Scales Corporation Limited – 2016 Annual Report

National
coverage.
Contents
Introduction 4
Key 2016 Highlights 6
Managing Director and
Chairman’s Report 8
Sustainability Report 20
Divisional Overview 28
Leadership Profiles 42
Financial Statements 46
Independent Auditor’s Report 80
Corporate Governance 84
Remuneration Report 88
Director Disclosures 92
Glossary 98
Directory 99
Scales Corporation Limited 2

Global
presence.
3Annual Report - Year Ended 31 December 2016

Growing your
diversified
agribusiness.
We like to think that New Zealand is the best place in the world for
growing and producing the highest quality food and ingredients.
At Scales we take immense pride in helping to grow New Zealand’s
agribusiness sector in a manner that is sustainable. We do this through
our vertically integrated Horticulture division, by providing critical cold
chain and logistics services to key food exporters in our Storage &
Logistics division, and by converting agricultural by-products into
high quality ingredients in our Food Ingredients division.
In our 105th year Scales achieved and delivered on a number of key
developmental milestones. These are discussed in the pages that
follow, but include new heights of financial performance, organic
and acquisition growth, and improved access and networks into
the significant China market.
Scales Corporation Limited 4
INTRODUCTION

5Annual Report - Year Ended 31 December 2016
Temperature controlled
storage
Horticulture
Vertically integrated apple growers, packers & marketersApple marketer
1
Storage & Logistics
Air & sea freightBulk liquid storage
INTRODUCTION
1. Scales owns 73 per cent of Fern Ridge Produce Limited (Fern Ridge).
2. Profruit is a 50 per cent joint venture.
MEATEOR
FOODS LTD
Food Ingredients
Agricultural by-product manufacturers
2

Fern Ridge shareholding increased to
73 per cent.
Vertically integrated grower, packer,
marketer Longview Group Holdings Limited
(Longview) acquired.
China Resources Ng Fung Limited (China
Resources Ng Fung) welcomed as a shareholder.
Significant strategic
developments
Operating targets
exceeded
2.66m TCEs of apples sold to Asia and the Middle
East, 5.46m TCEs sold in total by Scales’ Horticulture
division (Mr Apple and Fern Ridge).
More than half a billion apples picked from Mr
Apple’s orchards.
5.7M litres of juice concentrate sold.
22,971 MT of petfood ingredients sold by Meateor.
24,713 TEUs organised for international transit by
Scales Logistics.
3,306 MT of airfreight cargo managed.
Scales Corporation Limited 6
KEY 2016 HIGHLIGHTS

$67.9m Underlying EBITDA, an increase of 11 per cent
on 2015 (restated).
A 24 per cent increase in revenue to $374m. A 29
per cent increase in revenue to $230m within the
Horticulture division.
27.0c earnings per share.
Partner in the master licensing rights for the
production and marketing of a new apple variety,
Dazzle
®
, worldwide.
Significant branding work in China undertaken.
Sustainability materiality review undertaken and
feedback received.
Approximately 2.5 Olympic-sized swimming pools
of rainwater collected and used in 2016 at the
Wiri coldstore.
In the fifth year of the Seasonal Employee/Employer
Development (SEED) programme.
Excellent financial
performance
Ongoing
developments
in Horticulture
Developing our
Sustainability reporting
7Annual Report - Year Ended 31 December 2016
KEY 2016 HIGHLIGHTS

Managing
Director and
Chairman’s
Report
Scales Corporation Limited 8

$’00020162015
(Restated)
Variance
%
Underlying EBITDA*67,856 61,405 11%
Underlying Net Profit*38,638 34,795 11%
Net Profit38,178 35,894 6%
$27.4m
$42.8m
$39.8m
$61.4m
$67.9m
20122013201420152016
20122013201420152016
$6.8m
$20.0m
$19.8m
$34.8m
$38.6m
Underlying EBITDAUnderlying NPAT
This result maintains a steady progression in group profitability. Underlying EBITDA
(our preferred profitability metric) has now increased by 147 per cent in the past 4
years, or a compounding annual growth rate (CAGR) of 25 per cent.
We are delighted to present Scales’ third Annual Report as an NZX Main Board listed
company and our first within the S&P NZX 50 Index. During 2016 we have successfully
consolidated on previous strong financial results to deliver another record profit, 11
per cent ahead of 2015 (restated) on both an Underlying EBITDA and Underlying Net
Profit basis.
*Underlying Net Profit and Underlying EBITDA
are considered by Management and the Board
to be the best financial measures to describe
the ongoing performance of Scales. Underlying
Net Profit adjusts Net Profit for the post-tax
implications of any non-cash IFRS adjustments
(such as asset revaluations). Underlying EBITDA
is calculated by adding back to Underlying Net
Profit Net Finance Costs, Tax, Depreciation and
Amortisation expenses. A full reconciliation to
Net Profit is provided in the sections below.
CAGR 25%CAGR 54%
Once again, the trend of improving profitability would not
have been possible without the hard work and dedication
of our entire team. Scales now employs more than 600
permanent team members, with our ranks swelling to
approximately 2,400 during the peak of the apple harvest
season. Their hard work, enthusiasm and continued focus on
ensuring the highest quality goods and services are provided
to our customers is critical to our success. The Scales Board
expresses its gratitude for our team’s ongoing commitment.
In return, we are unwavering in our focus to never stop
improving our workforce. As such, it is critical to us that our
team members feel safe, respected, and are provided with
opportunities to develop and grow their careers.
Health and safety is treated with utmost focus by the Board. It
is our first agenda item for every Board meeting and given due
consideration and time to ensure all opportunities are being
taken and initiatives implemented to improve the safety of our
workplace. Health and safety is discussed in more detail in the
Sustainability section of this report on the pages that follow.
9Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

In addition to the financial results
highlighted on the previous page,
the 2016 year was marked with
a number of developments and
milestones achieved:
The 2016 year was overall extremely positive in terms of financial
performance and milestones achieved. However, the performance
of our coldstore operations was lower than anticipated. External
factors, specifically shortened product turnaround cycles reflecting
a generally supportive macroeconomic climate (which in turn
benefits our Food Ingredients and Horticulture divisions), climatic
conditions resulting in a slow start to the 2016/2017 cropping
season, and the exit from New Zealand of a Timaru based
customer influenced this result. Momentum gains in Auckland
coupled with an expectation of more normal trading cycles
are expected to drive improved performance in 2017. We
are in the process of conducting an in-depth review of our
coldstore business to understand if changes are necessary.
The outlook for Scales remains positive. During 2017 the
Group will benefit from the incremental earnings of Longview
as well as initiatives developed over the past few years. In addition,
we are actively reviewing a number of organic and acquisition growth
opportunities. As always we will continue to be patient and disciplined
in our approach towards any investment. Opportunities must
demonstrate that we will continue to be able to achieve our long-
term 15 per cent return on capital employed objectives whilst also
demonstrating value in excess of the risk-adjusted returns we would
achieve should we replicate the opportunities for ourselves.
Scales Corporation Limited
10
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
In January we increased our shareholding in Fern Ridge
to 73 per cent. Fern Ridge is an excellent business that
increases our marketing sphere of influence in the sale
of New Zealand apples. Fern Ridge is capably led by
Hamish Davis and his team who continue their roles in
the business.
In March we recognised China Resources Ng Fung as a
key strategic shareholder in the Group. China Resources
Ng Fung brings considerable experience and a wide
ranging network to allow us to gradually develop our
apple sales throughout China.
The China Resources Ng Fung shareholding was mostly
acquired from Direct Capital who have now finalised
their sell down in Scales with their shares coming off
the IPO escrow early in 2016. We would once again
like to acknowledge the significantly positive influence
the Direct Capital investment has had on Scales, from
an operational, financial and cultural perspective. Mark
Hutton, one of the original Direct Capital partners,
continues as a Director in Scales.
In June we welcomed Mr Weiyong Wang, CEO of China
Resources Ng Fung, to the Scales Board. Mr Wang’s rich
experience and insightful contribution is highly valued
by us and our fellow Directors.
Also in June we welcomed Liz Muller through the
Institute of Directors’ Future Directors programme as
an attendee at Scales’ Board Meetings. The Future
Directors programme is designed to help develop the
next generation of Directors by providing experience at
the board room table. It is a pleasure for us to be able
to provide these opportunities to aspiring Directors.
In September we entered the S&P NZX 50 Index. This
significant milestone is a positive move for existing
shareholders, bringing the company to the attention of
a wider group of New Zealand and offshore investors.
In November we completed the acquisition of
Longview. Longview is a standalone Hawke’s Bay
grower, packer, and marketer of apples that increases
our supply of Asia-focused apples whilst also unlocking
post-harvest capacity and synergies to meet the
expected future growth in the combined horticulture
business. Longview is a well-established business in the
Hawke’s Bay with a highly experienced and capable
team that share our existing customer-centric values.
We exceeded an apple production target that we had
set for 2020 four years ahead of plan (3.5m TCEs of our
own fruit exported).
We achieved another substantial increase in petfood
sales volumes which were up by 13.6 per cent to
22,971 MT. In our Food Ingredients division we
are focused on how we can add further value and
broaden our offering of high quality New Zealand and
Australian ingredients.

Longview is an iconic and well established business
in the Hawke’s Bay. Its history spans more than 100
years, being founded in 1912 by Vincent Caccioppoli.
Orcharding runs strongly through the Caccioppoli
family, with the orcharding business at Longlands Road
near Hastings now into its fourth generation. Vincent’s
great grandson Michael Caccioppoli (Site Manager) and
Marketing Manager Wayne Yule are capable and strong
leaders who will continue their involvement in Scales’
broader horticultural team.
Longview operates a modern and customised
packhouse and coolstore operation with capacity to
double existing packhouse throughput. The facility
takes advantage of technological developments by
operating optical apple grading and sorting equipment
as well as pallet stacking and storage robots.
The transaction has a strong strategic rationale for our
existing Horticulture division.
Mr Apple is positioning itself to be the supplier of
choice in the fast-growing Asian regions
3
. To be the
supplier of choice we need to be able to (a) deliver
large volumes (b) of consistently high quality fruit (c) in
the varieties preferred by near markets (d) to customers
across a wide variety of market formats (i.e. wholesale,
retail, or online customers).

As mentioned, Scales, through its wholly owned subsidiary Mr Apple,
acquired the vertically integrated grower, packer and apple marketing
business Longview in November 2016.
Longview is a critical addition to our
capabilities of meeting our supplier
of choice objective through:
High percentage of sales to Asia. Not only does
Longview provide us with access to increased apple
volumes (via orchards acquired through the transaction
and Longview’s relationships with external growers) but
a high proportion of the volumes handled and sold by
Longview are in varieties that are sought after in Asian
markets (in 2016 sales to Asia accounted for 62 per cent
of Longview’s sales).
Access to modern post-harvest infrastructure with
surplus capacity. Longview has the capacity to
approximately double the packhouse volumes handled
during the 2016 season. This capacity will accommodate
expected growth in apple volumes as orchards continue
to mature. We currently anticipate that the additional
capacity will be fully utilised by 2020.

11Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Longview
3
Some of the initiatives being developed by Mr Apple are touched on further in the divisional pages of this report.

Scales’ Vision
Our long-term goal
To generate a long-run average 15 per cent Return on
Capital Employed (ROCE)
5
across the portfolio.
Scales Corporation Limited12
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Shareholder Returns
Shareholders who invested in the IPO have achieved a 134 per cent
4
return on funds invested to the end of January 2017. By
comparison, an investment in the NZX50 would have delivered a 36 per cent return on funds invested over the same period.
To be the foremost investor in, and grower of, New Zealand
agribusinesses by leveraging its unique insights, experience, and access
to collaborative synergies.
Strategies to Create Value
Strengthen existing business:
• Continue to strengthen existing divisions and businesses
within those divisions by providing appropriate operating
and financial support.
• Expand existing divisions through appropriate investment
in growth (e.g. investing in proprietary apple varieties such
as Dazzle
®
).
• Invest in new equipment to drive cost efficiencies.
Develop existing divisions or extend
agribusiness reach through disciplined and
patient investment:
• Investment may either take place by:
– Acquiring appropriate ‘bolt-on’ businesses to
support existing divisions.
– Developing new divisions or market sectors.
• We believe that the best and most consistent returns are
achieved through operating, or providing a nationwide
service to, businesses that are fully vertically integrated.
Accordingly, investment must be consistent, or help us to
better align, with this core belief. In addition, investment:
– Should align with our core competencies and deliver
collaborative synergies.
– Meet, or be able to meet, minimum ROCE targets
appropriate for their operations. Scales will seek to
achieve a minimum of 15 per cent ROCE across its
portfolio.
– Either have scale, be able to reach scale, or enhance
the scale of our existing divisions.
– Retain a focus predominantly, but not exclusively, on
New Zealand.
Strategy
• Investment opportunities that do not meet these criteria
will not be developed. Furthermore our holding in any
division, or business within a division, that no longer meets
our objectives will be subject to review.
A measured approach to risk:
Scales will focus on long-term shareholder return and financial
performance. We will not take unnecessary risks for short-term
gains but will instead take a measured and occasionally bold
approach to improving performance. Our approach is based
around ensuring any new acquisition or activity complements
or adds to the existing skills, expertise and culture of Scales.
We will invest to improve diversification.

Lead the market with transparent, regular,
and easy-to-understand communications:
For each division, we will report key operating metrics and
trends in these metrics. Whilst commercial sensitivities will
preclude us from sharing all information, we will provide
as much as we can when we can. We acknowledge that
recommendations arising from the NZX corporate governance
review are important to our shareholders and we are
committed to meeting the standards outlined.
4
Calculated as the difference between the closing share price on 31 January
2017 plus all net dividends paid (a total of $0.35 per share) and the IPO
listing price of $1.60.
5
Calculated as Underlying EBIT / Capital Employed, where Underlying EBIT
is calculated as Underlying Net Profit plus Net Financing Costs and Tax, and
Capital Employed is calculated as Non Current Assets plus Current Assets
(excluding any Cash or Cash Equivalent balances) less Current Liabilities
(excluding any Overdraft or Short-Term Debt balances).

13Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Whilst it is the Board that provides
strategic input and governance, it is the
management team that is accountable
for delivering the results.
Scales has implemented a strong incentive based
remuneration scheme aligned to its existing culture
of positive personal performance and retaining and
developing excellent team members over the long
term. The Board also recognises that there is a balance
between shorter term incentive arrangements and
the need to ensure team members remain focused
on the longer term objectives of building a strong
and sustainable business. The Board continues to be
supportive of the Long Term Incentive (LTI) Scheme
which we believe is key to driving shareholder wealth
and the Board will look to extend a similar scheme
on its next review date at the end of 2017 (subject to
changes required to reflect any legislative amendments).
The balance between shorter term incentives and long
term business interests has been a key feature of the
positive Scales’ business culture of recent years and its
retention and further development is a key component
of the Board and Managing Director’s major objectives.
Scales’ remuneration philosophy and a detailed
breakdown of executive remuneration is outlined in
more detail in the expanded Remuneration Report on
page 88. You should note in particular the accounting
treatment and implications as it relates to the reported
Managing Director remuneration.
Appropriately Incentivising our Team

DivisionTargetStatus
Group
Sustainability
ü SIGNIFICANT PROGRESS
Develop and evolve our reporting and
measuring of key sustainability aspects affecting
Scales’ businesses.
Develop best-in-class sustainability reporting.
Demonstrate improvements in sustainability.
Sustainability report developed and included in this
Annual Report.
Financial
ü GOOD PROGRESS
Position our diversified agribusiness to
deliver consistent and sustainable growth in
financial performance.
Prudently utilise leverage to support equity
returns whilst balancing risk.
Strategic acquisitions and developments made in
2016 position the group well for sustained growth.
Acquisitions financed via leverage.
Shareholder returns
ü GOOD PROGRESS
Reward our shareholders with dividends
that represent an attractive yield on current
market pricing.
Deliver capital gains and shareholder
liquidity through careful strategic execution,
and transparent and easy to understand
stakeholder communications .
Share price improved, interim dividend increased to
8.0 cents per share.
Finalist in INFINZ emerging communicator of
the year.
Entered the S&P NZX50 Index.
Horticulture
Brand and Intellectual Property development
ü GOOD PROGRESS
Continue to develop Mr Apple as a preferred
supplier and brand of choice for our customers.
Develop Diva
®
, Dazzle
®
and other brands for
which Mr Apple has proprietary rights.
Develop proprietary varieties targeted for Asia
and Middle East markets.
Dazzle
®
launched in December 2016. Further new
varieties in the pipeline.
Volumes
ü EXCELLENT PROGRESS
Reach 4m TCEs of our own grown apples.Previous target of 3.5m TCEs by 2020 met 4 years
ahead of schedule.
Sales
ü ON TRACK
Increase market penetration into China through
services company Primary Collaboration
New Zealand Limited and strategic partner
China Resources Ng Fung.
In-market immersion sessions held in Shanghai
(April 2016 and proposed 2017). Online and retail
sales growing rapidly.
Specific Strategic Targets
Scales Corporation Limited14
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

