2017 Annual Report

SCALES CORPORATION LIMITED
ANNUAL REPORT 2017

Agribusiness helps form the
backbone of New Zealand’s economy.
We are passionate about Agribusiness.
We believe in creating meaningful
relationships and outcomes for our
customers, partners, shareholders,
employees and the communities
that we work within.
Map data ©2018 Google

Contents
Introduction 4
Key 2017 Highlights 6
Managing Director and Chairman’s Report 8
Sustainability Report 20
Divisional Overview 30
Leadership Profiles 42
Financial Statements 46
Independent Auditor’s Report 78
Corporate Governance 82
Director Disclosures 95
Directory 103

“It is not the strongest of the species
that survive, not the most intelligent,
but the one most responsive to change.”
This is an extremely exciting time to be a diversified operator and
investor in New Zealand agribusiness.
Globally there is strong demand for safe and premium positioned
branded food products, and increasing benefits are being seen from
the involvement of well-resourced entities in agriculture production.
Within New Zealand, stakeholders are expecting the agriculture
sector to embrace an emphasis on environmentally friendly,
sustainable and high value production. These targets will not
only ensure New Zealand is making best use of its current natural
resources but also create long lasting environmental benefits. This is
also reflected in recent government announcements covering areas
such as climate change and expectations of foreign investment.
After 106 years of operation, we believe that we have the skills,
knowledge and, most importantly, the team, to be able to take
advantage of changes in the agribusiness sector and we continue
to work towards our vision of being the foremost investor in, and
grower of, New Zealand agribusiness.
04
SCALES CORPORATION LIMITED
INTRODUCTION

05
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
INTRODUCTION
Vertically integrated apple grower,
packer & marketer
Apple marketer
1
Horticulture
Air & sea freight
Temperature controlled storage
Bulk liquid storage
Storage & Logistics
Agricultural
by-product
manufacturers
2
MEATEOR
FOODS LTD
Food Ingredients
1
Scales owns 73 per cent of Fern Ridge Produce Limited (Fern Ridge).
2
Profruit is a 50 per cent owned joint venture.

Success in Fruition.
06
SCALES CORPORATION LIMITED
KEY 2017 HIGHLIGHTS
handled, up 88 per cent
5.6m
$
62.0m
22.6c
$
32.7m
litres of juice
sold, down
2 per cent
9 per cent decrease on 2016
(2016: 27.4 cents)
15 per cent
decrease
on 2016
400
+
29,481
3.55m
shipped, up 19 per cent
of export apples shipped, in line
with 2016
(third-party/
independent)
undertaken
6,217
TCEs
3
TEUs
4
UNDERLYING
EBITDA
UNDERLYING NET PROFIT
AIRFREIGHT
TONNES
EARNINGS
PER SHARE
AUDITS
3
Tray Carton Equivalent.
4
Twenty-foot Equivalent Unit.

07
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
KEY 2017 HIGHLIGHTS
$
399.1m
19.0c
16%
7 per cent increase on 2016
declared, (2016: 14.5 cents)
700
+
3000
+
6%
(ROCE)
(2016: 21 per cent)
undertaken
was achieved at Polarcold’s
North Island sites
increasing to almost 2,500 total
staff members at the height of the
apple harvest season
PERMANENT
STAFF MEMBERS
REVENUE
DIVIDENDS
PER SHARE
RETURN ON

CAPITAL EMPLOYED
6
TRAINING COURSES
ENERGY
INTENSITY
REDUCTION
5
See our Sustainability section for further information.
6
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).
27,663
100%
of petfood ingredients
sold, up 20 per cent
of Mr Apple orchards
became GRASP
5

(GlobalGap Risk Assessment
on Social Practice) certified
METRIC
TONNES

Focus and resilience.
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Map data ©2018 Google

2017
$’000
2016
$’000
Variance
%
Underlying EBITDA62,007 67,856 -9%
Underlying Net Profit32,730 38,638 -15%
Net Profit31,771 38,178 -17%
On behalf of the Board, we are pleased to present Scales’ 2017 Annual Report for the
year ended 31 December 2017.
The Group generated Underlying EBITDA
7
of $62.0 million and Underlying Net Profit of
$32.7 million. Whilst these are below our record 2016 results, it emphasises the skill,
resilience, tenacity and commitment of the Scales team to achieve these returns whilst
encountering a difficult growing season.
Tim Goodacre and Andy Borland
09
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
7
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 International Financial Reporting Standards (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 on page 16.

Shareholder Returns
Shareholders who invested in the IPO have achieved a 216 per
cent
8
return on funds invested to the end of February 2018.
By comparison, an investment in the S&P NZX50 would have
delivered a 61 per cent return on funds invested over the
same period.
Scales’ Team
As ever, our excellent results are due to the hard work and
resilience of the entire Scales team. We currently employ over
700 permanent staff, which rises to almost 2,500 total staff
during the height of the apple harvest season, and it is their
effort and dedication that allows us to provide quality produce,
goods and services to our customers. The Board would like
to acknowledge and thank every member of the team for
their efforts.
We would also like to thank the team for the attention paid
to health and safety. The safety of our staff remains of utmost
importance to us and we welcome innovations that have been
suggested and implemented throughout the business. We
will continue to ensure that health and safety is treated with
the importance it deserves and that improvements are made
quickly and efficiently.
Strategic and Operational Highlights
Following a busy 2016, we took the opportunity in 2017 to
consolidate our position and build on our key skills. Some of
the highlights of the year’s activity included:
• The integration of the operations and team of Longview.
This 2016 acquisition has added apple volumes as well as
much needed packing capacity.
• The continued redevelopment of our apple orchards to
higher value apple varieties, best suited to the changing
tastes of consumers in all markets, including the latest
variety addition, Dazzle
®
.
• The ongoing investment in the Mr Apple brand to ensure
its continued pre-eminence as the highest quality premium
offering in the international apple market.
• The acquisition of freight forwarding business OceanAir,
which was acquired on 1 August 2017. This acquisition
adds the ports of Auckland and Melbourne to our logistics
offering and further extends our specialty in the export of
perishable goods.
• A review of our group strategy, more information on which
is provided on the following page.
• Progress on our sustainability journey, maintaining our
commitment to stakeholders that we have sustainability at
the heart of our businesses.
Underlying EBITDAUnderlying NPAT
Underlying EBITDA (our preferred profitability metric) has increased by 45 per cent
since 2013 at a compounding annual growth rate (CAGR) of 10 per cent.
10
CAGR 13%
SCALES CORPORATION LIMITED
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
2017201720162016201520152014201420132013
$62.0m
$67.9m
$61.4m
CAGR 10%
$39.8m
$42.8m
$32.7m
$38.6m
$34.8m
$19.8m
$20.0m
8
Calculated as the difference between: the closing share price on 28 February 2018 plus all net dividends paid (a total of $0.54 per share) and the IPO listing price of $1.60.

Strategy
Scales’ Vision
To be the foremost investor in, and grower of, New Zealand
agribusinesses by leveraging our unique insights, experience,
and access to collaborative synergies.
Scales’ Long Term Goal
To generate a long-run average 15 per cent ROCE across
the portfolio.
Strategy Update
Scales has been delighted with the performance of all our
businesses since listing, as they continue to successfully
implement their business and growth strategies. The most
sustainable returns have been achieved through operating
diversified businesses that are fully integrated and / or have
credible export opportunities leveraging the core competencies
of both New Zealand and Scales.
As a result of our performance to date, and noting recent
government announcements on environmental issues and
foreign investment, we have refreshed our group investment
/ growth strategy, adopting a greater focus on pure agri-
businesses. In particular, we will focus on opportunities that:
• Are fully-vertically integrated.
• Are export-led.
• Add value from our China relationships.
Scales will seek to allocate new capital in sectors that have
the above characteristics and play well to our strengths.
We will look to release capital from businesses not directly
benefitting from these long term trends and genuine growth
opportunities.
Successful implementation of this strategy would ultimately
result in a meaningful rebalance of our current portfolio of
businesses, both via acquisition of businesses aligning with our
strategy, and through possible divestment of businesses that
do not align.
Strategies to Create Value
Our underlying strategies to create value remain the same.
We will:
• Extend our agribusiness reach through disciplined and
patient investment to develop new divisions or market
sectors by:
–Using our core investor competency of identifying
sectors with the appropriate growth characteristics
and supporting this with our in-depth industry due
diligence capabilities.
–Aligning investments with our core operating
competencies to deliver collaborative synergies.
–Seeking a ROCE target of 15 per cent across
our portfolio.
–Targeting investments that have scale, or are able to
reach scale.
–Retaining a focus predominately (but not exclusively) on
New Zealand.
–Where appropriate, investments will also align with
our expanding network in Asia, taking advantage of
the connection and support from our cornerstone
shareholder China Resources Ng Fung Limited (China
Resources Ng Fung) and our participation in Primary
Collaboration New Zealand (PCNZ) and its
Shanghai office.
• Support business units by making material investment in
growth assets, our people and our culture.
–This includes significant investment in our team, fixed
assets, brands and market position.
–Develop our sustainability philosophy and reporting such
that we are seen to be an ‘Employer of Choice’.
• Be transparent in our market communications.
–Provide relevant key operating metrics with
honesty and integrity, subject to maintaining
commercial confidentiality.
11
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Specific Strategic Targets
DivisionTargetStatus
Group
SustainabilitySignificant Progress
• Further develop and evolve our reporting and
measuring of key sustainability aspects affecting
Scales’ businesses.
• Develop best-in-class sustainability reporting.
• Demonstrate improvements in sustainability.
Group Sustainability and Health & Safety role
established.
Monitoring of sustainability KPIs commenced.
FinancialOn Track
• Maintain financial returns in line with, or above,
industry returns.
• Continue to seek acquisitive and organic growth
to expand the business.
Solid return achieved.
A number of acquisitions, strategic
partnerships and growth opportunities
reviewed.
Shareholder returnsSignificant Progress
• Continue to provide shareholders with an
attractive yield on dividends.
• Deliver capital gains and shareholder liquidity
through careful strategic execution.
Substantial growth in share price.
Interim dividend increased to 9.0 cents
per share.
Horticulture
Brand and Intellectual Property developmentGood Progress
• Continue to develop the Mr Apple brand,
particularly within our newer markets of Asia and
the Middle East, as well as our more traditional
markets of Europe and elsewhere.
New sales collateral created and marketing
strategies implemented.
VolumesGood Progress
• Reach 4 million TCEs of our own grown apples.Volumes in line with last year despite poor
weather.
SalesOn Track
• Increase market penetration into Asia through
services company PCNZ and strategic partner
China Resources Ng Fung.
Continued development of branding and
marketing specific to the Asia market.
Plant VarietiesGood Progress
• Acquire new Plant Variety Rights (PVRs) to meet
emerging needs.
• Redevelop lower-performing orchards and
varieties into higher value crops, more aligned
to changing consumer tastes in newer and
traditional markets.
Dazzle
®
gaining market recognition, new PVRs
in progress.
Continued redevelopment of orchards
undertaken.
12
SCALES CORPORATION LIMITED
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Storage &
Logistics
Capitalise on opportunities within coldstoresGood Progress
• Review existing coldstore activities to explore
potential for improved financial performance and
asset returns.
New racking introduced to improve efficiency
and safety and extend customer reach.
Software rollout Achieved
• Continue rollout of Fast Moving Consumer Goods
(FMCG) capable warehouse management software
through Polarcold.
Software upgrade completed in 2017.
Coldstore mergerAchieved
• Complete merger of Whakatu Coldstores and
Polarcold Stores.
Merger completed effective 1 January 2018.
Polarcold logo modernised.
Expand logistics offerings Significant Progress
• Develop scale to utilise the expertise and capacity
within the team.
• Leverage our strength and knowledge in
perishable products.
OceanAir acquired August 2017.
Increased throughput of volumes from both
new and existing customers.
Continuing to investigate opportunities.
Food
Ingredients
Increase scaleProgressing
• Review strategic initiatives and consider organic
and acquisition opportunities to increase
divisional scale.
• Widen our breadth of raw material
sourcing options.
• Strengthen our relationship with customers by
providing a wider range of products and services.
A number of opportunities being considered.
DivisionTargetStatus
13
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Outlook
Looking forward, we believe that Scales is well positioned for
growth. We are experiencing strong demand and anticipate
volume growth in our existing businesses.
We continue to actively review organic, strategic and
acquisitive growth opportunities that play well to our
strengths and will review our holdings in operations that are
less well-aligned. We believe 2018 will be an exciting year.
Appropriately
Incentivising our Team
Whilst strategic input and governance is provided by the Board,
the management team is accountable for implementing those
strategies. As a result, Scales has a strong incentive based
remuneration scheme aligned to positive personal performance
and retaining and developing excellent team members over the
long term.
The Board 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 Scheme
(LTI Scheme) which we believe is key to driving shareholder
wealth. Due to the success of the LTI Scheme, the Board have
agreed to extend it for a further three years, relating to the
2018 to 2020 financial years. The Board’s current intention is
to retain the same overall scheme structure, subject to changes
required to reflect any legislative amendments.
The balance between shorter term incentives and long
term business interests continues to be a key feature of the
positive Scales business culture. The retention and continued
development of the incentive based remuneration schemes
are an important part of the Board and Managing Director’s
objectives. Scales’ remuneration philosophy, and a detailed
breakdown of executive remuneration, is outlined in more detail
in the Corporate Governance section.
Tim Goodacre
As announced last year, Tim Goodacre was
appointed as just the 9th Chairman of Scales
in 106 years at the 2017 Annual Shareholders’
Meeting (ASM), taking over from Jon Mayson.
Tim was elected to the Scales Board in 2014,
having been appointed Chairman of Scales’
Horticulture division in 2011. He has been involved
in agribusiness for nearly forty years, including
holding the position of CEO of Zespri International
from 2003 to 2007, and thus brings a wealth of
industry experience to the Chairman position.
We are delighted to be able to benefit from Tim’s
knowledge as our Chairman.
Additional background to Tim is provided in our
Leadership Profiles section.
14
SCALES CORPORATION LIMITED
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Income Statement
2017
$’000
2016
$’000
Revenue399,100 373,927
Underlying Cost of Sales(287,062)(262,472)
Underlying Gross Margin112,038 111,455
Underlying Gross Margin %28%30%
Underlying EBITDA62,007 67,856
Underlying EBIT47,758 55,757
Underlying Net Profit32,730 38,638
After tax impact of:
Non-cash IFRS adjustments(959)(460)
Net Profit31,771 38,178
Capital employed
9
307,535 271,142
Return on capital employed
9
16%21%
We are pleased to present record revenue of $399.1 million and group Underlying
EBITDA of $62.0 million for the year ended 31 December 2017. This result was very
satisfying in light of a difficult growing season and competitive trading conditions and,
whilst Underlying EBITDA was 9 per cent below last year, it is reflective of the abilities of
the Scales team to minimise the impact of these conditions.
The individual performance of each division is discussed further in the next section.
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 next table 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.
9
Capital Employed and Return on Capital Employed in 2016 excluded capital employed and net losses from the Longview acquisition which, due to the timing of the acquisition,
did not contribute to 2016 profits. Longview has been included in the 2017 calculation.
Group Financials
15
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Reconciliation of Underlying EBITDA to Net Profit
2017
$’000
2016
$’000
Underlying EBITDA62,007 67,856
Reconciliation to GAAP information
- Depreciation(13,661)(11,438)
- Amortisation(588)(661)
- Finance revenue175 167
- Finance charges(3,039)(2,533)
- Taxation(12,164)(14,753)
Underlying Net Profit32,730 38,638
- Foreign exchange contracts revaluations / hedge ineffectiveness214 (1,258)
- Change in fair value gain on apple inventory(40)993
- Cash settled share-based payments(92) -
- Change in gross liability for non-controlling interests(629) -
- Equity settled employee benefits(389)(270)
- Taxation(23)75
(959)(460)
Net Profit as Reported in Financial Statements31,771 38,178
Capital Management
We continue to 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.
Group capital employed increased slightly between 2016
and 2017, mainly due to an increase in working capital.
Despite this increase, Group ROCE exceeded the targeted 15
per cent in 2017.
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
business tends to operate a higher EBITDA margin. As a group
we target a long-run combined EBITDA margin of 13 per cent.
Our Group EBITDA margin exceeded the targeted 13 per cent
i n 2017.
Scales’ Net Tangible Assets as at 31 December 2017 were
$1.43 per share (31 December 2016: $1.41 per share)
10
.
Scales’ basic earnings per share for the year ended 31
December 2017 was 22.6 cents per share (27.4 cents per share
in the year ended 31 December 2016).
10
Based on the weighted average number of ordinary shares.
16
SCALES CORPORATION LIMITED
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Capital Management Benchmarks
2017
$’000
2016
$’000
ROCE
Horticulture
11
19%28%
Storage & Logistics13%11%
Food Ingredients30%53%
Group
11
16%21%
Long term Group target15%15%
Underlying EBITDA margin
12
Horticulture17%20%
Storage & Logistics15%15%
Food Ingredients10%13%
Group16%18%
Target13%13%
Financing
Average Net Debt
13
for the year was $54.8 million, $11.4
million above Average Net Debt during 2016 of $43.4 million.
This higher debt figure reflects the purchase of Longview and
also movements in working capital.
Hedging Strategy
As an exporter, we continue to have significant exposure
to foreign exchange movements. This is most prevalent in
Mr Apple, but our Food Ingredients and Storage & Logistics
divisions are also affected.
In 2017, Mr Apple made approximately 57 per cent of its apple
sales in US dollars, 29 per cent in Euros, 8 per cent in British
pounds, and 1 per cent in Canadian dollars.
14
We continue to
have a natural hedge covering some of our US dollar exposure
as all international shipping is payable in US dollars. We take
cover on the remaining expected net US dollar, Euro, British
pound and Canadian dollar exposures.
We also take out interest rate swaps and forward rate
agreements which provide some certainty on interest costs on
Scales’ long-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
80 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.
Dividend
A final 2016 fully imputed cash dividend of 10.0 cents per
share (a gross amount of 13.9 cents per share) was paid on
7 July 2017. Together with an interim dividend of 8.0 cents
per share (a gross amount of 11.1 cents per share) that was
paid on 18 January 2017, this brought the annual dividends
for 2016 to a total of 18.0 cents per share (a gross amount of
25.0 cents per share).
A fully imputed interim 2017 cash dividend of 9.0 cents per
share (a gross amount of 12.5 cents per share) was declared
in December 2017 and paid on 19 January 2018. Our
expectation is to declare a final fully imputed cash dividend in
respect of 2017 in May 2018, for payment in July 2018.
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.
11
Due to the timing of the acquisition, Longview was excluded from the calculation
of Horticulture and Group 2016 ROCE. It has been included in 2017.
12
Excluding share of profit from joint venture.
13
Average Net Debt is calculated as the average term debt balance plus the average
net working capital facility balance (averages are of 30 June 2017 and 31 December
2017 balances).
14
The balance was made in NZD.
17
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
MANAGING DIRECTOR AND CHAIRMAN’S REPORT

