NZK FY18 Annual Report

ANNUAL
REPORT
2018

Big ideas often have humble beginnings.
King salmon were introduced to New Zealand
over 100 years ago. From these first small eggs,
a self-sustaining wild population developed,
and the idea of salmon for game fishing led to
another big idea: King salmon farming.
Our company embraced this vision, which is
why we’re now the world’s largest producer of
this rare species, farming more than 50% of
the world’s supply. Our team of nearly 500,
most in the Top of the South Island, export our
outstanding premium products to 18 countries
and we’re pretty proud of what we’ve achieved.
Now we’re embracing the next big ideas.
With global demand for protein expected

to double by 2050, New Zealand has the
opportunity to feed the world with minimal
environmental impact. We can develop a

world-leading aquaculture industry that is the
greenest primary industry in the country.
New Zealand King Salmon is an aspirational
company and we are excited about what’s in
front of us. It won’t be easy to achieve – but what
big idea ever was?

We believe in creating the ultimate salmon
experience. As the world’s largest producer
with more than 30 years of farming,
processing and branding our unique breed,
we’re the King salmon experts.
Our company and our industry already contribute to a high
quality of life, not only in the Top of the South Island, but all
over New Zealand too.
But there’s even more we can do.
We think it’s time to harness the big ideas to place
New Zealand and our industry, at the forefront of sustainable
food development.
Our King salmon is the highest quality, tastiest salmon you
can get. We’re also incredibly committed to making sure it’s
grown in the safest, most sustainable way possible.
We’re proud that our high-value brands – Ōra King TYEE,
Ōra King, Regal, Southern Ocean and Omega Plus – are
known for their quality, category leadership and innovation
across New Zealand and an increasing number of
international markets.
By investing in cutting-edge aquaculture technology and
expertise, we have the opportunity to position our farming
operations to drive our brands forward and deliver even
better results.
Our aspiration is to farm to the highest standards with
a combination of open ocean and inshore sites, reducing
the impact on our communities and the environment.
The proposed farm relocation would be a stepping stone
towards this vision, by growing our business in a way that
is environmentally, socially and economically sustainable.
This is the future for salmon farming in New Zealand and this
is our opportunity to generate value over the long-term.

“Proudly contributing to
a sustainable food future
with a unique breed of
King salmon grown and
processed in the Top of
the South, New Zealand.”

17% ABOVE FY18 PDS FORECAST
SALMON
BITES
$
16.1
$
160.3
$
26.2
million
million
million
NET PROFIT
AFTER TAX
PRO FORMA
OPERATING
EBITDA
WE SUPPLY
MORE THAN
OF THE WORLD’S
FARMED KING
SALMON
0.7
%
ONLY
OF THE WORLD’S
SALMON IS
KING SALMON
50
%
METRIC TONNES HARVESTED
8,018
4.4
kg
REVENUE OF
AVERAGE
HARVEST
SIZE
$
550million
REVENUE
GENERATED BY
AQUACULTURE
IN NEW ZEALAND

$
28.9
$
503,000
$
904
1223
million
million
RESTAURANTS
FEATURING
ŌRA KING
ON THE MENU
87
%
NEW JOBS
IN FY1818
446
EMPLOYEES
375
SHAREHOLDERS
TOP OF THE
SOUTH
LOW FLOW SALMON
FARMS UNDER
CONSIDERATION
FOR RELOCATION
9ha
TOTAL REGAL BRANDED SALES
TOTAL OMEGA
PLUS PET
FOOD SALES
OF TEAM MEMBERS AT
OR ABOVE LIVING WAGE
5
th
LARGEST
EMPLOYER IN
THE TOP OF
THE SOUTH
A SINGLE
Ō RA KING TYEE
SOLD FOR
1
st
NZD
REVENUE HIGH FLOW SITES
PER HECTARE
BEST AQUACULTURE PRACTICES
(BAP) CERTIFIED SALMON
PRODUCER IN AUSTRALASIA
4 star
$
30.4

CHAIR & CEO REPORT
John Ryder
CHAIRMAN
Grant Rosewarne
MANAGING
DIRECTOR & CEO
The conclusion of our second year as a public
company brings great satisfaction to the Board
and senior management, with a successful
year’s performance, despite challenging
growing and climatic conditions. In addition,
we’ve made further steps in improving our
aquaculture and processing infrastructure, to
deliver the best quality product possible within
the current constrained supply. We must find
a way to capitalise on the thriving demand
we see for our brands worldwide, and suitable
water space is a critical factor in achieving this.
Our long-term plan for capacity expansion and improved
biosecurity has been a key area of focus this year, with the
first stage of the plan hinging on a positive decision from the
Ministry of Primary Industries (MPI) farm relocation proposal.
Longer-term, we are committed to exploring open ocean sites
with newly commercialised farming technology.
Pursuing these big ideas with persistence and sound science
will give us the tools to transform our industry into a significant
contributor to a sustainable food future. We are proud to be
part of the aquaculture industry in New Zealand, which has
huge growth potential.
We’re now the fifth largest employer in the Top of the
South region, and a significant New Zealand food business
and exporter. As the business continues to grow, we have
a responsibility to our industry and to our home region to
demonstrate leadership, set a great example, and collaborate
towards smarter outcomes all-round. Salmon farming is already
one of the most efficient forms of animal food production in
the world, and we are always trying to do even better for our
local communities, our consumers, and all New Zealanders.
NZKS’s mission is to:
• Enrich the lives of our Customers (taste and health),
Team Members (wellness, personal development and
wealth) and Shareholders (wealth, environmental and
social conscience).
• Contribute positively to the Communities in which we
operate providing regional prosperity and operating to
achieve net improvements to the natural environment.
• Reward our Partners (value added relationships) and
Suppliers (transactional relationships) fairly.
We will increase our scale if it maximises the outcomes
for all these stakeholders. As a result of coming into contact
with NZKS we want all stakeholders to be better off.
NZKS is for good.
With regard to our team members we want them, as stated
above, to have the positive outcomes of wellness, personal
development and wealth. We find it helpful and convenient that
someone has created a credible benchmark regarding a decent
living standard in the Living Wage concept. For the time being,
we have adopted this benchmark and set it as a target to be
achieved for all our team members. In the future we may retain
this target or adopt an alternative benchmark. At the end of
FY18, 87% of our team members were at or above the Living
Wage benchmarked and we expect to increase this over time.
A PIVOTAL MOMENT FOR
A GREEN INDUSTRY
A recently released report by the Global Salmon Initiative
(GSI) shows that global demand for protein is set to double by
2050, and that salmon is the most resource-efficient animal
production method on the planet.
International demand for our premium brands is outstripping the
sector’s ability to supply, and with increasing attention around
the appropriate future use of our natural resources, the industry
needs strong Government support to keep growing.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
8
INTRODUCTION CHAIR & CEO REPORT

Aquaculture is a ‘sunrise’ industry – in comparison to ‘sunset’
industries such as oil and gas – and has the potential to
contribute significantly to New Zealand’s sustainable food
future. To put this into context, the revenue from just 80 surface
hectares of farming space – roughly the size of a small land farm
and around three times the size of today’s salmon industry in
New Zealand – would be enough to completely eliminate New
Zealand’s 2017 trade deficit of $2.8 billion.
We believe that aquaculture could be the greenest primary
industry for New Zealand, contributing to regional economic
growth and sustainable leadership with a locally sourced
low-impact, healthy and high-value protein.
As a company, we are on the cusp of fulfilling our vision for
growth. The MPI salmon farm relocation proposal currently
being considered by the Government, is the first step in the
industry adapting to deliver improved environmental, social
and economic outcomes for our region. Moving our nine surface
hectares is an important step that allows us to develop and
prove new technology in preparation for offshore farming.
MINISTRY OF PRIMARY
INDUSTRIES' SALMON FARM
RELOCATION PROPOSAL
Over the course of the year, we’ve continued to work positively
with the new Government to progress a plan to relocate some
of our farms to higher-flow waters. The past summer has seen
challenges with fish survival due to warmer water temperatures
in the Marlborough Sounds. Farms located in higher-flow waters
will deliver much better survival over high temperature periods.
We want to move some of our farms to prepare for the future
of salmon farming, improve biosecurity, reduce fish mortality
and create even more green jobs. Through more efficient use
of marine farming space, rather than additional new space,
a successful relocation proposal could create hundreds of new
jobs, significant additional revenue, and thus, the springboard
required to support investing in offshore farms.
OCEAN FARMING – THE
NEXT BIG IDEA
Ocean farming is part of the future of our industry. It will
mean we can farm beyond the Sounds, maximise our
biosecurity management, and further reduce the impact
we have on our community. Long-term, we see our business
requiring a combination of open ocean and inshore sites
to operate successfully and at best practice. It is likely that
inshore sites will be used for staging and harvesting.
Ocean farming provides the best conditions to produce
quality protein at a greater scale, with next to no
environmental footprint. This means we can create
more regional GDP and local jobs, yet avoid disturbing
residents and recreational water users. Additionally,
developing open ocean farming allows us to implement
best practice biosecurity management, by way of
appropriate spatial separation.
Our first step is to develop and prove technology for ocean
farming in New Zealand’s environment, with our unique
species. This requires investment in training and farm
infrastructure, with the first prototype submersible pens
expected to be trialled within our proposed relocation to
higher-flow sites in the Sounds.
Our ability to grow beyond our current projected capacity
of 12,000 metric tonnes by 2032 is predicated on our ability
to deliver considered, collaborative and innovative farming
solutions whilst minimising our impact on nature.
There's a long way to go before we can achieve our
open ocean vision, and we'll be working closely with the
Government, communities and iwi as our plan develops.
“A successful farm relocation
is the first step in fulfilling our
future farming vision.”
Grant Rosewarne, Managing Director & CEO
We hope for a decision from the Minister of Fisheries
in the near future.
2018: BIG IDEAS START HERE
9
INTRODUCTION CHAIR & CEO REPORT

10
NEW ZEALAND KING SALMON ff ANNUAL REPORT FY18

FINANCIAL UPDATE
For the twelve-month period ending 30 June 2018, the Board is
delighted to report a record net profit after tax of $16.1 million.
This is up 14.0% on the Prospective Financial Information (PFI)
as included in our Product Disclosure Statement (PDS). The Pro
Forma operating EBITDA, a metric used extensively by your Board
as an indication of the underlying profitability for the group, is
$26.2 million, up 21.1% on FY17 and 17.0% ahead of PFI.
The excellent FY18 results can be attributed to an initial boost in
volume and an increasing global demand for our salmon.
We saw strong sales growth in export markets, including
increased sales of Ōra King, which delivered improved value.
FY18 saw the company sell 7,779 metric tonnes of gilled and
gutted salmon, an increase of 7.7% on FY17 and up 4.0% on PFI.
Whilst FY18 was impacted by an extended summer period
of higher water temperatures, our strong H1 performance,
coupled with product and pricing mix strategies, helped us
maintain the highest possible value. Our focus remains on our
branded salmon products, with sales of Ōra King, our best-of-
breed salmon brand for premium foodservice, up 25.9% on FY17
and 16.7% on PFI.
New Zealand King Salmon is pleased to advise that a final
dividend of 3.0 cents per share was declared for payment on
21 September, bringing the total dividend paid for FY18 to
5.0 cents per share.
BUSINESS UPDATE
It’s been a tough year in maintaining access for Kiwis to locally
grown fresh King salmon. New Zealand’s enviable position
as a predominantly King salmon producing market has been
threatened due to the lack of local supply, with imported
Atlantic salmon partially filling that gap. Through our
communications programs and our work in the trade,
we’ve aimed to guide consumers to easily identify local King
salmon when they’re shopping, as well as pointing out the
species’ differences.
The nationwide Regal advertising campaign, featuring
Al Brown and Reg the Seal, reinforced our premium local offer
with a strong Marlborough provenance message – “It’s the
merroir that makes the difference”. Coupled with new product
launches of the Regal Manuka Smoked range and an extended
Omega Plus range, we maintained a strong category voice
in the domestic market.
Overseas, we launched Regal smoked salmon ranges in North
America, and in Asia towards the end of the year, whilst Ōra King
sales continued to lead growth, particularly in North America
with regional sales of 2,175 metric tonnes, up 26.6% on FY17.
We also brought one of our big ideas to fruition this year, with
the launch of our exciting new Ōra King TYEE, a pioneering
aquaculture discovery. The unique characteristics of our breed
John Ryder
CHAIRMAN
Grant Rosewarne
MANAGING DIRECTOR & CEO
enable us to grow these rare salmon to over 13 kilograms –
delivering our customers an even more luxurious, yet sustainable,
sushi experience.
PRODUCTION DEVELOPMENTS
As the FY18 year progressed it became apparent that volume
was going to be significantly ahead of NZKS’s expectations and
well ahead of FY17 and PFI. However, at around the same time,
the record FY18 marine summer temperatures took their toll
and brought the volume back to 7.7% up on FY17 and 4.0% up
on PFI. The costs associated with higher mortality would have
normally negatively impacted our financial results, but we were
able to maximise value and thereby achieved a record net
profit after tax.
We continue to work on solutions to address the risk of rising
seawater temperatures – in addition to a strong focus on fish
husbandry and animal welfare, this year we have reduced
stocking density on some farms. We see opportunities to improve
future survival rates for our fish via preventative immunisation
in our hatchery, and specifically targeting robustness in our
selective breeding program.
SUMMARY
The Board would like to take this opportunity to acknowledge
the contribution of our team to New Zealand King Salmon’s
very successful delivery of the two-year commitment within
the Prospective Financial Information (PFI). We would also like
to thank the broader New Zealand King Salmon team - our
shareholders, our customers, our community and our partners,
for supporting us throughout the year.
We look forward to “Creating the Ultimate Salmon
Experience” and achieving our mission to enrich the lives
of all our stakeholders.
Despite the extraordinarily hot
summer, our strategy of strong
brands, diversified markets
and innovation has delivered
a record result.
2018: BIG IDEAS START HERE
11
INTRODUCTION CHAIR & CEO REPORT