DivisionTargetStatus
Storage &
Logistics
Review opportunities within coldstores
Ü TO BE PROGRESSED IN 2017
Review existing coldstore activities to explore
potential for improved financial performance and
asset returns.
A number of initiatives underway.
Update software and broaden
service offering
ü GOOD PROGRESS
Complete rollout of FMCG capable warehouse
management software through Polarcold.
Extend current FMCG business to Auckland and
the South Island.
Software upgrade project continuing and
scheduled to complete in 2017.
FMCG clients have and are being sourced
for Auckland.
Complete merger of Whakatu Coldstores
and Polarcold
ü ON TARGET
Expand bulk liquid storage and logistics
offerings
Ü VARIOUS OPPORTUNITIES
UNDER REVIEW
Food
Ingredients
Develop new value-add opportunities
via long-term and mutually beneficial
partnerships
Ü A NUMBER OF OPPORTUNITIES
UNDER REVIEW
Consider organic and acquisition
opportunities to increase divisional scale
and significance
Ü A NUMBER OF OPPORTUNITIES
UNDER REVIEW
15Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Group Financials
Directors and management use non-GAAP (Underlying) profit measures when discussing financial performance in this document. The Directors and management
believe that these measures provide information that is useful to stakeholders along with GAAP measures. For example, New Zealand equivalents to International
Financial Reporting Standards (NZ IFRS) require us to value our foreign exchange contracts at the end of each year. Changes in the values of these contracts are
recognised as a gain or loss in our accounts. However, because we intend to hold our foreign exchange contracts to completion (taking any associated gain or
loss on those contracts at the point at which they are closed out), our approach is to focus on profit or loss prior to these adjustments. Furthermore, the non-
GAAP profit measures discussed above are also used internally to evaluate performance of our divisions, to establish operational goals, and to allocate resources.
They also represent some of the performance measures required by Scales’ debt providers.
Non-GAAP profit measures are not prepared in accordance with NZ IFRS and are not uniformly defined, therefore the non-GAAP profit measures reported in
this document may not be comparable with those that other companies report and should not be viewed in isolation or considered as a substitute for measures
reported by Scales in accordance with NZ IFRS.
The table following shows how Underlying EBITDA and Underlying Net Profit reconcile to Net Profit in our Financial Statements (which are prepared in
accordance with NZ IFRS). Note that our financial statements are prepared on a fully NZ IFRS compliant basis.
Income Statement
$’00020162015
(Restated)
Revenue373,927301,410
Underlying Cost of Sales(258,030)(194,142)
Underlying Gross Margin115,897107,268
Underlying Gross Margin %31%36%
Underlying EBITDA67,85661,405
Underlying EBIT55,75750,074
Underlying Net Profit38,63834,795
After tax impact of:
Non-cash IFRS adjustments(460)1,099
Net Profit38,17835,894
Capital employed
6
271,142209,468
Return on capital employed
6
21%24%
Financial Performance
We are very pleased to present group
Underlying EBITDA of $67.9m, 11 per cent
ahead of 2015 (restated). This result, which
represents a new record for the Group, is due
to strong performances from our Horticulture
and Food Ingredients divisions in particular.
The individual performance of each division
is discussed further in the next section.
As announced at our annual shareholders
meeting (ASM) last year, our Chairman, Jon
Mayson, will retire at our ASM in June of
this year. Jon commenced as a Director of
Polarcold, and thus our Storage & Logistics
division, on 15 February 2012, became a
Director of Scales Corporation on 1 June
2012 and Chairman on 20 July 2012. Jon is
the 8th Chairman of Scales.
Jon’s leadership during his years as
Chairman has been a great asset to the
Group, providing his extensive experience
and expertise in a number of areas
including leadership, governance and
analysis of investment opportunities. He
has expertly guided Board discussions
and overseen the Group during its most
transformative years, where Underlying
Group EBITDA has grown from $27.4
million in 2012 to $67.9 million in 2016.
Jon has also directed the Group through
a number of significant milestones
including its Initial Public Offering in June
2014 and entering the S&P NZX50 in
September 2016.
We would like to thank Jon for his
significant contribution as both Director
and Chairman over the past 5 years.
Tim Goodacre will be appointed 9th
Chairman of Scales at the 2017 ASM.
Jon Mayson
6
To enable a like-for-like comparison, capital employed and return on capital employed have been adjusted to reverse out impacts of the Longview acquisition.
This is due to the timing of the Longview acquisition which did not contribute to earnings during the 2016 year.
Scales Corporation Limited16
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Reconciliation of Underlying EBITDA to Net Profit
$’00020162015
(Restated)
Underlying EBITDA67,85661,405
Reconciliation to GAAP information
- Depreciation
(11,438)(10,243)
- Amortisation
(661)(1,088)
- Finance revenue
167185
- Finance charges
(2,533)(2,801)
- Taxation
(14,753)(12,663)
Underlying Net Profit
38,63834,795
- Foreign exchange contracts revaluations / hedge ineffectiveness(1,258)1,759
- Fair value gain on apple inventory (pursuant to NZ IAS 41)993N/A
- Equity settled employee benefits(270)(168)
- Taxation
75(492)
(460)1,099
Net Profit as Reported in Financial Statements38,17835,894
Change in accounting policy
The Group has adopted the amendments to NZ IAS 16
Property, Plant and Equipment and NZ IAS 41 Agriculture
which are effective for periods beginning on 1 January 2016.
The amendments bring apple trees, which are used to grow
produce, into the scope of NZ IAS 16 and out of the scope of
NZ IAS 41 so that they are accounted for in the same way as
property, plant and equipment. The produce growing on apple
trees continues to be accounted for as unharvested agricultural
produce under NZ IAS 41.
This amendment was applied to the Group’s apple trees.
These financial statements have been retrospectively restated
to reflect this accounting policy change. On adoption of the
amendment, the Group elected to measure its apple trees using
the revaluation model.
Consolidation of Fern Ridge
Prior to 2016, Fern Ridge was an associate business of the
Scales Group. From an accounting perspective this meant
that Scales equity accounted 50 per cent of Net Profit. In
January 2016, Scales’ share of Fern Ridge was increased to
72.88 per cent. As a result the financial performance of Fern
Ridge is consolidated into our group results. Fern Ridge is a
high-revenue, low margin business with annual revenues of
approximately $35 million in 2016.
Capital Management
Performance against Benchmarks
We monitor the ROCE and EBITDA margin of each division and
the group.
ROCE is a measure of how efficiently we are generating a
return on our assets. It lies at the heart of how we monitor
the performance of the portfolio as well as decisions around
capital expenditure. Prior to committing to an investment in
assets, we need to be confident that we will generate a return
that meets or exceeds our targets. The ROCE targets vary by
division, given each division’s specific asset and risk profiles,
however, as a group we target a long-run combined ROCE of
15 per cent.
There has been a 40 per cent increase in capital employed
between 2015 and 2016. This increase is mostly due to the
acquisition of Longview (approximately $20.5 million, which
was completed in November after the 2016 apple harvest and
therefore contributed a small loss in 2016) and revaluations
of our land, buildings, and orchard assets (approximately
$39.7 million in total). These asset increases noted above are
not accompanied by an increase in earnings during 2016.
Accordingly, capital employed and ROCE have been adjusted
so as to remove the impact of the Longview acquisition. As a
result of the increase in our asset base principally relating to
asset revaluations, group ROCE decreased to 21 per cent (2015
restated: 24 per cent), still significantly ahead of our long term
target of 15 per cent.
17Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Financing
Average Net Debt
9
for the year was $43.4 million, $10.9
million above Average Net Debt during 2015 of $32.5 million.
This higher debt figure was primarily due to the acquisition of
Longview which was financed entirely from cash and debt.
Hedging Strategy
We sell to the world. This means that we have a significant
exposure to movements in foreign exchange rates – most
specifically in Mr Apple. Our freight forwarding businesses,
Scales Logistics and Balance Cargo, and our Food Ingredients
division are also impacted by foreign exchange rate
movements.
In 2016, Mr Apple made approximately 58 per cent of its
apple sales in US dollars, 29 per cent in Euros, 10 per cent in
British pounds, and 1 per cent in Canadian dollars
10
. We have
a natural hedge covering some of our US dollar exposure as
all international shipping is payable in US dollars also. We take
cover on the remaining expected net US dollar, Euro, British
pound, and Canadian dollar exposures.
Capital Management Benchmarks
20162015
(Restated)
ROCE
Horticulture
7
28%34%
Storage & Logistics
11%13%
Food Ingredients
53%49%
Group
7
21%24%
Long term Group target15%15%
Underlying EBITDA margin
8
Horticulture
20%22%
Storage & Logistics
15%17%
Food Ingredients
13%13%
Group
18%20%
Target13%13%
We also take out interest rate swaps and forward rate
agreements which provide some certainty on interest costs on
Scales’ term and short-term borrowings.
Scales has a Board approved Treasury Management Policy
within which all foreign exchange, interest rate and related
activities are conducted. This policy is reviewed biennially.
Under this policy:
• We take foreign exchange cover for up to 48 months
using a variety of foreign exchange instruments (including
options and forward contracts). Scales maintains a blend of
instruments. For the next 12 months, approximately 75 per
cent of Mr Apple’s expected net foreign exchange exposure
is covered.
• We also have interest rate swaps and forward rate
agreements covering interest on our long term and short
term borrowings.
7
Due to the timing of the acquisition, Longview has been excluded from the
calculation of Horticulture and Group 2016 ROCE.
8
Excluding share of profit from associate company and joint venture.
9
Average Net Debt is calculated as the term debt balance plus the average
net working capital facility balance (calculated as the average of the net
working capital facility balance as at 30 June 2016 and 31 December 2016).
10
The balance was made in NZD.
We note that sustained success from our business divisions
will, in the case of the horticulture and coldstorage businesses
specifically, be accompanied by an increase in asset valuations
and a subsequent lowering of ROCE percentages.
EBITDA margin is a measure of profitability of each division.
Over time we use it to monitor the competitive dynamics
and cost control of each business within the Scales portfolio.
EBITDA margin targets vary significantly by business. For
example, our freight forwarding business is a high-turnover,
low-margin business, whilst our asset intensive cold storage
businesses tend to operate a higher EBITDA margin. As a
group we target a long-run combined EBITDA margin of 13
per cent.
At a group level our 2016 EBITDA margin at 18 per cent easily
exceeded our target.
Scales’ Net Tangible Assets as at 31 December 2016 were
$1.41 per share (31 December 2015 (restated): $1.09
per share).
Scales’ earnings per share for the year ended 31 December
2016 was 27.0 cents per share (25.7 cents per share in the
year ended 31 December 2015 (restated)).
Scales Corporation Limited18
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Capital Expenditure
$’000
20162015
Operational capital expenditure
Horticulture
3,290 1,905
Storage & Logistics
3,355 2,367
Food Ingredients
370 220
Other
8 39
Total operational capital expenditure
7,023 4,531
Growth capital expenditure
Horticulture
4,975 3,721
Storage & Logistics
3,705 7,557
Food Ingredients
- -
Total growth capital expenditure
8,680 11,278
Total capital expenditure
15,703 15,809
Dividend
A final 2015 fully imputed cash dividend of 6.5 cents per share
(a gross amount of 9.0 cents per share) was paid on 8 July
2016. Together with an interim dividend of 6.5 cents per share
(a gross amount of 9.0 cents per share) and a special dividend
of 4.0 cents per share (a gross amount of 5.6 cents per share),
which were both paid on 20 January 2016, this brought the
annual dividends for 2015 to a total of 17.0 cents per share (a
gross amount of 23.6 cents per share).
A fully imputed interim 2016 cash dividend of 8.0 cents per
share (a gross amount of 11.1 cents per share) was declared
in December 2016 and paid on 18 January 2017. Our
expectation is to declare a final fully imputed cash dividend in
respect of 2016 in May 2017, for payment in July 2017. As
always, any dividend is subject to Board approval. It is standard
practice for the Directors to consider all aspects of the
Group’s performance and financial position prior to declaring
any dividend.
Capital Expenditure
Operational capital expenditure was $7.0 million, almost $2.5
million ahead of our 2015 spend.
During 2016 we invested $8.7 million in the future growth of
Scales to support our future growth and earnings potential.
Major purchases during 2016 included:
• Purchase of around 4 hectares of land surrounding Mr
Apple’s Whakatu Packhouse.
• Redevelopment of around 30.5 hectares of Mr Apple’s
Pakowhai orchard into premium varieties.
• Upgrade of the warehouse management software
by Polarcold.
• Purchase of land surrounding strategic coldstore assets in
the Hawke’s Bay to enable future expansion.
Jon Mayson
Chairman
17 March 2017
Andy Borland
Managing Director
19Annual Report - Year Ended 31 December 2016
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Outlook
The outlook for Scales remains positive. With the acquisition of Longview and the increased investment in Fern Ridge, added to
continued strong performances across ongoing businesses, the outlook for 2017 and beyond is positive. We expect to improve the
contribution achieved from our Storage & Logistics division, specifically from our coldstores, whilst our Food Ingredients businesses
continue to be well regarded in the market places they operate.
We would like to thank all of our management and staff, fellow directors, suppliers and of course our customers. Scales greatly
appreciates your collective support and involvement in our 105th year of trading.

Sustainability
Report

As an agribusiness investor we clearly recognise that we have a responsibility to all
stakeholders to ensure we have a sustainable business. For us, it is important to know
that we operate a work environment where people feel safe and comfortable at work,
that we provide opportunities to develop and build a career, that we are looking after
our environment, and that we treat suppliers and customers with respect recognising
their bespoke needs and requirements.
This year we are producing our inaugural sustainability report. This is the second year
we are reporting on sustainability, however we have taken significant steps to improve
the depth and breadth of coverage in this year’s report.
In this report we will touch on (a) what matters and what is material to our stakeholders
(b) what we are already doing to address stakeholder concerns, and (c) where we think
we can or need to make improvements to become a better corporate citizen.
21Annual Report - Year Ended 31 December 2016
SUSTAINABILITY REPORT
Why is Scales reporting on
sustainability?
We started our sustainability reporting journey in 2015 and we
are seeking to learn, gather feedback and improve through the
process. In making sustainability disclosures we are seeking to
meet the NZX’s proposed draft Corporate Governance Code
requirements. We strive to provide stakeholders with robust
information so that they may make informed decisions.
In our efforts to achieve this we have been influenced by the
internationally-recognised sustainability reporting standard
Global Reporting Initiative (GRI). We have used GRI as a high
level guide to determine our report topics.
What is included in this report?
The scope of this sustainability report covers all group
companies for the 2016 annual reporting period. However,
much of the report focusses on Mr Apple (including
the recently acquired Longview operations) and the
coldstore businesses as that is where material sustainability
impacts occur.
The boundary of this report includes all direct sustainability
impacts generated by Scales’ group companies. The report
does not include indirect impacts generated by suppliers and
service providers, but does reference customer and market
requirements, which in turn influence the direct operational
impacts of Scales.
How did we decide what to
report on?
In determining what to include in our sustainability report, we
have drawn upon the GRI’s materiality principles and related
guidance. We have identified 16 sustainability topics which
we believe reflect key sustainability concerns for Scales. The
matrix on the following page presents those topics that have
been identified and their relative level of materiality. Some less
material topics have not been reported on this year. We have
grouped the topics that we will be reporting on under three
headings (People, Marketplace, Environment) and we cover
each in further detail on the following pages.
Community
investment
Water
Energy
WasteBiosecurity
Spray use
& residues
Certification
& traceability
Workforce
stability
Health
& Safety
Employment
practices
E
n
v
i
r
o
n
m
e
n
t
M
a
r
k
e
t
p
l
a
c
e
P
e
o
p
l
e
Scales’ sustainability framework

Scales Corporation Limited22
SUSTAINABILITY REPORT
MediumImportance to external stakeholders
Importance to internal stakeholders
Medium
High
High
Highly Material
Environment
4 Water use
8 Carbon
9 Water quality
10 Energy use
11 Weather and climate
12 Biodiversity
13 Fruit waste
15 Refrigeration
16 Soil health
Marketplace
3 Supplier requirements
5 Spray use and residues
7 Food safety
14 Consumer preferences
65
15 14
3
1
7
2
4
9
8
1312
1611
10
People
1 Employment
2 Health and safety
6 Workforce stability
Scales’ sustainability matrix

23Annual Report - Year Ended 31 December 2016
SUSTAINABILITY REPORT
Health and Safety
We are uncompromising in our commitment to the
health and safety of our workers and the communities
in which we operate. Safety is our number one priority
and is the responsibility of every Director, manager
and team member. Health and safety is a separate
and significant part of every Board meeting and we
are constantly introducing new initiatives to further
improve the safety of our team at work. Positive
safety outcomes are achieved through a wide range
of management approaches with a focus on training,
continuous improvement and staff engagement.
Induction and training
New staff are inducted in all aspects of health and safety
when they commence employment. Managers and health and
safety representatives receive ongoing internal and external
training. External training includes NZQA accredited courses
that are operated by external health and safety specialists and
training providers.
Safety improvements
The process of identifying and eliminating hazards is core to
improving safety. Safety improvements are being made on a
daily basis across all parts of Scales’ business in an ongoing
effort to achieve zero harm at work.
As an example, the use of spot welds to improve traction
on ladder steps has led to a reduction in the
number of slips and resulting injuries on
our orchards.
Our people
Scales is extremely lucky to have a stable, experienced and hard-working
team of people. In return, we are committed to being an employer of choice,
developing our people’s skills and potential.

Scales Corporation Limited24
SUSTAINABILITY REPORT
Staff engagement
Staff are actively engaged and encouraged
to participate in health and safety
initiatives. The Your Extraordinary ideaS
(YES) programme run by Mr Apple is an
example of staff engagement leading to
the development of safety improvements.
Safety improvements suggested through
the YES programme are treated seriously
throughout the organisation and have
resulted in specific implementations
across the Group. For example, we have
implemented an initiative to remove
potentially hazardous gaps between
packing tables and conveyers in
the packhouse.
Employment
Scales employs over 600 permanent staff across our 10
operating entities. An additional 1,800 fixed term staff are
employed within the Horticulture division for periods of up to
7 months through the apple production cycle. Scales, through
Mr Apple, has long-term relationships with a large number
of these seasonal workers, resulting in them returning to the
Group for several years.
Maintaining a stable workforce and planning for growth
is a material issue for the horticulture sector. As one of the
largest employers in the region, we recognise that we have
a responsibility to train and develop the skill set of the local
community. This responsibility extends to creating bespoke
pathways to train workers without previous horticulture
experience and help find employment opportunities for those
who are out of work. To this end, our entities run a number of
programmes, which are touched on briefly below. We continue
to investigate ways to further improve the employment
opportunities they provide:
Apprenticeships
Mr Apple has a four-year apprenticeship programme offering
apprentices the opportunity to earn while they learn, studying
towards a National Certificate in Horticulture whilst in full-time
employment. In 2016, Mr Apple had 12 new apprentices.
Hua Initiative
Mr Apple has partnered with Hawke’s Bay Iwi Ngati
Kahungungu to actively recruit and develop employment
opportunities for whanau.
One of our staff members recruited through this initiative is
19 year old Te Atawhai Te Tomo, who joined Clive Orchard
in October 2016 after completing the Wairoa Waikaremoana
Youth Trust Program designed to introduce candidates into the
horticultural field.
Te Atawhai has become a valued member of Mr Apple,
working independently in re-development areas, post counts
and thinning. Te Atawhai aspires to attain her licence and to
be a competent tractor driver.
WINZ partnership
Mr Apple works together with WINZ to provide employment
readiness and job opportunities for local unemployed and
recently-released prisoners.
SEED Programme
Mr Apple has completed its fifth Year of the Seasonal
Employee/Employer Development (SEED) programme and
currently has 16 permanent staff recruited through this
programme who are on successful career pathways (see our
success stories on the following page).
Te Atawhai Te Tomo.

25Annual Report - Year Ended 31 December 2016
SUSTAINABILITY REPORT
Seeding success
Our SEED programme aims to create successful career pathways for new recruits.
Renee Makea – Renee started at Mr Apple in 2014, working
in the packing lanes and on our orchards. She subsequently
progressed to the position of Technician for Mr Apple’s largest
packhouse and most recently has been promoted to a Shift
Manager role. With the support of funding from the Ministry
of Social Development and in-work support from Mr Apple,
Renee has built an excellent career in the horticulture industry.