Tim Goodacre
Chairman
19 March 2018
Andy Borland
Managing Director
2017
$’000
2016
$’000
Operational capital expenditure
Horticulture3,826 3,290
Storage & Logistics3,330 3,355
Food Ingredients211 370
Other73 8
Total operational capital expenditure7,440 7,023
Growth capital expenditure
Horticulture5,237 4,975
Storage & Logistics802 3,705
Food Ingredients - -
Total growth capital expenditure6,039 8,680
Total capital expenditure13,479 15,703
Capital Expenditure
Operational capital expenditure in 2017 of $7.4 million was slightly higher than 2016, whilst $6.0 million was invested in
growth projects in 2017, positioning us strategically for future earnings growth.
Major investments during 2017 included:
• Redevelopment of orchards to premium varieties such as Dazzle
®
.
• Installation of an apple washer at the Longview packhouse.
• Upgraded vehicles and accommodation for seasonal workers.
• Racking upgrades at Polarcold’s Whakatu coldstore for improved FMCG storage and racking at Scales Logistics.
• Finalisation of the warehouse management system upgrade at Polarcold.
18
SCALES CORPORATION LIMITED
MANAGING DIRECTOR AND CHAIRMAN’S REPORT
Outlook
Market dynamics for Scales remain supportive and we are optimistic about the overall agribusiness environment. In the year ahead,
we will strive to grow in our target strategic industries. As a result, based on current market conditions and other factors known to
us at the present time, we are optimistic that our 2018 results will build upon 2017.
As ever, thanks go to all of our management and staff, fellow Directors, suppliers, customers and other stakeholders. Your support in
our 106th year of trading is hugely appreciated and we look forward to our continued journey in 2018.

Moving forward
sustainably.
SUSTAINABILITY REPORT
“Scales operates all its businesses like we are just
starting out. We need to leave our businesses better
for the next generation of managers and owners.”
Andy Borland, Managing Director and CEO
Map data ©2018 Google

Our Sustainability Journey
Following our inaugural sustainability report last year, we have continued to make strides
in monitoring and reporting our sustainability journey. We are continuing on our long-
term objective of aligning ourselves with the internationally-recognised sustainability
reporting standard Global Reporting Initiative (GRI) framework as recommended in the
NZX’s Corporate Governance Code.
This year, we validated our materiality index (undertaken last year) with all business units.
Each CEO and key operational manager took part in interviews to review the continuing
relevance of each area and it was agreed that all materiality areas remain relevant to Scales
and will form the foundation of how we will move forward.
Within the categories of People, Environment and Marketplace
are three areas of the business that have historically been of
importance to Scales and are now becoming a focal point for
future-proofing our business:
• Water (preservation and conservation).
• Energy (intensity savings and shared learning throughout
the businesses).
• Being an Employer of Choice.
The entire Scales group is undertaking a review of its information
technology, security and accounting systems to improve integrity,
traceability and accountability throughout all businesses – the
ultimate sustainability in identifying costs, drivers, and process
improvements. We have also been delighted to appoint a Chief
Information Officer, Group Sustainability and Health & Safety
Manager and an Internal Auditor.
Whilst our sustainability journey continues to be in its
infancy, many of the Scales businesses are the very essence
of sustainability – taking a formerly discarded item and
transforming it into a saleable and useable product (for
example, in Liqueo and Meateor) and creating more from an
existing footprint (as with increasing quality and yields at Mr
Apple). The nimble nature of our diverse businesses leads us
to be lean and dynamic in rapidly changing times and without
our fantastic staff we would not be able to achieve any of
this, nor innovate like we do. We will be including them at the
forefront of our increased focus on the sustainability of Scales.
21
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
SUSTAINABILITY REPORT
Scales’ sustainability framework
Community
investment
Water
Energy
WasteBiosecurity
Spray use
& residues
Certification
& traceability
Workforce
stability
Health
and Safety
Employment
practices
E
n
v
i
r
o
n
m
e
n
t
M
a
r
k
e
t
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a
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e
o
p
l
e

15
As at 31 December 2017, includes permanent and casual staff.
16
Part of the Recognised Seasonal Employer (RSE) scheme.
17
Permanent staff.
22
SCALES CORPORATION LIMITED
SUSTAINABILITY REPORT
Sustainability by Statistics
2017 has been about evaluating our current position, gathering data and analysing it with a view to developing the correct Key
Performance Indicators (KPIs) for the future. So, what does the Scales Group look like right now?
Going forward, it is our intent to extend, and capitalise on, this data as it will provide the base for our sustainability reporting requirements.
~
50
800
+
~
1,10 0
~
25%
~
40%
700
+
increasing to almost 2,500 total staff at
the height of the apple harvest season
at the peak of the harvest season
16
SITES
CUSTOMERS
OVERSEAS WORKERS
FEMALE
17
OVER 50 YEARS OF AGE
15
PERMANENT STAFF MEMBERS

Our People
Health and Safety
The Scales Team
We are fortunate to continue to have an amazing group of
people working for us and without their input, passion and
dedication Scales would not be where it is today. One of our
long-term goals is to be recognised as an Employer of Choice,
but first we must establish where we are at and where we
want to be, whilst developing a pathway of how to get there.
The safety of our staff remains a key priority for all of us
and innovations throughout the business have seen many
improvements in these areas. Safety remains at the forefront of
every discussion within all of our businesses and we continue
to see a growth in our reporting culture with innovations being
developed from staff throughout the business units.
During 2017:
• We had an increased focus on injury prevention and
careful management.
• There were 4 notifiable injuries, thankfully all of a relatively
minor nature.
• There was increased reporting of near misses and
other incidents.
• We had 92 staff members with a formal Health and Safety
Representative (HSR) qualification.
• 80 per cent of all staff members had completed formal
security training on-line.
• Over 3,000 individual training courses were undertaken.
• We ensured that 100 per cent of the van fleet at Mr
Apple is fitted with compliance technology to monitor
and improve driver behaviour.
• 100 per cent of Mr Apple orchards became GRASP
18
(GlobalGap Risk Assessment on Social Practice) certified.
In addition, over the past 3 years, Mr Apple has seen 48
people succeed in a numeracy and literacy programme.
Health and Safety will always be a strong focus for us and
2018 will see a more structured governance approach, with
a specific Board committee established, and a road map
created for the short to medium term. A benchmark staff
engagement survey will also commence in 2018.
16
Road User Charges (RUC) compliance technology.
17
GRASP is a voluntary module developed to assess social practices on-orchard (and farms worldwide), addressing specific aspects of workers’ health, safety and welfare.
18
GRASP is a voluntary module developed to assess social practices on-orchard (and farms worldwide), addressing specific aspects of workers’ health, safety and welfare.
23
SUSTAINABILITY REPORT

19
LTI is an industry-wide standard term, defined by Worksafe New Zealand as “An event that causes an injury or illness of such a nature that,
following basic first aid treatment, it prevents the sufferer from returning to their normal work.”
Safety Innovations and Investments
A small example of some of the safety innovations and
investments that we have made during 2017 include:
• Racking - installations at Polarcold’s Whakatu coldstore and
Balance Cargo are improving safety and production flow.
• Ladder innovations - in 2016 we spot welded ladders to
help prevent slips or falls. In 2017 we started to introduce
Velcro
®
strips, placed by the ladder user at a position that
will remind them by touch that they are on the bottom step.
We have seen a considerable drop in LTIs resulting from
ladder incidents. Of the falls that have occurred an increased
percentage required no treatment.
• Manual handling initiatives - Mr Apple saw a 55 per cent
drop in post-harvest Lost Time Injuries
19
(LTIs) between
2016 and 2017, and an extraordinary decrease of 80
per cent in the number of days being taken off, due
to a change in our injury management process. These
improved injury management techniques have been
rolled out throughout the group, focussing on prevention
first followed by effective management of any injuries.
Prevention techniques have included regular stretches and
also rotation of roles.
• Meateor stability improvements - Meateor has worked
hard to better stabilise pallets of frozen goods giving
them both additional operational and export space, and
safety gains.
Going forward, an initial focus will be on continuing to
improve engagement and to include our teams in all
relevant aspects of our businesses from safety through to
process innovations. It is our intention to streamline some of
these processes through 2018.
• Liqueo remote monitoring improvements - Liqueo tanks
are now remotely monitored for temperature and content
level, thus removing the need for our teams to work at
heights and speeding up the reaction time if issues occur.
Racking installations at Polarcold’s Whakatu coldstore
Liqueo remote monitoring improvements
Ladder innovations
Meateor stability improvements
24
SCALES CORPORATION LIMITED
SUSTAINABILITY REPORT

Severity of Ladder Incidents 2016 vs 2017
25
SUSTAINABILITY REPORT
First Aid Injury
0
2
4
6
8
10
12
14
16
18
Medical Treatment Injury
2016 Season
2017 Season
Restricted Work InjuryLost Time InjuryNo Treatment

Job Share Solo Parent Programme - What started out at
just one of Mr Apple’s packhouses, the Job Share Solo Parent
Programme is now being rolled out to another packhouse
and is in its 4th year of operation. The programme, run in
conjunction with the Ministry of Social Development, sees
10 staff share 5 positions on day shift. The staff take part
in a pre-employment training programme covering a wide
range of areas such as fitness, diet and hydration, budgeting,
smoking/drug/alcohol awareness, wellness and setting up
effective childcare. Coupled with ongoing support from
an external provider, the team is monitored by our staffing
team leaders and offers excellent employment opportunities
for the future. The 2018 season sees 4 successful returnees
working alongside 20 new recruits. Pictured above is Robynne
Edmonds, one of our 2018 recruits.
Training
Training and support of our staff remains a key focus and we have identified several star players throughout the group who are
being mentored into future roles.
Naomi Mannering - Naomi grew up on her family orchard
(one of Mr Apple’s biggest suppliers) and, after competing
around the world in yachting and studying International
Business and Marketing at university, she started at Fern
Ridge in a senior role of export sales. With keen mentoring,
Naomi is looking forward to gaining as much experience and
knowledge as she can to allow her to enjoy a long career in
the apple industry.
Kate Stokes - After leaving school, Kate joined Scales on a
short-term contract, which quickly grew to a permanent role
in the accounting team. With support from management, Kate
is studying part-time towards her accounting degree and her
aptitude and enthusiasm now sees her with responsibilities
in accounts payable and receivable and looking after a large
payroll system, all the while receiving invaluable mentoring
from the senior Scales team. Beyond this Kate is keen to gain
her Chartered Accountancy qualification and grow further
within the Scales finance team.
Jen Bunbury - We continue to participate in the Institute
of Directors’ Future Directors programme with Jen replacing
Liz Muller as an attendee at Scales’ Board Meetings. Jen is
a Director in the Deutsche Craigs Investment Banking Team,
with over 15 years Capital Markets experience in Auckland
and London. The Future Directors programme is designed to
help develop the next generation of Directors by providing
experience at the boardroom table and it is a pleasure to
provide these opportunities to aspiring Directors.
26
SCALES CORPORATION LIMITED
SUSTAINABILITY REPORT

Hawke’s Bay Young Fruit Grower of the Year winners
- Tom Dalziel, Jordan James and Anthony Taueki, all in key
Mr Apple orchard positions, competed and secured 1st, 2nd
and 3rd places at the Hawke’s Bay Young Fruitgrower of the
Year for 2017. Eight rigorous practical sessions were held
to test the competitors, covering knowledge on pest and
disease through to spray application and tractor safety and
maintenance. The competition ended with a three-minute
speech to an audience of 220 people. It is an excellent
testament, not only to the competitors themselves, but
also the teams and management around them. Mr Apple
continues to enter candidates every year and supports them
through their learning and preparation.
Marketplace
Certification and Auditing
Over the past few years there has been a move towards
customers requiring more transparency and accountability of
the supply chain. Accordingly, we have implemented a wide
range of improvements and innovations in areas of health and
safety and sustainability alongside streamlining processes and
maximising our return on investment.
To summarise this investment in numbers:
• Over 52 third-party accreditations are required to keep our
business operational.
• Over 400 third-party/independent audits are undertaken to
achieve these accreditations.
• 100 per cent of directly owned Scales businesses operate
under a business continuity plan as well as an overarching
Scales crisis management plan.
• 795,200 sterile moths were released across the Central
Hawke’s Bay Mr Apple orchards in 2017. Working with
Plant & Food Research in a 3-year partnership has seen a
significant reduction in the fertile codling moth population
(a major pest) with the eventual goal to be eradication.
• 26 of our sites are approved Ministry of Primary Industries
facilities and we operate 14 transitional facility sites with
strict biosecurity requirements.
Our plan for 2018 is to review and update our business
continuity and crisis management plans, with a specific focus
on ensuring that the right people know how to react at the
right time, with a keen focus on maintaining the integrity of
our supply chain.
Spray Use and Residue
Mr Apple residue tests nearly 300 apple samples each year to
ensure that fruit safety is maintained for each of the different
customer and market requirements. Extensive residue research,
built up over the past eight years, means that we have
sufficient confidence in our spray applications and resulting
residues to enable us to safely eat the fruit straight from the
tree at harvest time.
100 per cent of residues on fruit at Mr Apple are significantly
below the EU Maximum Residue Limit (MRL).
27
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
SUSTAINABILITY REPORT