PROSPECTIVE FINANCIAL
INFORMATION
Your Board is pleased to announce Net profit
after tax of $16.1m for the full year. This result
is significantly ahead (14.0%) of the Prospective
Financial Information (PFI) as disclosed in our
Product Disclosure Statement (PDS). We are also
delighted to report an operating result that sets
a new record in the history of NZKS. Not only
is Pro Forma operating EBITDA of $26.2m a new
record for the company, it is significantly ahead
of both FY17 and PFI (17.0% and 21.1% respectively).
This result was made possible by the strong
demand both domestically and offshore for our
world-leading salmon, giving rise to increases
in both volumes sold and average sale prices.
The global demand for our unique salmon creates
a platform for future earnings.
FINANCIAL PERFORMANCE – KEY INDICATORS
Directors and management use non-GAAP 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. International financial reporting standards require us to value our
biological assets (salmon) at the end of each year. Changes in the values of biological assets are recognised as a gain or loss in our accounts. However, because only
a small percentage of these fish are ready for harvest, our approach is to focus on profit or loss prior to this adjustment. Furthermore, the non-GAAP profit measures
discussed above are also used internally to evaluate company performance. 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 New Zealand King salmon Investments Limited in accordance with NZ IFRS.
20182017
Income Statement ($000)ActualPDSActual
Sales volume (MT) 7, 7 7 9 7,480 7,223
Revenue 160.3 143.6
136.4
EBITDA 28.5 26.1
38.5
Pro Forma EBITDA 26.2 22.4
21.6
Net Profit After Tax (NPAT) 16.1 14.1
22.8
Pro Forma Operating NPAT 14.5 11.5
11.8
Total assets 216.0 198.8
204.5
Cash and cash equivalents 14.4 0.6
10.6
Total liabilities 49.7 45.1
45.8
Net Cash/(debt)4.09.6
0.1
Net cash flows from operating activities 24.8 11.5
5.3
The table below summarises the key financial metrics for the business for FY18:
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
12
INTRODUCTION PROSPECTIVE FINANCIAL INFORMATION

BIOLOGICAL PERFORMANCE – KEY INDICATORS
Low FY17 summer water temperatures and mortality resulted in strong first half growth and harvest of 8,018 metric tonnes,
significantly in excess of the forecasted harvest of 7,518 metric tonnes as noted in the PDS (up 6.7%).
Extended high summer water temperatures gave rise to a significant increase in mortality which increased to 20.4%, ahead of
our PDS (11.0%) and the year prior (8.5%). This increase in summer mortality also negatively impacted closing livestock biomass,
which at 5,391 metric tonnes is now below both the PDS and the prior year, and also the feed volume discharged.
Whilst this result was disappointing, our aquaculture team is focused on continuing to improve fish diet to drive improved fish
health outcomes, as well as investigating other options to lower both the feed conversion ratio (FCR) and mortality in future years.
Actions already put in place to mitigate the ongoing effects of increased temperatures include:
• Immunisation of smolt in freshwater prior to transfer to sea (with nearly one million smolt already immunised and transferred).
• The introduction of additional resource into our fish health and welfare team.
• Continuing evolution and refinement of summer diets including the trialling of specialist health diets.
The FCR showed on improvement on FY17 as benefits were seen from changes to diet, however this remains above our PDS forecasts.
We continue efforts to further improve FCR and are working with Seafood Innovations Ltd, the Cawthron Institute, and existing and
prospective international feed partners to undertake research into improving feed for the King salmon species.
The table below shows key biological measures against the actual performance and the 2018 forecast detailed in the PDS:
20182017
Reconciliation of Non-GAAP to GAAP FinancialsActualPDSActual
Net Profit/ (Loss) After Tax 16,125 14,149 22,764
Add Back:
Depreciation, amortisation and impairment5,105 5,928 4,366
Net financing cost690 478 1,802
Income tax expense/ (income)6,562 5,541 9,601
Statutory EBITDA 28,482 26,096 38,533
Deduct:
Fair value (gains) / losses(2,549)(3,742)(17,962)
Operating EBITDA 25,933 22,354 20,571
Pro Forma adjustments:
Non-recurring or infrequent items
Consent swap expense write off232 - 846
Offer costs - - 1,970
Supplier settlement gain- - (1,784)
Pro Forma Operating EBITDA 26,165 22,354 21,603
Deduct:
Depreciation and amortisation(5,105)(5,928)(4,366)
Net financing cost(690)(478)(878)
Income tax (expense) / income(5,913)(4,493)(4,567)
Pro Forma Operating NPAT 14,457 11,455 11,792
20182017
Biological MetricsActualPDSActual
Harvest Volume (MT)8,0187,5187, 2 3 2
Feed Conversion Ratio (FCR)1.811.76
1.84
Mortality as a % of Biomass20.4%11.0%
8.5%
Closing Livestock Biomass (MT)5,3916,889
6,227
Feed volume (MT)17,95217,986
18,948
In calculating Pro Forma Operating NPAT the income tax expense differs from statutory due to the adjusting of income tax to reflect tax expense on Pro Forma
Operating EBITDA.
The table below shows how Pro Forma EBITDA and Pro Forma Net Profit reconcile to Net Profit in our Financial Statements
(which are prepared in accordance with NZ IFRS).
2018: BIG IDEAS START HERE
13
INTRODUCTION PROSPECTIVE FINANCIAL INFORMATION

Waihinau Bay
Waitata
Kopāua
Forsyth Bay
Crail Bay
(2 sites)
Ruakaka
Otanerau
Ngamahau
Te Pangu
Clay Point
Tio Point
Richmond Bay South
Horseshoe Bay
Mid Waitata
Blowhole Point South
Blowhole Point North
MPI FARM
RELOCATION
FUTURE FARMING RESEARCH & DEVELOPMENT
Data collection, initial benchmarking, trialling of technology,
continuing to explore waterspace options in other regions of NZ
VOLUME
*Regional direct and indirect
assuming full relocation.
20162017201820192021
Proposed low flow
sites for relocation
THE BENEFITS
Proposed new
high flow sites
Active sites
8,018mt
~9,500mt
7,232mt
6,315mt
OUR VISION FOR
FUTURE FARMING
FUTURE INCREMENTAL GROWTH
Based on existing water space
FISH HEALTH
SOCIAL
REGIONAL
ECONOMY
ENVIRONMENTAL
In February, the report and
recommendations from the
Marlborough Sounds Salmon
Farm Relocation Advisory Panel
were released. The Minister of
Fisheries is expected to make
a decision in FY19.
PwC Economic
Impact Assessment
Up to 407 new jobs
and $39 million GDP
*
FINANCIAL YEAR

Waihinau Bay
Waitata
Kopāua
Forsyth Bay
Crail Bay
(2 sites)
Ruakaka
Otanerau
Ngamahau
Te Pangu
Clay Point
Tio Point
Richmond Bay South
Horseshoe Bay
Mid Waitata
Blowhole Point South
Blowhole Point North
2032~2028
THE FUTURE INCLUDES
OCEAN FARMING
In addition to optimising conditions
and practices for our existing sea
farms, the next big idea is to focus on
our longer-term options for growth,
in particular ocean farming. There
are well-documented biosecurity
benefits to having farms in multiple
locations and we are currently
reviewing opportunities for farming
in several areas around the South
Island, including Stewart Island. These
steps are at the very early phase of
information gathering and assessment
and are some years away from full
commercial implementation.
Wave
heights
up to
11m
Submersible
for protection
from storms
Distance from
shore at least
2km
POTENTIAL COMMERCIALISATION
THE BENEFITS
~12,000mt
BIOSECURITY
DISTANCE FROM
COMMUNITIES
MINIMAL
SEABED IMPACT
SPACE & DEPTH

O U R
SUSTAINABILITY
STORY
The success of our business
in today’s world is highly
dependent on the communities
and the environment in which
we live and operate, as well
as the people who care for
our salmon and our products
throughout the life cycle.

INTRODUCING OUR
SUSTAINABILITY STORY
Sustainable environmental practices have been
an integral part of our business for many years.
In today's context, sustainability is also about
people and, in a business context, delivering
long-term value to stakeholders.
ANY BIG IDEA MUST BE SUSTAINABLE
From our base in regional New Zealand, we have a vision
for sustainable economic growth. While mitigating the
environmental effects of our activities throughout our entire
business, we also strive for the prosperity and ongoing
development of our people, our stakeholders and
our community.
We aim to pass on our land and water environments to the
next generation and beyond in the same or better condition
than we inherited them.
Access to natural resources, water quality, climate change
and regional economic development are major sustainable
development issues for New Zealand in the early years of
the 21st century.
Our Government has an ambitious target for New Zealand
to become a world leader in sustainability, including improving
the quality of fresh water resources, and achieving a carbon
neutral target by 2050. We believe that our business can
contribute positively towards a better outcome for our
country, and the planet.
Last year, we announced our commitment to five United
Nations' Sustainable Development Goals as a guiding framework
for our sustainability activities, and as a follow-on to this, we
have now committed to five sustainability goals specific to our
business, outlined on the opposite page.
VERIFYING OUR SUSTAINABLE
PRACTICES
Our environmental certifications and recommendations are
achieved through regular audits with independent accreditation
bodies. This year, we achieved another milestone with the Global
Aquaculture Alliance’s (GAA) Best Aquaculture Practices (BAP)
programme. In April 2018, our largest feed supplier, Skretting
Tasmania, achieved BAP certification, enabling NZKS to gain
a fourth star as part of the certification.
Four stars is the highest designation in the BAP third-party
certification program, indicating that a product originates
from a BAP-certified processing plant, farm, hatchery and feed
mill. New Zealand King Salmon is not only the first King salmon
company to earn the distinction worldwide, but also the first
salmon producer in Australasia with four stars. Our other feed
suppliers already carry the requisite certification to support
the achievement of the fourth star.
We also contributed to the fifth year of industry sustainability
reporting with the Global Salmon Initiative (GSI) covering
14 key sustainability indicators – 9 environmental and 5 social.
For more information visit www.globalsalmoninitiative.org/en/
sustainability-report.
AQUACULTURE STEWARDSHIP
COUNCIL (ASC)
As a business, we are aligned with the GSI goal to maintain
and grow the industry’s license to operate, done so by improving
the reputation of both farmed salmon and salmon farming.
As part of the long-term vision of the group, New Zealand
King Salmon has signed up to implement the Aquaculture
Stewardship Council (ASC) accreditation by 2020. We are
currently engaging with auditing bodies to conduct a pilot
evaluation at one of our farm sites.
1
st
Salmon producer
in Australasia to
achieve 4 star
Best Aquaculture
Practices (BAP)
Certification
We aim to pass on our land and
water environments to the next
generation and beyond in the
same or better condition than
we inherited them.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
18
OUR SUSTAINABILITY STORY INTRODUCING OUR SUSTAINABILITY STORY

We work to fulfil salmon aquaculture’s potential
as a positive force for the health of people,
nature and our company.
We are committed to caring for water
in our region.
We are a trustworthy and transparent
neighbour and community partner.
We attract and develop talented people
across our diverse roles and teams.
We are committed to using resources responsibly
and reducing our impacts wherever possible.
OUR COMMITMENT TO SUSTAINABILITY
We are focused on the following United Nations Sustainable Development Goals
2018: BIG IDEAS START HERE
19
OUR SUSTAINABILITY STORY OUR COMMITMENT TO SUSTAINABILITY

OUR PEOPLE
One of the key ingredients to the future
sustainability of any business is its people.
With close to 500 team members, predominantly based
in Marlborough and Nelson, we are a significant employer
for the region, requiring a diverse range of skills and
experience. We are proud to be the fifth largest employer
in the Top of the South Island.
We want to help our community prosper by providing an
increasing number of 'green jobs' in our region, committing
to fair pay, attracting and nurturing talent, maintaining
a safe, happy and productive workplace and driving an
engaged culture. In the last year, 18 new roles were recruited
across our business, including eight in Marlborough.
Our goal of ensuring all our team members are paid to the
New Zealand Living Wage standard - around $4 an hour
more than minimum wage - is on track. During the year, we
celebrated our latest milestone towards achieving this as a
result of a further pay increase for those on the collective
agreement in the processing and supply chain teams.
At the end of FY18, 87% of our team members were on
or above the current Living Wage of $20.20 per hour. This
Living Wage is set to increase in September 2018 to $20.55
per hour. By mid-2019, we will have more than 90% of team
members at or over the $20.55 mark.
*Full time equivalent (FTE) figures are approximate and based on a best effort estimate as at April 2018. Nelson, Marlborough and Tasman.
In 2019, all of our team
members will be at or over the
current living wage of $20.20.
LARGEST EMPLOYER IN
THE TOP OF THE SOUTH
*
5
th
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
20
OUR SUSTAINABILITY STORY OUR PEOPLE