Annmarie Horn – Annmarie started work at Mr Apple in
2013 in a Validation role and also working on our orchards.
She progressed to Quality Supervisor and in 2016 Annmarie
was promoted to Packhouse Quality Manager. Recently she
travelled to Europe and spent a week in Spalding, England,
at Univeg, a large distribution centre. In 2015, Annmarie
completed a 10-week Dale Carnegie Leadership course and
won the highest award for achievement for the class.
Training
We invest in a wide range of training programmes to
upskill and develop our staff. Over 200 staff are in formal
training programmes including professional development,
National Certificate in Horticulture, driver training, numeracy
and literacy.
Community investment
We support a wide range of local community initiatives within
our operating entities. These investments include financial,
product and staff time contributions. Scales’ companies
are significant members of the Hawke’s Bay community in
particular. As a Group we are considering ways to further
enchance our contribution to the community.
Seasonal employment
The New Zealand horticulture sector is experiencing significant
growth. Undoubtedly this is positive for our staff and the
community, but meeting increasing peak seasonal labour
requirements is an increasing challenge. Whilst work for New
Zealanders and Hawke’s Bay residents is our first priority,
Mr Apple meets the balance of its workforce requirements
through its participation in the New Zealand Government’s
Recognised Seasonal Employer (RSE) scheme. In 2016, Mr
Apple employed 1,040 (2015: 914) RSE workers from 7 Pacific
nations, with an average work duration of 27 weeks.
Mr Apple has made significant investments in worker welfare,
accommodation, transportation and training to ensure the
success of the RSE scheme. Worker training includes leadership
development, financial literacy and driver training. RSE workers
are paid above minimum wage, at an average of $18.80
per hour compared to the minimum wage and holiday pay
of $16.47.
Worker welfare is recognised internationally as a material
issue for the horticulture sector and feedback from Scales’
stakeholders confirms this. Mr Apple is committed to
ensuring RSE workers are well looked after and that their
employment opportunities are optimised while in New
Zealand. Development initiatives include the identification of
future leaders and providing them with training in leadership,
supervision and management. Mr Apple ensures that all RSE
workers get a minimum of 30 hours work per week and
training in budgeting where appropriate.
Renee Makea.Annmarie Horn.

Scales Corporation Limited26
SUSTAINABILITY REPORT
Certification and auditing
Mr Apple meets a number of certification standards including
Global G.A.P, Tesco’s Nurture, Waitrose, British Retail
Consortium (BRC) and SEDEX certification standards.
These internationally-recognised standards cover a wide range
of good agricultural practices including pest and disease
management, environmental impact management, resource
use, soils management, landscape enhancement, health and
safety, and workers’ welfare. Certification to these standards is
verified though independent third-party external audits.
An extensive internal audit and monitoring programme is
continuously conducted by dedicated in-house teams to
ensure certifications are maintained and specific market and
customer requirements are being met. Within the Scales group
of companies a number of MPI and other quality-related
certifications are held by operating entities to meet market and
customer requirements.
Marketplace
Meeting Market and Customer Requirements
Market and customer requirements for safe food, and the demand for transparent
information about environmental and social impacts of food production methods,
are increasing. Our operating entities are meeting these requirements through
internationally-recognised certifications, the development of world-class traceability
systems and best-practice management approaches.
Traceability systems
Our operating entities have developed world-class traceability
systems that enable the accurate identification and tracking of
products from source to end consumer. One system, the MAX
system, is proprietary to Scales having been developed by Mr
Apple and a third party software developer.
The traceability systems are useful for product management
and are vital in streamlining the process of meeting market
and customer audit requirements. As an example, a carton of
apples in a UK supermarket can be traced back to an individual
bay in a Mr Apple orchard in the Hawke’s Bay. Data available
from the system includes: how that apple was grown; which
sprays were used and when; on what date the apple was
picked and its storage and transport history to market.
Spray use and residues
The use of chemical sprays to control pests and diseases and
maintain food safety is a market requirement. Mr Apple meets
specific spray use and residue requirements for different
markets and for individual customers. A comprehensive range
of management strategies are used by Mr Apple to minimise
spray use and target application for greatest efficacy.
Encouraging natural predators, using pheromone controls and
adjusting spray application timing to suit localised conditions
are all part of an integrated approach to pest management.
Ongoing investments in technology (such as the Billy spray
management application and Quantum Mist sprayers) and
training are also helping to deliver better spraying techniques
and reduced chemical application rates per hectare.
In many cases, the requirements of our customers are
significantly stricter than the regulatory frameworks in which
our customers operate. For example, one of the major
supermarkets in the EU requires that any spray residue found
on fruit is 70 per cent lower than the regulatory level set in
the EU.

27Annual Report - Year Ended 31 December 2016
SUSTAINABILITY REPORT
Water conservation
Water use is a material focus for our Horticulture division.
All water use on Mr Apple orchards is metered and
achieved 100 per cent compliance with the consented
caps set by the Regional Council. Extensive soil moisture
testing and water-saving irrigation technology is used to
optimise water use, delivering water only when and where
it’s needed.
Our water conservation efforts also extend beyond the
Horticulture division with rainwater harvesting at the
new Wiri coldstore in Auckland saving the equivalent of
approximately 2.5 Olympic-sized swimming pools in water
in 2016.
Energy efficiency
Our operating entities use over 70,000 megawatt hours of
electricity per year, the majority in the coldstore operations.
In line with our energy policy, we are committed to the
continuous improvement of the energy performance
of each business. This is an essential part of our overall
drive to exceed best-practice, improve productivity and
enhance competitiveness.
Our environment
Looking after our environment
As a food producer, food storage, and logistics business, we have a strong awareness
of our environmental impacts and the need to protect and enhance the natural systems
and resources on which it depends. Three key environmental focus areas for us are
water conservation, energy efficiency and waste minimisation.
We are committed to reducing energy intensity by 2.5 per
cent per annum and we have made significant investments
in control, management and monitoring systems for our
coldstore businesses. The investment in energy efficiency is
yielding positive results with a 25 per cent reduction in one
of our largest coldstores (the Whakatu Coldstores E Block in
Whakatu, Hawke’s Bay) since 2012.
Waste minimisation
Initiatives to minimise and eliminate waste have been
implemented throughout our operating entities including
recycling, re-use, repair systems and waste avoidance
strategies. The use of recycled content in packaging is
increasing and Mr Apple orchards are members of the
New Zealand AgRecovery programme which focusses
on the recovery of products specific to agricultural and
horticultural sectors.
Photo by Trevor Plunkett, Mr Apple

Divisional
Overview

In this section we examine the divisional performance and key drivers of
Scales’ three trading divisions. As before, we focus on the underlying financial
performance of our business divisions, which excludes certain one-off or non-cash
IFRS year-end adjustments. Where such adjustments have been made we identify
the quantum.
Horticulture
Our Horticulture division primarily comprises:
• Mr Apple, New Zealand’s largest fully vertically integrated apple business, based in Hawke’s Bay
• a 73 per cent stake in Fern Ridge, a fresh produce exporter in Hawke’s Bay
• Longview, a standalone Hawke’s Bay grower, packer and marketer of apples, acquired in November 2016.
Post-Harvest
(Packing/
Coolstorage)
Orchards/
Leases
Total grown
volume
~3.8m TCEs
Total export
volume ~5.9m
TCEs
Marketing
(Hawke’s Bay & Nelson):
• Mr Apple: ~1,100k TCEs (about 60 per cent in Hawke’s Bay, 40 per cent in Nelson).
• Fern Ridge: ~700k TCEs (all major growing regions).
• Longview: ~300k TCEs (all from the Hawke’s Bay). Longview’s previous shareholders (representing >50 per
cent of this volume) have committed to supply for a 1-3 year period as part of the transaction.
~4,700k TCEs
marketed
globally
~4,300k TCEs
packed and
stored
1,045ha planted
orchard yielding
3,550k TCEs
~700k TCEs
marketed
globally
~530k TCEs
marketed
globally
~85 planted
orchard yielding
~230k TCEs
~530k TCEs
packed and
stored
Longview
+ acquired orchards
Independent
Growers
Includes
Independent
Growers
Includes
Independent
Growers
Includes
Independent
Growers
Includes
Independent
Growers
29Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW
Mr Apple
Fern Ridge

With the addition of Longview and Fern Ridge, Scales’
Horticulture division is expected to handle more than
25 per cent of New Zealand’s total apple crop.
We are pleased to present a very strong performance from our Horticulture division. During 2016:
The division achieved an Underlying EBITDA of $45.3 million, 13 per cent above last year.
Mr Apple sold 4.77 million TCEs to more than 150 customers in approximately 40 countries.
Including Fern Ridge, the Horticulture division
11
sold nearly 5.5 million TCEs.
In this section we provide additional detail and insight into our Horticulture
division, the largest division within the Scales group. During 2016 we launched
our new marketing campaign, which focuses on a 5-point promise - Pure Place,
Pure Expertise, Pure Control, Pure Safety, Pure Delight. Elements of the market
campaign are captured in the following pages. The 5-point promise reflects the
5-point star that can be seen if an apple is cut perpendicular to the core.
Orchard Redevelopment
Orchard redevelopment has been a major strategy
for the division over the last 9 years, with a
significant investment being made. This investment
has seen large portions of our orchards, and
orchards that we have acquired, being redeveloped
into premium varieties targeted at Asian and Middle
Eastern consumers.
Large areas of orchard that were redeveloped
between 2011 and 2012 especially are now reaching
full maturity.
We continue to review opportunities for
redevelopment. Every variety in every orchard is
measured from a profitability perspective. We review
yield (which is a function of orchard management,
tree spacing, and the suitability of growing
conditions for the variety being grown), costs, and
profitability on a granular level.
Low or under-performing orchards will be marked
for redevelopment. New orchard development will
be focused on new and exciting varieties for which
Mr Apple has proprietary rights.
11
The acquisition of Longview was made after the 2016 apple season had ended.
Scales Corporation Limited30
DIVISIONAL OVERVIEW

Apple Varieties and Brands
Mr Apple is all about the apple. As a result, it has a large
range of traditional and new premium varieties, with
different characteristics and quality grades to meet customer
requirements and price points.
The introduction of new apple varieties is extremely important
to the Horticulture division. We have partnered with two other
large New Zealand apple growers to form Fruitcraft
®
to secure
proprietary rights to new apple varieties and pool resources
to market those new varieties. Through Fruitcraft
®
we have
developed four new apple brands:
• Dazzle
®
. Launched in December 2016, Dazzle
®
is a big,
highly coloured and very sweet apple, targeted towards
the Asian market. It was developed by Prevar Limited, with
the worldwide master licensing rights for production and
marketing granted to Fruitcraft
®
.
• The very best of the best Fuji apples can be marketed under
the Diva
®
brand. Diva
®
is targeted at consumers in Asia
and the Middle East where it commands a premium price.
• An early season pink to bright red apple with a sweet
honey flavour.
• A highly productive, large, full-red apple that also matures
early in the season.
Unlike Dazzle
®
, the latter two brands have yet to have their full
marketing launches. These brands must be marketed through
either Mr Apple or one of our partner apple growers.
Markets
In 2016 we sold apples to more than 150 customers in
approximately 40 countries. Sales to Asia and the Middle East
accounted for 53 per cent of all sales in 2016.
The increased significance of Asia and the Middle East is
considerable. National data from 2005 shows that only 14 per
cent of New Zealand’s apple exports went to Asia
12
. Increased
sales to Asia has come at the expense of sales to the UK and
Europe. Where these markets once accounted for 72 per cent
of New Zealand exports, Mr Apple sells only 40 per cent of its
fruit to these markets today.
The increase in sales to Asia and the Middle East reflects
changes in the trading terms that we have with these countries
(for example various free trade agreements entered into by
our respective governments), geopolitical developments, and
conscious orchard development focused on varieties that
appeal to consumers in those markets.
Asia and the Middle East are expected to continue to be key
markets for us and we will continue to focus innovation and
development towards opportunities in the region. This reflects:
• The large population in the region.
• A proven propensity to consume apples (China consumers
are one of, if not, the highest per capita consumers of
apples in the world).
• Local apple production is limited either due to
alternative land uses or a climate that is not suitable for
growing apples.
• Market proximity enabling faster shipping and lower
distribution costs.
• A diversity of markets and customers within each market
enabling adequate returns.
As our orchard continues to mature, and as the Longview
orchard is integrated into our business, we expect to continue
to increase our sales to this region.
12
Source: Coriolis Research, NZ Pipfruit Overview, 2006.
Asia & Middle
East 53%
North
America
7%
UK
10%
Europe
30%
Asia & Middle
East 53%
North
America
5%
UK
13%
Europe
29%
2015
Mr Apple - Sales by Region (TCEs)
2016
Asia & Middle
East 53%
North
America
7%
UK
10%
Europe
30%
Asia & Middle
East 53%
North
America
5%
UK
13%
Europe
29%
31Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW

DIVISIONAL OVERVIEW
Scales Corporation Limited 32
Horticulture - To China and Beyond
China has been identified as a key export market for Mr Apple
going forward:
• There is currently no dominant apple brand in the China
market, providing an opportunity for Mr Apple to take a
leadership role.
• Technology has opened up new routes to market for
the sale of produce in China. In addition to traditional
wholesale sales, technology and the internet enable us to
sell directly to retailers as well as selling online.
We have undertaken significant field research to understand
the buying and eating habits of consumers in the China
market. This research has been instrumental in informing
how we should be marketing and branding our apples to
optimise uptake.
We have also been evolving the way we market ourselves.
Our initial marketing focus was a business-to-business focus
to maximise our appeal to wholesalers and retailers. Key
points of difference relate to increasing foot traffic and sales
volumes by stocking our apples. The next step in our branding
development is to appeal directly to consumers. This has led
to the evolved branding line “every bite ... pure delight” with
a focus on the quality and traceability of New Zealand apples
that are ready to eat straight from the tree.
Between our apple varieties, market focus, and shareholder
partner we are hoping to develop traction in the China market
over the years to come.
Summary
2016 was an exciting year in the Horticulture division’s
development. Not only did we meet a production target that
we had set for 2020, but the business was notably expanded
both through our increased share in Fern Ridge as well as
the acquisition of Longview near the end of the year. The
Longview acquisition and investments we have been making in
branding reinforce our position as a serious and credible global
apple exporter.

Financial Performance and Key Operating Statistics
Summary Performance
The table below shows the financial performance of our Horticulture division for 2016 and 2015 (restated):
Horticulture
$’000
20162015
(Restated)
Revenue230,077 178,126
Underlying Cost of Sales(162,684)(113,507)
Underlying Gross Margin67,393 64,619
Underlying Gross Margin %29%36%
Other income, administration and operating expenses(22,054)(25,441)
Underlying Mr Apple EBITDA 43,636 39,178
Underlying Fern Ridge EBITDA 2,114 -
Underlying Longview EBITDA (411) -
Share of Fern Ridge net profit - 814
Underlying Horticulture EBITDA45,339 39,992
Depreciation and amortisation(6,228)(5,791)
Underlying Horticulture EBIT39,111 34,201
IFRS impacts(81)1,632
Horticulture EBITDA45,258 41,624
Horticulture EBIT39,030 35,833
Capital employed143,380 100,221
Return on capital employed
13
28%34%
NB. The table above includes 100 per cent of the EBITDA contribution from Fern Ridge. Approximately 27 per cent of Fern Ridge is
owned by minority shareholders. We record a minority interest of $0.4 million in our group results reflecting their share of tax paid
profit from Fern Ridge.
DIVISIONAL OVERVIEW
Our Horticulture division delivered
another strong performance during
2016. Revenue was 29 per cent ahead
of 2015, reflecting a larger crop and the
consolidation of Fern Ridge revenues
(approximately $35 million), whilst the
gross margin percentage was down
primarily due to the consolidation of
Fern Ridge’s low margin activities.
As a result of our increased shareholding, as of January 2016
Fern Ridge became a subsidiary of the group and rather than
equity accounting for 50 per cent of net profit after tax, 100
per cent of Fern Ridge’s revenues and costs are consolidated
into the group with a minority interest deducted.
Both sales volumes and average prices were above 2015 levels
and this, together with efficiencies in our packhouse, resulted
in an Underlying EBITDA that was 13 per cent ahead of 2015.
This includes:
• An 11 per cent increase in Underlying EBITDA from
Mr Apple.
• An EBITDA of $2.1 million from Fern Ridge, which
represents another successful year from that operation.
• A small loss from Longview due to the timing of our
acquisition (this loss relates to certain preparatory costs
associated with readying the business for the upcoming
2017 harvest). Longview’s results will be consolidated
within Mr Apple during 2017.
Non-cash IFRS adjustments, before tax, in 2016 relate to
revaluation of foreign exchange contracts and fair value
gains on unharvested produce (mostly relating to the initial
application of the new accounting policy outlined above).
We note that the two impacts largely offset one another to
create a net impact of -$0.1 million.
Non-cash IFRS adjustments of $1.6 million in 2015 (restated)
relate to revaluation of foreign exchange contracts.
Note that gains and losses on foreign exchange contracts
closed out during the year are a normal part of our business
and are included in the calculation of Underlying EBITDA.
13
Due to the timing of the acquisition, Longview has been excluded from the calculation of 2016 Horticulture ROCE.
33Annual Report - Year Ended 31 December 2016

Orchard Statistics
2016201520142013201220112010
Orchard
Total planted orchard (at time of harvest)*Ha.1,0421,0521,0371,028852803802
Fully mature equivalent planted orchardHa.922902871858716703684
Apples picked (Mr Apple orchards)TCE 000s4,3604,4333,6683,8902,9213,1682,701
Apples packed (Mr Apple + external
growers (Hawke’s Bay))TCE 000s4,1503,8093,3273,4192,7862,7212,431
Exported volume
Mr AppleTCE 000s3,5463,1552,7522,8332,1442,0011,868
External growersTCE 000s1,1871,0191,2181,3401,5001,6821,429
TotalTCE 000s4,7334,1743,9704,1733,6443,6833,297
Mr Apple ‘packout’ %%81%71%75%73%73%63%69%
Total NZ productionTCE 000s19,34618,36017,25917,77615,83616,90414,749
Mr Apple own grown volume share of NZ
production%18.3%17.2%15.9%15.9%13.5%11.8%12.7%
*Planted orchard at the end of the year, including Longview orchards and orchards acquired through the Longview transaction, was 1,144 hectares.
More than half a billion apples were picked this year from over 1,042 hectares of Mr Apple’s planted apple orchard. This equates to
a gross production of 4.36 million TCEs (on average there were 116 apples in a TCE) from which 3.55 million TCEs were exported.
Production from our owned and leased orchards accounted for 18.3 per cent of the national crop, up from 17.2 per cent in 2015.
The following tables highlight various Key Operating Statistics that we monitor and report against.
Scales Corporation Limited34
DIVISIONAL OVERVIEW