Our Environment
Fundamentally Sustainable
Scales businesses are fundamentally sustainable at their core
- from mulching apple tree prunings and giving nutrition back
to the soil, to handling ingredients for soap manufacture from
waste tallows, to creating pet food ingredients from meat
by-products. In short, many of our businesses have their own
sustainable circle that gives back.
Our focus on the environment, and the impact that we have
on it, is about protecting what we have got and creating more
benefit from the same or a lesser footprint and inputs. A few
examples of current initiatives include:
• 100 per cent of fibre trays used at Mr Apple are recycled.
• 95 per cent of Mr Apple on-orchard plastics are recycled.
• Mr Apple generated a 10 per cent reduction in paper use
due to the implementation of a paperless
accounting system.
• 21,000 plastic dairy slip sheets are recycled per year at
Balance Cargo.
• Polarcold’s North Island sites (through their site by site
energy monitoring) saw a 5.7 per cent energy intensity
reduction, resulting in a refund of over $30,000 on
energy costings.
We believe that we recycle a large percentage of waste
products and reuse those items that we can. However, we
will be undertaking a waste audit across our businesses in
2018 to identify areas where we can more effectively reduce,
reuse and recycle. In conjunction with new software and
lean manufacturing principles we will also look to streamline
process and eliminate as much waste or repetition as we can.
The energy management system at Polarcold will be rolled out
across the South Island sites in 2018 and other parts of the
business will be tasked with reviewing their energy sources and
usage and look at ways in which to improve going forward.
Water
Water is a significant area of focus within Horticulture, in
particular the preservation of our access to, and the quality
and quantity of, water we use. We operate within 83 water
permits throughout our businesses (93 per cent within Mr
Apple) therefore the Mr Apple management team takes a
proactive role, working with local groups, to best fit allocation
requirements to needs.
Through the use of precision agricultural techniques (cab
tractors, computerised application systems and sophisticated
sprayer set ups), water usage is kept to a minimum and all
water sources are tested on a regular basis for potability to
ensure safe use on our product.
Case study - Hawke’s Bay Regional Council is working with
landowners and communities living in the Tukituki River
catchment in Central Hawke’s Bay, to manage specific water
quality issues. Tukituki River Catchment Plan Change 6 (Plan
Change 6) seeks to address specific water allocation and water
quality issues in the catchment. As a result, eight Mr Apple
orchards have completed a nutrient management plan and
independent calculations have verified that nitrogen leaching
from our orchards is lower than one third of the allowable limit
and that no risks were identified throughout the audit process.
Smarter Orchards
Mr Apple, together with its software partners, is embarking
on a “Smarter Orchard” journey and has planned how the
business can better monitor and measure its inputs and
outputs in the medium term. The guiding principles of the
Smarter Orchard project are to:
1. Improve marketable products.
2. Be an employer of choice.
3. Optimise quality and yield.
With exceptional improvements on yield over recent years
(in part thanks to our proprietary software app “Billy”),
Smarter Orchard will focus on areas that can help make better
informed decisions, including in areas such as data mapping
and hot-mapping with sensor technology (including the
weather, trending, soil temperature and moisture levels and
microclimates). It is our continued intent to drive increased
performance in our orchards on our existing footprint with the
same inputs or less.
The Board will continually review the issue of climate change
and what it means for each of our businesses, both from the
point of view of our inputs and what we can do to make a
difference. We will assess how outcomes that impact our sites
can be prepared for within our business continuity and crisis
management plans.
28
SCALES CORPORATION LIMITED
SUSTAINABILITY REPORT
Precision agricultural techniques

View from the top.
DIVISIONAL OVERVIEW
Map data ©2018 Google

This section summarises divisional performance and key operating statistics of our three
trading divisions. As in previous years, 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
Overview
Our Horticulture division remains the largest division within the
Scales group and comprises:
• Mr Apple (including Longview), New Zealand’s largest
fully vertically integrated apple business, based in Hawke’s
Bay, where we own or lease over 1,100ha of prime apple
producing orchards.
• A 73 per cent stake in Fern Ridge, a fresh produce exporter
in Hawke’s Bay.
The division performed solidly in 2017:
• Revenue of $228.0 million, 1 per cent lower than last year.
• Underlying EBITDA of $38.9 million, 14 per cent lower than
last year.
• Mr Apple picked over half a billion apples and sold 4.79
million TCEs.
• It operated 4 packhouses, 3 with high-speed optical grading
machines, and 5 coolstores.
Orchard Redevelopment
Orchard redevelopment continues to be a major strategy for the
division, with a significant investment being made. We scrutinise
per hectare orchard returns and look to redevelop lower-
performing orchards and varieties into higher value varieties. As
historical redevelopment matures, volumes of premium varieties
will continue to increase with the focus being on new and
existing varieties for which Mr Apple has proprietary rights.
Apple Varieties and Brands
In addition to our existing range of traditional and premium
varieties, we continue to focus on evolving our products with
innovation to meet emerging needs.
• We successfully launched Dazzle
®
in December 2016 and
it is gaining market recognition as a promising new variety.
It has red, sweet characteristics and is targeted at Asia
markets.
• Our Diva
®
branded apple is crisp, juicy and very sweet and
delivers excellent returns through focussed marketing in the
Asia and Middle East markets.
• Our Little Darlings
®
range are smaller apples, directed
towards children in Asia.
We have further proprietary varieties in the pipeline, with
marketing launches planned for 2018.
Markets
New Zealand has been ranked number 1 in the world as the
most internationally competitive region to produce apples by
the World Apple Review and New Zealand’s global reputation
for food quality positions it well to capture its share of Asia’s
fast growing apple market.
“Evolving apple growing from
an art to a science.”
Andrew van Workum, Mr Apple CEO
31
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
DIVISIONAL OVERVIEW

Mr Apple - Sales by Region (TCEs)
20172016
32
SCALES CORPORATION LIMITED
DIVISIONAL OVERVIEW
Asia &
Middle East
54%
Asia &
Middle East
53%
Europe
31%
Europe
30%
UK
10%
UK
10%
North America
5%
North America
7%
With an increasing middle class and Westernisation of their
diet driving considerable demand, Asia and the Middle
East will continue to be key markets for the division. As a
result, innovation and development will be focussed towards
opportunities in those regions.
Continued development of our relationship with key
strategic shareholder, China Resources Ng Fung, as well as
participation in the PCNZ partnership provides improved
access to the large Asia market. We believe that this is
essential for our continuing successful trading in this market.
Asia – Developing a Market Leading Brand
Without a dominant apple brand in the Asia market, there is an
opportunity for Mr Apple to take a leadership role. We believe
we are uniquely positioned to fulfil this position by virtue of our
size and our dedicated focus on apples.
To do so, we are engaging a range of marketing and branding
strategies including:
• An emphasis on generating ‘pull-through’ demand with
consumer focused branding.
• Understanding apple purchasing habits through
customers’ eyes.
• Packaging innovation, specific to consumer needs
and desires.
• Increasing market awareness through online advertising,
live-streaming shows, in-store promotions and exhibitions.
• Extending our markets through, for example, e-commerce.
In 2017 we sold apples to more than 160 customers in over 40 countries, with sales to Asia and the Middle East accounting for
54 per cent of export sales.
Markets (continued)

Financial Performance and Key Operating Statistics
Summary Performance
The table below shows the financial performance of our Horticulture division for 2017 and 2016:
Horticulture Financial Performance
2017
$’000
2016
$’000
Revenue227,970 230,077
Underlying Cost of Sales(169,977)(167,125)
Underlying Gross Margin57,992 62,952
Underlying Gross Margin %25%27%
Other income, administration and operating expenses(19,060)(17,651)
Underlying Mr Apple EBITDA 36,634 43,636
Underlying Fern Ridge EBITDA 2,299 2,114
Underlying Longview EBITDA - (411)
Underlying Horticulture EBITDA38,933 45,339
Depreciation and amortisation(7,840)(6,228)
Underlying Horticulture EBIT31,093 39,111
IFRS impacts(581)(81)
Horticulture EBITDA38,35245,258
Horticulture EBIT30,512 39,030
Capital employed168,060 143,380
Return on capital employed
20
19%28%
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 non-controlling
shareholders. We record a non-controlling interest of $0.4 million (2016: $0.4 million) in our group results reflecting their share of tax paid profit from Fern Ridge.
20
Due to the timing of the acquisition, Longview was excluded from the calculation of 2016 Horticulture ROCE. It has been included in the 2017 calculation.
33
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
DIVISIONAL OVERVIEW
Revenue for the Horticulture division was slightly below 2016
revenue as a result of slightly lower weighted average apple
pricing. Our gross margin percentage at 25 per cent was also
lower than the prior year, having been impacted by additional
on-orchard expenses and additional labour costs.
Resulting Underlying EBITDA of $38.9 million was 14 per cent
below 2016 but was a resilient performance in a challenging
growing season.
Non-cash IFRS adjustments, before tax, in 2017 and 2016
relate to revaluation of foreign exchange contracts, fair value
gains on unharvested agricultural produce and the revaluation
of the Fern Ridge put option.
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.

Orchard Statistics
20172016201520142013
Orchard
Total planted orchard (at time of harvest)*Ha.1,142 1,042 1,052 1,037 1,028
Fully mature equivalent planted orchardHa.1,043 922 902 871 858
Apples picked (Mr Apple orchards)TCE 000s4,434 4,360 4,433 3,668 3,890
Apples packed (Mr Apple + external growers
(Hawke’s Bay))TCE 000s4,354 4,150 3,809 3,327 3,419
Exported volume
Mr AppleTCE 000s3,545 3,546 3,155 2,752 2,833
External growersTCE 000s1,250 1,187 1,019 1,218 1,340
TotalTCE 000s4,794 4,733 4,174 3,970 4,173
Mr Apple ‘packout’ %%80%81%71%75%73%
Total NZ productionTCE 000s18,829 19,346 18,360 17,259 17,776
Mr Apple own grown volume share of NZ production%18.8%18.3%17.2%15.9%15.9%
*Planted orchard at the end of the year was 1,148 hectares.
More than half a billion apples were, once again, picked from Mr Apple’s planted apple orchards, equating to a gross production of
4.43 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 18.8 per cent of the national crop, up from 18.3 per cent in 2016.
34
SCALES CORPORATION LIMITED
DIVISIONAL OVERVIEW
The following tables highlight various Key Operating Statistics that we monitor and report against.

Volumes and Prices
The table below shows volumes and prices (on a NZD FOB basis) for 2017 and 2016:
Varietal Performance - Mr Apple Volumes
Volumes by Variety (TCE 000s)20172016
Premium Varieties
NZ Queen406 343
Pink Lady253 301
Red Sports (Fuji and Royal Gala)809 866
Other148 147
Total1,616 1,657
Growth(2%)14%
% premium46%47%
Traditional Varieties
Braeburn758 735
Royal Gala567 516
Other604 638
Total1,928 1,889
Growth2%11%
Total Mr Apple owned and leased orchards3,545 3,546
Growth(0%)12%
Prices by Variety (NZD / TCE (FOB))
Weighted average price for premium varieties36.3 37.4
Weighted average price for traditional varieties28.6 29.3
Total weighted average price32.1 33.1
35
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
DIVISIONAL OVERVIEW
Compared to the record 2016 prices that we achieved, our 2017 apple prices were affected by a softening of prices in some
markets. However, our weighted average price for 2017 was only 3 per cent lower than 2016 and we firmly believe that our strategy
is helping us to obtain a price premium for our apples.

36
SCALES CORPORATION LIMITED
DIVISIONAL OVERVIEW
20172016
NZD:USD0.69 0.70
NZD:EUR0.60 0.60
NZD:GBP0.46 0.47
NZD:CAD0.88 0.86

During 2017 we exported 1.61 million TCEs of premium fruit,
a decrease of 2 per cent as a result of the inclement weather
conditions. However, this was offset by a 2 per cent increase
in the export of traditional varieties, from 1.89 million TCEs
to 1.93 million TCEs, mainly in our Braeburn and Royal Gala
varieties. We experienced strong growth in volumes of the
Asia-targeted NZ Queen premium variety, with an increase of
18 per cent to over 400,000 TCEs.
Exchange Rates
The table below summarises our weighted average exchange
rates for 2017, which were generally in line with 2016. This
reflected our hedged position together with general rate
movements. We continue to manage foreign exchange
exposure, with all efforts made to lock in favourable rate
movements and minimise the impact of any volatility in
spot rates.
3,500
3,000
2,500
2,000
1,500
1,000
500
0
20102011201220132014201520162017
4,000
Other Premium
Red Sports
(Fuji and Royal Gala)
Pink Lady
NZ Queen
Other Traditional
Royal Gala
Braeburn
Volumes by Variety (TCE 000s)
2018 Outlook
With a number of opportunities in the region, Asia and
the Middle East will continue to be the key focus for the
Horticulture division in 2018. We are positive in our outlook:
• Given a more settled growing season, gross production is
expected to be consistent with 5-year average volumes and
we are optimistic that packout rates will be slightly ahead
of 2017.
• Marketing and branding efforts will continue throughout
China and other Asian countries in order to ensure our
products are relevant in the eyes of consumers and
capitalise on opportunities there.
• However, foreign exchange spot rates may present a
headwind for the business post 2018 should the current
market conditions prevail.

Storage & Logistics
Divisional Components of EBITDA
Divisional Developments
The Storage & Logistics division experienced excellent
growth in 2017, taking advantage of both organic and
acquisition opportunities:
• We acquired OceanAir on 1 August 2017.
• Coldstores reaped the benefit of industry conditions and
storage times returning to normal trends.
• We increased our leased coldstore space in Christchurch by
5 per cent, securing space for anticipated demand.
• We merged our Polarcold and Whakatu businesses under
the single “Polarcold” brand, with a new modernised logo
being rolled out across the network.
Overview
Our Storage & Logistics division comprises:
• Polarcold - specialists in temperature controlled storage and
warehousing, with facilities in Auckland, Waikato, Hawke’s
Bay, Timaru, Christchurch and Dunedin.
• Scales Logistics (including OceanAir) – leaders in ocean
freight services to exporters and importers of perishable
products, with offices in Auckland, Christchurch, Tauranga,
the Hawke’s Bay, and Melbourne.
• Balance Cargo – providers of air freight services, including
a purpose built chiller and warehousing facilities, based in
Christchurch.
• Liqueo Bulk Storage – operator of bulk liquid storage
terminals for the storage of tallow, edible and non-edible
oils, liquid stock foods and liquid waste products, with
operations at the ports of Timaru and Napier.
20172016
Liqueo
$1.3m
7%
Liqueo
$2.3m
14%
Scales
Logistics
$3.3m
17%
Scales
Logistics
$2.3m
14%
Coldstores
$14.5m
76%
Coldstores
$11.7m
72%
As shown in the chart below, the storage components of the division collectively make up 83 per cent of the divisional EBITDA:
• We had an excellent performance from Scales Logistics
(which includes Balance Cargo) with strong increases
in underlying activity from both internal and external
customers, as well as the acquisition of new customers.
Containers shipped were up 19 per cent and airfreight
tonnes handled were a significant 88 per cent ahead
of 2016.
• Liqueo was impacted by the combination of factors
including the loss of a large customer, closure costs of a
previously exited site and lower volumes.
38
SCALES CORPORATION LIMITED
DIVISIONAL OVERVIEW