TALENT RECRUITMENT AND
RETENTION
Our people are key to our success. We recognise the need to
attract and retain great talent, continually supporting them
in their professional development.
Supporting our managers in the recruitment process is the first
step to securing the right people with the right skills to fill the
right roles. A key part of this is also around additional personality
profiling and testing to ensure the right cultural fit.
Leadership development is supported within the company
with targeted manager and leadership workshops. Many
team members have gone through the two-day Courageous
Conversations workshops, encouraging strong, sensitive and
assertive communication. More cross-functional visits and
secondment programmes are underway, where we move
team members around the company to encourage learning
opportunities. Team members also undertake international
visits to familiarise themselves with current best practice to
bring the learnings back for application within business.
Professional and personal development includes a broad range
of development activities from qualification-based programs to
focused short courses. We continue to engage with our leaders
and team members with structured leadership and health and
safety conferences, where business strategy and information are
communicated and new ideas are discussed.
THE VALUE OF RECOGNISING
POSITIVE BEHAVIOURS
We actively recognise team members who demonstrate our
company standards and behaviours at a high level. The Way
We Work and Positive Safety Behaviour Awards are a great
way of recognising when our team members go the extra
mile. In the last six months of our financial year we received
approximately 100 nominations for Way We Work or Positive
Safety Behaviour Awards. A few examples of the excellent
work are detailed below:
A team member was nominated for when he was doing
a pre-dive check and noticed the depth gauge hose
failed under pressure. The consequence of a dive gear
failure can be very high so this shows the importance
of doing pre-dive checks correctly and in line with our
standard operating procedures.
A team member was nominated for conducting a very
detailed safety briefing when introducing a new team
member to water blasting. Research has indicated that
new team members are more at risk of accidents than
experienced people so taking time to explain it thoroughly
is a great way of reducing the likelihood of an accident. We
did have a notifiable incident involving a water blaster in
FY18 which fortunately did not result in injury.
21
2018: BIG IDEAS START HERE

DIVERSITY
As part of our efforts to attract and retain a diverse
workforce, we work hard to ensure our new team members
are well supported in their new roles and homes. Financial
assistance is offered to relocate key international recruits and
English language training is available. We are committed
to supporting a diverse workforce in terms of race, age and
gender, and our membership of the Employee Assistance
Programme continues to ensure relevant support and advice
is readily available to every team member.
We also put a lot of effort into supporting employees as
they get older or those who suffer age-related disabilities
or unexpected life changes. NZKS is also proud to be
supportive of working parents, with a range of mothers,
in particular, working part or flexi-time to suit their
childcare commitments.
Our company is proud of the way it continues to attract
international talent. For example, this year, we recruited a fish
welfare specialist and qualified vet from Chile. He brings 12 years
of experience in fish farming, working in the areas of salmon
production, fish health and welfare and fish feed analysis. This
appointment is part of our ongoing commitment to fish welfare.
We also actively encourage movement and promotion within
existing teams. For example, one team member has progressed
through several roles to recently join our customer service
team. Similarly, two of our farm workers have moved to the
net cleaning team, and others have moved between the
harvest and dive teams.
We also welcome secondments such as one team member
who worked in our hot smoke factory for 13 years, and is now
on secondment at our hatchery in Takaka, and another who
is now working part-time in marketing in addition to his role
in the customer service team.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
22
OUR SUSTAINABILITY STORY OUR PEOPLE

WORK PLACEMENTS AND
INTERNSHIPS
We also understand the value in supporting students, the
next generation of our workforce.
By offering work placements and internships, we provide
students an opportunity to gain hands-on experience working
within a local organisation.
We partner with Nelson Marlborough Institute of Technology
(NMIT) to provide scholarships and work experience for
Aquaculture students, many of whom have completed
placements at our hatcheries or on our sea farms. We are
delighted to have some of those graduates now employed
in our Aquaculture team.
This year, we increased the NMIT scholarships to include two
recipients from the NMIT Business School and the Culinary
School to reflect the diverse range of careers available within our
company. Each scholar will be offered tailored work experience
opportunities to suit their career aspirations.
We have also taken on students as paid interns in our Finance,
IT and Marketing teams, as well as in our new division,
Omega Innovations.
SCHOLARSHIP RECIPIENTS 2018
Chris Waters
NZ King Salmon Aquaculture Scholarship recipient, Year 3
A special interest in whether native New Zealand sea cucumbers
can be grown below salmon farms was behind Chris Waters’
scholarship application. Being a mature student with two sons
still at home, Chris has no access to a student loan this year
so the scholarship is “significant’ for him to complete his study.
He hopes to one day repay NZKS as a future employee.
David Stephens
NZ King Salmon Aquaculture Scholarship recipient, Year 2
David Stephens is halfway towards achieving the degree
he’s always wanted, a dream that stems from a lifelong love
of the marine environment and an interest in aquaculture.
Ruby Boyd
NZ King Salmon Aquaculture Scholarship recipient, Year 1
Whakatane student Ruby Boyd, 17, loves seafood, so when
she happened to meet an NMIT lecturer who told her about
their aquaculture course, she enrolled and moved to Nelson.
“It’s something I’m interested in and something I can get
a job in.”
Raylene Juniper
NZ King Salmon Business Scholarship recipient
Raylene Juniper (also known as Raylene Finlay) started studying
accounting in February 2017 and despite the "hard going"
of juggling four of her five children still living at home, has
maintained an A average.
"My goal is to provide for my family the best I can and I couldn't
see a supermarket job or the dole doing that. I wanted to show
the kids that even though it's hard, you still can manage things,
and to go for it."
Eugene Ringdahl
NZ King Salmon Hospitality Scholarship recipient
Eugene Ringdahl already had a few years of cooking experience
under his apron when he decided it was time to extend his
knowledge and continue his learning. Eugene also works as
chef de partie at The Tides Restaurant in Nelson.
“Aquaculture is something I’m
interested in, and I know there are
good job opportunities.”
Ruby Boyd, Scholarship recipient
Left to right: Grant Rosewarne, David, Eugene (front), Ruby,
Jemma McCowan, Raylene and Chris after the NMIT
scholarship ceremony.
2018: BIG IDEAS START HERE
23
OUR SUSTAINABILITY STORY OUR PEOPLE

OUR ACHIEVEMENTS
THIS YEAR
July 2017 – June 2018
OUR ACHIEVEMENTS
THIS YEAR
July 2017 – June 2018
Our approach to health, safety and wellness is a critical
part of our daily work, as well as our longer-term
thinking, as we believe that a healthy and safe workplace
is all of our team’s responsibility together.
HEALTH, SAFETY AND WELLNESS
OUR FOUR KEY HSW PRINCIPLES:
ENGAGEMENT
We will involve all our team
members in our plans to
improve our health, safety
and wellness performance.
PERFORMANCE
We will actively look to
recognise positive health,
safety and wellness behaviours
and will challenge any
team member who fails to
set the highest personal
standards of health and safety
performance, while continuing
to improve equipment
and infrastructure.
• Continually improving I-safe
functionality and near miss
reporting staying high.
• Water blaster process.
• Winch safety.
• Lone worker safety.
• Lifejackets / water
guard rails.
• Traffic management plans
created for Beatty and
Bullen Street sites.
• Ice tower identified as
a confined space, new
equipment and processes in
place to help manage risk.
• Winch design and
process improvements.
ACCOUNTABILITY
All our team members will
have a clear understanding
of their health, safety and
wellness accountabilities
through clarity of expectations
and ongoing training.
• Bi-annual leadership
and health and safety
representatives’
conferences.
• Engaged a new senior
advisor in health safety
and wellness.
• Expanded cross functional
visits to include reps visiting
other sites.
• 4 reps trained in Incident
Cause Analysis Method
(ICAM) investigation
techniques.
• Stop smoking seminar held
for Processing employees.
• Flu vaccination take-up
almost doubled with
150 carried out this year,
compared to 88 last year.
• Asbestos management
survey and management
plans completed.
• Seismic assessments
completed for all sites.
• New electronic pallet jacks
ordered for Tory Channel
barges that provide back
rest protection for the
operator and are rated to
take the correct weight of
feed bags.
• Fire reviews completed
for all factories.
SYSTEMS & PROCESSES
We will have systems and
processes that manage risk in
the workplace. We commit to
design and engineer high-risk
activities out of our business
wherever possible.
01020304
OUR ACHIEVEMENTS
THIS YEAR
July 2017 – June 2018
OUR ACHIEVEMENTS
THIS YEAR
July 2017 – June 2018
• Monthly internal audit
completion rates increased
by 75% when compared to
the first quarter of 2017.*
• Contractors have been
pre-qualified and moved
towards the implementation
of Rapid Global, an
award-winning workplace
health and safety
software provider.
Our health, safety and wellness strategy (HSW)
is built around four key principles: accountability,
engagement, performance, and systems and
processes. This year, we implemented the
following projects to align with our four principles.
*Monthly internal audit completion rates increased by 75% in Q4, compared to similar period last year (Apr–Jun)
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
24
OUR SUSTAINABILITY STORY HEALTH, SAFETY AND WELLNESS

ADDRESSING CRITICAL RISK
We have identified six critical risks in our business. This focus on
our critical risks is in line with Worksafe and ACC thinking and
we will investigate further the potential of the Safe+ audit tool
as a way to measure our performance.
This year we took the following improvement actions:
STAYING SAFE AT WORK
We continue to monitor the headline measure of Lost Time
Injury Frequency Ratio (LITFR). This year, the LTIFR remained at
a similar level to previous years at 18.1. However, we continue to
incur less serious LTIs such as slips, trips and manual handling
injuries, that result in less time off work for our team members.
This is displayed by our new severity indicator measure (average
number of days lost from LTI) which continues to drop – from
10.0 to 5.1 over the course of the year.
During the financial year we had two notifiable incidents
reported to Worksafe, one involving a water blaster fire that
fortunately did not result in any significant injury. The second
notifiable incident resulted in a finger injury at one of our sea
farms. While using a winch, one of our team members had their
finger pulled through, partially severing his little finger. The finger
was reattached successfully and the team member returned
initially on light duties to upskill and train, and he is now back
working on full duties as a valued team member. We conducted
a thorough post-incident investigation which has resulted in
the current roll out stage of what we believe is the only guarded
winch in the aquaculture industry.
Frequency rates for near miss notifications remained strong
at 998 in the year, whilst absenteeism continued to improve.
Our absenteeism for FY18 was 2.84%, down from 3.18% in FY17.
We are proud to report a 20% discount on our ACC levies
(improved from last year). In FY18, ACC moved away from
its traditional audit to a performance-based system. This has
shown NZKS to have outperformed our peers within the industry,
whilst the aquaculture industry itself has also exceeded other
comparable industries.
New Zealand
King Salmon
Industry
Peer Group
Risk Management Rate
*
0.240.5
Rehabilitation Rate
**
15.3732.33
*Number of qualifying claims with medical costs greater than $500 (or fatal claims) per $1 million liable earnings in the LRG
**Rehabilitation rate: Number of weekly compensation days for qualifying claims per $1 million liable earnings in the LRG)
Maritime Operations
• Refresher training for skippers.
• Life jacket retesting for self-righting.
• Purchase of Remote Operated Vehicles (ROVs)
to reduce deep diving activity.
Fire, Electricity and Natural Events
• Lone worker device trials completed in our
Takaka freshwater facility, the Bullen Street
factory, and our sea farms.
• Updated process for refuelling water blasters.
• Development of emergency response plans for
sea farms in conjunction with Helicopter Rescue.
• Seismic surveys completed, with improvements
required in our freshwater facilities.
Heights and Lifting
• Working at heights training for Coldstore team.
• Harvest lifting mechanisms (winches) policy
and process reviewed and updated.
• Barge lifting mechanism for feed hatches
reviewed and updated.
• Installation of lifting devices and roof anchors in
cold smoked facility.
• Regular reinforcement of two-person lift and
lifting technique with factory team members.
Confined Spaces
• Installation of Davit crane for factory ice tower.
• Gas detection installed on sea farm barges.
Mobile Plant and Equipment
• Forklift retender incorporated key operator
training requirements and new technology
to manage risk.
• Trialling removal of forklift from harvest vessel.
• Reviewing truck loading process.
Construction Activity
• Review of lock-out tag out completed in
Bullen Street factory.
• Asbestos management plan and
register created.
2018: BIG IDEAS START HERE
25
OUR SUSTAINABILITY STORY HEALTH, SAFETY AND WELLNESS