Consistency and traceability is key to our operations.
Volumes and Prices
The table below shows volumes and prices (on a NZD FOB basis) for 2016 and 2015:
Varietal Performance - Mr Apple Volumes
Volumes by Variety (TCE 000s)20162015
Premium Varieties
NZ Queen
343214
Pink Lady
301282
Red Sports (Fuji and Royal Gala)
866831
Other
147127
Total
1,6571,454
Growth
14%40%
% premium
47%46%
Traditional Varieties
Braeburn
735705
Royal Gala
516475
Other
638521
Total
1,8891,701
Growth
11%(1%)
Total Mr Apple owned and leased orchards3,5463,155
Growth
12%15%
Prices by Variety (NZD / TCE (FOB))
Weighted average price for premium varieties
37.437.8
Weighted average price for traditional varieties
29.328.0
Total weighted average price
33.132.5
Pure Control
35Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW

20162015
NZD:USD0.700.73
NZD:EUR0.600.60
NZD:GBP0.470.48
NZD:CAD
0.86
0.86

Premium varieties
During 2016 we exported 1.66 million TCEs of premium fruit, an increase of 14 per cent, as we benefited from the maturing of
recently developed orchards together with an investment in reflective foil to improve apple colour.
The weighted average price achieved for our premium apples of $37.40 continues to be a solid result for our premium apples which
are now nearly accounting for 50 per cent of our apple volume. A decrease on the weighted average 2015 price is explained by
changes in varietal and market mix, movements in exchanges rates, changes in the in-market costs to sell, and the clearing price
for apples.
Traditional varieties
During 2016 we achieved an 11 per cent increase in the export of traditional varieties, from 1.70 million TCEs to
1.89 million TCEs. This volume includes a large increase in higher value traditional varieties (Fuji and Jazz) in turn
driving an increase in the weighted average selling price for traditional apples.
Exchange Rates
The table below summarises weighted average exchange rates for 2016 and 2015.
All rates were generally in line with 2015 reflecting our hedged position and general rate movements. Foreign
exchange exposure continues to be managed, with all efforts made to lock in favourable movements in rates and
thus minimise the impact of sudden changes on a year to year basis.
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2010201120122013201420152016
4,000
Other Premium
Red Sports (Fuji and Royal Gala)
Pink Lady
NZ Queen
Other Traditional
Royal Gala
Braeburn
Volumes by Variety (TCE 000s)
Volumes and Prices (continued)
Scales Corporation Limited36
DIVISIONAL OVERVIEW

2017 Outlook
The team at Mr Apple is working hard to ensure that the brand is given
the prominence that it deserves, particularly in the Asian and Middle
Eastern markets. And the addition of Longview to the Scales portfolio
provides further exciting opportunities for the company in 2017.
Key highlights for 2017:
Gross production is expected to be higher than 2016 with the addition of Longview volumes and
ongoing orchard maturity. However we are assuming that packout rates return to longer term
averages which will result in an overall export volume that is in line with 2016 volumes.
Marketing and branding effort will be continued in China and other Asian countries, in order to
capitalise on the opportunities those markets bring.
Foreign exchange rates have moved against us. Whilst we have some level of protection from
exchange rate contracts taken out in previous periods, after several years of positive exchange rate
movements, at current levels the rates will be a headwind for the business post 2017.
37Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW

Coldstores
$12.6m
77%
Liqueo
$1.8m
11%
Scales Logistics
$1.9m
12%
Storage & Logistics
Polarcold and Waikato Coldstores - specialists in controlled temperature storage and warehousing, with
facilities in Auckland, Waikato, Hawke’s Bay, Timaru, Christchurch and Dunedin. Our coldstore businesses
have total temperature controlled storage capacity of over 780,000m³, making us the largest independent
providers of temperature controlled storage in New Zealand
14
.
Scales Logistics – leaders in ocean freight services to exporters and importers of perishable products
including fish, fruit and vegetables. With offices in Christchurch, Tauranga and the Hawke’s Bay, Scales
Logistics specialises in providing tailored international freight services and all land-side services for import
and export transportation.
Balance Cargo – provides air freight services, including a purpose built chiller and warehousing facilities.
Balance Cargo was formed in 2012 as part of Scales Logistics and is based in Christchurch.
Liqueo Bulk Storage - operates bulk liquid storage terminals with a total capacity of approximately 20,300
tonnes for the storage of tallow, edible and non-edible oils, liquid stock foods and liquid waste products.
It has direct ship to shore loading / unloading capability at the Ports of Timaru and Napier.
14
Whakatu Coldstores managed a facility in Wellington under contract during 2016. Damage caused by the Wellington earthquake in
November 2016 has caused this facility to close in 2017.
20162015
Coldstores
$11.7m
72%
Liqueo
$2.3m
14%
Scales Logistics
$2.3m
14%
Divisional Components of EBITDA ($ millions)
The range of services provided by the Storage & Logistics
division gives our customers end-to-end confidence that their
product will arrive fresh, on time, and complying with all
relevant import rules and regulations.
Our Storage & Logistics division is characterised by extremely
high barriers to entry. Whilst we will experience some
movement from year to year due to the timing of the various
primary sector production seasons (concentrated around
the New Zealand summer), and the average duration goods
remain in store, over an extended period this division has
delivered consistent earnings. During 2016 our coldstore
activities were impacted by higher turnaround cycles, a slow start
to the production season at the end of the year, and the exit of
some customers. As mentioned, we are conducting a review of
our activities to understand if any changes to our activities are
required. As a whole, the profitability of the Storage & Logistics
division shows strong consistency.
As shown in the chart below, the storage components of the
business (being the coldstorage and bulk liquid storage business)
collectively make up 86 per cent of the divisional EBITDA:
Our Storage & Logistics division provides an end-to-end solution for
our customers’ perishable produce. The division comprises:
Scales Corporation Limited38
DIVISIONAL OVERVIEW

Financial Performance
The table below outlines Key Performance Indicators and the summarised financial performance for the
Storage & Logistics division:
Storage & Logistics
20162015
Key Operational Metrics
Polarcold and Whakatu Coldstores
Total available refrigerated coldstore space
(at end of year)m3 000s780.4 721.6
Liqueo
Installed capacity of all tanksMT20,308 22,500
Scales Logistics
TEUs shippedTEUs24,713 21,125
Airfreight tonnes managedMT3,3062,832
Profitability ($’000)
Revenue108,383 95,622
Cost of sales(70,221)(61,541)
Gross Margin38,162 34,081
Gross Margin %35%36%
Administration, operating expenses and other gains
and losses(21,962)(17,787)
Underlying EBITDA
Coldstores11,660 12,584
Liqueo2,283 1,761
Scales Logistics2,257 1,931
Underlying Storage & Logistics EBITDA16,200 16,276
Depreciation and amortisation(5,330)(4,993)
Underlying Storage & Logistics EBIT10,870 11,283
IFRS foreign exchange hedge revaluations(18)18
Storage & Logistics EBITDA16,18216,294
Storage & Logistics EBIT10,85211,301
Capital employed98,10583,809
Return on capital employed
11%13%
Divisional Developments
During 2016, the Storage & Logistics division obtained the
benefit of a full year of trading from a number of initiatives or
acquisitions undertaken in 2015:
• The Auckland coldstore, which opened in November 2015.
We are experiencing strong demand from FMCG customers
in Auckland and anticipate a ‘mature’ contribution from
this store in 2017.
• Liqueo obtained the benefit of additional revenues and
increased space from the upgrade of the Timaru facility,
the 20 year contract for the storage of edible oils and the
acquisition of the Ahuriri (Napier) bulk liquid processing
operation (August 2015). These factors contributed to a
meaningful uplift in contribution from Liqueo.
• The division continued the roll out of its highly
successful coldstore software system. This software
upgrade is expected to be completed in 2017 and
will enable the entire group to provide storage
solutions to FMCG customers.
• Scales Logistics continued its journey of strong
organic growth. TEUs shipped and airfreight tonnes
handled were both up by 17 per cent on 2015 levels
resulting in a record contribution from this operation.
This reflects increased trade from captive customers
(Mr Apple and Meateor), good apple volumes in
2016, and the acquisition of new customers.
39Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW

Food Ingredients
Divisional Developments
Meateor provides ingredients used in the increasingly lucrative
petfood industry, an industry that was estimated to be worth
~US$75 billion in 2016, an increase of 4.8 per cent over 2015
15
.
During 2016, we continued to build on opportunities in alternative
proteins (i.e. meat other than New Zealand lamb), including the
ongoing development of our Australian partnership and extended
protein options from New Zealand suppliers.
Profruit sells its juice concentrate to customers in New Zealand,
Australia, USA and a growing number of Asian countries. Profruit
extracts a premium for its juice concentrate due to being 100 per
cent New Zealand made and to very high quality specifications.
15
Petfoodindustry.com, ‘Global pet food sales update: ending 2016 on a high note’
(3 January 2017).
In aggregate, the division delivered $16.2m in Underlying
EBITDA, 0.5 per cent below 2015. Both Liqueo and Scales
Logistics delivered solid growth in EBITDA whilst the
contribution from our Coldstore operations was lower than
anticipated reflecting external factors described above. In
aggregate the group delivered another highly consistent
outcome building on the strong storage and logistics platform
that we have created.
2017 Outlook
The Storage & Logistics division is well
positioned. We expect that the 2017
result will improve upon 2016 as the
performance from Coldstores returns to
longer run levels.
Meateor – a processor and marketer of pet food ingredients for the global pet food industry. It
operates processing plants in Whakatu and Dunedin with a combined processing capacity of more
than 30,000 metric tonnes a year.
Profruit – a 50 per cent owned manufacturer of high quality apple, kiwifruit and pear juice
concentrates, located in Hawke’s Bay.
Our Food Ingredients division converts agricultural by-products
into valuable food commodities. It comprises two businesses
that complement Scales’ other businesses:
Storage & Logistics (continued)
Scales Corporation Limited40
DIVISIONAL OVERVIEW

Other highlights of this result include:
• Meateor delivered an Underlying EBITDA that was 24 per
cent higher than 2015 reflecting increased volumes and
scale efficiencies:
–Sales volumes (nearly 23,000 MT) represents a new
record for the business, an indication that the team
is successfully executing on their strategy to diversify
protein sources.
–The increased volume was largely handled by the same
overhead and infrastructure as we had in place during
2015, resulting in efficiencies.
• Our share of earnings from juice concentrate manufacturer,
Profruit, was 11 per cent ahead of 2015.
–Profruit processed 47,481 MT of apple and kiwifruit for
the 2016 year. Considering the later start to the season
(processing started on 21 March, more than two weeks
later than normal) and a higher proportion of kiwifruit
(which is slower to process) the 2016 season was an
outstanding processing season for Profruit.
–Total sale volumes of 5.7 million litres is a strong
result with higher levels of kiwifruit volumes sold and
processed making up for lower apple volumes reflecting
the favourable apple growing conditions in 2016.
2017 Outlook
Once again our Food Ingredients division
produced an excellent result, setting the
bar even higher for future years.
We continue to review ways that we can
offer our customers a competitive edge
through innovation and we are exploring
a number of opportunities to continue
the growth of this division in the future.
Food Ingredients
20162015
Key Operational Metrics
Meateor - Sales volumes (MT) 22,97120,220
Profruit - Sales volumes (thousands of litres)5,7126,117
Profitability ($’000)
Meateor revenue58,038 48,570
Meateor cost of sales(47,766)(39,984)
Gross Margin10,272 8,586
Gross Margin %18%18%
Administration, operating expenses and other gains and losses(2,702)(2,486)
Underlying Meateor EBITDA7,570 6,099
Share of Profruit net profit1,612 1,454
Underlying Food Ingredients EBITDA9,182 7,554
Depreciation and amortisation(503)(499)
Underlying Food Ingredients EBIT8,679 7,054
IFRS foreign exchange hedge revaluations(166)109
Food Ingredients EBITDA9,016 7,663
Food Ingredients EBIT8,513 7,163
Capital employed16,525 14,391
Return on capital employed53%49%
Financial Performance
This division continued its excellent growth curve by producing an Underlying EBITDA of $9.2 million, 22 per cent ahead
of 2015:
41Annual Report - Year Ended 31 December 2016
DIVISIONAL OVERVIEW

Leadership
Profiles
LEADERSHIP PROFILES
Jon Mayson, Non-Executive Independent Chairman
Jon was elected to the Board as Chairman in 2012, having
previously been appointed Chairman of Scales’ Storage &
Logistics division. Jon was the CEO of the Port of Tauranga
from 1997 to 2005 and oversaw the Port’s expansion
to become New Zealand’s largest export port. He is also
Chairman of Ziwipeak Limited, Martin Aircraft Company
Limited and Titanium Technologies New Zealand, and was
previously Chairman of New Zealand Trade and Enterprise.
Jon is also a Director of Ports of Auckland Limited, Te Arawa
Group Holdings Limited and Chiefs Rugby Club GP Limited.
He was made a Companion of the New Zealand Order
of Merit (CNZM) in 2006 for his services to the shipping
industry and export. Jon is a member of Scales’ Nominations
and Remuneration Committee.
Board of Directors (as at 17 March 2017)
Andy Borland, Executive Director
Andy joined Scales in 2007 and became Managing Director
in 2011. Prior to joining Scales he had a 20 year career in
banking, with his final role being Head of Corporate at
Westpac New Zealand. Andy has overall responsibility for the
strategic direction and day-to-day management of Scales. In
addition to his directorships of the Group, Andy is currently a
Chairman of Akaroa Salmon Limited, Primary Collaboration
New Zealand Limited and Primary Collaboration New Zealand
(Shanghai) Co. Limited, and is a Director of apple and pear
industry body Pipfruit New Zealand Incorporated, George
H Investments Limited, Rabobank New Zealand Limited,
Rabobank Australia Limited and Rabo Australia Limited.
Andy also has an involvement with Central Otago deer
and beef cattle breeding and fattening farming company
Loganbrae Limited.
Tim Goodacre, Non-Executive Independent Deputy
Chairman
Tim was elected to the Board in 2014, having been appointed
Chairman of Scales’ Horticulture division in 2012. He has been
involved in agribusiness for nearly forty years and was CEO
of Zespri International from 2003 to 2007. Tim is currently:
Chairman of The Nutritious Kiwifruit Company Limited,
which is a consortium of New Zealand kiwi fruit suppliers
selling under a new single brand based around nutrition and
health on the Australian market; Director of Prevar Limited,
an Australian and New Zealand joint venture apple and
pear industry company, supporting the development and
commercialisation of new apple and pear varieties; Director
of Nagambie Healthcare, a community hospital and aged care
facility, based in regional Victoria, Australia; and Director of
Featherston Resources Limited. Tim is a member of Scales’
Nominations and Remuneration Committee.
Scales Corporation Limited42

Nick Harris, Non-Executive Independent Director
Nick was elected to the Board in 2014, having been appointed
a Director of both Scales’ Storage & Logistics division and
Meateor in 2012. Nick was previously the Managing Director,
and was one of the founding shareholders of Hellers Limited,
New Zealand’s largest bacon, ham and small goods company.
Nick is a shareholder and Director of several private companies.
He also chairs Enterprise North Canterbury Trust and is Deputy
Chairman of the Canterbury Hockey Association. Nick is a
member of Scales’ Audit and Risk Management Committee.
Mark Hutton, Non-Executive Independent Director
Mark was elected to the Board in 2011. He is a founding
partner of Direct Capital. Mark has a background in private
equity, specialising in portfolio management with a focus
on strategy, growth and capital funding. Mark is currently a
Director of a number of Direct Capital entities and portfolio
companies including George H Investments Limited and Hiway
Group Limited. Mark is also a Director of dual listed (NZX
and ASX), New Zealand King Salmon Investments Limited.
Mark is Chairman of Scales’ Nominations and Remuneration
Committee and is a member of Scales’ Audit and Risk
Management Committee.
Alan Isaac, Non-Executive Independent Director
Alan was elected to the Board in 2014. Alan was the President
of the International Cricket Council until June 2014 and
is currently Chairman of McGrathNicol and Partners NZ, a
Director of Opus International Consultants Limited, AKA
Investments Limited, Murray Capital General Partner Limited,
New Zealand Vault Limited, Rakaia Investments Limited,
Fliway Group Limited, Oceania Healthcare (NZ) Limited and
Skellerup Holdings Limited. In addition, he is the Chairman of
or advisor to a number of independent committees. Alan has
an extensive background in the accounting and finance field
and is a former National Chairman of KPMG. He was made
a Companion of the New Zealand Order of Merit (CNZM) in
2013 for services to cricket and business. Alan is Chairman of
Scales’ Audit and Risk Management Committee.
Weiyong Wang, Non-Executive Director
Mr Wang was appointed to the Board in June 2016. He is the
CEO, and a Director, of China Resources Ng Fung Limited and
its holding company, China Resources Enterprise, Limited.
Mr Wang joined the China Resources National Corporation in
1988, and holds a Bachelor of Science degree and a Bachelor’s
degree in Management Science from the University of Science
and Technology of China, as well as a Master’s degree in
Engineering from Tsinghua University. He has extensive
experience in strategic planning and corporate management.
43Annual Report - Year Ended 31 December 2016
LEADERSHIP PROFILES

Andy Borland, Managing Director
Andy joined Scales in 2007 and became Managing Director in
2011. Andy’s full biography is set out above.
Steve Kennelly, Chief Financial Officer
Steve has been with Scales since 1993 in a variety of
accounting and financial roles. As CFO, Steve is responsible for
finance, funding, legal, company secretarial and information
technology. Steve is a member of Chartered Accountants
Australia and New Zealand.
Andrew van Workum, CEO Mr Apple
Andrew has worked in the apple industry for over 30 years. He
joined Mr Apple at its inception in 2001 and prior to that was
General Manager of Mr Apple’s predecessor, Grocorp Pacific
Limited, where he worked for 16 years. He has extensive
experience in the production aspects of the apple industry, and
was previously a Director of Pipfruit New Zealand.
Stephen Foote, CEO Whakatu Coldstores and Polarcold
Stephen has been with the Whakatu Coldstores’ group of
companies in various management roles for 23 years. Prior to
joining Whakatu Coldstores, Stephen worked for Dominion
Breweries and had interests in orcharding in Hawke’s Bay.
John Sainsbury, CEO Meateor
John has been with Meateor in various management roles
for the last 16 years. Prior to that, John worked in senior
management, marketing and operational roles in the United
States. John was appointed CEO of Meateor Foods in
March 2015.
Kent Ritchie, CEO Scales Logistics
Kent joined Scales in 1998, and has spent over 30 years in the
shipping industry. He has been involved in setting up shipping
services from New Zealand, has experience in all aspects of
the transport industry and has led Scales’ expansion into the
logistics arena.
Kevin Cahill, Executive Director Liqueo
Kevin joined the staff of Polarcold in 1978 as Works Manager,
when the company was known as SC Co-op Cool Stores
Limited. Kevin was previously the CEO of Polarcold and Liqueo,
retiring from his position as CEO of Polarcold in May 2015,
having spent 37 years with the company.
Management Profiles
Leadership Profiles (continued)
LEADERSHIP PROFILES
Scales Corporation Limited 44

