD, PMP

Buddle Findlay Auckland and Wellington

Director, Digital Technology and Information Management Joshua Bankers Bachelor of Technology, Manufacturing and Industrial Technology

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