Caring for our environment is crucial to
our salmon’s well-being, and to protect our
community’s natural resources. Our operations
across the entire supply chain have an impact
on the environment, which we aim to minimise.
INCREASED TRANSPARENCY
Our company aims to be honest and transparent, and we
continually look for better ways to deliver open information
about our activities. Consumers have an increasing interest
in understanding more about the producers of the food they
choose. There is a growing desire for safe food which has been
produced ethically and with care for the environment. We strive
to go beyond compliance, aiming instead for best practice.
Independent monitoring of our salmon farms is carried out by
the Cawthron Institute. A report is available for each farm on
the biochemical and biological state of the seabed, and the
nutrient status of the water column around the farm.
Copper and zinc levels are also measured. Seabed impact is
one of the most common concerns, and we have prioritised
information on this topic. The state of the seabed is assigned
an enrichment score (ES) by Cawthron
1
. We have committed
to the agreed standard of the Best Management Practice (BMP)
threshold of ES5.
A video showing footage from the seabed in Waitata Reach
in 2011 (before our salmon farm was placed there) and from
December 2017, is now available on our website. Stills opposite
show the ES score assigned by Cawthron for a similar period.
They show the life under the seafloor including blue and green
shell mussels, scallops and burrow holes where crustaceans
have hidden.
Our team members now routinely deploy Remote Operated
Vehicles under our marine farms to monitor the benthic
(seabed) and this footage will be uploaded to our website
in future.
ACHIEVING BEST MANAGEMENT
PRACTICES IN OUR REGION
The 2014 ‘Best Management Practice (BMP) guidelines for
salmon farms in the Marlborough Sounds – Benthic’ have already
been incorporated at a number of our farm sites. A review of the
Benthic standards was carried out earlier this year to ensure they
are aligned with latest knowledge.
This year we have incorporated the BMP guidelines in our most
recent resource consent at Te Pangu, and we are committed to
implementing them across all of our remaining sites.
Working with a range of scientists and community stakeholders,
we have now begun to develop the ‘Best Management Practice
OUR ENVIRONMENT
guidelines – Water Quality’ for salmon farms in the Marlborough
Sounds. These are expected to be complete by the end of 2018
and will then be implemented on all our farms. We already
actively contribute to Marlborough District Council-coordinated
Sounds-wide monitoring.
MARINE WILDLIFE
Our company is a member of the King Shag working group.
The King Shag is an endangered species only found in small
numbers in the outer Marlborough Sounds. Unfortunately, a
count carried out in February this year showed a 24% decline
in bird numbers since 2015. Counts by the Department of
Conservation have shown a similar decline.
There is a significant element of uncertainty as to the reasons
for this year’s dramatic decline in numbers for what appears
to have been a relatively long-term stable population. What we
do know is that there have been no dramatic changes in our
operations which could have contributed to the decline and this
is not in dispute. There have been two severe weather events -
cyclones Fehi and Gita and they may be involved. In cooperation
with the working group we intend to work toward a greater
understanding of this species.
Seal interactions are managed by the Department of
Conservation under the Marine Mammals Protection Act 1978
and we require a permit to handle them. We take their safety
very seriously and work hard to protect them.
Some sharks are also protected. Our interactions with sharks
are minimal given the predator protection nets we have
on our farms.
The Marine Mammal and Shark Management Plan and the
King Shag Management Plan are both available on our
company website.
1
ES is the industry-accepted environmental quality standard providing environmental 'bottom lines' against which effects can be assessed.
Our company aims to be honest
and transparent, and we
remain committed to providing
information about our activities.
NEW ZEALAND KING SALMON fi ANNUAL REPORT FY18
26
OUR SUSTAINABILITY STORY OUR ENVIRONMENT

Waste Capture
A project has been started to
look at ways to capture fish
waste before it reaches the
seabed. That work is ongoing
and could potentially add
significant benefits to the way
lower flow sites can be farmed.
WAITATA FARM SEABED
2011
SEABED BEFORE FARM
Estimated average ES score of 1.5-2.51.
1
2018
SEABED AFTER FARM
Estimated average ES score of 3.3 at the edge of the net pens
DNA
New Zealand King Salmon is
supporting an investment in
world-leading technology to
assess the level of enrichment
on the seabed, which will result
in a simplified sampling regime
and more rapid assessment.
FOUR IDEAS TO MANAGE ORGANIC MATTER
Waste Utilisation
Once waste is captured,
end uses for the recovered
waste will be required,
perhaps as fertiliser. An
application has been made to
the Ministry for Environment’s
Waste Minimisation Fund
for a project to explore
potential end uses, which
may result in additional
funding over the company’s
current investment.
Remediation
A project led by the Cawthron
Institute to trial a vacuum
technique on the seabed
under lower flow salmon
farms is proposed and is
currently going through a
consenting process.
1
Based on the estimated ES scores for areas of ‘natural’ seabed in the Marlborough Sounds (MPI 2015).
Unfortunately much of the
Marlborough Sounds has been
damaged by human activity other
than aquaculture (dredging,
trawling and sedimentation).
GREENSHELL AND BLUE MUSSELS
Māori Name: kuku, kūtai
Scientific: Perna canaliculus and
Mytilus edulis aoteanus
As filter feeders, mussels take all their
nutrients from the seawater, and as a
result, loose greenshell and blue mussels
are frequently found under salmon
farms. Blue mussels are abundant in
New Zealand waters but not generally
commercially harvested, whilst
greenshell mussels are farmed.
SILT
Sites selected for
salmon farming
typically have
seabeds composed
of fine sand or clay,
rather than reefs
or other delicate
ecosystems.
BURROW HOLES
Seabed habitats for
crustaceans and
other marine life.
2018: BIG IDEAS START HERE
27
OUR SUSTAINABILITY STORY OUR ENVIRONMENT

Our commitment in
the community is to:
We’re all
about here.
CONTRIBUTE
TO REGIONAL
ECONOMIC
DEVELOPMENT
PRODUCE THE
WORLD’S FINEST
SALMON AND MAKE
OUR COMMUNITY
PROUD
BE A GOOD
NEIGHBOUR AND
COMMUNITY
PARTNER
PARTICIPATE
IN FLAGSHIP
LOCAL FOOD
AND WINE
EVENTS
BUILD
CONSTRUCTIVE
PARTNERSHIPS
WITH IWI AND
LOCAL SUPPLIERS
SUPPORT YOUTH
DEVELOPMENT TO
IMPROVE LIFE IN
THE COMMUNITY
DELIGHT CONSUMERS
WITH KING SALMON
EXPERIENCES

We believe engaging proactively and positively
with our community is crucial. We're proud of
our home in the Top of the South, and we want
to make it even better.
We work hard to be well-regarded and respected in the
community. Although we're a global business, it's important to
us we remain local too. Contributing to the region – and being
collaborative and communicative here – is a part of our DNA.
We are proud of the role we play in the regional economy of the
Top of the South. Salmon farming has an ‘economic multiplier’
effect – it creates work and income for employees, as well as a
raft of local suppliers. We regularly host VIPs in the region and
make sure they see the best the region has to offer.
We now have over 375 shareholders amongst Top of the
South residents and this year we employed our first full-time
sponsorships & events coordinator, based in the Picton office.
In November 2017, we held our first Annual Shareholder Meeting
(ASM) in Blenheim which was followed by a dinner celebrating
our story through food. This event was held at acclaimed
Marlborough restaurant, Arbour, where shareholders joined
Board members and senior management for a degustation
dinner, raising funds for the Graeme Dingle Foundation locally.
SPONSORSHIP AND EVENTS
We support many community organisations, charities and
events, with financial and product sponsorship in Marlborough,
Nelson, Golden Bay and Canterbury.
Environmental and Conservation
We are involved in an increasing number of environmental-based
initiatives that fit with our sustainability ethos in partnership
with organisations such as the Kaipupu Wildlife Sanctuary and
the Mistletoe Bay Foundation.
We also ran our popular ‘Sounds, Salmon and Songbirds’ tours
for the third consecutive year with Marlborough Tour Company
and Kaipupu Wildlife Sanctuary, giving guests a unique
experience in the Sounds.
Education and Youth
We also contribute to projects which support youth development
and education. These include the Graeme Dingle Foundation
KiwiCan Programme, focused on the Picton and Waikawa Bay
primary schools; the Bring Your Own Device (BYOD) scheme at
Marlborough Girls College; the premier Marlborough Girls College
and Golden Bay High School netball teams for their 2017 winter
season; and the Marlborough Boys College first XV rugby team.
We work with schools around the region with educational visits,
in-classroom aquariums and prize giving support as well as a
OUR COMMUNITY
year-round programme with Nelson Marlborough Institute
of Technology.
At the beginning of 2018, we worked with the Environmental
Sustainability Class from Marlborough Girls College to help them
better understand salmon farming in the Marlborough Sounds,
including a class field trip to visit a farm and meet our team.
We also have a Salmon Education Kit which is publicly
available online and in hard copy for all schools to utilise
in lesson planning.
Other Commitments
We have supported disadvantaged groups in Nelson/ Tasman
through the Fifeshire Foundation for a number of years. We also
support education about our industry and the promotion of food
tourism in the Marlborough region as a strategic partner with
Destination Marlborough.
We provide support to several key business and industry
groups, including sponsorship of the Marlborough Chamber
of Commerce (MCOC) Business Awards, the Nelson Business
Awards, the Aquaculture New Zealand Conference, local
Institute of Directors' events and the Nelson Hospitality Awards.
Local Events
Each year we participate in a number of key events in the
Marlborough region, including the Marlborough Wine & Food
Festival, the Picton Maritime Festival, the Havelock Mussel
Festival and Feast Marlborough. At the larger events, we
often provide a celebrity chef to demonstrate salmon recipes.
At the 2018 Marlborough Wine & Food Festival, we had
Annabelle White cook up a storm and Al Brown joined us for
Feast Marlborough’s Friday Night Feast. We also use these events
as a great opportunity to showcase our processing team’s
filleting and pin-boning skills, often encouraging the crowd
to get involved as well.
In September, we opened the doors to the public on our newly
commissioned state-of-the-art feed and accommodation barge
for the Waitata salmon farm in the Pelorus Sound. A naming
ceremony and blessing was conducted by local Te Atiawa iwi
with the barge named ‘Paerangi’ – meaning ‘new horizons’.
Completed in Picton by local contractor, Cuddon Ltd, the barge
is built to blend in with the local environment with muted
camouflage colours and a nautical-style look. In addition to
delivering the required feed to grow the salmon, it also provides
accommodation and facilities for team members.
WORKING WITH IWI
We strive to have good relationships with Te Tau Ihu (Top of
the South) iwi. We collaborate with iwi on a variety of strategic
partnerships and projects, sometimes with formal agreements,
and other times on an informal basis.
A delegation of iwi representatives accompanied a group
to the AquaVision conference in Norway in June.
2018: BIG IDEAS START HERE
29
OUR SUSTAINABILITY STORY OUR COMMUNITY

FROM EGG
TO PLATE
Our operations encompass the
life cycle of the King salmon and
culminate in delivering the highest
quality salmon products to consumers
and chefs around the world.

MARK GILLARD
Since pre-school, I have always been interested in
collecting, looking after and breeding things, especially fish.
On completing my degree in Zoology in the early 1970s,
I went to work in the wild eel fishery for 6 years.
One day I noticed an ad in the paper for someone to manage
an ocean ranching salmon operation on the Clutha River.
I applied and never looked back. I’m not sure that my wife
Heather knew what she was getting herself in to.
The role turned out to be a dream job: leading edge,
independent and with a requirement to get on with everyone
including the local anglers. Eventually I had anglers giving me
their prized salmon for use as broodstock. The small hatchery
I built with the expectation that it would last for only a few
years is still going today and is now owned by Sanford.
From there, I relocated to the Marlborough Sounds to take over
a pilot-scale salmon farm in Hallam Cove in 1985. The Hallam
Cove farms were moved out to Bulwer (Waihinau) in 1989, then
Forsyth and Port Ligar. I was responsible for the design and
build of those farms and for a small hatchery on the banks of
the Onamalutu Stream in Marlborough. That small hatchery
was where our NZKS breeding programme began.
The company then merged with the freshwater farm at Takaka
to form Southern Ocean Seafoods and I moved to the head
office in Nelson in 1994. I have carried out a range of roles and
now look after maintaining and growing our security of tenure
mainly in our seawater aquaculture operations.
MEET ONE OF
OUR PIONEERS
My wife and I have lived on a 30ha block one hour south of
Nelson growing cattle and sheep for over 16 years. I have
travelled to all of the major salmon producing countries
attending various conferences and meetings around the world.
I have been involved in the NZ Salmon Farmers' Association
since its inception in the 70s and was Chair for over 17 years,
as well as a founding board member at Aquaculture NZ.
I have represented aquaculture in one way or another since
my days in Kaitangata, both in company operations and
industry governance. My tenure within the aquaculture industry
is now over 39 years and I am learning as much now as when
I first started - I’m not sure any other industry can match the
opportunity for such a career.
First harvest from Hallam Cove in the 1980s
Hallam Cove
Salmon Farm, 1984
“I’m not sure any other industry
can match the opportunity for
such a career.”
Mark harvesting salmon
eggs, 1980
Mark at Waitata
farm, 2018
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
32
FROM EGG TO PLATE MEET ONE OF OUR PIONEERS

We have an ongoing commitment in our
freshwater, seawater, processing and
supply chain operations to enhance our
expertise, capability and infrastructure,
whilst managing key risks.
KEY OPERATIONAL
ACHIEVEMENTS
33
2018: BIG IDEAS START HERE

tipped the scales at 15.8kg! As large King salmon, TYEE are tricky
fish to grow and absolutely deserve their “natural wonder”
tag. Our freshwater team is continually improving production
methods and gaining a better understanding of the behaviour
and potential of this unique fish.
Infastructure projects underway in our freshwater facilities
include improving temperature control at the Takaka incubation
facility, particularly over the summer period, but also to improve
the regulation of time of hatch. Our Tentburn hatchery will
benefit from improved load-out facilities for a quality smolt
transfer result.
CEO Grant Rosewarne
hoists a 15 kilogram
TYEE at the ASM dinner
in November 2017
Reconfirming Our Unique Breed
Our freshwater classical breeding programme has been
in place for more than 25 years, and delivers the critical
scientific rigour to our Ōra King breed and brand story.
This year, we partnered with our independent genetic
and aquaculture breeding advisors, Xelect, to re-confirm
the unique traits of our Ōra King salmon breed. Using
state of the art molecular genetics tools, Xelect was able
to accurately and reliably distinguish our breed from
other King salmon strains on the commercial market to
confirm that the strain of fish produced by NZKS is truly
genetically unique and can be designated a “Unique
Breed”. This information protects the integrity of the
brand and should discourage attempts at false marketing.
This year, in addition to our Takaka team managing the longest
established commercial selective breeding programme for
King salmon in the world, our Tentburn team provided the
seawater farms with nearly three million smolt for growout.
These achievements were complemented by another milestone
– with the launch of our ground-breaking Ōra King TYEE grown
and harvested at our Takaka facility.
Over a one-month period in April/May, nearly one million of
our smolt were immunised in freshwater before transfer to sea,
giving them the greatest opportunity to maintain robust health
in the more challenging seawater environment.
Smolt transfer from our Tentburn and Waiau freshwater facilities
to seawater takes place between October and July to ensure
a year-round supply of salmon at an optimum size. The smolt
average 100 – 150 grams at the time of transfer. Various transfers
are made to our Te Pangu, Clay Point, Kopaua, Ruakaka and
Waihinau farms over this period, with larger fish transferred
to the remainder of farms after a period of seawater grow out.
Over the last 12 months, 37 Ōra King TYEE have been supplied
to international customers from our Takaka freshwater facility,
at a minimum weight of 13.6kg (30 pounds). Our largest TYEE
We operate three freshwater
facilities for broodstock, smolt
and as risk mitigation.
FRESHWATER
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
34
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