45Annual Report - Year Ended 31 December 2016

Financial
Statements

Contents
Comprehensive income 48
The income earned and operating expenditure incurred
by the Scales Group during the financial year (profit or
loss) followed by the other comprehensive income that
is taken to reserves in equity.
Changes in equity 49
The opening balance, details of movements during
the year and the balance of each component of
shareholders’ equity at the end of the financial year.
Financial position 50
The Scales Group assets, liabilities and equity at the
end of the financial year.
Cash flows 51
Cash generated and used in the operating, investing
and financing activities of the Scales Group.
Notes to the financial statements
About this report 53
A. Segment information 55
B. Financial performance 57
B1. Revenue
B2. Cost of sales, administration and
operating expenses
B3. Other income and losses
B4. Finance cost
B5. Taxation
B6. Foreign currency transactions
C. Key assets 61
C1. Property, plant and equipment
C2. Unharvested agricultural produce
C3. Investments accounted for using the
equity method
C4. Goodwill
C5. Inventories
C6. Impairment of assets
D. Capital funding 66
D1. Share capital
D2. Reserves
D3. Dividends
D4. Imputation credit account
D5. Earnings per share
E. Financial assets and liabilities 68
E1. Trade and other receivables
E2. Other financial assets
E3. Trade and other payables
E4. Borrowings
E5. Other financial liabilities
E6. Interest rate risk
E7. Foreign currency risk
E8. Categories of financial instruments
E9. Maturity profile of financial liabilities
F. Group structure 73
F1. Subsidiary companies
F2. Acquisition of subsidiaries
F3. Investments accounted for using the
equity method
G. Other 76
G1. Capital commitments
G2. Operating lease commitments
G3. Related party disclosures
G4. Events occurring after balance date
H. Adoption of amended
accounting standards
and resulting restatement 78
47Annual Report - Year Ended 31 December 2016
FINANCIAL STATEMENTS

Scales Corporation Limited48
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2016
20162015
NOTE$’000
$’000
(Restated)
RevenueB1
373,927301,410
Cost of salesB2
(257,038) (194,142)

116,889 107,268
Share of profi ts of entities accounted for using the equity method
C3
1,612 2,268
Other incomeB3
2751,946
Administration and operating expensesB2
(50,197) (48,486)
Other lossesB3 (1,258) -
EBITDA
67,321 62,996
Amortisation
(661) (1,088)
Depreciation
C1 (11,438) (10,243)
EBIT
55,222 51,665
Finance revenue
167 185
Finance costB4
(2,533) (2,801)
PROFIT BEFORE INCOME TAX EXPENSE
52,856 49,049
Income tax expense B5
14,678 13,155
PROFIT FOR THE YEAR 38,178 35,894
OTHER COMPREHENSIVE INCOME
Items that may be reclassifi ed subsequently to profi t or loss:
Gain (loss) on cash fl ow hedges

9,382 (8)
Income tax relating to cash fl ow hedges
(2,627) (27)
6,755 (35)
Items that will not be reclassifi ed to profi t or loss:
Revaluation of land and buildings

26,945-
Income tax relating to buildings (3,041)-
Revaluation of apple trees 11,839-
Income tax relating to apple trees (3,315)-
32,428-
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR 39,183 (35)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
77,361 35,859
Profi t for the Year Attributable to:
Equity holders of the Company 37,772 35,894
Non-controlling Interests 406-
38,178 35,894
Total Comprehensive Income for the Year Attributable to:
Equity holders of the Company 76,955 35,859
Non-controlling Interests 406-
77,361 35,859
EARNINGS PER SHARE:
D5
Basic and diluted earnings per share (cents)

27.0 25.7
The notes to the fi nancial statements on pages 53 to 79 form part of and should be read in conjunction with this statement.

49Annual Report - Year Ended 31 December 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2016

Share
Capital
Revaluation
Reserve
Hedging
Reserve
Equity-settled
Employee
Benefi ts
Reserve
Retained
Earnings
Attributable
to Owners
of the
Company
Non-
controlling
InterestsTotal
NOTE$’000$’000$’000$’000$’000$’000$’000$’000
Balance at
1 January 2015 90,915 25,289 2,245 65 27,816 146,330- 146,330
Profi t for the year
(Restated) - - - - 35,894 35,894 - 35,894
Other comprehensive
loss for the year - - (35) - - (35) - (35)
Total comprehensive
income for the year
(Restated) - - (35) - 35,894 35,859 - 35,859
Recognition of
share-based paymentsD2 - - - 168 - 168 - 168
Shares purchasedD1 (160) - - - - (160) - (160)
Dividends paidD3 - - - - (9,685) (9,685) - (9,685)
Dividends declaredD3 - - - - (14,527) (14,527) - (14,527)
Balance at
31 December 2015
(Restated)

90,755 25,289 2,210 233 39,498 157,985 - 157,985
Profi t for the year - - - - 37,772 37,772 406 38,178
Other comprehensive
income for the year - 32,428 6,755 - - 39,183 - 39,183
Total comprehensive
income for the year - 32,428 6,755 - 37,772 76,955 406 77,361
Recognition of
share-based payments D2 - - - 270 - 270 - 270
Shares purchasedD1(1,007) - - - - (1,007) - (1,007)
Dividends paidD3 - - - - (8,974) (8,974) - (8,974)
Dividends declaredD3 - - - - (11,045) (11,045) - (11,045)
Balance at
31 December 201689,748 57,717 8,965 503 57,251 214,184 406 214,590
The notes to the fi nancial statements on pages 53 to 79 form part of and should be read in conjunction with this statement.

Scales Corporation Limited 50
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2016
20162015
NOTE$’000
$’000
(Restated)
EQUITY
Share capital D1 89,748 90,755
Revaluation reserveD2 57,717 25,289
Hedging reserveD2 8,965 2,210
Equity-settled employee benefi ts reserveD2 503 233
Retained earningsD2 57,251 39,498
Equity attributable to Scales Corporation Limited Shareholders 214,184 157,985
Equity attributable to Non-controlling Interests 406 -
TOTAL EQUITY
214,590 157,985
Represented By:
CURRENT ASSETS
Cash and bank balances 6,355 13,832
Trade and other receivables E1 17,529 14,681
Other fi nancial assetsE2 8,464 5,476
Unharvested agricultural produceC2 18,433 15,493
InventoriesC5 16,365 14,314
Prepayments 3,655 2,966
TOTAL CURRENT ASSETS
70,801 66,762
NON-CURRENT ASSETS
Property, plant and equipment C1 226,652 168,067
Investments accounted for using the equity methodC3 4,131 4,962
GoodwillC4 16,222 5,319
Other fi nancial assetsE2 11,561 6,192
Computer software

745 929
TOTAL NON-CURRENT ASSETS
259,311 185,469
TOTAL ASSETS
330,112 252,231
CURRENT LIABILITIES
Trade and other payablesE3
22,047 22,276
Dividend declaredD3
11,045 14,527
BorrowingsE4
11,000 -
Current tax liabilitiesB5
5,009 4,427
Other fi nancial liabilitiesE5
3,357 2,229
TOTAL CURRENT LIABILITIES
52,458 43,459
NON-CURRENT LIABILITIES
BorrowingsE4
30,000 30,000
Deferred tax liabilitiesB5
28,187 17,933
Other fi nancial liabilitiesE5
4,877 2,854
TOTAL NON-CURRENT LIABILITIES
63,064 50,787
TOTAL LIABILITIES
115,522 94,246
NET ASSETS
214,590 157,985

The notes to the fi nancial statements on pages 53 to 79 form part of and should be read in conjunction with this statement.

51Annual Report - Year Ended 31 December 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2016
20162015
$’000
$’000
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers
373,223 300,026
Dividends received
525 895
Interest received
167 185
373,915 301,106
Cash was disbursed to:
Payments to suppliers and employees
315,413 238,705
Interest paid
2,533 2,801
Income tax paid
14,627 10,616
332,573 252,122
NET CASH GENERATED BY OPERATING ACTIVITIES
41,342 48,984
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Advances repaid 1,100 1,624
Sale of property, plant and equipment and computer software
216 920
1,316 2,544
Cash was applied to:
Net cash outfl ow on acquisition of businesses (Note F2) 16,414 -
Purchase of computer software 445 620
Purchase of shares in unlisted companies 53 9
Purchase of property, plant and equipment 19,715 17,210
36,627 17,839
NET CASH USED IN INVESTING ACTIVITIES
(35,311) (15,295)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Proceeds from borrowings
11,000 -
11,000 -
Cash was applied to:
Borrowings repaid
- 11,000
Dividends paid
23,501 9,685
Shares purchased
1,007 160
24,508 20,845
NET CASH USED IN FINANCING ACTIVITIES
(13,508) (20,845)
NET (DECREASE) INCREASE IN NET CASH (7,477) 12,844
Cash and cash equivalents at the beginning of the year
13,832 988
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
6,355 13,832
Represented by:
Cash and bank balances
6,355 13,832
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
6,355 13,832
The notes to the fi nancial statements on pages 53 to 79 form part of and should be read in conjunction with this statement.

Scales Corporation Limited 52
CONSOLIDATED STATEMENT OF CASH FLOWS
(continued)
for the year ended 31 December 2016
20162015
$’000
$’000
(Restated)
NET CASH GENERATED BY OPERATING ACTIVITIES

Reconciliation of profi t for the year to net cash generated by operating activities:
Profi t for the year
38,178 35,894
Non-cash items:
Amortisation
661 1,088
Hedge ineffectiveness on cash fl ow hedges
1,258 (1,759)
Deferred tax
36 33
Depreciation
11,438 10,243
Share of equity accounted results
(1,612) (2,268)
Share-based payments
270 168
Items classifi ed as investing and fi nancing activities:
Working capital amounts included in acquisition of businesses (1,162) -
Dividends received from equity accounted companies 500 870
Gain on disposal of property, plant and equipment (50) (163)
Changes in net assets and liabilities:

Trade and other receivables

(2,848) (1,383)
Unharvested agricultural produce

(2,940) -
Inventories (2,051) (293)
Prepayments

(689) (288)
Trade and other payables

(229) 4,336
Current tax

582 2,506
NET CASH GENERATED BY OPERATING ACTIVITIES
41,342 48,984
Statement of Cash Flows
For the purpose of the statement of cash fl ows, cash and cash equivalents include cash and bank balances and investments in
money market instruments.
The following terms are used in the statement of cash fl ows:
Operating activities are the principal revenue producing activities of the Group and other activities that are not investing or
fi nancing activities.
Investing activities are the acquisition and disposal of long-term assets and other investments not included in
cash equivalents.
Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of
the Group.

Jon Mayson, Chairman Andy Borland, Managing Director
For and on behalf of the Board of Directors who authorised the issue of the fi nancial statements on 27 February 2017.

53Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
ABOUT THIS REPORT
IN THIS SECTION
The notes to the fi nancial statements include information which is considered relevant and material to assist the reader
in understanding the fi nancial performance and fi nancial position of the Scales Corporation Limited Group (Scales).
Information is considered relevant and material if:
• the amount is signifi cant because of its size and nature;
• it is important for understanding the results of Scales;
• it helps to explain changes in Scales’ business; or
• it relates to an aspect of Scales’ operations that is important to future performance.
Scales Corporation Limited (the Company) is a for-profi t entity
domiciled and registered under the Companies Act 1993 in
New Zealand. It is an FMC reporting entity for the purposes
of the Financial Markets Conduct Act 2013. The Group
consists of Scales Corporation Limited, its subsidiaries and joint
venture. The principal activities of the Group are to provide
logistics services, grow apples, export products, provide
insurance services to companies within the Group and operate
storage and processing facilities.
The fi nancial statements have been prepared:
• in accordance with Generally Accepted Accounting Practice
(GAAP), International Financial Reporting Standards (IFRS),
the New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and other applicable
fi nancial reporting standards, as appropriate for a Tier 1
for-profi t entity;
• in accordance with the requirements of the Financial
Markets Conduct Act 2013;
• in accordance with accounting policies that are consistent
with those applied in the previous year except for the
changes described in note H1;
• on the basis of historical cost, except for certain assets and
fi nancial instruments that are measured at fair values; and
• in New Zealand dollars with all values rounded to the
nearest thousand dollars.
Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of
whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value
of an asset or liability, the Group takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when pricing the
asset or liability at the measurement date.
For fi nancial reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are observable. The
levels are described as:
• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date:
• Level 2 inputs are inputs, other than quoted prices within
Level 1, that are observable for the asset or liability, either
directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset
or liability.
Key Judgements and Estimates
In the process of applying the Group’s accounting policies and
the application of fi nancial reporting standards, Scales has
made a number of judgements and estimates. The estimates
and underlying assumptions are based on historical experience
and various other factors that are considered to be appropriate
under the circumstances. Actual results may differ from
these estimates.
Judgements and estimates which are considered material to
understanding the performance of Scales are explained in the
following notes:
• Apple trees in note C1.
• Land and buildings in note C1.
• Unharvested agricultural produce C2.
Basis of Consolidation
The Group fi nancial statements incorporate the fi nancial
statements of the Company and its subsidiaries (being entities
controlled by Scales Corporation Limited), and the equity
accounted result, assets and liabilities of the joint venture, as
listed in section F Group Structure.
The fi nancial statements of members of the Group are
prepared for the same reporting period as the parent company,
using consistent accounting policies.
In preparing the Group fi nancial statements, all material
intra-group transactions, balances, income, expenses and cash
fl ows have been eliminated. Subsidiaries are consolidated from
the date on which control is obtained to the date on which
control is lost.
Other Accounting Policies
Other accounting policies that are relevant to an
understanding of the fi nancial statements are provided
throughout the notes to the fi nancial statements.
Change in accounting policy on adoption of
amendments to fi nancial reporting standards and
resulting restatement
The Group has adopted the amendments to NZ IAS 16
Property, Plant and Equipment and NZ IAS 41 Agriculture
which are effective for periods beginning on 1 January 2016.
The amendments bring bearer plants (apple trees), which are
used to grow produce, into the scope of NZ IAS 16 and out of
the scope of NZ IAS 41 so that they are accounted for in the
same way as property, plant and equipment.

Scales Corporation Limited 54
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
The produce growing on bearer plants continues to be
accounted for as a biological asset (unharvested agricultural
produce) under NZ IAS 41. This amendment was applied
to the Group’s apple trees. These fi nancial statements have
been retrospectively restated to refl ect this accounting policy
change. Note H1 provides further details of the effect of
adopting
these amendments.
On adoption of the amendment, the Group elected to
measure its apple trees using the revaluation model.
Adoption of New and Revised Standards and
Interpretations - Standards and Interpretations in Issue
not yet Effective
The Group has reviewed all Standards, Interpretations and
Amendments to existing Standards in issue not yet effective
and, with the exception of NZ IFRS 9 (2014) Financial
Instruments which is effective for the fi nancial year ending
31 December 2018, NZ IFRS 15 Revenue from Contracts with
Customers which is effective for the Financial year ending 31
December 2018 and NZ IFRS 16 Leases which is effective for
the fi nancial year ending 31 December 2019, does not expect
these Standards to have a material effect on the fi nancial
statements of the Group.
NZ IFRS 9 (2014) Financial Instruments establishes the
principles for hedge accounting and impairment of fi nancial
assets. The Group has not yet determined the potential impact
of this Standard.
NZ IFRS 15 Revenue from Contracts with Customers provides
a single, comprehensive principles-based fi ve-step model to
be applied to all contracts with customers. The fi ve steps
in the model are: identify the contract with the customer;
identify the performance obligations in the contract; determine
the transaction price; allocate the transaction price to the
performance obligations in the contract; and, recognise
revenue when (or as) the entity satisfi es a performance
obligation. The Group has not yet determined the potential
impact of this Standard.
NZ IFRS 16 Leases eliminates the distinction between operating
and fi nance leases for lessees and will result in lessees bringing
most leases onto their statement of fi nancial position. The
accounting by lessors will remain largely unchanged. The
Group has not yet determined the potential impact of
this Standard.

55Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
A. SEGMENT INFORMATION
IN THIS SECTION
This section explains the fi nancial performance of the operating segments of Scales, providing additional information
about individual segments, including:
• total segment revenue and revenue from external customers;
• segment profi t before income tax; and
• total segment assets and liabilities
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker,
being the Managing Director. The Managing Director monitors the operating performance of each segment for the purpose of
making decisions on resource allocation and strategic direction.
Inter-segment pricing is determined on an arm’s length basis. Segment results include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis.
No single external customer’s revenue accounts for 10% or more of the Group’s revenue.
All non-current assets are located in New Zealand.
The Group comprises the following operating segments:
Food Ingredients: processing and marketing of food ingredients such as pet food ingredients and juice concentrate. Meateor Foods
Limited, Meateor Foods Australia Pty Limited and Profruit (2006) Limited.
Horticulture: orchards, fruit packing and marketing. Mr Apple New Zealand Limited, New Zealand Apple Limited, Fern Ridge Produce
Limited, Longview Group Holdings Limited, Longview New Zealand Limited and Longview Packhouse Limited.
Storage & Logistics: cool, cold and bulk liquid storage and logistics services. Liqueo Bulk Storage Limited, Polarcold Stores Limited, Scales
Logistics Limited and Whakatu Coldstores Limited.
Other: Scales Corporation Limited, Geo. H. Scales Limited, Scales Employees Limited, Scales Holdings Limited and Selacs Insurance Limited.
Food
IngredientsHorticulture
Storage &
LogisticsOtherEliminationsTotal
$'000$'000$'000$'000$'000$'000
2016
Total segment revenue 58,038 230,077 108,383 3,525 (26,096) 373,927
Inter-segment revenue - (212) (23,131) (2,753) 26,096 -
Revenue from external customers 58,038 229,865 85,252 772 - 373,927
Gain (loss) on sale of non-current assets 1 70 (20) (1) - 50
Share of profi ts of entities accounted for
using the equity method 1,612 - - - - 1,612
EBITDA 9,016 45,258 16,182 (3,135) - 67,321
Amortisation expense (2) (278) (359) (22) - (661)
Depreciation expense (501) (5,950) (4,971) (16) - (11,438)
Finance revenue 1 108 15 43 - 167
Finance costs - (13) - (2,520) - (2,533)
Segment profi t (loss) before income tax 8,514 39,125 10,867 (5,650) - 52,856

Scales Corporation Limited 56
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
Food
IngredientsHorticulture
Storage &
LogisticsOtherEliminationsTotal
$'000$'000$'000$'000$'000$'000
Segment assets 27,327 185,423 109,971 7,391 - 330,112
Segment liabilities 6,325 44,781 20,777 43,639 - 115,522
Segment carrying value of investments
accounted for using the equity method 4,131 - - - - 4,131
Segment acquisition of property, plant and
equipment and other intangible assets 370 12,722 7,060 8 - 20,160
Property, plant and equipment and other
intangible assets included in business
acquisitions (note F2) - 11,722 - - - 11,722
2015
Total segment revenue 48,570 178,126 95,622 3,354 (24,262) 301,410
Inter-segment revenue - - (21,648) (2,614) 24,262 -
Revenue from external customers 48,570 178,126 73,974 740 - 301,410
Gain (loss) on sale of non-current assets - 204 (38) (3) - 163
Share of profi ts of entities accounted for
using the equity method 1,454 814 - - - 2,268
EBITDA (Restated) 7,663 41,624 16,294 (2,585) - 62,996
Amortisation expense (6) (321) (723) (38) - (1,088)
Depreciation expense (Restated) (494) (5,470) (4,270) (9) - (10,243)
Finance revenue 1 41 15 128 - 185
Finance costs - - - (2,801) - (2,801)
Segment profi t (loss) before income tax
(Restated) 7,164 35,874 11,316 (5,305) - 49,049
Segment assets (Restated) 24,964 120,472 96,013 10,782 - 252,231
Segment liabilities (Restated) 6,332 32,669 19,189 36,056 - 94,246
Segment carrying value of investments
accounted for using the equity method 3,019 1,943 - - - 4,962
Segment acquisition of property, plant
and equipment and other intangible
assets (Restated) 220 5,624 9,924 38 - 15,806
20162015
$'000$'000
The total revenue from external customers in New Zealand and other countries are:
New Zealand 107,111 95,965
Asia 83,511 67,907
Europe 76,530 64,704
North America 75,210 45,562
Other 31,565 27,272
373,927 301,410
SEGMENT REPORTING (continued)

57Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
B. FINANCIAL PERFORMANCE
IN THIS SECTION
This section explains the fi nancial performance of Scales, providing additional information about individual items in the
statement of comprehensive income, including:
• accounting policies, judgements and estimates that are relevant for understanding items recognised in the statement of
comprehensive income; and
• analysis of Scales’ performance for the year by reference to key areas including; revenue, expenses and taxation.
B1. REVENUE
20162015
$'000$'000
Revenue from the sale of goods
269,062 218,566
Revenue from the rendering of services
92,507 81,827
Fees and commission
681 454
Net foreign exchange gain (loss) 7,925 (6,929)
Net hail insurance proceeds
- 4,192
Rental revenue
3,752 3,300
373,927 301,410
Sale of Goods
Revenue from the sale of goods is recognised when the Group has transferred to the buyer the
signifi cant risks and rewards of ownership of the goods, the amount of revenue and costs incurred can
be measured reliably, management have effectively ceased involvement or control over the goods sold
and it is probable that the economic benefi ts associated with the transaction will fl ow to the Group.
Rendering of Services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the
contract. The stage of completion of the contract at reporting date is assessed based on the value of
services performed to date as a percentage of the total services to be performed.
Fees and Commission
Fees and commission are recognised as revenue when the Group’s right to receive payment
becomes unconditional.
Net Hail Insurance Proceeds
Net hail insurance proceeds are recognised as revenue when the Group’s right to receive payment
becomes unconditional.
Rental Income
Rental income is recognised on a straight-line basis over the term of the relevant lease.
B2. COST OF SALES, ADMINISTRATION AND OPERATING EXPENSES
Auditor's remuneration:
Audit of the fi nancial statements
Audit of the annual fi nancial statements 141 106
Review of interim fi nancial statements 40 35
Other services
Acquisition due diligence services 89 -
Audit of solvency certifi cate for Selacs Insurance Limited 6 9
Review of fi nancial statement presentation - 5
Risk management review 17 -
Tax compliance services 4 33
Tax services re employee share scheme 6 69

Scales Corporation Limited 58
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
20162015
$'000$'000
Bad debts (recovered) incurred (390) 225
Change in fair value of unharvested agricultural produce (993) -
Change in inventories
(2,051) (293)
Direct expenses
35,299 26,747
Directors' fees
434 360
Donations
14 19
Electricity
8,427 7,315
Employee benefi ts expense:
Post employment benefi ts - defi ned contribution plans
1,235 1,167
Salaries, wages and related benefi ts
68,777 59,917
Other employee benefi ts
314 366
Grower payments
58,972 30,827
Insurance
3,369 3,315
Management fees
108 114
Materials and consumables
44,238 34,169
Ocean and air freight
50,911 45,610
Operating lease expenses
14,998 11,894
Packaging
15,913 13,245
Repairs and maintenance
7,357 7,374
307,235 242,628
Disclosed as:
Cost of sales
257,038 194,142
Administration and operating expenses
50,197 48,486
307,235 242,628
Employee Benefi ts
An accrual is made for benefi ts due to employees in respect of wages and salaries, annual leave and
long service leave when it is probable that settlement will be required and they are capable of being
measured reliably. Accruals are measured at their nominal values using the remuneration rate expected
to apply at the time of settlement.
Contributions to defi ned contribution plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
The costs relating to shares issued in accordance with the Senior Executive Share Scheme are explained
in note D2.
Leased Assets
Operating lease payments, where the lessors effectively retain substantially all the risks and benefi ts of
ownership of the leased items, are recognised as an expense on a straight-line basis over the lease term.
B3. OTHER INCOME AND LOSSES
Dividends
25 24
Gain on disposal of property, plant and equipment
50 163
Hedge ineffectiveness on cash fl ow hedges
(1,258) 1,759
Insurance proceeds 200 -
(983) 1,946
Disclosed as:
Other income 275 1,946
Other expenses (1,258) -
(983) 1,946
B2. COST OF SALES, ADMINISTRATION AND OPERATING EXPENSES (continued)

59Annual Report - Year Ended 31 December 2016
B4. FINANCE COST
20162015
$'000$'000
Interest on loans 2,346 2,588
Other interest 41 36
Bank facility fees 146 177
2,533 2,801
Finance costs consist of interest and other costs incurred in connection with the borrowing of funds.
Interest expense is accrued on a time basis using the effective interest method.
B5. TAXATION
Income Tax Recognised in Profi t or Loss
Income tax expense comprises:
Current tax expense 14,648 13,252
Adjustments recognised in the current year in relation to the current tax of prior years (6) (130)
Deferred tax expense relating to the origination and reversal of temporary differences 36 33
Total income tax expense recognised in profi t or loss 14,678 13,155
The prima facie income tax expense on pre tax accounting profi t reconciles to the income tax expense
in the fi nancial statements as follows:
Profi t before income tax expense 52,856 49,049
Income tax expense calculated at 28%
14,799 13,733
Non-assessable income
(448) (747)
Non-deductible expenses
321 158
Over provision of income tax in previous year - current tax (6) (130)
Under provision of income tax in previous year - deferred tax 12 141

14,678 13,155
The tax rate used in the above reconciliation is the corporate tax rate of 28% payable by New Zealand
companies under New Zealand tax law.
Current Tax Liability
Balance at beginning of the year
4,427 1,921
Arising on acquisition of businesses 567 -
Current taxation expense 14,642 13,122
Taxation paid
(14,627) (10,616)
Balance at end of the year
5,009 4,427
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Scales Corporation Limited 60
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Opening
balance
Charged to
profi t or loss
Charged to other
comprehensive
income
Acquisition
of Businesses
Closing
balance
$'000$'000$'000$'000$'000
Deferred Tax Liability
Taxable and deductible temporary differences
arise from the following:
31 December 2016
Deferred tax liabilities (assets):
Trade and other receivables (81) 76 - - (5)
Unharvested agricultural produce 4,338 440 - 105 4,883
Computer software 11 - - - 11
Property, plant and equipment 13,334 (509) 6,356 1,142 20,323
Trade and other payables (529) 29 - (12) (512)
Other fi nancial assets and liabilities 860 - 2,627 - 3,487
Net deferred tax liability17,933368,9831,23528,187
31 December 2015
Deferred tax liabilities (assets):
Trade and other receivables 2 (83) - - (81)
Unharvested agricultural produce (Restated) 3,772 566 - - 4,338
Computer software 11 - - - 11
Property, plant and equipment (Restated) 13,842 (508) - - 13,334
Trade and other payables (587) 58 - - (529)
Other fi nancial assets and liabilities 833 - 27 - 860
Net deferred tax liability17,8733327 - 17,933
Current tax is the taxation expected to be paid to Taxation Authorities in respect of the current year.
Deferred taxation is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the Financial Statements.
Current and deferred tax is calculated on the basis of the laws enacted or substantively enacted at balance date.
Income Tax
Current and deferred tax are recognised in profi t or loss, except when the tax relates to items charged or credited to other
comprehensive income, in which case the tax is also recognised in other comprehensive income.
B6. FOREIGN CURRENCY TRANSACTIONS
In preparing the fi nancial statements of the individual entities, the transactions in currencies other than New Zealand dollars are
recorded at the rates of exchange prevailing at the dates of the transaction. At the end of each reporting period fi nancial assets
and liabilities denominated in foreign currencies are retranslated into New Zealand dollars at the rates prevailing at the end of the
reporting period.
Exchange differences are recognised in profi t or loss in the period in which they arise.
B5. TAXATION (continued)

61Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
C. KEY ASSETS
IN THIS SECTION
This section shows the key assets Scales uses to generate operating revenues. There is information about:
• property, plant and equipment;
• unharvested agricultural produce;
• investments accounted for using the equity method;
• goodwill; and
• inventories
C1. PROPERTY, PLANT AND EQUIPMENT
Land and
Buildings at
fair value
Apple Trees
at fair value
Plant and
Equipment
at cost
Offi ce
Equipment &
Motor Vehicles
at cost
Capital
Work in
Progress
at costTotal
$’000$’000$’000$’000$’000$’000
(Restated)(Restated)
Gross carrying amount
Balance 1 January 2015 103,833 17,897 88,359 15,912 6,606 232,607
Additions 992 613 14,478 1,519 (2,414) 15,188
Disposals (293) - (2,082) (542) (40) (2,957)
Balance 31 December 2015 104,532 18,510 100,755 16,889 4,152 244,838
Additions 6,904 2,909 6,086 3,056 761 19,716
Acquisition of businesses 8,866 200 2,563 93 - 11,722
Disposals - - (543) (756) - (1,299)
Revaluation 20,368 9,520 - - - 29,888
Balance 31 December 2016 140,670 31,139 108,861 19,282 4,913 304,865
Accumulated depreciation and
impairment
Balance 1 January 2015 2,217 - 55,368 11,142 - 68,727
Depreciation expense 2,204 1,193 5,293 1,553 - 10,243
Disposals (19) - (1,787) (393) - (2,199)
Balance 31 December 2015 4,402 1,193 58,874 12,302 - 76,771
Depreciation expense 2,175 1,311 6,128 1,824 - 11,438
Disposals - - (432) (668) - (1,100)
Revaluation (6,577) (2,319) - - - (8,896)
Balance 31 December 2016 - 185 64,570 13,458 - 78,213
Net book value
As at 31 December 2015 100,130 17,317 41,881 4,587 4,152 168,067
As at 31 December 2016 140,670 30,954 44,291 5,824 4,913 226,652

Scales Corporation Limited 62
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
Accounting Policy
Land, buildings and apple trees on owned orchards are included in the statement of fi nancial position at their revalued amounts,
being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. Revaluations are performed with suffi cient regularity such that the carrying amounts do not differ materially from
those that would be determined using fair values at the end of the reporting period.
Any revaluation increase arising on the revaluation of such land, buildings and apple trees on owned orchards is recognised in other
comprehensive income and accumulated as a separate component of equity in the revaluation reserve, except to the extent that it
reverses a revaluation decrease for the same asset previously recognised in profi t or loss, in which case the increase is credited to
profi t or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such
land, buildings and apple trees is charged to profi t or loss to the extent that it exceeds the balance, if any, held in the revaluation
reserve relating to a previous revaluation of that asset.
Depreciation on revalued buildings and apple trees is charged to profi t or loss. On the subsequent sale or retirement of revalued
property or apple trees, the attributable revaluation surplus remaining in the revaluation reserve is transferred directly to retained
earnings. No transfer is made from the revaluation reserve to retained earnings except when an asset is derecognised.
Offi ce equipment, motor vehicles, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation is provided on property, plant and equipment, including buildings and apple trees but excluding land and capital work
in progress. Depreciation is charged so as to write off the cost or valuation of assets, other than land and capital work in progress,
over their estimated useful lives, using either the straight-line or the diminishing value method. The estimated useful lives, residual
values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a
prospective basis. The following estimated useful lives are used in the calculation of depreciation:
Apple trees 30 years
Buildings 10 to 50 years
Offi ce Equipment and Motor Vehicles 2 to 20 years
Plant and Equipment 2 to 25 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sale proceeds and the carrying amount of the asset and is recognised in profi t or loss.
Land and Buildings carried at Fair Value
Land and buildings shown at valuation were valued at fair value as at 31 December 2016 by independent registered valuers Added
Valuation Limited ($77,730,000), Logan Stone Limited ($58,314,000) and Telfer Young Limited ($3,865,000). The valuations, which
conform to the New Zealand Property Institute Practice Standard 3 - Valuations for Financial Reporting Purposes, were arrived at by
reference to market evidence of transaction prices for similar properties.
The fair value of land and buildings is calculated on the basis of market value. Market value is determined applying income
capitalisation and comparative sales calculations which are benchmarked against depreciated replacement cost calculations. The
valuations include adjustments to observable data for similar properties to take into account property-specifi c attributes.
The signifi cant unobservable inputs, based on regional averages, for the land and buildings (mainly coldstores and packhouses) are
potential market comparative rentals $10 - $220 per square metre and capitalisation rates of 8% - 18%. The higher the rental rates
the higher the fair value. The higher the capitalisation rates the lower the fair value. Signifi cant changes in either of these inputs
would result in signifi cant changes to the fair value measurement.
The Group’s land and buildings are classifi ed as Level 3 in the fair value hierarchy.
The carrying amount of land and buildings had it been recognised under the cost model is $83,869,000
(31 December 2015 $70,274,000).
Apple Trees carried at Fair Value
The Group’s apple orchards, being the apple trees other than the existing crop on the trees, were valued at fair value by Boyd Gross
B.Agr (Rural Val), Dip Bus Std, FNZIV, FPINZ of Logan Stone Limited as at 31 December 2016. The market valuations completed by
Boyd Gross were based on a DCF analysis of forecast income streams and costs. This was benchmarked against a comparison of sales
of other orchards adjusted to refl ect the location, plantings, age and varieties of trees and productive capabilities of the orchards.
The signifi cant unobservable inputs, based on district averages, for the apple trees valuations included in the valuer’s report are the:
20162015
Production levels (gross tray carton equivalent (tce)) per hectare 3,624 - 5,7092,500 - 5,265
Orchard gate returns per tce$25.31 - $38.90$21.00 - $42.20
Orchard costs per tce$17.00 - $28.60$15.50 - $21.00
Discount rate 18.0% - 21.40%19.8% - 23.8%
C1. PROPERTY, PLANT AND EQUIPMENT (continued)

63Annual Report - Year Ended 31 December 2016
The higher the production levels and orchard gate return the higher the fair value. The higher the orchard costs and discount rate
the lower the fair value. Signifi cant changes in any of these inputs would result in signifi cant changes to the fair value measurement.
The Group’s apple trees are classifi ed as level 3 in the fair value hierarchy.
The apple trees, on owned and leased orchards, have the following planting profi le:
Total Hectares Planted
20162015
Premium varieties:
NZ Queen 213194
Pink Lady121107
Red sports (Fuji and Royal Gala)234204
Other premium5943
Traditional varieties:
Braeburn 171172
Royal Gala186173
Other traditional160149
1,1441,042
The exported volume from Mr Apple’s planted apple orchard was 3,546,000 TCE’s
(2015: 3,147,000 TCE’s).
Risk Management Strategy:
The Group is exposed to fi nancial risks arising from changes in climatic conditions, market
prices and the value of the New Zealand dollar. The Group mitigates these risks by installing
hail and frost protection on orchards which have shown to be more susceptible to these
risks, obtaining hail insurance cover, utilising foreign currency derivative instruments and
building close working relationships with key customers.
C2. UNHARVESTED AGRICULTURAL PRODUCE
20162015
$'000$'000
Balance at beginning of the year 15,493 13,471
Decrease due to Harvest (15,493) (13,471)
Acquisition of businesses 375 -
Development expenditure 17,065 15,493
Fair value adjustment 993 -
Balance at end of the year18,43315,493
The assessment of the value of unharvested agricultural produce was undertaken by
management, using a discounted cash fl ow model, and is calculated as the fair value less
estimated harvest and post-harvest costs of the unharvested crop on the trees at the
reporting date. The risk adjusting discount rate represents an allowance for adverse events
that may affect crop, harvest and/or market conditions. This calculation is also benchmarked
against orchard costs incurred during the current growing cycle.
The signifi cant unobservable inputs included in the model are the:
Production levels (tonnes per hectare per annum) 50 - 10050 - 100
Orchard gate returns per tce$20 to $40 $20 to $42
Risk adjusting discount rates 55% to 73%53% to 72%
The higher the yield per hectare and the higher the orchard gate returns per tce, the higher the fair value. The higher the risk
adjusting discount rate, the lower the fair value.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
C1. PROPERTY, PLANT AND EQUIPMENT (continued)

Scales Corporation Limited 64
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
20162015
Associate
Company
Joint
VentureTotal
Associate
Company
Joint
VentureTotal
$'000$'000$'000$'000$'000$'000
Share of profi t before taxation - 2,2412,2411,1332,0353,168
Share of income tax - (629) (629) (319) (581) (900)
Share of Net Profi t for the Year and
Total Comprehensive Income - 1,6121,6128141,4542,268
Carrying value at beginning of the year1,9443,0194,9632,0001,5643,564
Disposal of equity interest in Fern Ridge
Produce Limited (1,944) - (1,944) - - -
Dividend paid - (500) (500) (870) - (870)
INVESTMENT IN EQUITY
ACCOUNTED ENTITIES - 4,1314,1311,9443,0184,962
On 11 January 2016 the Group acquired a further 22.88% of the share capital of Fern Ridge Produce Limited and it is now a
subsidiary company. Details of this acquisition are included in Note F2.
An associate is an entity over which the Group has signifi cant infl uence. Signifi cant infl uence is the power to participate in the
fi nancial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated fi nancial statements using
the equity method of accounting. Under the equity method, an investment in an associate or joint venture is initially recognised in
the consolidated statement of fi nancial position at cost and adjusted thereafter to recognise the Group’s share of the profi t or loss
and other comprehensive income of the associate or joint venture. Dividends or distributions received from an associate or joint
venture reduce the carrying amount of the investment in that associate or joint venture in the Group fi nancial statements. When
the Group’s share of losses of an associate or joint venture exceeds the Group’s interest in that associate or joint venture, the Group
discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred
legal or constructive obligations or made payments on behalf of the associate or joint venture.
An investment in an associate or joint venture is accounted for using the equity method from the date on which the investee
becomes an associate or a joint venture until the date it ceases to be an associate or joint venture. On acquisition of the investment
in an associate or joint venture, any excess of the cost of the investment over the Group’s share of the net fair value of the
identifi able assets and liabilities of the investee is recognised as goodwill, which is included within the carrying value of the
investment. The requirements of NZ IAS 36 are applied to determine whether it is necessary to recognise any impairment loss.
C4. GOODWILL
20162015
$'000$'000
Gross Carrying Amount
Balance at beginning of the year 5,3195,319
Arising on acquisition of:
Fern Ridge Produce Limited 5,702 -
Longview Group Holdings Limited5,201 -
Balance at end of the year16,2225,319
Goodwill arising on the acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
C3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