Financial Performance
The table below outlines key operational metrics and the summarised financial performance for the Storage & Logistics division for
2017 and 2016:
Storage & Logistics
20172016
Key Operational Metrics
Polarcold
Total available refrigerated coldstore space
(at end of year)m3 000s775.1 737.6
Liqueo
Installed capacity of all tanksMT20,308 20,308
Scales Logistics
TEUs shippedTEUs29,481 24,713
Airfreight tonnes managedMT6,217 3,306
Financial Performance$’000$’000
Revenue125,998 108,383
Cost of sales(81,377)(70,221)
Gross Margin44,621 38,162
Gross Margin %35%35%
Administration, operating expenses and other gains and losses(25,496)(21,962)
Underlying EBITDA
Coldstores14,495 11,660
Liqueo1,335 2,283
Scales Logistics3,295 2,257
Underlying Storage & Logistics EBITDA19,125 16,200
Depreciation and amortisation(5,824)(5,330)
Underlying Storage & Logistics EBIT13,301 10,870
IFRS foreign exchange hedge revaluations - (18)
Storage & Logistics EBITDA19,125 16,182
Storage & Logistics EBIT13,301 10,852
Capital employed103,396 98,105
Return on capital employed13%11%
Storage & Logistics delivered an excellent result in 2017 with
overall revenues up 16 per cent to $126.0 million and EBITDA
up 18 per cent to $19.1m.
We saw a strong EBITDA uplift of 24 per cent from coldstore
activities, reflecting a return to more ordinary levels of trading.
Scales Logistics acquired OceanAir in August 2017 and this,
together with organic growth opportunities, resulted in a 46
per cent increase in EBITDA compared to 2016.
2018 Outlook
The outlook for the Storage & Logistics division is positive.
Coldstores expects to consolidate returns from new and
existing customers requiring additional storage. New racking
to be installed in existing coldstores will improve the utilisable
space and earnings potential of those sites whilst also
improving safety and handling efficiency.
Scales Logistics anticipates further increases in activity from
projected increased fruit and other volumes. And Liqueo is
expected to benefit from an anticipated volume increase.
39
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
DIVISIONAL OVERVIEW

Food Ingredients
Overview
Our Food Ingredients division converts agricultural by-
products into valuable food commodities. It comprises two
businesses that complement Scales’ other businesses:
• Meateor – a processor and marketer of pet food
ingredients for the global pet food industry with
processing plants in Whakatu and Dunedin.
• Profruit – a 50 per cent owned manufacturer of high
quality apple, kiwifruit and pear juice concentrates,
located in Hawke’s Bay.
Divisional Developments
Meateor continued its steady growth in securing and selling
petfood ingredient volumes with a record 27,663 MT of
petfood ingredients sold in 2017, up 20 per cent on 2016.
As in prior years, it has continued to seek alternative proteins
for manufacture and it continues to explore a number of
strategic initiatives to enhance relationships with suppliers and
customers as well as build further scale within the division.
Profruit sales volumes remained relatively steady at 5.6 million
litres of juice concentrate. This was a robust outcome given
the difficult fruit growing conditions in the year. In addition,
continued improvements being made in industry orcharding
practices means there is an overall reduced amount of fruit
available for processing.
40
DIVISIONAL OVERVIEW

Financial Performance
The table below outlines key operational metrics and the summarised financial performance for the Food Ingredients division for
2017 and 2016:
20172016
Key Operational Metrics
Meateor - Sales volumes (MT)27,663 22,971
Profruit - Sales volumes (thousands of litres)5,579 5,712
Financial Performance$’000$’000
Meateor revenue68,855 58,038
Underlying Food Ingredients EBITDA8,041 9,182
Depreciation and amortisation(532)(503)
Underlying Food Ingredients EBIT7,509 8,679
IFRS foreign exchange hedge revaluations125 (166)
Food Ingredients EBITDA8,166 9,016
Food Ingredients EBIT7,634 8,513
Capital employed24,733 16,525
Return on capital employed30%53%
The increase in volumes processed delivered a 19 percent increase in divisional revenues to $68.9 million. Underlying EBITDA
reduced by 12 per cent from 2016 levels reflecting increased margin pressures within the division.
Profruit continued to deliver a robust result, with our share of earnings being $1.4 million.
2018 Outlook
We anticipate an increase in volumes in Food Ingredients in 2018, with potential changes in product mix and we continue to
consider a number of exciting opportunities to grow and develop this division.
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017

Setting the standard.
LEADERSHIP PROFILES
Map data ©2018 Google

Tim Goodacre, Non-Executive Independent 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; President of Nagambie Lakes Tourism
and Commerce Incorporated; and Director of Featherston
Resources Limited. Tim is a member of Scales’ Nominations
and Remuneration Committee.
Board of Directors (as at 19 March 2018)
Andrew (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 the 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 New Zealand
Apples & Pears 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. Andy is a
member of Scales’ Finance and Treasury Committee and
Scales’ Health and Safety Committee.
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
Chairman of Scales’ Health and Safety Committee and 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. Mark
is also: Director of dual listed (NZX and ASX) New Zealand
King Salmon Investments Limited; and Director of investment
company, Evergreen Partners Limited. Mark is Chairman of
Scales’ Nominations and Remuneration Committee, Scales
Finance and Treasury Committee and is a member of Scales’
Audit and Risk Management Committee.
43
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
LEADERSHIP PROFILES

Board of Directors (continued)
Alan Isaac, Non-Executive Independent Director
Alan was elected to the Board in 2014. Alan was the
President of the International Cricket Council between
2012 and 2014 and is currently; Chairman of McGrathNicol
and Partners NZ and the New Zealand Community Trust; a
Director of New Zealand Vault Limited, Oceania Healthcare
(NZ) Limited, Skellerup Holdings Limited and a number of
private companies. 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 a
Director of China Resources Ng Fung Limited and CEO of its
holding company, China Resources Enterprises, Limited (CRE).
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.
Carol Chen, Alternate Director for Weiyong Wang
Carol was appointed as an Alternate Director for Weiyong
Wang on 2 November 2017. Carol is the Investment
Director of the Corporate Development Department at
CRE, and is responsible for Mergers & Acquisitions (M&A)
initiation and execution in the Asia Pacific Region. Since
joining CRE in 2009, Carol has participated in various key
M&A transactions. Prior to that, Carol worked for China
Resources Microelectronics Limited, a subsidiary of China
Resources Holdings Limited that was formerly listed in
Hong Kong. Carol holds a Bachelor’s degree of Business
Administration from the RMIT University, Australia.
44
SCALES CORPORATION LIMITED
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.
Karen Morrish, Group Health & Safety, Compliance and
Sustainability Manager
Karen was appointed to this new Group role during 2017.
Prior to that Karen was the Health & Safety and Compliance
Manager for Mr Apple, where she has worked for 13 years.
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 Polarcold
Stephen has been with the Polarcold group of companies
in various management roles for 24 years. Prior to that,
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 17 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
45
LEADERSHIP PROFILES

Map data ©2018 Google
Thorough,
to the last detail.
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.
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 69
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 74
F1. Subsidiary companies
F2. Acquisition of OceanAir
G. Other 76
G1. Capital commitments
G2. Operating lease commitments
G3. Related party disclosures
G4. Events occurring after balance date
47
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS

48
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
20172016
NOTE$’000$’000
RevenueB1 399,100 373,927
Cost of salesB2(287,102)(257,038)
111,998 116,889
Share of profit of entity accounted for using the equity methodC31,376 1,612
Other incomeB3233 275
Administration and operating expensesB2(51,871)(50,197)
Other lossesB3(665)(1,258)
EBITDA61,071 67,321
Amortisation (588)(661)
DepreciationC1(13,661)(11,438)
EBIT46,822 55,222
Finance revenue175 167
Finance costB4(3,039)(2,533)
PROFIT BEFORE INCOME TAX EXPENSE43,95852,856
Income tax expense B5(12,187)(14,678)
PROFIT FOR THE YEAR31,771 38,178
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
(Loss) gain on cash flow hedges (6,377)9,382
Income tax relating to cash flow hedges 1,786 (2,627)
(4,591)6,755
Items that will not be reclassified to profit or loss:
Revaluation of land and buildings 4,200 26,945
Income tax relating to buildings(588)(3,041)
Revaluation of apple trees- 11,839
Income tax relating to apple trees- (3,315)
3,612 32,428
OTHER COMPREHENSIVE (LOSS) INCOME FOR THE YEAR(979)39,183
TOTAL COMPREHENSIVE INCOME FOR THE YEAR30,792 77,361
Profit for the year attributable to:
Equity holders of the Company31,330 37,772
Non-controlling Interests441 406
31,771 38,178
Total comprehensive income for the year attributable to:
Equity holders of the Company30,351 76,955
Non-controlling interests441 406
30,792 77,361
EARNINGS PER SHARE:
Basic earnings per share (cents) D522.6 27.4
Diluted earnings per share (cents) D522.5 27.2
The notes to the financial statements on pages 53 to 77 form part of and should be read in conjunction with this statement.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2017

49
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS

Share
Capital
Revaluation
Reserve
Hedging
Reserve
Equity-settled
Employee
Benefits
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 201690,755 25,289 2,210 233 39,498 157,985 - 157,985
Profit 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 paymentsD2- - - 270 - 270 - 270
Shares purchasedD2(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
Profit for the year- - - - 31,330 31,330 441 31,771
Other comprehensive
income (loss) for
the year- 3,612 (4,591)- - (979)- (979)
Total comprehensive
income (loss) for
the year- 3,612 (4,591)- 31,330 30,351 441 30,792
Recognition of
share-based paymentsD2- - - 389 - 389 - 389
Shares sold179 - - - - 179 - 179
Shares issuedF2970 - - - - 970 - 970
Shares fully vestedD22,853 - - (462)(591)1,800 - 1,800
Dividends paidD3- - - - (13,811)(13,811)(406)(14,217)
Dividends declaredD3- - - - (12,586)(12,586)- (12,586)
Balance at 31
December 201793,750 61,329 4,374 430 61,593 221,476 441 221,917
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2017
The notes to the financial statements on pages 53 to 77 form part of and should be read in conjunction with this statement.

50
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
20172016
NOTE$’000$’000
EQUITY
Share capitalD193,750 89,748
Revaluation reserveD261,329 57,717
Hedging reserveD24,374 8,965
Equity-settled employee benefits reserveD2430 503
Retained earningsD261,593 57,251
Equity attributable to Scales Corporation Limited Shareholders221,476 214,184
Equity attributable to Non-controlling Interests441 406
TOTAL EQUITY221,917 214,590
Represented By:
CURRENT ASSETS
Cash and bank balances5,690 6,355
Trade and other receivablesE123,437 17,529
Other financial assetsE26,415 8,464
Unharvested agricultural produceC220,189 18,433
InventoriesC522,212 16,365
Prepayments3,423 3,655
TOTAL CURRENT ASSETS81,366 70,801
NON-CURRENT ASSETS
Property, plant and equipmentC1228,881 226,652
Investments accounted for using the equity methodC34,507 4,131
GoodwillC418,177 16,222
Other financial assetsE27,764 11,561
Computer software 1,811 745
TOTAL NON-CURRENT ASSETS261,140 259,311
TOTAL ASSETS342,506 330,112
CURRENT LIABILITIES
Trade and other payablesE322,215 22,047
Dividend declaredD312,586 11,045
BorrowingsE46,500 11,000
Current tax liabilitiesB52,739 5,009
Other financial liabilitiesE54,331 3,357
TOTAL CURRENT LIABILITIES48,371 52,458
NON-CURRENT LIABILITIES
BorrowingsE440,000 30,000
Deferred tax liabilitiesB528,175 28,187
Other financial liabilitiesE54,043 4,877
TOTAL NON-CURRENT LIABILITIES72,218 63,064
TOTAL LIABILITIES120,589 115,522
NET ASSETS221,917 214,590

The notes to the financial statements on pages 53 to 77 form part of and should be read in conjunction with this statement.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2017

51
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
20172016
$’000$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers393,145 373,223
Dividends received1,018 525
Interest received175 167
394,338 373,915
Cash was disbursed to:
Payments to suppliers and employees(345,660)(315,413)
Interest paid(3,039)(2,533)
Income tax paid(13,271)(14,627)
(361,970)(332,573)
NET CASH GENERATED BY OPERATING ACTIVITIES 32,368 41,342
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Advances repaid866 1,100
Sale of property, plant and equipment and computer software147 216
1,013 1,316
Cash was applied to:
Net cash outflow on acquisition of businesses (Note F2)(978)(16,414)
Purchase of computer software(1,654)(445)
Purchase of shares in unlisted companies(5)(53)
Purchase of property, plant and equipment(11,826)(19,715)
(14,463)(36,627)
NET CASH USED IN INVESTING ACTIVITIES(13,450)(35,311)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Proceeds from term facility borrowings10,000 -
Proceeds from seasonal facility borrowings52,500 65,000
Shares sold179 -
62,679 65,000
Cash was applied to:
Repayments of seasonal facility borrowings(57,000)(54,000)
Dividends paid(24,856)(23,501)
Dividends paid to non-controlling interests(406)-
Shares purchased- (1,007)
(82,262)(78,508)
NET CASH USED IN FINANCING ACTIVITIES(19,583)(13,508)
NET DECREASE IN NET CASH(665)(7,477)
Cash and cash equivalents at the beginning of the year6,355 13,832
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR5,690 6,355
Represented by:
Cash and bank balances5,690 6,355
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR5,690 6,355
The notes to the financial statements on pages 53 to 77 form part of and should be read in conjunction with this statement.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2017

52
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
20172016
$’000$’000
NET CASH GENERATED BY OPERATING ACTIVITIES
Reconciliation of profit for the year to net cash generated by operating activities:
Profit for the year 31,771 38,178
Non-cash items:
Amortisation 588 661
Hedge ineffectiveness on cash flow hedges(214)1,258
Deferred tax 1,186 36
Depreciation 13,661 11,438
Share of equity accounted results (1,376)(1,612)
Share-based payments523 270
Change in gross liability on Fern Ridge Produce Limited put option628 -
Items classified as investing and financing activities:
Working capital amounts included in acquisition of businesses(54)(1,162)
Dividends received from equity accounted company1,000 500
Gain (loss) on disposal of property, plant and equipment36 (50)
Changes in net assets and liabilities:

Trade and other receivables (5,908)(2,848)
Unharvested agricultural produce (1,756)(2,940)
Inventories (5,847)(2,051)
Prepayments 232 (689)
Trade and other payables 168 (229)
Current tax (2,270)582
NET CASH GENERATED BY OPERATING ACTIVITIES32,368 41,342
Statement of Cash Flows
For the purpose of the statement of cash flows, 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 flows:
Operating activities are the principal revenue producing activities of the Group and other activities that are not investing or
financing 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.

Tim Goodacre, ChairmanAndy Borland, Managing Director
For and on behalf of the Board of Directors who authorised the issue of the financial statements on 27 February 2018.
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
for the year ended 31 December 2017

53
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
ABOUT THIS REPORT
IN THIS SECTION
The notes to the financial statements include information which is considered relevant and material to assist the reader
in understanding the financial performance and financial position of the Scales Corporation Limited Group (Scales).
Information is considered relevant and material if:
• the amount is significant 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-profit
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 financial 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 financial reporting standards, as
appropriate for a Tier 1 for-profit 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;
• on the basis of historical cost, except for certain assets and
financial 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 financial 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 financial 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; and
• Unharvested agricultural produce in note C2.
Basis of Consolidation
The Group financial statements incorporate the financial
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.
The financial 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 financial statements, all material intra-
group transactions, balances, income, expenses and cash flows
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 financial statements are provided
throughout the notes to the financial statements.