Fish performance in the first half of the year was very promising,
however this year’s record-breaking summer temperatures
were extremely challenging for many farmers, whether land
or sea. Our farming teams worked extremely hard to mitigate
the impact, but with above-average water temperatures in the
Pelorus Sound, we did experience heightened fish health and
mortality issues, with the warm water impairing the natural
immune response of the fish, leaving some of them
susceptible to illness.
We implemented management measures including changes
to harvest timing to reduce fish numbers on the more affected
sites, and constant net cleaning activity to ensure that the fish
had the best possible conditions in terms of flow and oxygen
availability. Longer term measures include obtaining higher
flow, colder waters, building warm weather resistance into our
breeding program, ongoing diet improvements, and immunising
our smolt at the freshwater stage.
The larger smolt grown in freshwater have resulted in very
positive production results, reducing the cycle time required
in the seawater phase and delivering excellent growth and fish
quality at harvest.
Regarding infrastructure projects, a state of the art 172-tonne
barge was completed with local engineering firm, Cuddon Ltd.
The barge is equipped with an automatic feeding system
and can carry about 240 tonnes of fish feed to supply our
Waitata sea farm.
We have commenced the capacity upgrade and expansion
in the Pelorus farms (Waitata and Kopa ̄ua), following the
successful completion of three years of positive environmental
results at our new farms.
The final phase of expansion will be the Ngamahau farm
development in the Tory Channel, due for completion in early
2019 with local supplier Cuddon Ltd, which will see additional
pen space installed.
The farm improvement projects are benefiting from more
centralised project co-ordination and the appointment of
specialist Project Managers, as well as ensuring that we capture
the full operational value in the shortest interval possible.
Security of Tenure
Our 35-year sea farm consents at Ngamahau, Waitata and
Kopa ̄ua are about to reach the three-year point at which
incremental volumes can be implemented subject to compliance
with consent conditions. There will be an increase in discharge
of 1,000 metric tonnes of feed for Waitata during 2019, with the
other two farms increased by 500 metric tonnes during 2020.
Meanwhile, a plan change and resource consent application
is underway at Te Pangu which would allow the farm to be
moved closer to the main channel, siting it in a more optimum,
high-flow location.
Our greatest constraint to growth is the availability of suitable
seawater space in New Zealand. In addition to the MPI Farm
Relocation Process, we are contributing to the Marlborough
Environment Plan (MEP) review process, which we understand
will use the outcome of the site relocation process to help inform
its policies and rules. MPI has been working with DoC and MfE
on the National Environmental Standard (NES) for marine
aquaculture to incorporate changes based on submissions
and feedback, and amendments have already been made to
a number of proposed policies. A cost-benefit analysis is being
carried out with a recommendation expected to be provided to
Cabinet early in 2019. All our marine farms have a Biosecurity
Management Plan (BioMP) and we are also working with the
Government to produce a standardised industry BioMP.
Feed Research Update
In 2015, a four-year $5.2 million research programme with the
Cawthron Institute, Seafood Innovations Ltd (SIL) and salmon
feed companies, was undertaken, to ascertain the optimal
diet for our salmon. This year (year three), a series of trials
were conducted to enable us to develop new salmon feed
commercially. These trials have increased the energy in the fish
diet resulting in the same fish growth for less food and less
nitrogenous discharge and/or effluent. In the next financial year
(FY19) the focus will be on determining digestible protein and
energy levels for diets fed at various life stages. The findings from
this research will be trialled in our seafarms in FY19/FY20 with
commercialisation into production thereafter.
Following transfer from freshwater,
salmon are grown for up to 18 months
in one of our seawater farms.
SEAWATER
Wheat
19
%
Fish Meal
18
%
16
%
Veg. Meal
5
%
Veg. Oils
Avian Meal
26
%
Fish Oil
9
%
Avian Oil
2
%
Meat Meal
5
%
Components of feed (1990)
Veg. Oils
17
%
Fish Meal
59
%
24
%
Fish Oil
Components of feed (Current)
Wheat
19
%
Fish Meal
18
%
16
%
Veg. Meal
5
%
Veg. Oils
Avian Meal
26
%
Fish Oil
9
%
Avian Oil
2
%
Meat Meal
5
%
Components of feed (1990)
Veg. Oils
17
%
Fish Meal
59
%
24
%
Fish Oil
Components of feed (Current)
GLOBAL SALMON
AQUACULTURE
(1990)
1
NEW ZEALAND
KING SALMON
(CURRENT)
Percentages are
approximate
and based
on our most
commonly
used feed type.
COMPONENTS
OF FEED
1
Source: Marine Harvest - Salmon Industry handbook 2016.
2018: BIG IDEAS START HERE
35
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

The increased demand for value-added products has
triggered investment in improved slicing technology and
equipment to increase throughput and capacity in our
smoked salmon factories.
At the end of FY18, we installed a new kiln for our Ready to Eat
(RTE) Cold Smoke factory. Amongst many benefits, it will help
to deliver a shorter smoking time and a more consistent smoke
quality. It is environmentally friendly with low energy costs, since
no reheating is required. Our engineering team delivered in time
and under budget.
Hygiene in the factories is a critical food safety factor
and improves shelf life and customer satisfaction. We are
engineering food safety and quality into equipment selection
and process design to ensure that we can increase capacity
without compromising quality and hygiene standards. Project
management and learning from the world’s best are two of the
initiatives rolled out this year to further improve our capability.
Our processing department now has a dedicated project
management and process development expert and a food
safety team that are motivated and committed to best practice.
In general, we are aiming for best practice energy and water
management across our factories, through increased monthly
reporting and a dedicated team developing priority energy
saving projects.
Quality
Quality remains a priority focus in delivering brand value to our
customers. Texture is a key quality indicator and we have recently
invested in equipment to better understand what happens to
the texture of our fish through the processing and supply chain.
Understanding this will help to further improve quality and also
to link results with feed and husbandry decisions. Microbiology
research is helping us improve the shelf life of our products whilst
maintaining safety and high quality. We are also investigating
new freezing technologies and chilled storage to further
enhance our quality.
Salmon are weighed, gilled and gutted.
Depending on final use, further processing
can take place, such as filleting, portioning
or smoking.
PROCESSING
Our salmon are treated to the highest
standards of care, with fish health and
wellness a priority
FISH WELFARE
As a company, we take fish welfare very seriously, and we strive
to keep our salmon healthy and well cared for.
This year, we have invested significantly in our fish welfare team
and associated operational activities to cater for the specific
biology and husbandry needs of our King salmon, and to provide
the highest standards of care.
The focus of our fish welfare team is to continually monitor the
welfare and condition of our salmon to help them cope with
emerging or existing challenges to wellness. Most recently we
introduced routine immunisation programmes for our juveniles
in freshwater to protect them against the naturally occurring
micro-organisms that they will encounter in seawater.
Quality remains a priority
focus in delivering brand
value to our customers.
Salmon are humanely harvested at sea
and transferred back to our processing
facilities in Nelson on the same day.
HARVEST
This year, a decision was made, in accordance with international
best practice, to transfer the harvest function to the quality
team, acknowledging the critical part that harvest plays in the
resultant quality within the factory. This move will help us stay
connected across multiple locations and teams, with the goal
of implementing pre-rigor primary processing, and flow-on
improvements in texture and minimal blood retention.
Since moving to a pump method last year, the harvest team has
seen a steady improvement in quality. A consultant has been
brought on board to further embed our harvesting system and
to look into the next generation of harvesting as our numbers
and fish size increases.
A specialist has also been recruited to help improve the
pneumatics for our stunners which are critical for animal welfare
and quality. Trials are being carried out to understand the rigor
curve to pinpoint optimal processing times, plus we’ve brought
on board a second barge to get our fish to plant quickly.
NEW ZEALAND KING SALMON Ō ANNUAL REPORT FY18
36
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

37
2018: BIG IDEAS START HERE

Our production planning, procurement, customer services,
logistics, coldstore and pick 'n' pack teams ensure our salmon
products get to customers when required, while our ICT
and project management teams ensure we have the right
technology and systems in place to deliver year-round.
Delivering a great final product safely to our consumers and
chefs means taking care of quality throughout the supply
chain. We do this through a range of food safety and quality
controls, as well as core ICT and project management
programs, and the smart and thoughtful use of packaging.
We are also striving to reduce our carbon footprint by utilising
many of the new direct airline routes that have opened
up e.g. Houston and Chicago. Negotiating company-wide
contracts for major consumables and services is also critical
to ensuring quality, cost-effective solutions that meet
our business needs.
Tenders
Three key service contracts negotiated this year were for our
forklifts, laundry and the Omega Plus packaging range.
We focused on the needs of key forklift operators, so that the
chosen supplier delivered health and safety training, compliant
clothing and met the quality standards reflecting our market
position. On-board performance was a non-negotiable,
improving health and safety of drivers and pedestrians.
These systems allow us to reward good driver behaviour
and reduce operating costs.
Sustainability was a key focus for the laundry tender. We
sought better performing garments with a focus on end-of-life
use of garments, as well as ensuring traceability of process to
ensure food safety standards are always met.
With the Omega Plus packaging range, we worked to
ensure this high-spec product could be produced at an
affordable price, as well as adding a second approved
pouch supplier to our stable of packaging suppliers.
IT Upgrades
Over the last 12 months the ICT team has been focused on
improving performance, security and efficiency across the
business. Key projects include:
Client Compute Platform Upgrade (CCPU)
Delivering the latest version of the Microsoft Office
Suite to all computer users to ensure that everyone
has a secure feature-rich set of tools to meet their
work requirements.
Enterprise Resource Planning (Stage 1 Innova)
Installing Innova as our Manufacturing Execution
System (MES) across all factories set the platform
for greater factory efficiencies, ensuring we obtain
the maximum performance benefits from our
specialised factory hardware. Innova is one of the
most sophisticated integrated systems in the world,
establishing our company at the forefront of
New Zealand food manufacturing.
Enterprise Resource Planning (Stage 2 NAV)
Replacement of our Core Financial System (M3) with
Microsoft Dynamic NAV is a substantial project and
impacts every area of the business. Although this
project has not been fully deployed, it is well underway.
NAV will improve our ability to plan, forecast and deliver
to our customers by providing relevant information
to all team members to make better business decisions.
Internet Services Review
With our continued use of cloud-based hosted services
our reliance on quality internet services increases.
This project doubled the capacity of our existing
services to meet our current and future needs and
introduced automatic failover to a secondary location
to ensure business continuity is maintained in the case
of a localised event or natural disaster.
Includes production planning, logistics,
coldstore and pick 'n' pack/dispatch teams,
procurement, customer services, ICT and
project management.
SUPPLY CHAIN
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
38
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

30
Product development technologists
collaborate with sales, marketing,
operations, and our supply chain team
to develop and launch innovative new
products that suit our customers needs.
NEW PRODUCT
DEVELOPMENT
MANAGING KEY PROJECTS WELL
TOTAL
PROJECTS
TRAINING
SESSIONS
19
ACTIVE
PROJECT
MANAGEMENT
USERS
65
Project Management
Our project management office (PMO) has now been in
operation for a full financial year. The three key focus areas
have been a) raising the basic level of project management
awareness, b) introducing tools to effectively operate multi-sized
change activities, and c) developing a monthly governance and
reporting culture for the 30 largest projects.
A programme manager responsible for overall project visibility
and outcomes has been joined by 3 dedicated project managers
in the business.
Regular project reviews, improved project communication, and
authorisation at key steps in project life-cycles are features of
the new approach. 2019 will reinforce the new approach with
further training and support, as well as an overall program
and portfolio prioritisation.
New product development is a critical element in our brand
leadership program to keep our brands fresh and relevant.
Our product development team has had a productive year
working on over 100 projects with 40 Stock Keeping Units (SKUs)
launched (includes chilled and frozen versions), delivering over
$2.8 million gross margin.
In addition to the development of Ōra King TYEE and the Regal
Manuka range, the team has worked on new glazes to add to
the fresh serve-over range. International interest in our Regal
smoked range has resulted in bespoke ranges, whilst fresh value-
add products have also been developed for North American
foodservice customers. We also collaborated with long-standing
domestic customers to extend existing product offers in
acknowledgment of evolving customer needs and cuisine trends.
Packaging choices have an impact on our commitment to using
resources responsibly. We need to maintain a safe and well-
presented product, whilst caring for the environment. In addition
to a general push to reduce our packaging footprint, the team
is also considering plant-based alternatives to plastic, and
reducing polystyrene usage.
Three years ago, the Omega Innovations division was established
with the specific task of reviewing by-products generated
and seeking out high-value products that would utilise these
materials. The division now comprises four full time team
members including a division manager, a national sales
manager, production coordinator and project manager.
Since then, we have made some fundamental changes to our
by-product and offal management systems. Furthermore, we
have identified products and industries where we see value for
our business. We are currently investing in a project to convert
leftover heads, frames, skins, and trimmings into a convenient
large block for bulk supply to the pet food industry. The project
will identify the equipment and freezing capacity upgrades
required to commercialise such products.
We also continue to explore the opportunity for garden care and
nutriceutical products based on the use of various by-products.
Utilising our by-products to minimise
waste, whilst creating innovative products
to meet a gap in the market.
OMEGA INNOVATIONS
2018: BIG IDEAS START HERE
39
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