65Annual Report - Year Ended 31 December 2016
C4. GOODWILL (continued)
For the purpose of impairment testing, goodwill has been allocated to the cash-generating units listed below which represent the
lowest level at which goodwill is monitored.
20162015
$'000$'000
Storage & Logistics 1,9891,989
Horticulture14,2333,330
16,2225,319
As at 31 December 2016, the Directors have determined, based on discounted cash fl ow and value in
use calculations, that there is no impairment of goodwill associated with Storage & Logistics and
Horticulture. The Directors consider that any reasonably possible changes in the key assumptions would
not cause the carrying amount of any of the cash-generating units to exceed their recoverable amount.
C5 . INVENTORIES
Finished goods
12,489 11,512
Other
3,876 2,802
16,365 14,314
Inventories are stated at the lower of cost and net realisable value. Cost means the actual cost of the inventory and in determining
cost the fi rst in fi rst out basis of stock movement is followed, with due allowance having been made for obsolescence. Net realisable
value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make
the sale.
C6. IMPAIRMENT OF ASSETS
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated fi rst to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in
profi t or loss and is not reversed in subsequent periods.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future pre-
tax cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time
value of money and the risks specifi c to the asset for which the estimates of future cash fl ows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profi t or
loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Scales Corporation Limited 66
D. CAPITAL FUNDING
IN THIS SECTION
This section explains how Scales manages its capital structure and how dividends are returned to shareholders. In this
section there is information about:
• equity;
• dividends paid; and
• earnings per share.
Capital Management
The Group’s capital includes share capital, reserves and retained earnings. The Group’s policy is to maintain a strong capital base so
as to maintain investor, creditor and customer confi dence and to sustain the future development of the business. The impact of the
level of capital on shareholders’ return is also recognised and the Group recognises the need to maintain a balance between the
higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position.
D1. SHARE CAPITAL
Issued and paid up capital consists of 139,779,006 fully paid ordinary shares (2015: 139,779,006) less treasury stock of 1,846,927
shares (2015: 1,532,863 shares) (refer to note D2). All shares rank equally in all respects.
Basic and diluted earnings per share has been calculated on the basis of 139,779,006 shares (2015: 139,779,006).
Shares purchased on market under the senior executive share scheme (note D2) are treated as treasury stock until vesting to
the employee.
The Available Subscribed Capital of $34,870,000 (2015: $35,877,000) represents the amount of the shareholders’ equity that is
available to be returned to shareholders on a tax-free basis.
In accordance with the Companies Act 1993 the Company does not have a limited amount of authorised capital and issued shares
do not have a par value.
D2. RESERVES
Revaluation Reserve
The revaluation reserve arises on the revaluation of land, buildings and apple trees, net of the related deferred tax.
Hedging Reserve
The hedging reserve represents the unrealised gains and losses on interest rate and foreign currency contracts taken out to manage
the Group interest rate and foreign currency risks, net of the related deferred tax.
Equity-settled Employee Benefi ts Reserve
The Senior Executive Share Scheme involves the Company making available interest-free loans to selected senior executives to
acquire shares in the Company. The senior executive will not gain any benefi t with respect to the shares purchased under the
Scheme unless they remain in employment with the Group for a period of three years from the date of acquisition of those shares.
The shares are held by a custodian during the restrictive period and are then transferred to the senior executive. All net dividends or
distributions received in respect of the shares must be applied to repayment of the interest-free loan.
The 1,436,700 shares acquired during 2014 have an exercise price of $1.60 and vest on 24 July 2017; the 96,163 shares acquired
during 2015 have an exercise price of $1.66 and vest on 8 May 2018; and the 314,064 shares acquired during 2016 have an
exercise price of $1.67 and vest on 20 April or 24 May 2019. The price that the executives pay for each share is the issue price at
grant date, reduced by any dividends that are applied to the loans. No shares vested or were forfeited or expired during the year.
The shares issued vest over three years. Each instrument issued in the current year was estimated to have a fair value of $1.65 (2015:
32.7 cents) at the grant date. The estimated value of the share options was determined using the Black-Scholes pricing calculator
and is being amortised over the restrictive period. This cost is expensed with the corresponding credit included in the equity-settled
employee benefi ts reserve. The inputs into the option pricing calculator are the acquisition date share price $3.20 (2015: $1.66),
expected share price volatility 24% (2015: 22%), option life 3 years and risk-free interest rate 2.12% (2015: 3.89%).
Retained Earnings
Retained earnings represents the profi ts retained in the business.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

67Annual Report - Year Ended 31 December 2016
D3. DIVIDENDS
20162015
$'000$'000
Final dividend - 6.50 (2015: 7.00) cents per share 8,974 9,685
Interim dividend - 8.00 (2015: 6.50) cents per share 11,045 8,993
Special dividend 4.00 cents per share - 5,534
20,019 24,212
The 2016 interim dividend was declared on 12 December 2016 and paid on 18 January 2017.
D4. IMPUTATION CREDIT ACCOUNT
Balance at end of the year 17,408 10,898
The imputation credit account balance represents the net amount available at the reporting date that
can be attached to future dividends declared.
The Scales Corporation Limited consolidated tax group for income tax includes Scales Corporation
Limited and all New Zealand registered subsidiary companies other than Scales Employees Limited.
D5. EARNINGS PER SHARE
Profi t attributable to equity holders of the Company - used in the calculation of earnings
per share 37,772 35,894
Basic and diluted earnings per share
Weighted average number of ordinary shares outstanding 139,779,006139,779,006
Basic and diluted earnings per share (cents) 27.0 25.7
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Scales Corporation Limited 68
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
E. FINANCIAL ASSETS AND LIABILITIES
IN THIS SECTION
This section explains the fi nancial assets and liabilities of Scales, the related risks and how Scales manages these risks. In
this section of the notes there is information on:
• the accounting policies, judgements and estimates relating to fi nancial assets and liabilities; and
• the fi nancial instruments used to manage risk.
ACCOUNTING POLICIES
Financial Assets
Financial assets are classifi ed into the following specifi ed categories: fi nancial assets ‘at fair value through profi t or loss’ (FVTPL) and
‘measured at amortised cost’.
The classifi cation depends on the business model for managing the fi nancial asset and the cash fl ow characteristics of the fi nancial
asset and is determined at the time of initial recognition or when a change in the business model occurs.
Financial assets at fair value through profi t or loss
Financial assets are classifi ed at fair value through profi t or loss if they are not measured at amortised cost. Gains and losses on a
fi nancial asset designated in this category and not part of a hedging relationship are recognised in profi t or loss.
Financial assets measured at amortised cost
The Group’s fi nancial assets held in order to collect contractual cash fl ows that are solely payments of principal and interest on the
principal outstanding are measured at amortised cost. Cash and cash equivalents and trade receivables are classifi ed in this category.
Impairment of fi nancial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial
assets are considered to be impaired when there is objective evidence that, as a result of events that occurred after the initial
recognition of the fi nancial asset, the estimated future cash fl ows of the asset have been affected.
For fi nancial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s
carrying amount and the present value of estimated future cash fl ows, discounted at the fi nancial asset’s original effective
interest rate.
Financial Liabilities Measured at Amortised Cost
The Group’s fi nancial liabilities include trade and other payables and borrowings. These fi nancial liabilities are initially recognised
at fair value plus any directly attributable costs. Subsequent to initial recognition, they are measured at amortised cost using the
effective interest method.
Derivative Financial Instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to
their fair value with reference to observable market data at the end of each reporting period. The resulting gain or loss is recognised
in profi t or loss immediately unless the derivative is designated as an effective hedging instrument, in which event the timing of the
recognition in profi t or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as cash
fl ow hedges.
A derivative is presented as a non-current asset or a non-current liability where the cash fl ow will occur after 12 months and it is not
expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
Hedge Accounting
At the inception of a hedge relationship, the Group documents the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging
relationship is highly effective in offsetting changes in cash fl ows of the hedged item, attributable to the hedged risk.
Cash Flow Hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges is recognised in
other comprehensive income and accumulated as a separate component of equity in the hedging reserve. The gain or loss relating
to the ineffective portion is recognised immediately in profi t or loss, and is included in ‘other income’ or ‘other losses’.
Amounts recognised in the hedging reserve are reclassifi ed from equity to profi t or loss in the periods when the hedged item is
recognised in profi t or loss, in the same line as the recognised hedged item. Hedge accounting is discontinued when the Group
revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifi es for hedge
accounting. Any cumulative gain or loss deferred in the hedging reserve at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in profi t or loss. When a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was deferred in the hedging reserve is recognised immediately in profi t or loss.

69Annual Report - Year Ended 31 December 2016
E1. TRADE AND OTHER RECEIVABLES
20162015
$'000$'000
Trade receivables 14,574 11,822
Other receivables 593 603
Owing by entities accounted for using the equity method 349 531
Goods and services tax 2,013 1,725
17,529 14,681
Credit Risk Management
The Group activities expose it to credit risk which refers to the risk that a counterparty will default on
its contractual obligations resulting in fi nancial loss to the Group. Financial instruments which
potentially subject the Group to credit risk principally consist of cash and cash equivalents, trade and
other receivables and advances as disclosed in note E2. The Group performs credit evaluations on
trade customers, obtains trade credit insurance as appropriate but generally does not require collateral.
The Group continuously monitors the credit quality of its major receivables and does not anticipate
non-performance of those customers. Cash and cash equivalents are placed with high credit quality
fi nancial institutions.
There is a signifi cant concentration of credit risk with fi ve customers who represent 35.63%
(2015 fi ve customers who represent 22.01%) of trade and other receivables.
The carrying amount of fi nancial assets recorded in the fi nancial statements represents the Group’s
maximum exposure to credit risk.
Included in Trade Receivables are debtors which are past due at balance date, as payment was not
received within one month, and for which no provision has been made as there has not been a
signifi cant change in credit quality and the amounts are still considered recoverable. No collateral is
held over these balances although trade credit insurance cover is obtained in respect of some specifi c
receivables. Interest is not charged on overdue debtors. The ageing of these past due trade
receivables is:
One month 2,363 2,191
Two months 639 654
More than two months 2,139 636
5,141 3,481
E2. OTHER FINANCIAL ASSETS
Current:
At fair value:
Foreign currency derivative instruments 8,409 4,540
At amortised cost:
Advances to entities accounted for using the equity method - 530
Advances to other entities 55 406
8,464 5,476
Non-current:
At fair value:
Foreign currency derivative instruments 11,231 5,705
Shares in unlisted companies 206 144
At amortised cost:
Employee loans 124 343
11,561 6,192
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Scales Corporation Limited 70
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
E3. TRADE AND OTHER PAYABLES
20162015
$'000$'000
Trade payables 12,737 12,981
Accruals 4,882 5,665
Employee entitlements 4,428 3,630
22,047 22,276
E4. BORROWINGS
Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial
recognition, borrowings are measured at amortised cost with any difference between the initial
recognised amount and the redemption value being recognised in profi t or loss over the period of the
borrowing using the effective interest method.
The Group signed Multi-Option Facility Agreements with Rabobank and Westpac New Zealand Limited
on 22 March 2013. The total facility is $102,000,000. At 31 December 2016 the undrawn amount
under these facilities, after allowing $2,000,000 to cover the bank overdraft facilities, was
$59,000,000 (2015: $70,000,000). The fl oating interest rates are 2.91% to 3.25% (2015: 4.07%)
and the term borrowing facility roll-over date is 30 June 2019. The bank facilities are secured by a
registered fi rst and exclusive general security over the company and all subsidiaries (other than Selacs
Insurance Limited, Scales Employees Limited and Meateor Foods Australia Pty Limited) and mortgages
over all Group land and buildings.
The Multi-Option Facility Agreements with the Group’s banks includes the requirement that at all
times the Tangible Net Worth of the Group, being Tangible Assets less Total Liabilities (excluding
deferred tax liabilities), be not less than $100,000,000. The Group has complied with this requirement
since the facility was established. The Group policies in respect of capital management and allocation
are reviewed regularly by the Board of Directors. There have been no material changes to the Group’s
management of capital during the year.
E5. OTHER FINANCIAL LIABILITIES
Current fi nancial liabilities at fair value:
Foreign currency derivative instruments 2,047 2,145
Interest rate swap contracts and forward rate agreements 371 84
Fern Ridge Produce Limited put option (Note F2) 939 -
3,357 2,229
Non-current fi nancial liabilities at fair value:
Foreign currency derivative instruments 3,111 1,799
Interest rate swap contracts and forward rate agreements 826 1,055
Fern Ridge Produce Limited put option (Note F2) 940 -
4,877 2,854
E6. INTEREST RATE RISK
Interest Rate Risk Management
The Group is exposed to interest rate risk as it borrows funds at fl oating interest rates. Management monitors the level of interest
rates on an ongoing basis and may use interest rate swaps and forward rate agreements to manage interest rate risk.
Interest Rate Swap Contracts and Forward Rate Agreements
Under interest rate swap contracts and forward rate agreements, the Group agrees to exchange the difference between fi xed and
fl oating rate interest amounts calculated on agreed notional principal amounts. Such contracts, some of which commence in future
reporting years, enable the Group to mitigate the risk of changing interest rates on the cash fl ow exposures on the issued fl oating
rate debt. The fair value of these contracts at the reporting date is determined by discounting the future cash fl ows using the
forward interest rate curves at reporting date and the credit risk inherent in the contracts. The average contracted fi xed interest rate
is based on the notional principal amount at balance date.

71Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
Details of interest rate swap contracts and forward rate agreements for the Group are:
Maturity Date
Fixed Interest
Rate
Notional Principal
AmountFair Value
201620152016201520162015
%%$’000$’000$’000$’000
Interest rate swap contracts:
Within one year 4.97 - 10,000 - (280) -
Two to fi ve years 4.02 4.14 30,000 30,000 (826) (856)
After fi ve years - 4.62 - 10,000 - (159)
Forward rate agreements:
Within one year 3.55 3.65 25,000 25,000 (91) (84)
Two to fi ve years - 3.55 - 25,000 - (40)
(1,197) (1,139)
These interest rate swap contracts and forward rate agreements, exchanging fl oating rate interest amounts for fi xed rate interest
amounts, are designated as cash fl ow hedges in order to reduce the Group’s cash fl ow exposure resulting from fl oating interest
rates on borrowings. The interest rate swap and forward rate agreement payments, and the interest payments on the loans occur
simultaneously, and the amount deferred in equity is recognised in profi t or loss over the period that the fl oating rate interest
payments on debt impact profi t or loss.
The Group’s interest rate swap contracts and forward rate agreements are classifi ed as Level 2 in the fair value hierarchy.
At 31 December 2016 it is estimated that a general increase of one percent in interest rates would decrease the Group’s profi t after
income tax and equity by approximately $451,000 (2015: $417,000).
E7. FOREIGN CURRENCY RISK
Foreign Currency Risk Management
Foreign currency risk is the risk that the value of the Group’s assets and liabilities or revenues and expenses will fl uctuate due to
changes in foreign exchange rates. The Group is exposed to currency risk as a result of normal trading transactions denominated in
foreign currencies. The currencies in which the Group primarily trades are the Australian dollar, Euro, Canadian dollar, Great Britain
pound and United States dollar, with the largest exposure being to the United States dollar.
Currency risk is managed by the natural hedge of foreign currency receivables and payables and the use of foreign currency
derivative fi nancial instruments. The fair value of foreign currency derivative fi nancial instruments at the reporting date is determined
on a discounted cash fl ow basis whereby future cash fl ows are estimated based on forward exchange rates and contract forward
rates, discounted at a rate that refl ects the credit risk of various counterparties.
The Group’s forward foreign exchange contracts and foreign exchange options are classifi ed as Level 2 in the fair value hierarchy.
Details of foreign currency instruments at balance date for the Group are:
20162015
Contract ValueFair ValueContract ValueFair Value
$’000$’000$’000$’000
Sale commitments forward foreign exchange contracts 165,524 7,250 152,613 1,955
Sale commitments foreign exchange options 128,150 7,232 146,158 4,346
These foreign currency instruments are designated as cash fl ow hedges in order to reduce the Group’s cash fl ow exposure resulting
from movements in foreign currency exchange rates on anticipated future transactions. It is anticipated that the sales will take place
during the 2017 to 2020 fi nancial years at which stage the amount deferred in equity will be released into profi t or loss.
It is estimated that a general increase of fi ve cents in the value of the New Zealand dollar against other foreign currencies would
have decreased the Group’s profi t after income tax by $9,939,000 (2015: $10,159,000). A decrease in exchange rates would have
the opposite impact on profi t.
E6. INTEREST RATE RISK (continued)

Scales Corporation Limited 72
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
E8. CATEGORIES OF FINANCIAL INSTRUMENTS
20162015
$'000$'000
Financial Assets:
Fair value through profi t or loss 206 144
Derivative instruments in designated hedge accounting relationships 19,640 10,245
Amortised cost 22,050 28,068
41,896 38,457
Financial Liabilities:
Amortised cost 74,092 66,802
Fair value through profi t or loss 1,879 -
Derivative instruments in designated hedge accounting relationships 6,355 5,084
82,326 71,886
E9. MATURITY PROFILE OF FINANCIAL LIABILITIES
Liquidity Risk Management
The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and
actual cash fl ows and matching the maturity profi les of fi nancial assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its fi nancial liabilities. The tables have been drawn up
based on the undiscounted cash fl ows of fi nancial liabilities based on the earliest date on which the Group can be required to pay.
The table includes both interest and principal cash fl ows.
Within Three
Months
Four Months
to One Year
One to Five
YearsTotal
$'000$'000$'000$'000
2016
Trade and other payables 22,047 - - 22,047
Dividend declared 11,045 - - 11,045
Fern Ridge Produce Limited put options 939 - 940 1,879
Borrowings 324 11,812 31,462 43,598
Interest rate swaps and forward rate agreements 113 315 684 1,112
34,468 12,127 33,086 79,681
2015
Trade and other payables 22,276 - - 22,276
Dividend declared 14,527 - - 14,527
Borrowings 305 916 30,611 31,832
Interest rate swaps and forward rate agreements 92 276 1,035 1,403
37,200 1,192 31,646 70,038

73Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
F. GROUP STRUCTURE
IN THIS SECTION
This section provides information to help readers understand the Scales Group structure and how it affects the fi nancial
position and performance of the Group. In this section there is information about:
• subsidiary companies;
• the acquisition of further shares in Fern Ridge Produce Limited;
• the acquisition of shares in Longview Group Holdings Limited; and
• investments in associate company and joint venture.
F1. SUBSIDIARY COMPANIES
Subsidiary Companies:Principal Activity
Country of
Incorporation
Holding
2016 2015Balance Date
Meateor Foods LimitedTrading company
New Zealand100%100%
31 December
Meateor Foods Australia Pty LimitedTrading company
Australia100%100%
31 December
Mr Apple New Zealand LimitedTrading company
New Zealand100%100%
31 December
New Zealand Apple LimitedTrading company
New Zealand100%100%
31 December
Fern Ridge Produce Limited (Note F2)Trading companyNew Zealand72.88%0%31 December
Longview Group Holdings Limited
(Note F2)
Trading companyNew Zealand100%0%31 December
Longview New Zealand Limited
(Note F2)
Trading companyNew Zealand100%0%31 December
Longview Packhouse Limited (Note F2)Trading companyNew Zealand100%0%31 December
Liqueo Bulk Storage LimitedTrading company
New Zealand100%100%
31 December
Polarcold Stores LimitedColdstore operator
New Zealand100%100%
31 December
Scales Logistics LimitedFreight consolidator
New Zealand100%100%
31 December
Whakatu Coldstores LimitedColdstore operator
New Zealand100%100%
31 December
Geo. H. Scales LimitedNon trading company
New Zealand100%100%
31 December
Scales Employees LimitedCustodial company
New Zealand100%100%
31 December
Scales Holdings LimitedHolding company
New Zealand100%100%
31 December
Selacs Insurance LimitedInsurance company
New Zealand100%100%
31 December
Subsidiary companies are controlled by the Company. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the company loses
control of the subsidiary.