54
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
Adoption of New and Revised Standards and
Interpretations - Standards and Interpretations in Issue
not yet Effective
NZ IFRS 9 (2014) Financial Instruments
NZ IFRS 9 (2014) Financial Instruments establishes the
principles for hedge accounting and impairment of financial
assets. The directors do not anticipate that application of
NZ IFRS 9 (2014) will have a material impact on the financial
performance or financial position of the Group when it
becomes effective on 1 January 2018.
NZ IFRS 15 Revenue from Contracts with Customers
NZ IFRS 15 Revenue from Contracts with Customers establishes
a single comprehensive model for entities to use in accounting
for revenue arising from contracts with customers. NZ IFRS
15 will supersede the current revenue recognition guidance
including NZ IAS 18 Revenue and the related interpretations
when it becomes effective on 1 January 2018.
The core principle of NZ IFRS 15 is that an entity should
recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in
exchange for those goods or services. Specifically, the Standard
introduces a 5-step approach to revenue recognition:
• Identify the contract(s) with a 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 satisfies a
performance obligation.
Under NZ IFRS 15, an entity recognises revenue when (or as)
a performance obligation is satisfied, i.e. when “control” of
the goods or services underlying the particular performance
obligation is transferred to the customer. Far more prescriptive
guidance has been added in NZ IFRS 15 to deal with specific
scenarios. Furthermore, extensive disclosures are required by
NZ IFRS 15.
Based on preliminary analysis, the directors do not anticipate
that the implementation of NZ IFRS 15 will have a significant
impact on the financial performance of the Group for the full
year reporting period.
NZ IFRS 16 Leases
NZ IFRS 16 Leases introduces a comprehensive model for
the identification of lease arrangements and accounting
treatments for both lessors and lessees. NZ IFRS 16 will
supersede the current lease guidance including NZ IAS 17
Leases and the related interpretations when it becomes
effective on 1 January 2018.
NZ IFRS 16 distinguishes leases and service contracts on the
basis of whether an identified asset is controlled by a customer.
The distinction between operating leases (off balance sheet)
and finance leases (on balance sheet) is removed for lessee
accounting, and is replaced by a model where a right-of-use
asset and a corresponding liability have to be recognised for
all leases by lessees (i.e. all on balance sheet) except for short-
term leases and leases of low value assets.
The right-of-use asset is initially measured at cost and
subsequently measured at cost (subject to certain exceptions)
less accumulated depreciation and impairment losses,
adjusted for any remeasurement of the lease liability. The
lease liability is initially measured at the present value of the
lease payments that are not paid at that date. Subsequently,
the lease liability is adjusted for interest and lease payments,
as well as the impact of lease modifications, among others.
Furthermore, the classification of cash flows will also be
affected as operating lease payments under NZ IAS 17
are presented as operating cash flows; whereas under the
NZ IFRS 16 model, the lease payments will be split into a
principal and an interest portion which will be presented as
financing and operating cash flows respectively.
In contrast to lessee accounting, NZ IFRS 16 substantially
carries forward the lessor accounting requirements in NZ IAS
17, and continues to require a lessor to classify a lease either as
an operating lease or a finance lease.
Furthermore, extensive disclosures are required by NZ IFRS 16.
As at 31 December 2017, the Group has non-cancellable
operating lease commitments of $128 million. NZ IAS 17
does not require the recognition of any right-of-use asset or
liability for future payments for these leases; instead, certain
information is disclosed as operating lease commitments
in note G2. A preliminary assessment indicates that these
arrangements will meet the definition of a lease under NZ
IFRS 16, and hence the Group will recognise a right-of-use
asset and a corresponding liability in respect of all these leases
unless they qualify for low value or short-term leases upon the
application of NZ IFRS 16. The new requirement to recognise
a right-of use asset and a related lease liability is expected to
have a significant impact on the amounts recognised in the
Group’s consolidated financial statements and the directors are
currently assessing its potential impact. It is not practicable to
provide a reasonable estimate of the financial effect until the
directors complete their review.
Other
The Group has reviewed all other Standards, Interpretations
and Amendments to existing Standards in issue not yet
effective and, except as noted above, does not expect these
Standards to have a material effect on the financial statements
of the Group.

55
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
A. SEGMENT INFORMATION
IN THIS SECTION
This section explains the financial performance of the operating segments of Scales, providing additional information
about individual segments, including:
• total segment revenue and revenue from external customers;
• segment profit 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.
Food
IngredientsHorticulture
Storage &
LogisticsOtherEliminationsTotal
$'000$'000$'000$'000$'000$'000
2017
Total segment revenue68,855 227,970 126,851 3,779 (28,355)399,100
Inter-segment revenue- - (25,224)(3,131)28,355 -
Revenue from external customers68,855 227,970 101,627 648 - 399,100
Loss on sale of non-current assets- (5)(31)- - (36)
Share of profit of entity accounted for
using equity method1,376 - - - - 1,376
EBITDA8,166 38,352 19,125 (4,572)- 61,071
Amortisation expense(3)(247)(312)(26)- (588)
Depreciation expense(528)(7,593)(5,512)(28)- (13,661)
Finance revenue1 94 20 60 - 175
Finance costs- (22)- (3,017)- (3,039)
Segment profit (loss) before income tax7,636 30,584 13,321 (7,583)- 43,958
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, OceanAir Freight Pty Limited
and Whakatu Coldstores Limited.
Other: Scales Corporation Limited, Geo. H. Scales Limited,
Scales Employees Limited, Scales Holdings Limited and Selacs
Insurance Limited.

56
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
Food
IngredientsHorticulture
Storage &
LogisticsOtherEliminationsTotal
$'000$'000$'000$'000$'000$'000
Segment assets35,743 182,362 120,203 4,198 - 342,506
Segment liabilities7,906 38,229 23,155 51,299 - 120,589
Segment carrying value of investment
accounted for using the equity method4,507 - - - - 4,507
Segment acquisition of property, plant and
equipment and computer software211 9,063 4,129 73 - 13,476
Property, plant and equipment and
computer software included in business
acquisitions (note F2)- - 47 - - 47
2016
Total segment revenue58,038 230,077 108,383 3,525 (26,096)373,927
Inter-segment revenue- (212)(23,131)(2,753)26,096 -
Revenue from external customers58,038 229,865 85,252 772 - 373,927
Gain on sale of non-current assets1 70 (20)(1)- 50
Share of profit of entity accounted for
using the equity method1,612 - - - - 1,612
EBITDA9,016 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 revenue1 108 15 43 - 167
Finance costs- (13)- (2,520)- (2,533)
Segment profit (loss) before income tax8,514 39,125 10,867 (5,650)- 52,856
Segment assets27,327 185,423 109,971 7,391 - 330,112
Segment liabilities6,325 44,781 20,777 43,639 - 115,522
Segment carrying value of investment
accounted for using the equity method4,131 - - - - 4,131
Segment acquisition of property, plant
and equipment and computer software370 12,722 7,060 8 - 20,160
Property, plant and equipment and
computer software included in
business acquisitions- 11,722 - - - 11,722
20172016
$'000$'000
The total revenue from external customers in New Zealand and other countries are:
New Zealand 127,919 107,111
Asia106,925 112,712
Europe76,603 76,530
North America85,487 75,210
Other2,166 2,364
399,100 373,927
SEGMENT REPORTING (continued)

57
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
B. FINANCIAL PERFORMANCE
IN THIS SECTION
This section explains the financial 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
20172016
$'000$'000
Revenue from the sale of goods283,286 269,062
Revenue from the rendering of services110,196 92,507
Fees and commission476 681
Net foreign exchange gain1,002 7,925
Net hail insurance proceeds119 -
Rental revenue4,021 3,752
399,100 373,927
Sale of Goods
Revenue from the sale of goods is recognised when the Group has transferred to the buyer the significant 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 benefits associated with the transaction will flow to
the Group.
Rendering of Services
Revenue from services is recognised on the basis of the value of services 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 Revenue
Rental revenue 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 financial statements
Audit of the annual financial statements139 141
Review of interim financial statements 42 40
Other services:
Audit of solvency certificate for Selacs Insurance Limited6 6
Acquisition due diligence services- 89
Risk management review- 17
Tax compliance services- 4
Tax services re employee share scheme- 6
Bad debts Incurred (recovered)48 (390)
Change in fair value adjustment to unharvested agricultural produce40 (993)

58
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
20172016
$'000$'000
Change in inventories(5,847)(2,051)
Direct expenses38,022 35,299
Directors' fees466 434
Donations28 14
Electricity8,581 8,427
Employee benefits expense:
Post employment benefits - defined contribution plans1,566 1,235
Salaries, wages and related benefits72,986 68,777
Other employee benefits748 314
Grower payments55,620 58,972
Insurance3,605 3,369
Management fees119 108
Materials and consumables60,133 44,238
Ocean and air freight61,721 50,911
Operating lease expenses18,415 14,998
Packaging15,628 15,913
Repairs and maintenance6,907 7,357
338,973 307,235
Disclosed as:
Cost of sales287,102 257,038
Administration and operating expenses51,871 50,197
338,973 307,235
Employee Benefits
An accrual is made for benefits 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 defined 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 benefits 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
Dividends18 25
(Loss) gain on disposal of property, plant and equipment(36)50
Hedge ineffectiveness on cash flow hedges214 (1,258)
Remeasurement of gross liability to non-controlling interest(629)-
Insurance proceeds1 200
(432)(983)
Disclosed as:
Other income233 275
Other expenses(665)(1,258)
(432)(983)
B2. COST OF SALES, ADMINISTRATION AND OPERATING EXPENSES (continued)

59
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
B4. FINANCE COST
20172016
$'000$'000
Interest on loans2,729 2,346
Other interest180 41
Bank facility fees 130 146
3,039 2,533
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 Profit or Loss
Income tax expense comprises:
Current tax expense 11,504 14,648
Adjustments recognised in the current year in relation to the current tax of prior years (503)(6)
Deferred tax expense relating to the origination and reversal of temporary differences1,186 36
Total income tax expense recognised in profit or loss12,187 14,678
The prima facie income tax expense on pre tax accounting profit reconciles to the income tax expense
in the financial statements as follows:
Profit from continuing operations43,958 52,856
Income tax expense calculated at 28% 12,308 14,799
Non-assessable income(390)(448)
Non-deductible expenses443 321
Over provision of income tax in previous year - current tax(503)(6)
Under provision of income tax in previous year - deferred tax329 12
12,187 14,678
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 year5,009 4,427
Arising on acquisition of businesses- 567
Current taxation expense - continuing operations11,001 14,642
Taxation paid(13,271)(14,627)
Balance at end of the year2,739 5,009

60
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS

Opening
balance
Charged to
profit 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 2017
Deferred tax liabilities (assets):
Trade and other receivables(5)- - - (5)
Unharvested agricultural produce4,883 769 - - 5,652
Property, plant and equipment and
computer software20,334 574 588 - 21,496
Trade and other payables(512)(157)- - (669)
Other financial assets and liabilities 3,487 - (1,786)- 1,701
Net deferred tax liability28,187 1,186 (1,198)- 28,175
31 December 2016
Deferred tax liabilities (assets):
Trade and other receivables(81)76 - - (5)
Unharvested agricultural produce4,338 440 - 105 4,883
Property, plant and equipment and
computer software13,345 (509)6,356 1,142 20,334
Trade and other payables(529)29 - (12)(512)
Other financial assets and liabilities 860 - 2,627 - 3,487
Net deferred tax liability17,933 36 8,983 1,235 28,187
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 profit 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 financial 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 financial 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 profit or loss in the period in which they arise.
B5. TAXATION (continued)

61
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
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
Office
Equipment &
Motor Vehicles
at cost
Capital
Work in
Progress
at costTotal
$’000$’000$’000$’000$’000$’000
Gross carrying amount
Balance at 1 January 2016104,532 18,510 100,755 16,889 4,152 244,838
Additions6,904 2,909 6,086 3,056 761 19,716
Acquisition of businesses8,866 200 2,563 93 - 11,722
Disposals- - (543)(756)- (1,299)
Revaluation20,368 9,520 - - - 29,888
Balance at 31 December 2016140,670 31,139 108,861 19,282 4,913 304,865
Additions252 2,209 7,599 2,505 (739)11,826
Acquisition of businesses (Note F2)- - - 47 - 47
Disposals(9)- (685)(1,032)- (1,726)
Revaluation1,712 - - - - 1,712
Balance at 31 December 2017142,625 33,348 115,775 20,802 4,174 316,724
Accumulated depreciation and
impairment
Balance at 1 January 20164,402 1,193 58,874 12,302 - 76,771
Depreciation expense2,175 1,311 6,128 1,824 - 11,438
Disposals- - (432)(668)- (1,100)
Revaluation(6,577)(2,319)- - - (8,896)
Balance at 31 December 2016- 185 64,570 13,458 - 78,213
Depreciation expense2,488 2,432 6,628 2,113 - 13,661
Disposals- - (595)(948)- (1,543)
Revaluation(2,488)- - - - (2,488)
Balance at 31 December 2017- 2,617 70,603 14,623 - 87,843
Net book value
As at 31 December 2016140,670 30,954 44,291 5,824 4,913 226,652
As at 31 December 2017142,625 30,731 45,172 6,179 4,174 228,881

62
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
Accounting Policy
Land, buildings and apple trees are included in the statement
of financial 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 sufficient
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 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 profit or loss, in which case
the increase is credited to profit 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 profit 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 profit 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.
Office 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
Office 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 profit or loss.
C1. PROPERTY, PLANT AND EQUIPMENT (continued)
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, Logan Stone Limited and
Telfer Young Limited. 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.
An assessment of the fair value of land and buildings as at
31 December 2017 was completed by Scales using market
information provided by independent valuers. Based on this
assessment there was deemed to be no material change in the
capitalisation rates from 31 December 2016 and only minor
movements in potential market comparative rental rates. As a
result a valuation increase of $4,200,000 has been recorded in
other comprehensive income.
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-
specific attributes.
The significant 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 the 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.
Significant changes in either of these inputs would result in
significant changes to the fair value measurement.
The Group’s land and buildings are classified as Level 3 in the
fair value hierarchy.
The carrying amount of land and buildings had it been
recognised under the cost model is $82,221,000 (31 December
2016: $83,869,000).
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 reflect the location, plantings, age and varieties of
trees and productive capabilities of the orchards.
An assessment of the fair value of the apple trees as at
31 December 2017 was completed by Scales using market
information provided by the independent valuer. It was
determined that the carrying amount as at 31 December 2017
did not differ materially from fair value.

63
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
C1. PROPERTY, PLANT AND EQUIPMENT (continued)
The significant unobservable inputs, based on district averages, for the apple trees are:
20172016
Production levels (gross tray carton equivalent (tce)) per hectare3,305 - 5,8963,624 - 5,709
Orchard gate returns per tce$24.36 - $39.90$25.31 - $38.90
Orchard costs per tce$18.77 - $31.39$17.00 - $28.60
Discount rate18.0% - 21.40%18.0% - 21.40%
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. Significant changes in any of these inputs would result in significant changes to the fair value measurement.
The Group’s apple trees are classified as level 3 in the fair value hierarchy.
The apple trees, on owned and leased orchards, have the following planting profile:
Total Hectares Planted
20172016
Premium varieties:
NZ Queen211 213
Pink Lady119 121
Red sports (Fuji and Royal Gala)234 234
Other premium75 59
Traditional varieties:
Braeburn165 171
Royal Gala186 186
Other traditional158 160
1,148 1,144
The exported volume from Mr Apple’s planted apple orchard was 3,537,000 tce’s (2016: 3,546,000 tce’s).
Risk Management Strategy:
The Group is exposed to financial 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
20172016
$'000$'000
Balance at beginning of the year18,433 15,493
Decrease due to harvest(18,433)(15,493)
Acquisition of businesses- 375
Development expenditure19,236 17,065
Fair value adjustment953 993
Balance at end of the year20,189 18,433
The assessment of the value of unharvested agricultural produce was undertaken by management, using a discounted cash flow
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.