A VISION FOR THE FUTURE
In June, we hosted a 25-strong delegation to this year’s
AquaVision conference in Stavanger, Norway. The event has
established itself as the world’s number one conference for the
aquaculture industry. Every second year, top decision makers
gather in Stavanger to discuss aquaculture as it relates to public
policy, and to learn about exciting new technologies which will
ideally position aquaculture to help feed a growing planet while
decreasing the environmental footprint of food production.
AquaVision 2018 and the associated field trips in Norway were
the ideal opportunity for the delegation to hear first-hand
about the potential for growth and the associated challenges
faced by companies, and independently assess what the future
for a sustainable, high-value and healthy protein industry could
look like in regional New Zealand. Our delegation included
senior members from five different iwi, local and central
government representatives, environmental NGOs, media,
and industry groups.
Norway provides an excellent example of how salmon farming
has developed successfully. Norway is a comparable size to
Aquaculture is already the world’s fastest
growing food production industry and
is one of the most efficient forms of food
production, making it a sustainable solution
to feeding our planet. Being a part of this
blue revolution is important to our company.
New Zealand with regards to land mass and population (land
mass 20.8% bigger; population 9.3% bigger), however when
it comes to quality infrastructure and many positive societal
measures, it tends to rank at the top of the OECD countries,
whereas New Zealand is generally positioned further down the
ranking. Norway, with its renowned high standards, already has
a salmon and trout industry almost 100 times our size, with a
plan to move to 400 times our size by 2050. In fact, Norway
is replacing its number one industry – oil and gas, with exports
valued at over NZ$70 billion – with their sustainable wild fishery
and salmon aquaculture.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
40
FROM EGG TO PLATE KEY OPERATIONAL ACHIEVEMENTS

41
2018: BIG IDEAS START HERE

STRONG
BRANDS
Our premium
brands tell the
story behind
our products to
our core groups of
customers - discerning
chefs, consumers, retailers
and wholesalers, both here in
New Zealand and worldwide.

Ōra King Awards 2017
Best Dish Australia
by Chris Bonello

OUR BRANDS
The New Zealand King Salmon brand is our corporate brand.
The brand represents our business as a whole, expressing our
vision, purpose, values and culture.
We also communicate with our varied stakeholder groups
through our corporate brand, including our shareholders, our
community, our suppliers, partners and customers.
In all our brand activities, opportunities for more personal
engagement serve us best. Our first annual report brought
to life our story, through our people, our environment and our
product. More informal activities also proved valuable - such
as the post-Annual Shareholders Meeting dinner and Investor
Open Day. These activities added a personal, creative touch
to our investor relations, but also gathered investor feedback
one-on-one.
We have also focused on sustainability and community-specific
communications work this year, as well as a proactive
communications program around the benefits of aquaculture
and the positive future for aquaculture in NZ.
Our approach to communicating with investors was recognised
this year when we were announced as the winner of the NZX
Emerging Leaders Best Investor Relations Award at the 2018
INFINZ (Institute of Finance Professionals NZ Inc) Awards.
We were proud that the judges referred to NZ King Salmon as
“a leading light in the NZ market when it comes to disclosure
and transparency”.
Analysts and investors commented that management are
generous with their time, key operational metrics are provided
to the market and our environmental, social and governance
reporting is very comprehensive.
Our premium brands position our
salmon products in a variety of
high value customer segments,
with in-depth, engaging stories.
Ōra King is our unique breed of King salmon, designed for
culinary excellence. Focused on the premium food service
channel, Ōra King is proudly featured on the menus of more
than 1,200 premium dining restaurants worldwide.
This year, the Ōra King creative team, including our partners
at Downing Creative Marketing, were lauded for various design
projects, including awards for the Ōra King business cards, and
the Ōra King Awards invitation design.
Our flagship campaign - the Ōra King Awards – celebrated its
fifth year as an industry competition offering chefs the chance
to create a special dish using our stunning Ōra King salmon as
the hero ingredient. The Awards ceremony for 2017 was held
in Tokyo to commemorate the first year of participation from
leading Japanese chefs.
To fit the theme, chefs were asked to create a dish with
a Japanese twist. After an initial selection round, the final
contenders were then independently judged by a panel of
leading food experts. With over 300 chefs entering from
our four largest markets, the 2017 Awards were our most
successful to date.
The finalists and Best Ōra King Ambassadors from
New Zealand, Australia and North America were flown
to Tokyo to join Japanese chefs for the Awards ceremony.
A gastronomic tour of Japan included the famed tuna auction
at the world’s largest seafood market, Tsukiji Market, meals at
world-renowned restaurants and visits to traditional artisan
producers. The Japanese finalists were flown to New Zealand
for an equivalent gastronomic tour as well as the opportunity
to experience first-hand how our best-of-breed Ōra King
salmon is grown.
The 6th Annual Ōra King Awards for 2018 were launched in
June with the theme “Inspired by Art”.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
44
STRONG BRANDS OUR BRANDS

GETTING ŌRA KING ON THE MENU
An integral part of our strategy is achieving brand recognition
on the menu at premium restaurants using Ōra King. As a
result, chefs and front of house staff can pass on the story of
Ōra King, and diners are then encouraged to seek out Ōra King
by name, achieving greater depth in brand story and greater
loyalty of customer.
This year, we achieved another step in securing approximately
350 new restaurants with Ōra King listed on the menu – with
one stand-out achievement in Australia in a five-star hotel from
a significant international hotel banner group. Ōra King now
features on the menu at this hotel's award-winning flagship
restaurant. With dishes on four set menu options, alongside
bluefin tuna and other high-value seafood, this customer is
now a high-volume user, consuming around 100 kilograms
(20 fish) per week. This example represents an optimal
scenario for linking brand with sales outcomes in a restaurant
environment. The customer had previously purchased Australian
Atlantic salmon, but has now recognised the unique culinary
characteristics of Ōra King for its menu.
ŌRA KING BEST DISH
WINNERS 2017:
Marc Soper
Wharekauhau Country Estate, Wairarapa, New Zealand
Yosuke Kanai
Fleuve, Hotel Granvia, Osaka, Japan
Travis Swikard
Boulud Sud, New York City, USA
Christopher Bonello
MPD Steak Kitchen, Melbourne, Australia
Ōra King Awards Best
Dish North America
winner, Travis Swikard of
Boulud Sud, New York City
Ōra King Awards 2017
NZ Finalists Makoto
Tokuyama, Marc Soper
and Mark McAllister
in Tokyo
“We saw the theme expressed in
the use of Japanese ingredients
produced in New Zealand, such
as wasabi, fresh yuzu and sake,
in classical dishes reinterpreted,
and in seasonal, regional and
historical ideas.”
Geoff Scott, Judge
2018: BIG IDEAS START HERE
45
STRONG BRANDS OUR BRANDS

It is said, that in the old days the ocean felt empty.
So she filled herself with life, and named the salmon her kings.
She hid a portion of these salmon. In dark places she grew
them — where other fish fear to wander. She named these
few Tyee, and set them apart to be kings among kings.
No two Tyee are alike. They have wrestled their way to the
top. Their fins may bear the scars of a life truly lived, the
remnants of frays won, and lost.
Tyee are rare among salmon. No less than 30 pounds in
imperial weight, these salmon are giants — leviathans that
will sear themselves in your mind for years to come.

One of the highlights of the year was the
launch of a world-first innovation - the Ōra
King TYEE. This prized product has been made
available in limited quantities to a fortunate
few discerning chefs and diners worldwide.
The legendary Tyee salmon, caught in the Campbell River of
British Columbia since 1924, is famed in the wild for its size and
rarity. Our long-standing breeding program can now deliver
Ōra King TYEE, a unique King salmon that grows to more than
double the size of an Ōra King salmon - over 13 kilograms.
Unique characteristics of the Ōra King breed combined with the
ideal farming environment have enabled these salmon to grow
to such an incredible size.
With less than 10 fish available for sale each month, all
individually harvested and tagged with identification numbers,
an exclusive group of chefs have experienced Ōra King TYEE
and have remarked on its delicate flavour, distinctive 'bite',
and clean, herbaceous palate.
“The pure size of
the fish made such
a statement in our
kitchen. The Ōra King
TYEE surpassed all
expectations, deeply
marbled yet firm,
this fish ate like
no other.”
Chef Nathan Gould, Boston
Ōra King TYEE steak by
chef Nathan Gould.
Aaron Ballantyne
and Kevin Hopgood
of Hopgood's & Co.,
Nelson

45
%
With over 25 years of leadership in the
salmon category in New Zealand, Regal is our
premium retail brand. We finished the year
with a 45% market share
1
, despite increased
competition from Atlantic salmon. In
addition, our brand awareness has increased
from 85% to 90%
2
amongst smoked salmon
shoppers in New Zealand.
Our major new product launch this year - the Regal Manuka
range in September 2017 - has proven successful, with
excellent consumer and trade feedback. The Regal Double
Manuka Wood Roasted 200g product has been a particular
success story.
We also rolled-out a packaging renovation across the Regal
range to increase the brand presence in store, reinforcing
the brand story and premium positioning. Our sustainability
credentials have been moved to the front of each pack to
emphasise the credibility of our producer story.
Achieving brand clarity in the fresh serve-over is an ongoing
challenge, however this year we reached an agreement with
a retail chain to incorporate Regal branding in the serve-over.
Regal branded fish spikes will highlight the brand to shoppers
demonstrating quality and local provenance. Achieving this
branding equates to a 10% increase in branding penetration
for our business.
In the USA, Regal has been successfully launched in a regional
division of a major supermarket banner. Four cold smoked
products are now present in 129 stores. The range is selling
well, with positive feedback from the trade and consumers.
Work is underway to expand distribution in the USA.
Total Regal branded sales for the last fiscal year are
$28.9m with $3.3m coming from overseas markets - 11.6%.
This represents established sales in Australia as our new
markets have only just commenced.
Our Regal Consumer Panel now has over 1,000 members,
and is a valuable tool for gauging consumer sentiment,
usage and attitudes.
1
IRI, Total Supermarkets, MAT scan data Value Share to 30/06/18
2
Nielsen Brand Health Tracker, April 2018
OVERALL, REGAL IS THE LEADER IN THE
CHILLED SMOKED SALMON CATEGORY
Regal dominates awareness, brand loyalty
measures and brand equity.
90
%
#
1
REGAL TOPS TOTAL
BRAND AWARENESS AT
With our value-brand, Southern Ocean
performing second equal at 54%.
BRAND LOYALTY FOR REGAL
HAS STRENGTHENED OVER
THE PAST THREE YEARS
And there has been a significant rise
in the number of shoppers who would
consider buying Regal.
REGAL LEADS THE CATEGORY IN TERMS
OF THE TOP DRIVERS OF BRAND EQUITY
“Tastes
the best”
“Is a brand
for me and
my family”
“Has the
best quality
salmon”
NIELSEN BRAND HEALTH KEY POINTS
2
REGAL MARKET SHARE
IN SMOKED SALMON
CATEGORY
1
NEW ZEALAND KING SALMON fi ANNUAL REPORT FY18
48
STRONG BRANDS OUR BRANDS

Our major new product launch
this year - the Regal Manuka
range in September 2017 - has
proven successful, with excellent
consumer and trade feedback.
REGAL MANUKA SUCCESS
The three new Regal Manuka smoked products have sold a
combined $2.9 million since launch in September*. Regal brand
sales are also up 19% since launch of the Manuka range.
*Products initially launched in Foodstuffs only; IRI scandata, Total Foodstuffs dollar sales from WE 24/9/17 to 24/6/18
2018: BIG IDEAS START HERE
49
STRONG BRANDS OUR BRANDS

REG AND AL
Regal was back on TV screens after a five year hiatus, with
popular celebrity chef Al Brown and his new seafood connoisseur
mate, Reg the seal. With a tagline of "it's the merroir that makes
the difference" driving the provenance of the Marlborough
Sounds, the distinctive campaign was made up of a TV
advertisement, light box displays near supermarket entrances in
key mall locations, and a digital and social media component.
An external review of the TV advertisement, in addition to
positive feedback from consumers directly, indicated that
the campaign is considered likeable, memorable and unique.
Shoppers thought of high quality, New Zealand origin product
as a result of seeing the ad and recognised that there was a new
Regal Manuka range to look out for in-store. We plan to use Reg
and Al in future campaigns to support new product launches.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
50
STRONG BRANDS OUR BRANDS