Scales Corporation Limited 74
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
F2. ACQUISITION OF SUBSIDIARIES
Fern Ridge Produce Limited:
On 11 January 2016 the Group acquired a further 25% of the share capital of associate entity, Fern Ridge Produce Limited (Fern
Ridge), increasing its shareholding to 75%. As part of the transaction, 2.12% of the shares were then sold to an employee of Fern
Ridge and Scales entered into agreements with the remaining shareholders of Fern Ridge whereby those shareholders have an option
to ‘Put’ their shares to Scales at a value based on a multiple of the Fern Ridge profi ts but with a minimum value equivalent to that
paid to the selling shareholders. The obligations to acquire the shares under the Put options are included in other fi nancial liabilities.
Details of the acquisition are as follows:
Fair Value on
Acquisition
Assets and liabilities acquired: $'000
Assets
Cash and bank balances 1,466
Trade and other receivables1,126
Plant and equipment20
Other intangible assets32
Liabilities
Trade and other payables (2,463)
Current taxation (180)
Net assets acquired 1
Less fair value of non-controlling interest (1,880)
Goodwill on acquisition5,702
Less fair value of existing interest in Fern Ridge (1,943)
Consideration paid in cash 1,880
Less: Cash and bank balances acquired (1,466)
Net cash outfl ow on acquisition414
Goodwill arising on acquisition
Goodwill arose on the acquisition of Fern Ridge because the cost of acquisition included a control premium paid. In addition, the
goodwill refl ects the expected synergies and future market benefi ts expected to be obtained. These benefi ts are not recognised
separately from goodwill as the expected future economic benefi ts arising cannot be reliably measured and they do not meet the
defi nition of identifi able intangible assets.
The additional interest in Fern Ridge was acquired as it is a profi table horticultural trading business which the Group believes fi ts
strategically with its Horticulture operations.
Impact of the acquisition on the results of the Group
Fern Ridge contributed $1,498,000 to the Group profi t after taxation for the year. Group revenue for the year includes $35,291,000
in respect of Fern Ridge.

75Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
F2. ACQUISITION OF SUBSIDIARIES (continued)
Longview Group Holdings Limited Group:
On 2 November 2016 the Group acquired 100% of the shares in Longview Group Holdings Limited (Longview). Longview and its
wholly owned subsidiaries is a Hawke’s Bay grower, packer and marketer of apples. Longview leases 76 hectares of orchard and bare
land under long term leases.
Details of the acquisition are as follows:
Carrying Value
Fair Value
Adjustment
Fair Value on
Acquisition
$’000$’000$’000
Assets and liabilities acquired:
Assets
Trade and other receivables 818 - 818
Unharvested agricultural produce 375 - 375
Inventories 259 - 259
Prepayments 263 - 263
Property, plant and equipment 6,922 4,748 11,670
Other fi nancial assets 9 - 9
Liabilities
Trade and other payables (729) - (729)
Current taxation (388) - (388)
Deferred taxation (126) (1,108) (1,234)
Net assets acquired 11,043
Goodwill on acquisition 5,201
Consideration16,244
Less: Deferred purchase consideration (244)
Net cash outfl ow on acquisition16,000
Goodwill arising on acquisition
Goodwill arose on the acquisition of Longview because the cost of acquisition included immediate access to modern post-harvest
(packhouse) capacity; extends Scales’ total managed orchards by approximately 115 ha, of which 85 ha is planted; allows compelling
cost synergies as the additional owned and leased orchard operations are integrated with the Mr Apple orchard operations; and
gives Scales access to further grower suppliers, markets and customers. These benefi ts are not recognised separately from goodwill
as the expected future economic benefi ts arising cannot be reliably measured and they do not meet the defi nition of identifi able
intangible assets.
Impact of the acquisition on the results of the Group
Due to the seasonal nature of the business, Longview recorded a loss of $583,000 for the two months since acquisition. Group
revenue for the year includes $23,000 in respect of Longview.
Had the Longview acquisition been effective at 1 January 2016, the revenue of the Group would have been $396,459,000 and the
profi t for the year would have been $39,751,000.
F3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Joint Venture:Principal Activity
Country of
Incorporation
Holding
2016 2015Balance Date
Profruit (2006) Limited
Juice Production &
SalesNew Zealand50%50%31 December
The Scales Corporation Limited Group share of the guarantee of Profruit (2006) Limited bank loan facilities is $240,000
(2015: $348,000).
Associate Company:
Fern Ridge Produce Limited
Fruit & Produce
ExportingNew Zealand0%50%31 October
Effective 11 January 2016, Fern Ridge Produce Limited is a subsidiary company.

Scales Corporation Limited 76
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
G. OTHER
IN THIS SECTION
This section includes the remaining information relating to Scales’ fi nancial statements which is required to comply with
NZ IFRS.
G1. CAPITAL COMMITMENTS
20162015
$'000$'000
Commitments entered into in respect of apple trees as at balance date were 1,577 1,420
Commitments entered into in respect of other property, plant and equipment
as at balance date were 150 233
G2. OPERATING LEASE COMMITMENTS
The Group as Lessee
Operating leases relate to coldstores, orchards, offi ces, vehicles and offi ce equipment with lease terms
of between 3 to 9 years, generally with options to extend for further periods. All operating lease
contracts contain rental reviews that provide for reviews at regular intervals and in the event that the
Group exercises its options to renew.
Non-cancellable operating lease commitments:
Not later than one year 13,966 12,811
Later than one year and not later than fi ve years 41,894 40,020
Later than fi ve years 53,762 57,456
The Group as Lessor
Operating leases relate to coldstores owned by the Group with lease terms of between 3 to 9 years,
generally with options to extend for further periods. All operating lease contracts contain review clauses
that provide for reviews at regular intervals and in the event that the lessee exercises its option to renew.
The lessee does not have an option to purchase the property at the expiry of the lease period.
Non-cancellable operating lease receivables:
Not later than one year 1,520 1,101
Later than one year and not later than fi ve years 3,668 3,640
Later than fi ve years 2,796 3,223
G3. RELATED PARTY DISCLOSURES
Transactions with Related Parties
Certain Directors or senior management have relevant interests in companies with which Scales has
transactions in the normal course of business. A number of Scales directors are also non-executive
directors of other companies. Any transactions undertaken with these entities have been entered in
the ordinary course of business on a third party arm’s-length basis.
Key Management Personnel Remuneration
The compensation of the directors and executives, being the key management personnel of the Group,
is as follows:
Short-term employee benefi ts2,742 2,557
Post-employment benefi ts 85 99
2,827 2,656
During 2016 146,028 (2015: nil) shares were issued to key management personnel in accordance with the senior executive share
scheme described in note D2.

77Annual Report - Year Ended 31 December 2016
G3. RELATED PARTY DISCLOSURES (continued)

20162015
$'000
$'000
Transactions with Equity Accounted Entities
Revenue from sale of goods 1,128 4,683
Revenue from services 1,222 2,277
Dividends received 500 871
Materials and consumables purchases - 153
Trade receivables at balance date 349 531
Advance at balance date - 530
The advance was unsecured and repayable on demand.
G4. EVENTS OCCURRING AFTER BALANCE DATE
There were no events occurring subsequent to balance date which require adjustment to or disclosure in the fi nancial statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016

Scales Corporation Limited 78
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
H. ADOPTION OF AMENDED FINANCIAL REPORTING
STANDARDS AND RESULTING RESTATEMENT
IN THIS SECTION
This section summaries the effect of the change in accounting policy on the prior period disclosures resulting from the
adoption of the amendments to NZ IAS 16 and NZ IAS 41.
H1. ADOPTION OF AMENDED FINANCIAL REPORTING STANDARDS AND
RESULTING RESTATEMENT
The Group has applied the change in accounting policy retrospectively and restated the comparative periods to reverse the fair value
measurement recognised during 2015 relating to apple trees, which are now accounted for in accordance with NZ IAS 16.
In accordance with the transitional provisions in the amendments to NZ IAS 16 and NZ IAS 41 the Group elected to use the fair value
of the apple trees on 1 January 2015 as the deemed cost at that date. Depreciation on apple trees was recognised for the 2015 year
using depreciation rates based on an economic life of 30 years.
The following tables summarise the effect of the change in accounting policy on the prior period presented in the Group’s
consolidated fi nancial statements. The transitional provisions in the amendments to NZ IAS 16 and NZ IAS 41 do not require separate
disclosure showing the effect on the 2016 year.
(a) Consolidated Statement of Financial Position
Previously reportedAdjustmentsRestated
At 1 January 2015 $’000$’000$’000
Equity
Share capital 90,915 - 90,915
Other reserves27,599 - 27,599
Retained earnings27,816 - 27,816
Total Equity146,330 - 146,330
Current assets
Unharvested agricultural produce - 13,47113,471
Other35,763 - 35,763
35,76313,47149,234
Non-current assets
Apple trees 31,368 (31,368)0
Property, plant and equipment145,982 17,897 163,879
Other13,297 - 13,297
190,647 (13,471)177,176
Total Assets 226,410 - 226,410
Current liabilities31,734-31,734
Non-current liabilities
Deferred tax liabilities 17,873 - 17,873
Other30,473 - 30,473
48,346 - 48,346
Total liabilities 80,080 - 80,080
Net Assets 146,330 - 146,330

79Annual Report - Year Ended 31 December 2016
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2016
H1. ADOPTION OF AMENDED FINANCIAL REPORTING STANDARDS (continued)
Previously reportedAdjustmentsRestated
At 31 December 2015 $’000$’000$’000
Equity
Share capital 90,755 - 90,755
Other reserves27,732 - 27,732
Retained earnings42,539 (3,041)39,498
Total Equity161,026 (3,041)157,985
Current assets
Unharvested agricultural produce - 15,493 15,493
Other51,269 - 51,269
51,269 15,493 66,762
Non-current assets
Apple trees 37,034 (37,034) -
Property, plant and equipment150,750 17,317 168,067
Other17,402 - 17,402
205,186 (19,717)185,469
Total Assets 256,455 (4,224)252,231
Current liabilities 43,459 - 43,459
Non-current liabilities
Deferred tax liabilities 19,116 (1,183)17,933
Other32,854 - 32,854
51,970 (1,183)50,787
Total liabilities 95,429 (1,183)94,246
Net Assets 161,026 (3,041)157,985
(b) Consolidated Statement of Comprehensive Income
Previously reportedAdjustmentsRestated
For the year ended 31 December 2015 $’000$’000$’000
Other income 4,977 (3,031) 1,946
Depreciation and amortisation (10,138) (1,193) (11,331)
Income tax expense 14,338 (1,183) 13,155
Profi t for the year 38,935 (3,041) 35,894
Total comprehensive income 38,900 (3,041) 35,859
The Group’s basic and diluted earnings per share have changed from 27.9 cents to 25.7 cents for the year ended 31 December 2015.

Scales Corporation Limited 80
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SCALES CORPORATION LIMITED
OpinionWe have audited the consolidated fi nancial statements of Scales Corporation Limited (the
‘Company’) and its subsidiaries (the ‘Group’), which comprise the consolidated statement of
fi nancial position as at 31 December 2016, and the consolidated statement of comprehensive
income, statement of changes in equity and statement of cash fl ows for the year then ended,
and notes to the consolidated fi nancial statements, including a summary of signifi cant
accounting policies.
In our opinion, the accompanying consolidated fi nancial statements, on pages 48 to 79, present
fairly, in all material respects, the consolidated fi nancial position of the Group as at 31 December
2016, and its consolidated fi nancial performance and its consolidated cash fl ows for the year
then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants, and we have fulfi lled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor and the provision of taxation advice, risk management
advice, due diligence and other assurance services, we have no relationship with or interests in
the Company or any of its subsidiaries. These services have not impaired our independence as
auditor of the Company and Group.
Audit materialityWe consider materiality primarily in terms of the magnitude of misstatement in the fi nancial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or infl uenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or infl uence the decisions of such a
person (the ‘qualitative’ materiality). We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
We determined materiality for the Group fi nancial statements as a whole to be $2.5m.
Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most
signifi cance in our audit of the consolidated fi nancial statements of the current period. These
matters were addressed in the context of our audit of the consolidated fi nancial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matterHow our audit addressed the key audit matter
Valuation of Apple Trees
Bearer plants (the apple trees) are measured at fair value.
Apple trees were revalued at 31 December 2016 to
$31.0 million as described in note C1. A revaluation gain of
$11.8 million is recorded in other comprehensive income.
Apple trees are valued on the basis of a discounted cash
fl ow analysis of forecast income streams and costs from each
orchard. The model uses a number of signifi cant unobservable
inputs, in particular: production levels per hectare, orchard gate
returns (market prices), orchard costs, and discount rates.
Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the models.
Our procedures included, amongst others:
• Evaluating the Group’s processes in respect of the
independent valuation of the apple trees including its review
of the valuation methodology and determination of the key
valuation assumptions.
• Engaging a Deloitte valuation specialist to consider whether
the valuation method applied was reasonable.

81Annual Report - Year Ended 31 December 2016
On 1 January 2016, the Group adopted the amendments to NZ
IAS 16 Property, Plant and Equipment and NZ IAS 41 Agriculture
which bring bearer plants (apple trees) into the scope of NZ IAS
16 so they are accounted for as property, plant and equipment.
Disclosures about the impact of adopting these amendments
are provided in note H1 and the ‘About This Report’ section of
the fi nancial statements.
We included the valuation of apple trees as a key audit
matter due to the level of judgement involved in valuing the
apple trees.
• Assessing the competence, objectivity and integrity of
the Group’s independent registered valuer. This included
assessing the valuer’s professional qualifi cations, experience
and independence. It also included meeting with the valuer
to understand the valuation process adopted and to identify
and challenge the critical judgement areas in the valuations.
• Assessing the valuation methodology for consistency with
the prior year and determining whether any signifi cant
changes to the methodology were appropriate.
• Challenging the reasonableness of the key assumptions by
comparing them to the prior year’s valuation, the Group’s
internal data and current market evidence. We focused on
the assumptions relating to production levels per hectare,
orchard gate returns (market prices), orchard costs, and
discount rates.
–We tested estimated production levels per hectare by
comparing orchard hectares in production with prior year,
adjusted for any changes in land area during the current
year. We compared the production levels per hectare to
external production data published by the Ministry for
Primary Industries as well as internal production data for
the previous season on a sample basis.
–We tested the orchard gate returns on a sample basis
by obtaining actual sales returns received during the
previous year.
–We challenged orchard costs by comparing orchard costs
to the prior year valuation and to data published by the
Ministry for Primary Industries.
–We challenged the discount rates by comparing them
with prior period discount rates and considering current
market interest rates and the risks associated with
the orchards.
• Checking the mechanical accuracy of the discounted cash
fl ow models on a sample basis.
• Confi rming that the Group has appropriately applied the
amendments to NZ IAS 16 Property, Plant and Equipment
and NZ IAS 41 Agriculture in accordance with the
transitional provisions.
• Assessing the adequacy of the Group’s disclosures in respect
of the valuations.
Valuation of Unharvested Agricultural Produce
Unharvested agricultural produce growing on bearer plants
(i.e. fruit), is measured at fair value less costs to sell.
The Group’s unharvested agricultural produce was valued
at $18.4 million at balance date as described in note C2.
A revaluation gain of $1.0 million is recorded in profi t or loss.
Fair value less costs to sell is calculated by the Group using a
discounted cash fl ow model. The model includes signifi cant
unobservable inputs and assumptions including, for each
variety, the forecast production per hectare per annum by
weight, sales prices, costs to harvest and sell, and risk-adjusting
discount rates.
The risk-adjusting discount rates take into account the risk of
unknown adverse events that may affect crop, harvest and/or
market conditions.
The valuation of unharvested agricultural produce is a key audit
matter due to the level of judgement required to determine the
fair value less costs to sell.
Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the internal
valuation model.
Our procedures included, amongst others:
• Holding discussions with management and considering
market information to identify factors, including
environmental or market risks, that would impact the
current crop valuation.
• Engaging a Deloitte valuation specialist to consider whether
the valuation method applied was appropriate and whether
the risk-adjusting discount rates were reasonable based on
market information and risks relating to the unharvested
agricultural produce.
• Challenging the reasonableness of the key assumptions
by comparing the forecast production, prices, and costs
to harvest and sell for the current growing season to the
approved budgets for each orchard.
• Assessing the historical accuracy of the Group’s
budget forecasts.