64
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
The significant unobservable inputs included in the model are the:
20172016
$'000$'000
Production levels (tonnes per hectare per annum)60 - 10750 - 100
Orchard gate returns per tce$22 to $39$20 to $40
Risk adjusting discount rates 51% to 72%55% to 73%
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.
C3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
20172016
$'000$'000
Share of profit before taxation1,915 2,241
Share of income tax(539)(629)
Share of Net Profit for the Year and Total Comprehensive Income1,376 1,612
Carrying value at beginning of the year4,131 3,019
Dividend paid(1,000)(500)
INVESTMENT IN EQUITY ACCOUNTED ENTITY4,507 4,131
Profruit (2006) Limited, which is domiciled in New Zealand and has a 31 December balance date, is the joint venture investment as at
31 December 2017 and 31 December 2016. The principal activity is juice production and sales. Scales held 50% of of Profruit (2006)
Limited as at 31 December 2017 and 31 December 2016.
The Scales Corporation Limited Group share of the guarantee of the Profruit (2006) Limited bank loan facilities is $1,494,197
(2016: $240,000).
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 joint ventures are incorporated in these consolidated financial statements using the equity
method of accounting. Under the equity method, an investment in joint venture is initially recognised in the consolidated statement
of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the joint venture. Dividends or distributions received from a joint venture reduce the carrying amount of the investment in
that joint venture in the Group financial statements. When the Group’s share of losses of a joint venture exceeds the Group’s interest
in that 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 joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee becomes a joint
venture until the date it ceases to be a joint venture. On acquisition of the investment in a joint venture, any excess of the cost of
the investment over the Group’s share of the net fair value of the identifiable 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
20172016
$'000$'000
Gross Carrying Amount
Balance at beginning of the year16,222 5,319
Arising on acquisition of:
Fern Ridge Produce Limited- 5,702
Longview Group Holdings Limited- 5,201
OceanAir business and assets and shares in OceanAir Freight Pty Limited (see Note F2)1,955 -
Balance at end of the year18,177 16,222
C2. UNHARVESTED AGRICULTURAL PRODUCE (continued)

65
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
C4. GOODWILL (continued)
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.
For the purpose of impairment testing, goodwill has been allocated to the cash-generating units listed below which represent the
lowest level at which the Directors monitor goodwill.
20172016
$'000$'000
Storage & Logistics3,944 1,989
Horticulture14,233 14,233
18,177 16,222
As at 31 December 2017, the Directors have determined, based on discounted cash flow 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 goods17,798 12,489
Other4,414 3,876
22,212 16,365
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 first in first 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 first 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
profit 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 flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (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 profit or
loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

66
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
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 confidence 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 140,510,292 fully paid ordinary shares (2016: 139,779,006) less treasury stock of 721,056
shares (2016: 1,847,257 shares) (refer to note D2). All shares rank equally in all respects.
Shares issued or purchased on market under the Senior Executive Share Scheme (“Share Scheme”) (note D2) are treated as treasury
stock until vesting to the employee.
Number of shares
20172016
Fully paid ordinary shares
Opening balance139,779,006 139,779,006
Shares issued as consideration for business acquisition (Note F2)283,405 -
Share Scheme - shares issued335,211 -
Cash-settled share based payment shares issued112,670 -
Closing balance140,510,292 139,779,006
Treasury stock
Opening balance1,847,257 1,533,193
Share Scheme - shares issued335,211 -
Share Scheme - shares purchased on market- 314,064
Share Scheme - shares forfeited and sold on market(50,212)-
Share Scheme - shares fully vested(1,411,200)-
Closing balance721,056 1,847,257
The Available Subscribed Capital of $38,531,000 (2016: $36,036,000) 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.

67
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
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 Benefits 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 executives will not gain any benefit 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.
Grant dateVesting dateExercise price, $Number of shares
Opening
balanceGrantedForfeited
Vested and
exercised
Closing
balance
24 July 201424 July 20171.601,437,000 - 25,800 1,411,200 -
8 May 20158 May 20181.6696,193 - - - 96,193
22 April 2016*22 April 20191.67314,064 - 15,066 - 298,998
5 May 2017†5 May 20201.70- 299,377 9,346 - 290,031
5 May 2017‡5 May 20202.45- 35,834 - - 35,834
Total1,847,257 335,211 50,212 1,411,200 721,056
The weighted average share price for shares that vested on 24 July 2017 was $3.45.
The shares issued vest over three years. 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 benefits reserve. Expected share price volatility was based on historical volatility of the Company ordinary shares.
The inputs into the “option pricing calculator” are:
201720172016
†FY16A‡FY16B*FY15
Acquisition date share price, $3.353.353.20
Expected share price volatility, %232324
Option life, years333
Risk-free interest rate, %2.312.312.12
Exercise price, $1.702.451.67
Fair value of each instrument issued in the year, at the grant date, $1.771.161.65
Retained Earnings
Retained earnings represents the profits retained in the business.
D3. DIVIDENDS
20172016
$'000$'000
Final dividend - 10.00 (2016: 6.50) cents per share13,811 8,974
Interim dividend - 9.00 (2016: 8.00) cents per share12,586 11,045
26,397 20,019
The 2017 interim dividend was declared on 5 December 2017 and paid on 19 January 2018.

68
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
D4. IMPUTATION CREDIT ACCOUNT
20172016
$'000$'000
Balance at end of the year18,583 17,408
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
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the company by the weighted average
number of ordinary shares on issue during the year, excluding shares held as treasury stock. Diluted earnings per share assumes
conversion of all dilutive potential ordinary shares in determining the denominator.
20172016
$'000$'000
Profit attributable to equity holders of the Company
- used in the calculation of earnings per share
31,330 37,772
Number of shares
20172016
Basic and diluted earnings per share
Weighted average number of ordinary shares138,738,233138,026,398
Effect of dilutive ordinary shares (non-vested Senior Executive Share Scheme) 751,619832,669
Weighted average number of Ordinary Shares for diluted earnings per share 139,489,852138,859,067
Basic earnings per share (cents)22.6 27.4
Diluted earnings per share (cents)22.5 27.2

69
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
E. FINANCIAL ASSETS AND LIABILITIES
IN THIS SECTION
This section explains the financial 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 financial assets and liabilities; and
• the financial instruments used to manage risk.
ACCOUNTING POLICIES
Financial Assets
Financial assets are classified into the following specified
categories: financial assets ‘at fair value through profit or loss’
(FVTPL) and ‘measured at amortised cost’.
The classification depends on the business model for
managing the financial asset and the cash flow characteristics
of the financial 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 profit or loss
Financial assets are classified at fair value through profit or loss
if they are not measured at cost or amortised cost. Gains and
losses on a financial asset designated in this category and not
part of a hedging relationship are recognised in profit or loss.
Financial assets measured at amortised cost
The Group’s financial assets held in order to collect contractual
cash flows that are solely payments of principal and interest
on the principal outstanding are measured at amortised cost.
Cash and cash equivalents, trade receivables and employee
loans are classified in this category.
Impairment of financial 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 financial asset, the estimated
future cash flows of the asset have been affected.
For financial 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 flows, discounted at the financial asset’s original
effective interest rate.
Financial Liabilities Measured at Amortised Cost
The Group’s financial liabilities include trade and other
payables and borrowings. These financial 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 profit or loss immediately unless
the derivative is designated as an effective hedging instrument,
in which event the timing of the recognition in profit or loss
depends on the nature of the hedge relationship. The Group
designates certain derivatives as cash flow hedges. A derivative
is presented as a non-current asset or a non-current liability
where the cash flow 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 flows 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 flow 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 profit or loss, and is included in ‘other income’
or ‘other losses’.
Amounts recognised in the hedging reserve are reclassified
from equity to profit or loss in the periods when the hedged
item is recognised in profit 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 qualifies 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 profit 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 profit or loss.

70
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
E1. TRADE AND OTHER RECEIVABLES
20172016
$'000$'000
Trade receivables18,724 14,574
Other receivables1,356 593
Owing by entity accounted for using the equity method76 349
Goods and services tax3,281 2,013
23,437 17,529
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 financial 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 financial institutions.
There is a significant concentration of credit risk with five customers who represent 25.93% (2016: five customers who represent
35.63%) of trade and other receivables.
The carrying amount of financial assets recorded in the financial 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 significant 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
specific receivables. Interest is not charged on overdue debtors. The ageing of these past due trade receivables is:
One month3,995 2,363
Two months 790 639
More than two months786 2,139
5,571 5,141
E2. OTHER FINANCIAL ASSETS
Current:
At fair value:
Foreign currency derivative instruments6,415 8,409
At amortised cost:
Advances to other entities- 55
6,415 8,464
Non-current:
At fair value:
Foreign currency derivative instruments6,544 11,231
Shares in unlisted companies 211 206
At amortised cost:
Employee loans 1,009 124
7,764 11,561

71
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
E3. TRADE AND OTHER PAYABLES
20172016
$'000$'000
Trade payables10,325 12,737
Accruals7,214 4,882
Employee entitlements4,676 4,428
22,215 22,047
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 profit
or loss over the period of the borrowing using the effective interest method. The fair value of current and non-current borrowings is
approximately equal to their carrying amount.
The Group signed Multi-Option Facility Agreements with Rabobank and Westpac New Zealand Limited on 22 March 2013. The total
facility is $90,000,000 (2016: $100,000,000). At 31 December 2017 the undrawn amount under these facilities was $43,500,000
(2016: $59,000,000).
The floating interest rate is 2.94% to 3.34% (2016: 2.91% to 3.25%) and the term borrowing facility roll-over date is 30 June
2019. Seasonal facility presented as current borrowings is due for repayment within one year. The bank facilities are secured by a
first ranking security interest granted by each of the Charging Group* Companies over all its present and after-acquired property
(including proceeds) and a first ranking security interest over any of the Charging Group Companies present and future assets and
undertakings which are not personal property. The bank facilities are also secured by first and exclusive registered mortgages over
property comprising coolstores, orchards and industrial and commercial property owned by members of the Charging Group.
*Charging Group Companies are Scales Corporation Limited, Geo.H.Scales Limited, Liqueo Bulk Storage Limited, Meateor Foods
Limited, Mr Apple New Zealand Limited, New Zealand Apple Limited, Polarcold Stores Limited, Scales Holdings Limited, Scales
Logistics Limited and Whakatu Coldstores Limited.
The Multi-Option Facility Agreements with the Group’s banks include 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 financial liabilities at fair value:
Foreign currency derivative instruments1,312 2,047
Interest rate swap contracts and forward rate agreements481 371
Fern Ridge Produce Limited put option2,538 939
4,331 3,357
Non-current financial liabilities at fair value:
Foreign currency derivative instruments3,318 3,111
Interest rate swap contracts and forward rate agreements725 826
Fern Ridge Produce Limited put option- 940
4,043 4,877
On 11 January 2016 the Group increased its shareholding in Fern Ridge Produce Limited (“Fern Ridge”) 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 Fern Ridge profits, but with a minimum value equivalent to that paid to the selling shareholders.

72
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
E6. INTEREST RATE RISK
Interest Rate Risk Management
The Group is exposed to interest rate risk as it borrows funds at floating 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 fixed and
floating 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 flow exposures on the issued floating
rate debt. The fair value of these contracts at the reporting date is determined by discounting the future cash flows using the
forward interest rate curves at reporting date and the credit risk inherent in the contracts. The average contracted fixed interest rate
is based on the notional principal amount at balance date.
Details of interest rate swap contracts and forward rate agreements for the Group are:
Maturity Date
Fixed Interest
Rate
Notional Principal
AmountFair Value
201720162017201620172016
%%$’000$’000$’000$’000
Interest rate swap contracts:
Within one year- 4.97 - 10,000 - (280)
Two to five years4.02 4.02 30,000 30,000 (938)(826)
After five years3.25 - 10,000 - (268)-
Forward rate agreements:
Within one year- 3.55 - 25,000 - (91)
(1,206)(1,197)
These interest rate swap contracts and forward rate agreements, exchanging floating rate interest amounts for fixed rate interest
amounts, are designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting from floating 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 profit or loss over the period that the floating rate interest
payments on debt impact profit or loss.
The Group’s interest rate swap contracts and forward rate agreements are classified as Level 2 in the fair value hierarchy.
At 31 December 2017 it is estimated that a general increase of one percent in interest rates would decrease the Group’s profit after
income tax and equity by approximately $558,000 (2016: $451,000).
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 fluctuate 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 financial instruments. The fair value of foreign currency derivative financial instruments at the reporting date is determined
on a discounted cash flow basis whereby future cash flows are estimated based on forward exchange rates and contract forward
rates, discounted at a rate that reflects the credit risk of various counterparties.
The Group’s forward foreign exchange contracts and foreign exchange options are classified as Level 2 in the fair value hierarchy.
Details of foreign currency instruments at balance date for the Group are:
20172016
Contract ValueFair ValueContract ValueFair Value
$’000$’000$’000$’000
Sale commitments forward foreign exchange contracts260,406 3,546 165,524 7,250
Sale commitments foreign exchange options96,787 4,783 128,150 7,232

73
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
E7. FOREIGN CURRENCY RISK (continued)
These foreign currency instruments are designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting
from movements in foreign currency exchange rates on anticipated future transactions. It is anticipated that the sales will take place
during the 2018 to 2021 financial years at which stage the amount deferred in equity will be released into profit or loss.
It is estimated that a general increase of five cents in the value of the New Zealand dollar against other foreign currencies would
have decreased the Group’s profit after income tax by $10,303,000 (2016: $9,939,000). A decrease in exchange rates would have
the opposite impact on profit.
E8. CATEGORIES OF FINANCIAL INSTRUMENTS
2017 2016
$'000$'000
Financial Assets:
Fair value through profit or loss211 206
Derivative instruments in designated hedge accounting relationships12,959 19,640
Amortised cost26,855 22,050
40,025 41,896
Financial Liabilities:
Amortised cost81,301 74,092
Fair value through profit or loss2,538 1,879
Derivative instruments in designated hedge accounting relationships5,836 6,355
89,675 82,326
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 flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.
The table includes both interest and principal cash flows.
Within Three
Months
Four Months
to One Year
One to Five
YearsTotal
$'000$'000$'000$'000
2017
Trade and other payables22,215 - - 22,215
Dividend declared12,586 - - 12,586
Fern Ridge Produce Limited put options1,269 1,269 - 2,538
Borrowings363 7,601 40,633 48,597
Interest rate swaps and forward rate agreements120 364 1,247 1,731
36,553 9,234 41,880 87,667
2016
Trade and other payables22,047 - - 22,047
Dividend declared11,045 - - 11,045
Fern Ridge Produce Limited put options939 - 940 1,879
Borrowings324 11,812 31,462 43,598
Interest rate swaps and forward rate agreements113 315 684 1,112
34,468 12,127 33,086 79,681

74
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
F. GROUP STRUCTURE
IN THIS SECTION
This section provides information to help readers understand the Scales Group structure and how it affects the financial
position and performance of the Group. In this section there is information about:
• subsidiaries; and
• the acquisition of assets and business of OceanAir Limited and shares in OceanAir Freight Pty Limited.
F1. SUBSIDIARY COMPANIES
Subsidiary Companies:Principal Activity
Country of
Incorporation
Holding
2017 2016Balance Date
Fern Ridge Produce LimitedTrading companyNew Zealand 72.88%72.88%31 December
Geo. H. Scales Limited Non trading companyNew Zealand 100%100%31 December
Liqueo Bulk Storage LimitedTrading companyNew Zealand 100%100%31 December
Longview Group Holdings LimitedNon trading companyNew Zealand 100%100%31 December
Longview New Zealand LimitedNon trading companyNew Zealand 100%100%31 December
Longview Packhouse LimitedNon trading companyNew Zealand 100%100%31 December
Meateor Foods Australia Pty LimitedTrading companyAustralia100%100%31 December
Meateor Foods LimitedTrading companyNew Zealand 100%100%31 December
Mr Apple New Zealand LimitedTrading companyNew Zealand 100%100%31 December
New Zealand Apple LimitedTrading companyNew Zealand 100%100%31 December
OceanAir Freight Pty Limited (Note F2)Freight consolidatorAustralia100%0%31 December
Polarcold Stores LimitedColdstore operatorNew Zealand 100%100%31 December
Scales Employees LimitedCustodial companyNew Zealand 100%100%31 December
Scales Holdings LimitedHolding companyNew Zealand 100%100%31 December
Scales Logistics LimitedFreight consolidatorNew Zealand 100%100%31 December
Selacs Insurance LimitedInsurance companyNew Zealand 100%100%31 December
Whakatu Coldstores LimitedColdstore operatorNew Zealand 100%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.