Positioned as a premium pet food brand with King salmon
as the number one ingredient, Omega Plus is ‘vet quality at
supermarket prices’.
This year, we added wet cat food products to the Omega
Plus range and initial sales have been very strong. The range
now covers wet and dry cat and dog food, with salmon as the
number-one ingredient. High in Omega-3 and protein, the range
delivers a variety of nutritional benefits including a healthy skin
and coat, joint mobility, intestinal health and antioxidants.
Another major area of focus has been to finalise long-term
packaging in the form of fully printed pouches. Distribution
continues to develop positively in the highly competitive retail
channel, with an agreement now in place with another major
supermarket chain for listing once the new packaging is
available. Our retail footprint will then increase to over 100
stores nationally.
Our online customers have developed much faster than
expected, particularly in sales of treats and the salmon oil
dietary supplement. We see good future opportunity in the
online channel for pet products in New Zealand.
We have also been exploring export market opportunities for
Omega Plus this year with key export markets short-listed. China
is our initial focus with the first shipment due to leave later this
year for a large e-commerce customer. We have customised
our packaging to suit the Chinese market requirements.
Market research has also been conducted in North America
to determine brand perception in this market.
Southern Ocean is our value brand, predominantly sold as
smoked salmon products in New Zealand domestic channels.
Southern Ocean is the third most recognised smoked salmon
brand in New Zealand with 54% awareness in the recent
Nielsen study.
With the advent of imported Atlantic salmon in the domestic
market, Southern Ocean has played an important role in
mitigating the new entrants' arrival in the value sector -
maintaining a 17% value share in New Zealand grocery.
1
Our Southern Ocean brand is currently undergoing an
exciting rebrand and range review to increase growth and
brand relevance.
Big Catch is a brand from the Omega Innovations division which
utilises by-products to create salmon burley. By producing a
bacterially inert burley through heat treatment, concerns around
raw materials returning to the marine environment are removed,
representing good biosecurity practice.
Big Catch Salmon Burley delivers a small particle size and
a steady stream of salmon oil as it thaws. It’s perfect for
attracting all types of fish. Big Catch is for the quintessential
Kiwi fisherman who is passionate about the sport and
high-quality burley.
We have now developed a 3kg burley "bomb", which is
now heat-treated, enabling us to explore export and meet
customer demand.
1
IRI, Total Supermarkets, MAT Value Share to 30/06/18
2018: BIG IDEAS START HERE
51
STRONG BRANDS OUR BRANDS

Regal
18
%
New Zealand
King Salmon
(E ectively unbranded)
37
%
35
%
Ōra King
Southern
Ocean
10
%
8
%
Wood
Roasted
Cold
Smoked
Other
3
%
17
%
Whole
Salmon
49
%
23
%
Fillets and
Portions
MARKET GROWTH
AND DEMAND
In anticipation of future growth in production,
identifying and entering new high-value
customer segments in advance is essential to
drive demand. Our world-class sales teams
located in key markets are expert in delivering
relevant and innovative brand solutions to the
right customer and channel.
WITHIN NEW ZEALAND – BALANCING
SUPPLY AND DEMAND
Our continued focus on doubling salmon consumption per
capita within the New Zealand domestic market remains firm.
However, the combination of warmer than usual growing
conditions and higher customer demand meant that orders for
premium locally produced salmon surpassed our ability to supply.
Over the past few years, New Zealanders’ preferences have
evolved, and salmon is now recognised as not only tasty, but
also rich in Omega 3 and a nutritious source of protein alongside
traditional Kiwi favourites like beef and lamb. Across all food
categories, families and restaurants clearly prefer fresh, local
produce and this is particularly the case when it comes
to seafood.
The retail market within New Zealand had one of the strongest
seasonal demand periods that we have seen. Warm weather
patterns in spring and summer created a perfect environment
for home entertainment. This, combined with a great Regal
advertising campaign, saw demand surge into the festive
season. Growth of 36%
1
occurred compared to the same trading
period in 2017.
The foodservice sector also benefited from this weather pattern
and demand for salmon on menus increased significantly.
By mid-summer this increase in demand had outstripped all
available supply. Values firmed across all sectors as the shortage
in supply created an exceedingly strong market.
IMPORTED SALMON ENTERS THE
MARKET
As a result, imported Atlantic salmon proved the only solution
for local customers to keep supplying consumers with a salmon
offer. To maintain our category leadership and emphasise the
premium qualities of our local King salmon, whilst ensuring
continuity of salmon supply to our customers, a decision was
made to incorporate an imported branded salmon offer
in our range.
1
Dec 17 vs Dec 16. Source: IRI Total Supermarkets, Regal dollar growth
SALES BY
BRAND
($ FY18)
SALES BY
PRODUCT
($ FY18)
Retail
32
%
International
Foodservice
47
%
Domestic
Foodservice
21
%
SALES BY
CHANNEL
($ FY18)
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
52
STRONG BRANDS MARKET GROWTH AND DEMAND

Atlantic salmon is the most common type of salmon
globally and has a lower fat content and a different taste
from our local, premium King salmon. We continue to champion
King salmon as the premium salmon of choice for Kiwi and
international consumers, and our communications are
designed to remind consumers to check before they buy,
and to understand the difference between local King salmon
and imported Atlantic Salmon.
As outlined in previous sections, we have a growth plan to get
more branded Atlantic product on local shelves in the future.
The combination of warmer than
usual growing conditions and
higher customer demand meant
that orders for premium locally
produced salmon surpassed our
ability to supply.
2018: BIG IDEAS START HERE
53
STRONG BRANDS MARKET GROWTH AND DEMAND

29
%
NORTH
AMERICA
NEW
ZEALAND
50
%
7
%
AUSTRALIA
6
%
ASIA
EX JAPAN
5
%
JAPAN
2
%
EUROPE
1
%
CHINA
SALES BY MARKET
($ FY18)
INTERNATIONAL GROWTH
Within North America, we successfully launched our Regal
Smoked Salmon into a division of a nationwide retailer.
Acceptance and customer feedback for the Regal product
in North America confirms that the retail market has enormous
potential. We are actively working to maximise this potential
and this is reflected in the addition of a retail resource based
in North America. We also established a North American
subsidiary company in order to manage the timely distribution
of stock to retail.
Our Ōra King story resonates strongly with the North American
market and we saw further reach over this past year into the
premium and fine dining restaurant sector.
Our market positioning in North America was also
boosted with the launch of our unique product
offering – Ōra King TYEE. The value positioning is aligned
with the most coveted sushi fish species – such as blue
fin tuna. American chefs have been eager early adopters
for our TYEE, and a regular user base has already been
established in the United States.
The Japan team continue to adjust the channel split after
traditionally being a retail orientated market. Our focus with
Ōra King in foodservice has been a slower transition in Japan
but the recent addition of two foodservice focused importers
will expand our reach into the targeted premium dining sector.
The Ōra King Awards are now in the second year in Japan, and
this brand campaign has been instrumental in accessing chefs
and building more enduring relationships.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
54
STRONG BRANDS WE ARE DIVERSIFIED

29
%
NORTH
AMERICA
NEW
ZEALAND
50
%
7
%
AUSTRALIA
6
%
ASIA
EX JAPAN
5
%
JAPAN
2
%
EUROPE
1
%
CHINA
Our operations are well
diversified without over
reliance on any one market,
channel, brand or product.
We have developed a
robust formula to achieve
value via our strong
brands, which tell the story
of our King salmon to a
variety of audiences.
Over the past year, our team in Australia have made significant
progress. Local production in Tasmania has undergone some
challenges but demand for salmon has remained strong.
The work we have undertaken over these past years has
positioned us well to lead the market with our brand. Demand
for Ōra King outstripped supply and price returns strengthened
to be at parity with most of our export markets.
China has seen consistent growth over the past year. We have
supported our shareholder, China Resources Ng Fung Limited
by appointing a dedicated Market Manager based in Shanghai
with Primary Collaboration NZ (PCNZ). Our entry into the
China market was initially via the retail sector, but our focus
remains with our Ōra King product in premium restaurants and
foodservice, mainly in Shanghai.
Our European market continues to develop despite constrained
supply. This year, we expanded our fresh whole program with
business into Italy, whilst continuing our premium frozen
program into flagship European customers looking for a
high-quality, convenient sushi input. Well known Michelin star
and Japanese fusion restaurants are now loyal customers.
We anticipate that this region will be an ideal recipient for
branded smoked salmon and high-quality frozen products
in future years.
Surging demand over the past year and a general shortage of
supply has provided an opportunity to review our market mix
throughout the Southern Asian region. We have also supported
this region with a contracted market manager to ensure our Ōra
King story and product is represented all the way to the end user.
2018: BIG IDEAS START HERE
55
STRONG BRANDS WE ARE DIVERSIFIED

DIRECTORS &
MANAGEMENT

JOHN RYDER
Independent Chairman
MCom (Hons), FCA, CMA
BOARD OF DIRECTORS
JACK PORUS
Non-Executive Director
BCom, LLB
THOMAS SONG
Non-Executive Director
FCCA
MARK HUTTON
Independent
Non-Executive Director
BCom
John became a Director of
New Zealand King Salmon
in 2009 and Chair in 2016.
John is an active investor
and company Director, and
his current roles include
Executive Chairman of Alpine
Retirement Group Limited
and Independent Chairman of
Direct Capital IV Management
Limited. John was the
cofounder of NZX listed Ryman
Healthcare Limited (where he
was co-Managing Director)
and was a Director of NZX
listed Michael Hill International
Limited. He was involved in the
initial public offering of both
of these companies. John is a
Chartered Accountant.
Jack has been a Director of
New Zealand King Salmon
since 2008. Jack is Joint
Managing Partner of law firm
Glaister Ennor which he joined
in 1972. Jack has practiced
in all areas of property law,
commercial law, trusts and
estate planning and is an
experienced mediator. Jack
is currently the chairman of
Pinnacle Life Limited and a
Director of Neil Corporation
Limited, Norfolk Financial
Management Limited as well
as other substantial private
businesses, and is a trustee
of numerous personal and
charitable trusts. Jack is a
nominated appointee for
major New Zealand King
Salmon shareholder, Oregon
Group Limited.
Thomas has been a Director
of New Zealand King Salmon
since 2008. Thomas is
Managing Director of major
New Zealand King Salmon
shareholder, Oregon Group
Limited. In this role Thomas
is also the Chairman of Neil
Corporation Limited and
Winstone Pulp International
Limited. Thomas is a fellow
member of the Association
of Chartered Certified
Accountants (UK).
Mark became a Director of
New Zealand King Salmon
in 2008. 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 for a number of
Direct Capital entities. Mark
is also Director of NZX listed
Scales Corporation and
a Director of investment
company Evergreen Partners
Limited. Mark is also Chair
of our Nominations and
Remunerations Committee.
Our Board brings many years of
experience in salmon farming,
processing and marketing alongside
broader business experience in
New Zealand and internationally.
NEW ZEALAND KING SALMON - ANNUAL REPORT FY18
58
DIRECTORS AND MANAGEMENT BOARD OF DIRECTORS

PAUL STEERE
Independent
Non-Executive Director
XIN WANG
Non-Executive Director
MBA, Bs
NELSON LIU
Alternate Director to Xin Wang
MBA
GRANT ROSEWARNE
Managing Director and CEO
MBA (Executive), BAppSc
Paul was the founding CEO
of New Zealand King Salmon
from its formation in 1996 until
2009 and has been a Director
of New Zealand King Salmon
since 2009. He is Chair of the
Audit and Risk Committee.
Paul has a background in
manufacturing, international
trade and fast-moving
consumer goods having
previously held senior
executive positions with a
British multinational including
in Hong Kong and Singapore
before joining the NZ Dairy
Board as a General Manager
for eight years which included
responsibility for major
product lines and aligned
regional global markets.
Paul is currently Chairman
of Nelson Airport Limited,
Deputy Chair and Councillor
of Nelson Marlborough
Institute of Technology and a
Chairman of other substantial
private businesses in wine
and architectural facades. He
chairs an advisory committee
for advancing aquaculture in
the South Pacific Community
which supports initiatives
funded by NZ MFat. He served
on the National Board of New
Zealand Red Cross and its
Foundation from 2003 to 2013.
Xin became a Director in 2017.
Xin is the General Manager of
the Corporate Strategy and
Development Department at
China Resources Enterprise,
Limited. Xin was previously the
Assistant General Manager
of China Resources Ng Fung
Limited, in charge of strategy
and corporate development.
She joined China Resources
Group in 2010. Prior to that,
she was with McKinsey &
Company. She holds a B.S.
degree from Fudan University,
an MBA degree from Kellogg
Business School, Northwestern
University and a Master’s
degree from the University of
Illinois in Chicago.
Nelson Liu brings to New
Zealand King Salmon his
vast experience in the ports
and logistics industries. He
was previously an Executive
Director of China Merchants
Holdings International
Company Limited (a Hong
Kong Hang Seng Index
constituent stock company),
which was primarily involved
in the investment and
management of ports,
terminals and logistics parks.
Nelson is presently a Director
of the Port of Newcastle,
Australia. He holds a Master
of Business Administration
from the Roosevelt
University in USA.
Grant started his career
in technical roles having
completed a degree in
Chemistry and Microbiology.
He went on to gain
considerable international
consumer goods sales,
marketing and general
management experience. He
has worked across a number
of consumer goods categories
including dairy, wine, fresh
produce, and dry grocery as
well as foodservice segments
from cafes to fine dining.
Grant’s international business
expertise spans Britain, Europe
and Australasia, with blue chip
companies such as Unilever,
Cerebos and Douwe Egberts /
Sara Lee.
Grant was appointed CEO of
New Zealand King Salmon in
2009. During his time as CEO,
Grant has focused on lifting
New Zealand King Salmon’s
unique products from a
premium commodity to a
worldwide branded
food delicacy.
2018: BIG IDEAS START HERE
59
DIRECTORS AND MANAGEMENT BOARD OF DIRECTORS