75
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
F2. ACQUISITION OF OCEANAIR
On 1 August 2017 Scales Corporation Limited through its wholly owned subsidiary Scales Logistics Limited completed the purchase
of the assets and the business of OceanAir Limited and all of the shares in OceanAir Freight Pty Limited (collectively OceanAir), a
freight forwarding business with offices in Auckland and Melbourne.
OceanAir specialises in sea and air freight for perishable produce, specifically kiwifruit and avocado exports, which account for about
50% of its activity.
Details of the acquisition are as follows:
Fair Value on
Acquisition
$'000
Current assets
Cash and cash equivalents14
Trade and other receivables247
Prepayments4
Non-current assets
Property, plant and equipment47
Current liabilities
Trade and other payables(319)
Net liabilities acquired(7)
Goodwill on acquisition1,955
Consideration1,948
Issue of shares in Scales Corporation Limited as part consideration970
Net cash outflow on acquisition978
Goodwill arising on acquisition
Goodwill arose on the acquisition of OceanAir because the cost of acquisition included immediate operational presences in the
Auckland and Melbourne markets, synergies and future market benefits as the operations are integrated with the Scales Logistics
operations. These benefits are not recognised separately from goodwill as the expected future economic benefits arising cannot be
reliably measured and they do not meet the definition of identifiable intangible assets.
Impact of the acquisition on the results of the Group
OceanAir contributed $198,000 to the Group profit for the year. Group revenue for the year includes $4,308,000 in respect of
OceanAir. Had the OceanAir acquisition been effective at 1 January 2017, the revenue of the Group would have been $403,854,000
and the profit for the year would have been $31,735,000.

76
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS
G. OTHER
IN THIS SECTION
This section includes the remaining information relating to Scales’ financial statements which is required to comply
with NZ IFRS.
G1. CAPITAL COMMITMENTS
20172016
$'000$'000
Commitments entered into in respect of apple trees as at balance date2,161 1,577
Commitments entered into in respect of property, plant and equipment as at
balance date- 150
G2. OPERATING LEASE COMMITMENTS
The Group as Lessee
Operating leases relate to coldstores, orchards, offices, vehicles and office 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 year16,271 13,966
Later than one year and not later than five years53,325 41,894
Later than five years58,854 53,762
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 year4,065 1,520
Later than one year and not later than five years3,696 3,668
Later than five years1,866 2,796
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 benefits2,820 2,858
Share-based payments433 262
Post-employment benefits102 85
3,355 3,205
During 2017 145,813 (2016: 146,028) shares were issued to key management personnel in accordance with the senior executive
share scheme described in note D2.

77
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS
G3. RELATED PARTY DISCLOSURES (continued)
20172016
$'000$'000
Transactions with the Equity Accounted Entity
Revenue from sale of goods890 1,128
Revenue from services968 1,222
Dividends received1,000 500
Trade receivables at balance date76 349
G4. EVENTS OCCURRING AFTER BALANCE DATE
There were no events occurring subsequent to balance date which require adjustment to or disclosure in the financial statements.

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SCALES CORPORATION LIMITED
OpinionWe have audited the consolidated financial statements of Scales Corporation Limited and its
subsidiaries (the ‘Group’), which comprise the consolidated statement of financial position as
at 31 December 2017, and the consolidated statement of comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 48 to 77, present
fairly, in all material respects, the consolidated financial position of the Group as at 31 December
2017, and its consolidated financial performance and cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (‘NZ
IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for 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 sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor and the provision of 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 Group.
Audit materialityWe consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or influence the decisions of such a
person (the ‘qualitative’ materiality). We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $2.15 million.
Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
78
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS

Key audit matterHow our audit addressed the key audit matter
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 $20.2 million at balance date as described in note C2. A
revaluation gain of $1.0 million is recorded in profit or loss.
Fair value less costs to sell is calculated by the Group using a
discounted cash flow model. The model includes significant
unobservable inputs and assumptions including, for each
variety, the forecast production per hectare per annum by
weight, sales prices, and risk-adjusting discount rates, as well as
costs to harvest and sell.
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 considered
to be 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.
• Checking the mechanical accuracy of the discounted cash
flow model.
Valuation of Land and Buildings
As disclosed in note C1, the Group has land and buildings
of $142.6 million. The Group has a policy of recording land
and buildings at fair value with revaluations performed with
sufficient regularity that the carrying amount at the end of a
reporting period does not differ materially from their fair value
(usually every 3 years). The last independent valuation of land
and buildings was carried out as at 31 December 2016.
The significant assumptions adopted in the valuation of land
and buildings include; sales prices for similar properties, market
rental rates, and capitalisation rates. The valuations include
adjustments to observable data for similar properties to take
into account property-specific attributes.
Management have considered and sought input from
independent valuers as to any changes to the significant
assumptions used in the 2016 valuation and whether these
changes indicate that the land and buildings are not held at fair
value as at 31 December 2017.
Management have used the information provided by the
independent valuers to determine that the fair value of the
land and buildings has increased by $4.2 million. This increase
is recorded through other comprehensive income in the
consolidated statement of comprehensive income.
Valuation of land and buildings is considered to be a key audit
matter due to the significance of the assets to the Group’s
consolidated statement of financial position, and due to the
judgment involved in the assessment of the fair value of these
assets by the Group’s Directors.
In conjunction with our internal valuation specialists we
reviewed and evaluated the documentation prepared by the
Group in support of their assessment of whether the carrying
value of land and buildings classified as property, plant and
equipment as at 31 December 2017 differed materially from
their fair value.
Our procedures included, amongst others:
• Agreeing material additions to supporting documentation.
• Assessing changes in the significant assumptions from
the 31 December 2016 independent valuation against
external information.
• Assessing correspondence from the independent valuer.
• Checking the mathematical accuracy used in the
Group’s assessment.
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ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS

Valuation of Apple Trees
As disclosed in note C1 the Group has apple trees of $30.7
million. The Group has a policy of recording apple trees at fair
value with valuations performed with sufficient regularity that
the carrying amount at the end of a reporting period does not
differ materially from their fair value (usually every 3 years). The
last independent valuation of apple trees was carried out as at
31 December 2016.
The significant assumptions adopted in the valuation of these
assets are production levels per hectare, orchard gate returns
(market prices), orchard costs, and discount rates.
Management have considered and sought input from
independent valuers as to any changes to the significant
assumptions used in the 2016 valuation and whether these
changes indicate that the apple trees are not held at fair value
as at 31 December 2017.
Management have applied judgement in determining there
have been no substantial changes to the significant assumptions
used in the 2016 valuations, that these assumptions remain
appropriate, and that fair value does not differ materially from
carrying amount as at 31 December 2017.
Valuation of apple trees is considered to be a key audit matter
due to the significance of the assets to the Group’s consolidated
statement of financial position, and due to the judgment
involved in the assessment of the fair value of these assets by
the Group’s Directors.
In conjunction with our internal valuation specialists we
reviewed and evaluated the documentation prepared by the
Group in support of their assessment of whether the carrying
value of the apple trees as at 31 December 2017 differed
materially from their fair value.
Our procedures included, amongst others:
• Agreeing material additions to supporting documentation.
• Assessing management’s assertion that there have been no
substantial changes to the significant assumptions from the
31 December 2016 independent valuation against internal
data and market information.
• Assessing correspondence from the independent valuer.
80
SCALES CORPORATION LIMITED
FINANCIAL STATEMENTS

Other informationThe directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report. The Annual Report is expected to be made available
to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and
we will not express any form of assurance conclusion thereon.
Our responsibility is to read the other information identified above when it becomes available
and consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
When we read the other information in the Annual Report, if we conclude that there is a
material misstatement therein, we are required to communicate the matter to the directors and
consider further appropriate actions.
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation
of the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such
internal control as the directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
for the audit of the
consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs and ISAs (NZ)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements
is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on useThis report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company’s shareholders as a body, for our audit work, for this report, or for the opinions we
have formed.
Michael Wilkes, Partner
for Deloitte Limited
Christchurch, New Zealand
27 February, 2018
81
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
FINANCIAL STATEMENTS

82
SCALES CORPORATION LIMITED
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
The Board of Scales Corporation Limited (Scales or the Company) is committed to ensuring that the Company meets best practice
governance principles and maintains the highest ethical standards. This Corporate Governance Statement provides an overview of
the Company’s governance framework. It is structured to follow the NZX Corporate Governance Code (NZX Code) and discloses the
practices relating to the NZX Code’s recommendations.
The Board’s view is that Scales complies with the corporate governance principles and recommendations set out in the NZX Code
apart from two areas as outlined in this report. The Board expects to move to full compliance with the NZX Code during 2018.
The Company also complies with the principles in the Financial Markets Authority’s Corporate Governance in New Zealand Principles
and Guidelines and with the corporate governance requirements of the NZX Main Board Listing Rules (NZX Listing Rules). The Board
regularly reviews and assesses Scales’ governance structures and processes to ensure that they are consistent with best practice.
Scales’ key corporate governance documents referred to in this statement, including charters and policies, can be found at
www.scalescorporation.co.nz/about-us/governance.
Scales’ Corporate Governance Code (the Scales Code) was reviewed and updated in February 2018 and is reviewed annually.
This Corporate Governance Statement was approved by the Board on 19 March 2018.
Principle 1 – Code of Ethical Behaviour
“Directors should set high standards of ethical behaviour, model this behaviour and hold management accountable for
these standards being followed throughout the organisation.”
RECOMMENDATION 1.1
The Board should document minimum standards of ethical behaviour to which the issuer’s Directors and employees are
expected to adhere (a Code of Ethics).
Code of Ethics
Scales’ Board sets a framework of ethical standards for the Company via its Code of Ethics, which is contained in the Scales Code.
Directors and employees of Scales and its subsidiaries are expected to be guided in their behaviour and actions by these standards.
The Code of Ethics covers a wide range of areas including: standards of behaviour; conflicts of interest; proper use of Company
information and assets; gifts; delegated authorities; compliance with laws and policies; reporting concerns; and corporate
opportunities. The procedure for advising the Company of a suspected breach is set out in the Code of Ethics. No breaches were
identified during the year.
Every new Director, employee and contractor is to be provided with a copy of the Code of Ethics and must confirm that they have
read and understand the Code of Ethics. The Code of Ethics is available on the Company’s website. The Board is currently assessing
options for training in ethics and consequently is not fully compliant with Recommendation 1.1.
The Code of Ethics is subject to biennial review by the Board.
RECOMMENDATION 1.2
An issuer should have a financial product dealing policy which applies to employees and Directors.
Share trading by Company Directors and Employees
The Board has implemented formal procedures to handle trading in the Company’s securities by Directors, employees and advisors of
the Company, with the approval of the Chief Financial Officer being required before trading can occur. A blackout period is imposed
for all Directors and employees between the end of the half year and full year and the release to NZX of the result for that period.
The policy provides that shares may not be traded at any time by any individual holding material information. The full procedures are
outlined in the Securities Trading Policy and Guidelines, which is contained in the Scales Code.
The fundamental rule in the policy is that insider trading is prohibited at all times. The requirements of the policy are separate from,
and in addition to, the legal prohibitions on insider trading in New Zealand.
Principle 2 – Board Composition & Performance
To ensure an effective Board, there should be a balance of independence, skills, knowledge, experience and perspectives.
RECOMMENDATION 2.1
The Board of an issuer should operate under a written charter which sets out the roles and responsibilities of the Board.
Responsibilities of the Board
The Board has overall responsibility for all decision making within Scales. In this regard the Board is responsible for laying solid
foundations for the direction, management and oversight of the Company in the support of its objectives to generate growth,
corporate profit and shareholder gain. It has delegated day-to-day management of the Company to the Managing Director and the
senior management team.

83
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
CORPORATE GOVERNANCE
0%
25%
50%
75%
75%
100%
25%
50%
100%
Digital & Technology
China
Storage & Logistics
Financial
Legal & Regulatory
Retail
Exports
Executive Leadership
& Strategy
Branding & Marketing
Agriculture
Governance
Risk & Compliance
Capital Markets
People
The main functions of the Board include to:
• Review and approve the strategic, business and financial plans prepared by Management.
• Monitor performance against the strategic, business and financial plans.
• Appoint, provide counsel to and review the performance of the Managing Director.
• Approve major investments and divestments.
• Ensure ethical behaviour by the Company, Board, Management and employees.
• Assess its own effectiveness in carrying out its functions.
The Board monitors these matters by receiving reports and plans from Management, maintaining an active programme of divisional
visits and through its annual work programme.
The Board uses Committees to address certain issues that require detailed consideration by members of the Board who have
specialist knowledge and experience. The Board retains ultimate responsibility for the functions of its committees and determines
their responsibilities.
The Board has a statutory obligation to reserve responsibility for certain matters. It also deals directly with issues relating to the
Company’s mission, appointments to the Board, strategy, business and financial plans.
Details of the Board’s role, composition, responsibilities, operation, policies and committees are provided in Scales Code.
RECOMMENDATION 2.2
Every issuer should have a procedure for the nomination and appointment of Directors to the Board.
Director nomination and appointment
The Board is responsible for appointing Directors. The Nominations and Remuneration Committee manages the appointment process
for new Directors and the re-election of existing Directors in order to make a recommendation to the Board. When considering an
appointment, the Committee will undertake a thorough check of the candidate and his or her background. Where the Board determines
a person is an appropriate candidate, shareholders are notified of that and are provided with all material information that is relevant to the
decision on whether to elect or re-elect a Director.
The Nominations and Remuneration Committee also has responsibility for
reviewing the composition of the Board to ensure that the Company
has access to the most appropriate balance of skills, qualifications,
experience, perspectives and background to effectively govern
the Company. The Board has developed a Board skills
matrix setting out the preferred mix of skills of the
Board. The skills matrix is used to evaluate whether
the collective skills and experience of the Directors
meet Scales’ requirements both currently and
into the future. If the Board determines that
new or additional skills are required, training is
completed or a formal recruitment process
is undertaken.
The Board has determined that to operate
effectively and to meet its responsibilities
it requires competencies in disciplines
including executive leadership and strategy,
governance, agriculture, storage and
logistics, finance and capital markets, risk
and compliance, legal and regulatory,
people, digital and technology, export,
retail and doing business in China.
The graphic on this page illustrates the
current collective Board skill level for
each discipline.
The current mix of skills and experience is
considered appropriate for the responsibilities
and requirements of governing Scales. The
Board looks to strengthen its oversight of issues in
all disciplines, as required, via expert advice.
As at 31 December 2017 the Board has a majority
of Independent Directors. Director independence is
considered on a case-by-case basis and is monitored on
an ongoing basis.

84
SCALES CORPORATION LIMITED
CORPORATE GOVERNANCE
RECOMMENDATION 2.3
An issuer should enter into written agreements with each newly appointed Director establishing the terms of their appointment.
Letter of appointment
All new directors will enter into a written agreement with Scales setting out the terms of their appointment.
RECOMMENDATION 2.4 AND 2.8
Every issuer should disclose information about each Director in its annual report or on its website, including a profile of
experience, length of service, independence and ownership interests.
Board of Directors
A profile of each of the Directors is on pages 43 – 44 of this report. The profiles include information on the year of appointment,
skills, experience and background of each Director.
Tim Goodacre is the Independent Chairman of Scales. Nick Harris, Mark Hutton and Alan Isaac are Independent Directors. Weiyong
Wang is the CEO, and a Director, of China Resources Ng Fung Limited, holder of a 15.3% shareholding in the Company. Carol Chen
is an Alternate Director for Weiyong Wang. Mr Wang and Ms Chen are non-executive Directors.
Andy Borland is the Managing Director and Chief Executive Officer (CEO) of Scales.
The roles of Board Chairman, Audit and Risk Management Committee Chairman and CEO are not held by the same person.
The Board determines annually on a case-by-case basis on the advice of the Nominations and Remuneration Committee who, in its
view, are Independent Directors. The guidelines set out in the NZX Listing Rules (para.3.3.1) are used for this purpose.
Ownership of Scales shares by Directors is encouraged rather than being a requirement. Directors’ ownership interests are disclosed
at page 97.
The Board does not have a tenure policy however it recognises that a regular refreshment programme leads to the introduction of
new perspectives, skills, attributes and experience.
Director period of appointment
0-3 years3 – 9 years9 years +
Number of Directors*250
*Includes Alternate Director
Interests Register
The Board maintains an Interests Register. Any Director who is interested in a transaction with the Company must immediately
disclose to the Board the nature, monetary value and extent of the interest. A Director who is interested in a transaction may attend
and participate at a Board meeting at which the transaction is discussed but may not be counted in the quorum for that meeting or
vote in respect of the transaction, unless it is one in respect of which Directors are expressly required by the Companies Act 1993 to
sign a certificate.
Particulars of entries made in the Interests Register for the year ended 31 December 2017 are included in the Director Disclosures
section on page 96.
RECOMMENDATION 2.5
An issuer should have a written diversity policy which includes requirements for the Board or a relevant Committee of
the Board to set measurable objectives for achieving diversity (which, at a minimum, should address gender diversity)
and to assess annually both the objectives and the entity’s progress in achieving them.
Diversity
Scales recognises the value in diversity of thinking and skills, and seeks to ensure that the Board and workforce both comprise
members reflecting diversity. A formal diversity policy has been adopted by the Board.
The Board seeks diversity in the skills, attributes, perspectives and experience of its members across a broad range of criteria so as to
represent the diversity of shareholders, business types and regions in which Scales operates.
Scales participates in the Institute of Directors’ Future Directors programme. Our second and current Future Director, Jen Bunbury,
will sit on the Board for a twelve month period from June 2017 as a participant in this programme. Jen participates in discussions at
all Board meetings but does not participate in decision making. The programme is designed to give talented young aspiring Directors
exposure to a company Board, whilst also giving the host company a fresh perspective.
In addition during 2017, Carol Chen joined the Board as an Alternate Director for Weiyong Wang.
Scales recruits, promotes and compensates on the basis of merit, regardless of gender, ethnicity, religion, age, nationality, sexual
orientation, union membership or political opinion. Scales requires that people in the workplace are treated with respect in
accordance with the Company’s philosophies of equal employment opportunities, and anti-harassment and discrimination policies.
Responsibility for workplace diversity and the setting of measurable objectives is held by the Nominations and Remuneration
Committee. The Committee is currently in the process of developing measurable diversity objectives and consequently is not
compliant with Recommendation 2.5

85
ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
CORPORATE GOVERNANCE
The gender composition of Scales’ Directors, Senior Managers and Management Team (comprising the top two layers of
management) was as follows:
As at 31 December 2017As at 31 December 2016
PositionFemaleMaleFemaleMale
Director*1 (14%)6 (86%)0 (0%)7 (100%)
Senior Managers1 (14%)6 (86%)0 (0%)6 (100%)
Management Team
(excluding Senior Managers)
14 (35%)26 (65%)15 (40%)22 (60%)
*Includes Alternate Director.
RECOMMENDATION 2.6
Directors should undertake appropriate training to remain current on how to best perform their duties as Directors of
an issuer.
DIRECTOR TRAINING
The Board ensures that there is appropriate training available to all Directors to enable them to remain current on how best to
discharge their responsibilities and keep up to date on changes and trends in areas relevant to their work. Directors are provided with
industry information and receive copies of appropriate company documents to enable them to perform their role. The Board has
allocated funding of $1,000 per annum for each Director to provide resources to help develop and maintain skills and knowledge.
The Board also ensures that new Directors are appropriately introduced to Management and the businesses.
RECOMMENDATION 2.7
The Board should have a procedure to regularly assess Director, Board and Committee performance.
Board Performance Evaluation
The Board annually assesses its effectiveness in carrying out its functions and responsibilities. The Chairman of the Board leads the
review and evaluation of the Board as a whole, and of the Board Committees, against their charters. The Chairman of the Board also
engages with individual Directors to evaluate and discuss performance and professional development.
In 2016 the Board undertook the Institute of Directors’ BetterBoards evaluation. This provided the opportunity for a formal review
of Board operations to ensure that best practice was being followed. In 2017 a less structured assessment of the performance, skills
and tenure of the Board was undertaken. The conclusions and recommendations of the BetterBoards evaluation were considered as
part of the 2017 performance evaluation.
Principle 3 – Board Committees
The Board should use Committees where this will enhance its effectiveness in key areas, while still retaining Board responsibility.
Board Committees
The Board has four formally constituted committees – the Audit and Risk Management Committee, the Nominations and Remuneration
Committee, the Health and Safety Committee and the Finance and Treasury Committee. Each Committee focuses on specific areas of
governance and together they strengthen the Board’s oversight of Scales. Committee membership is reviewed annually.
Each Committee has a written charter that is approved by the Board and sets out its mandate. The charters are reviewed annually with
any proposed changes recommended to the Board for approval. The charters are included in the appendices within the Scales Code.
Annually each Committee agrees a programme of matters to be addressed over the following twelve month period. The Committees
each annually review their performance against the Committee charter and objectives for the year and report their findings to the
Board. The Audit and Risk Management Committee’s recommendation of the establishment of a Health and Safety Committee and a
Finance and Treasury Committee led to these Committee’s being formed in late 2017.
Attendance at Meetings
The table below sets out Director attendance at Board and Committee meetings during the year ended 31 December 2017.
As both the Health and Safety Committee and Finance and Treasury Committees were constituted in December 2017 there were no
meetings held during the year for these committees (there were however meetings held for the equivalent sub-committees which
were replaced by the full Board Committees).
BoardAudit and Risk
Management Committee
Nominations and
Remuneration Committee
Andrew Borland8--
Tim Goodacre8-4
Nick Harris85-
Mark Hutton744
Alan Isaac85-
Weiyong Wang3--
Carol Chen*1--
Jon Mayson* 4-2
*Jon Mayson retired from the Board in June 2017. Ms Chen was appointed as an Alternate Director to Weiyong Wang in November 2017.

86
SCALES CORPORATION LIMITED
CORPORATE GOVERNANCE
RECOMMENDATION 3.1:
An issuer’s Audit Committee should operate under a written charter. Membership on the Audit Committee should be
majority independent and comprise solely of non-executive Directors of the issuer. The Chair of the Audit Committee
should not also be the Chair of the Board.
Audit and Risk Management Committee
The primary functions of the Audit and Risk Management Committee are:
• To oversee the financial reporting process to ensure that the interests of shareholders are properly protected in relation to
financial reporting and internal control.
• To provide the Board with an independent assessment of the Company’s financial position and accounting affairs.
• To keep under review the effectiveness of the Company’s procedures for the identification, assessment and reporting of
material risks.
• To oversee the appointment and performance of the external auditor.
Members of the Committee are appointed by the Board and must comprise a majority of Independent Directors. The current
members of the Committee are Alan Isaac (Chairman), Nick Harris and Mark Hutton. All members of the Audit and Risk
Management Committee are Independent Directors. Alan Isaac is a former national chairman of KPMG. The Chairman of the Audit
and Risk Management Committee and the Board Chairman are different people.
The Committee met on five occasions during the year. The agenda items for each meeting generally relate to financial governance,
external financial reporting, external audit, internal audit, risk management, compliance and insurance.
RECOMMENDATION 3.2
Employees should only attend Audit Committee meetings at the invitation of the Audit Committee.
Meeting Attendance
The Managing Director and Chief Financial Officer are regularly invited to attend Audit and Risk Management Committee meetings.
RECOMMENDATION 3.3 AND 3.4:
An issuer should have a Remuneration Committee which operates under a written charter.
Nominations and Remuneration Committee
The primary functions of the Nominations and Remuneration Committee are:
• To establish a clear framework for oversight and management of the Company’s remuneration structure, policies, procedures and
practices to ensure Scales’ remuneration is fair and reasonable.
• Defining the roles and responsibilities of the Board and senior management.
• Reviewing and making recommendations on Board and Committee composition and succession.
Members of the Committee are appointed by the Board and must comprise a majority of Independent Directors. The current
members of the Committee are Mark Hutton (Chairman) and Tim Goodacre.
The Committee met on four occasions during the year.
RECOMMENDATION 3.5:
An issuer should consider whether it is appropriate to have any other Board Committees as standing Board Committees.
All Committees should operate under written charters.
Health and Safety Committee
The Board’s commitment to ensuring a safe and healthy workplace for staff, contractors and visitors led to it establishing a Health
and Safety Committee during the year.
The primary functions of the Committee are:
• To assist the Board to provide leadership and policy for health and safety.
• To assist the Board to fulfil its responsibilities and to ensure compliance with all legislative and regulatory requirements in relation
to the health and safety practices of the Company as those activities affect employees and contractors.
• To support the ongoing improvement of health and safety in the workplace.
Members of the Committee are appointed by the Board. The Committee must be chaired by an Independent Director. The current
members of the Committee are Nick Harris (Chairman) and Andy Borland.
Finance and Treasury Committee
Scales is one of New Zealand’s leading horticultural exporters and has material foreign currency receipts. The Board has determined
that with the growth in Scales’ treasury and funding activities it is appropriate to form a Board Committee to oversee this part of
the business.

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ANNUAL REPORT YEAR ENDED 31 DECEMBER 2017
CORPORATE GOVERNANCE
The primary function of the Committee is:
• To oversee the Company’s capital and treasury risk management, and continuous disclosure processes to ensure their integrity,
transparency and adequacy, and that they are in accordance with Company policies. In addition, the Committee will oversee
takeover protocols and establish a Takeovers Committee comprising of independent directors.
Members of the Committee are appointed by the Board. The Committee must be chaired by an Independent Director. The current
members of the Committee are Mark Hutton (Chairman) and Andy Borland.
RECOMMENDATION 3.6:
The Board should establish appropriate protocols that set out the procedure to be followed if there is a takeover offer
for the issuer.
Takeover Protocols
The Board has documented and adopted a series of protocols to be followed in the event of a takeover offer being made, including
communication between insiders and any bidder. A committee of Independent Directors would be formed and would have
responsibility for managing the takeover in accordance with the Board protocols and the New Zealand Takeovers Code.
Principle 4 – Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting, and in the timeliness and balance of
corporate disclosure.
RECOMMENDATION 4.1:
An issuer’s board should have a written continuous disclosure policy.
Shareholder Communications and Market Disclosure
Scales’ Board is committed to the principle that high standards of reporting and disclosure are essential for proper accountability
between the Company and its investors, employees and stakeholders.
It achieves these commitments, and the promotion of investor confidence, by ensuring that trading in its shares takes place in
an efficient, competitive and informed market. The Company has in place a written Shareholder Communications and Market
Disclosure Policy designed to ensure this occurs. The policy includes procedures intended to ensure that disclosure is made in a timely
and balanced manner and in compliance with the NZX Listing Rules, such that:
• All investors have equal and timely access to material information concerning the Company, including its financial situation,
performance, ownership and governance.
• Company announcements are factual and presented in a clear and balanced way.
Accountability for compliance with disclosure obligations is with the Managing Director and Chief Financial Officer. Managers
reporting to the Managing Director are required to provide the Chief Financial Officer with all relevant information that may be
material and to regularly confirm that they have done so.
Significant market announcements, including the preliminary announcement of the half year and full year results, the financial
statements for those periods, and any advice of a change in earnings forecast are approved by the Board.
Directors consider at each Board meeting whether there is any material information which should be disclosed to the market.
RECOMMENDATION 4.2:
An issuer should make its Code of Ethics, Board and Committee charters and the policies recommended in the NZX Code,
together with any other key governance documents, available on its website.
Governance Policies and Charters
Scales’ key corporate governance documents, including charters and policies, can be found at www.scalescorporation.co.nz/about-
us/governance.
RECOMMENDATION 4.3:
Financial reporting should be balanced, clear and objective. An issuer should provide non-financial disclosure at least
annually, including considering material exposure to environmental, economic and social sustainability risks and other
key risks.
Financial and Non-Financial Reporting
Scales’ Board is committed to ensuring integrity and timeliness in its financial reporting and in providing information to the market
and shareholders which reflects a considered view on the present and future prospects of the Company.
A programme of clear, meaningful, timely and effective communications with shareholders is centred around a comprehensive set of
information regarding Scales’ operations and results being available on the Company’s website and in shareholder reports.
The Audit and Risk Management Committee oversees the quality and integrity of external financial reporting including the accuracy,
completeness, balance and timeliness of financial statements. It reviews half-year and annual financial statements and makes
recommendations to the Board concerning accounting policies, areas of judgement, compliance with financial reporting standards,

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SCALES CORPORATION LIMITED
CORPORATE GOVERNANCE
stock exchange and legal requirements, and the results of the external audit. All matters required to be addressed and for which the
Committee has responsibility were addressed during the period under review.
All interim and full-year financial statements are prepared in accordance with relevant financial standards.
Non-Financial Reporting
Both financial and non-financial disclosures are made at least annually, including reporting of material exposure to environmental,
economic and social sustainability risks and other key risks. Scales has a strategic target to develop best-in-class sustainability
reporting and to measure and report on key sustainability aspects affecting its businesses.
Scales’ second Sustainability Report is included in this report at pages 20 – 29, and provides details of the continuing growth and
improvements in Scales’ initiatives in this area. The Group-wide report draws on the Global Reporting Initiative’s materiality principles
and identifies material sustainability topics, grouped under the headings Our People, Marketplace, and Our Environment.
Principle 5 - Remuneration
The remuneration of Directors and senior management should be transparent, fair and reasonable.
Remuneration Report
Introduction
This Remuneration Report outlines the Company’s overall reward strategy for the year ended 31 December 2017 and provides
detailed information on the remuneration arrangements in this period for the Directors of the Company, including the Managing
Director, and other nominated executives.
The Board has adopted a Corporate Governance Code. Among other policies, the Corporate Governance Code includes the
Company’s Remuneration Policy, which may be amended from time to time and is reviewed at least once a year.
Remuneration Philosophy
The Nominations and Remuneration Committee is responsible for making recommendations to the Board on remuneration
policies and packages for Directors, the Managing Director and nominated executives. The primary objectives of the Remuneration
Policy are to provide a competitive and flexible structure that reflects market practice, but is tailored to the specific circumstances
of the Company and which reflects each person’s duties and responsibilities so as to attract, motivate and retain people of the
appropriate quality.
The Nominations and Remuneration Committee reviews market data on remuneration structure and quantum. The remuneration
packages of the Managing Director and nominated executives are structured to include a Short Term Incentive Scheme (STI Scheme)
that is directly linked to the overall financial and operational performance of the Company. The Managing Director and nominated
executives may also be invited to participate in the Company’s Long Term Incentive Scheme (LTI Scheme). The long-term benefits
of the LTI Scheme are solely conditional upon the Company’s share price meeting certain performance criteria, details of which are
outlined below.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive Director remuneration is separate and distinct
from the remuneration of the Managing Director and other executives.
Components of Compensation – Non-executive Directors
The Board seeks to set aggregate remuneration for non-executive Directors at a level which provides the Company with the ability to
attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
No remuneration is payable to Directors unless it is approved by the Company’s shareholders. The NZX Listing Rules specify that
shareholders can approve a per-Director remuneration amount or an aggregate Directors’ fee pool. At the Company’s Annual
Shareholders Meeting on 14 June 2017, the Company’s shareholders approved an aggregate remuneration pool for non-executive
Directors of $500,000 per annum (an increase of $60,000 per annum).
The aggregate remuneration paid to non-executive Directors and the manner in which it is apportioned amongst Directors is
reviewed annually, with any proposed increase in the aggregate pool put to shareholders for approval at the Company’s next Annual
Shareholders Meeting. The Board reviews its fees to ensure the Company’s non-executive Directors are fairly remunerated for their
services, recognising the level of skill and experience required to fulfil the role, and to enable the Company to attract and retain
talented non-executive Directors. The process involves benchmarking against a group of peer companies. In addition the board
reviews the Committee structure and appropriate level of resourcing required to make an on-going contribution to long term value
creation. During the year the Board formed two new Committees to focus on Health and Safety plus Finance and Treasury, both
areas considered to be key drivers for the Company.
Non-executive Directors have no entitlement to any performance-based remuneration or participation in any share-based incentive
schemes. This policy reflects the differences in the role of the non-executive Directors, which is to provide oversight and guide
strategy, and the role of management, which is to operate the business and execute the Company’s strategy. Non-executive Directors
are encouraged to be shareholders, but are not required to hold shares in the Company.
Each non-executive Director receives a fee for services as a Director of the Company and an additional fee is also paid for being
a member of the Board Committees. The payment of an additional fee recognises the additional time commitment required by
Directors who serve on those Committees. All Directors are also entitled to be reimbursed for costs associated with carrying out
their duties.