SENIOR LEADERSHIP TEAM
GRANT ROSEWARNE
Managing Director and CEO
See previous page.
DAVID WHYTE
Chief Operating Officer
A marine biologist by training, David
has more than 30 years’ experience
in the aquaculture industry. He joined
New Zealand King Salmon to lead the
aquaculture and processing operations
teams, after more than a decade working
in Tasmanian salmon farming.
During his time in Australia, David led
business improvement projects on feed,
technology, planning, customer service,
third party certification, new species
diversification and new lease acquisition.
Prior to this he worked in technical and
commercial management roles in
Marine Harvest Scotland, Biomar UK
and AKVA Group.
ANDREW CLARK
Chief Financial Officer
Andrew has more than two decades
of finance experience across leading
New Zealand aquaculture and dairy
businesses. He has occupied many senior
finance roles in the United States, New
Zealand, Venezuela and Uruguay.
Andrew is passionate about growing New
Zealand’s exports and supporting regional
development. After working overseas for
many years, he has seen first-hand the
huge potential for New Zealand premium
food and beverages globally.
Andrew joined New Zealand King
Salmon in 2011.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
60
DIRECTORS AND MANAGEMENT SENIOR LEADERSHIP TEAM

JEMMA MCCOWAN
General Manager, Marketing
Jemma joined New Zealand King Salmon
in 2012 to launch Ōra King, our premium
foodservice brand, in New Zealand and
abroad. Jemma’s team now manages the
marketing and product development for
New Zealand King Salmon’s multiple retail
and foodservice brands globally.
Jemma is an unashamed champion
of New Zealand produce and believes
most Kiwis don’t realise the full value of
what the country offers on the global
stage. During her time at New Zealand
King Salmon, she has played a lead role
in taking the company’s brands to new
global markets as well as the business’
sustainability projects.
Prior to joining New Zealand King Salmon,
Jemma spent fifteen years working in
international business development and
marketing for an Australian seafood
exporter and the Australian Trade
Commission (Austrade).
GRAEME TREGIDGA
General Manager, Sales
Graeme started his career working for his
family’s horticultural business. He is the
first to admit that since then, working in
primary produce has got under his skin.
Prior to joining New Zealand King Salmon
in 2004, Graeme spent 16 years working
in various horticulture roles in processing,
domestic and international sales,
and management.
Graeme is passionate about taking New
Zealand’s products to the world and has
seen first-hand the value of telling strong
brand stories about New Zealand primary
products. He has been a central part
of growing New Zealand King Salmon’s
exports throughout Japan, North
America, Australia, China and South-East
Asia, as well as growing sales in
New Zealand.
SHAUN YOUNG
General Manager, Supply Chain
During the last decade, Shaun has worked
at New Zealand King Salmon across a
range of special projects and sales roles
in Auckland and Nelson. As General
Manager, Supply Chain, Shaun now leads
the company’s planning, procurement,
customer service, logistics and ICT teams.
His team coordinates shipping fresh
King Salmon around the world; including
getting product from the top of New
Zealand’s South Island to New York
almost every day of the year.
Prior to working for New Zealand King
Salmon, Shaun worked for Cadbury and
Goodman Fielder in sales management
and analytical roles.
2018: BIG IDEAS START HERE
61
DIRECTORS AND MANAGEMENT SENIOR LEADERSHIP TEAM

FINANCIAL
STATEMENTS
1 JULY 2017 - 30 JUNE 2018

Statement of comprehensive income 64
Statement of financial position 65
Statement of changes in equity 66
Statement of cash flows 67
Notes to the financial statements 68
1. Corporate information 68
2. Basis of preparation 68
3. Summary of significant accounting policies 69
4. New standards and interpretations not yet adopted 73
5. Segment information 74
6. Other income 75
7. Expenses 75
8. Financing income and costs 75
9. Income tax 76
10. Components of other comprehensive income 77
11. Earnings per share 77
12. Cash and cash equivalents 77
13. Trade and other receivables 78
14. Inventories 78
15. Biological assets 79
16. Property, plant and equipment 80
17. Intangibles 81
18. Non-current assets held for sale 81
19. Interest bearing loans and borrowings 82
20. Trade and other payables 82
21. Employee benefits 82
22. Commitments and contingencies 83
23. Financial risk management 83
24. Fair values of financial instruments 86
25. Capital management 86
26. Capital and reserves 87
27. Events after balance date 88
28. Related party disclosures 88
29. Auditor’s remuneration 89
30. Reconciliation of net operating cash flow to profit/(loss) 89
31. Comparison to prospective financial statements 90
Independent Auditor’s Report 94
Corporate Governance 98
Director Disclosures 115
Corporate Directory 119
Glossary 120
From Egg to Plate 121
CONTENTS
2018: BIG IDEAS START HERE
63
FINANCIAL STATEMENTS CONTENTS

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
20182017
Note$000$000
Revenue5160,271 136,351
Cost of goods sold14(145,320) (119,879)
Fair value gain on biological transformation1550,309 54,845
Freight costs to market(15,212) (13,360)
Gross profit50,048 57,957
Other income61,822 2,574
Sales, marketing and advertising expenses(10,381) (8,748)
Distribution overheads(3,348) (2,993)
Corporate expenses7(9,312) (7,261)
Other expenses7(347) (2,996)
Earnings before interest, tax, depreciation and amortisation28,482 38,533
Depreciation and amortisation expense16, 17(5,105) (4,366)
Finance income8198 188
Finance expenses8(888) (1,990)
Profit before tax22,687 32,365
Income tax expense9(6,562) (9,601)
Net profit after tax16,125 22,764
Other comprehensive income
Foreign currency translation differences10120 12
Net movement on cash flow hedges10(2,571) 6,063
Income tax effect of movement on cash flow hedges10721 (1,700)
Share based payment expense10263 142
Net other comprehensive income/(loss that will subsequently reverse through profit or loss)(1,467) 4,517
Total comprehensive income/(loss)14,658 27,281
Earnings per share
Basic earnings per share11 $0.12 $0.16
Diluted earnings per share11 $0.12 $0.16
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
64
FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
DIRECTOR
28 August 2018
DIRECTOR
28 August 2018
For and on behalf of the Board, who authorised the issue of these financial statements on 28 August 2018.
20182017
ASSETSNote$000$000
Current assets
Cash and cash equivalents1214,428 10,647
Trade and other receivables1312,426 11,688
Inventories1416,582 16,674
Biological assets1571,566 68,556
Non-current assets held for sale- 421
Derivative financial assets241,057 2,066
Total current assets116,059 110,052
Non-current assets
Property, plant and equipment1643,722 35,726
Biological assets157,888 10,960
Derivative financial assets241,884 3,196
Deferred tax asset92,052 1,636
Intangible assets175,114 3,687
Goodwill1739,255 39,255
Total non-current assets99,915 94,460
TOTAL ASSETS215,974 204,512
LIABILITIES
Current liabilities
Trade and other payables2013,924 13,282
Employee benefits213,384 3,028
Borrowings19461 414
Other financial liabilities2846 18
Derivative financial liabilities241,189 1,277
Taxation payable4,902 2,285
Total current liabilities23,906 20,304
Non-current liabilities
Employee benefits21473 451
Borrowings1910,000 10,124
Deferred tax liabilities913,995 14,010
Derivative financial liabilities241,299 948
Total non-current liabilities25,767 25,533
TOTAL LIABILITIES49,673 45,837
NET ASSETS166,301 158,675
EQUITY
Share capital26122,579 122,518
Reserves328 1,795
Retained earnings43,394 34,362
TOTAL EQUITY166,301 158,675
Net tangible assets per share
Net tangible assets per share $1.22 $1.15
2018: BIG IDEAS START HERE
65
FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Share
Capital
Foreign
Currency
Translation
Reserve
Hedge
Reserve
Share
Based
Payment
Reserve
Retained
Earnings
Total
Equity
Note$000$000$000$000$000$000
Balance as at 1 July 2017122,518 (515) 2,168 142 34,362 158,675
Profit for the period- - - - 16,125 16,125
Other comprehensive income/(loss)10- 120 (1,850) 263 - (1,467)
Total comprehensive income/(loss) for the period- 120 (1,850) 263 16,125 14,658
Shares issued2661 - - - - 61
Distribution to shareholders26- - - - (7,093) (7,093)
Balance as at 30 June 2018122,579 (395) 318 405 43,394 166,301
Balance as at 1 July 201625,296 (527) (2,195) - 14,440 37,014
Profit for the period- - - - 22,764 22,764
Other comprehensive income/(loss)10- 12 4,363 142 - 4,517
Total comprehensive income/(loss) for the period- 12 4,363 142 22,764 27,281
Increase in share capital in preparation for IPO2668,914 - - - - 68,914
Shares issued2630,105 - - - - 30,105
Transaction costs arising on share issue26(1,797) - - - - (1,797)
Distribution to shareholders26- - - - (2,842) (2,842)
Balance as at 30 June 2017122,518 (515) 2,168 142 34,362 158,675
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
66
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
20182017
Note$000$000
Operating activities
Receipts from customers161,212 135,163
Payments to suppliers(97,453) (97,428)
Payments to employees(35,029) (30,268)
Interest received164 181
Interest paid(597) (1,317)
Insurance and settlement income150 1,998
Income tax paid(3,609) (2,999)
Net cash flows from / (used in) operating activities3024,838 5,330
Investing activities
Proceeds from sale of property, plant and equipment19 29
Purchase of property, plant and equipment(14,022) (7,449)
Purchase of intangible assets(88) (48)
Net cash flow (used in) / from investing activities(14,091) (7,468)
Financing activities
Drawdown of revolving loan124 (8,876)
Government grants received148 110
Gross proceeds from share issue42 30,105
Transaction costs arising from share issue- (1,797)
Proceeds from shareholder advances- 1,402
Repayment of shareholder advances(89) (7,651)
Payment of finance lease liabilities(98) (85)
Dividends paid(7,093) (2,842)
Net cash flows (used in) / from financing activities(6,966) 10,366
Net increase/(decrease) in cash and cash equivalents3,781 8,228
Cash and cash equivalents at 1 July1210,647 2,419
Cash and cash equivalents at 30 June1214,428 10,647
2018: BIG IDEAS START HERE
67
FINANCIAL STATEMENTS STATEMENT OF CASH FLOWS

NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1. CORPORATE INFORMATION
The financial statements of New Zealand King Salmon Investments Limited (the Company) and its subsidiaries (together the Group)
for the year ended 30 June 2018 were authorised by the directors on 28 August 2018.
New Zealand King Salmon Investments Limited is a profit-orientated company incorporated and domiciled in New Zealand.
The Company is registered under the Companies Act 1993 and listed on the NZX Main Board (“NZX”) and the Australian Securities
Exchange (“ASX”). The Company is an FMC reporting entity under the Financial Markets Conduct Act 2013.
The Group is principally engaged in the farming, processing and sale of premium salmon products.
2. BASIS OF PREPARATION
a. Statement of compliance
The consolidated financial statements comply with International Financial Reporting Standards (IFRS) and also with New Zealand
Equivalents to International Financial Reporting Standards (NZ IFRS).
b. Basis of measurement
The financial statements have been prepared on a historical cost basis except for biological assets and financial instruments which
have been measured at fair value.
c. Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates
and assumptions that affect the reported outcomes of revenues, expenses, assets, liabilities and the accompanying disclosures.
The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared.
Uncertainties about these assumptions and estimates could result in an outcome that requires a material adjustment to the carrying
amount of assets or liabilities in future periods.
Specific areas requiring significant estimates and judgements include:
Valuation of biological assets
The Group recognises stocks of live fish at fair value less costs to sell according to the principles of NZ IAS 41 Agriculture. The fair value
is measured using a valuation model that relies on various assumptions and information available at balance date. Inputs include
anticipated market prices, quality mix, current weights of livestock relative to expected harvest weight, mortality rates, growth rates
and production costs. The income or loss that is ultimately recognised at time of sale may be significantly different from that implied
by the fair value adjustment at the end of a reporting period. The fair value uplift from accumulated costs to date has no cash impact.
Further details of the valuation and sensitivity to change in key inputs are given in note 15.
Impairment testing of intangibles
The Group reviews the carrying value of goodwill on an annual basis and assesses whether it is impaired according to the principles
of NZ IAS 36 Impairment of Assets. This requires the goodwill to be allocated to cash generating units with which it would naturally be
associated and the value in use of the cash generating units to be estimated. The value in use is estimated using a standard industry
model that relies on various assumptions and information available at balance date. Inputs include estimations of the growth rate of
the Group, future market conditions, prices, and discount rates. Further details of the value in use assessment are given in note 17.
Valuation of financial derivatives
The Group recognises financial derivatives at fair value according to the principles of NZ IFRS 13 Fair Value Measurement. The value is
calculated by a third party expert using an industry standard model. Inputs to the model are obtained externally by the service provider.
Further details of the valuation are included in note 24.
Useful lives of assets
The Group estimates the useful lives of property, plant and equipment and intangible assets based on historical performance and
currently consented future asset uses.
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d. Foreign currency translation
Functional and presentation currency
The Group’s consolidated financial statements are presented in New Zealand dollars, which is also the parent Company’s functional
currency. The Australian subsidiary’s functional currency is Australian dollars which is translated into the presentation currency in these
financial statements. The USA subsidiary’s functional currency is United States dollars which is translated into the presentation currency
in these financial statements.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange at balance date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the
date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.
Translation of Group subsidiaries functional currency to presentation currency
The assets and liabilities of both the Australian and USA subsidiaries are translated into New Zealand dollars at the rate of exchange
at balance date. Revenues and expenses are translated at rates approximating the exchange rate at the date of the transaction.
The exchange differences arising on translation for consolidation are recognised in other comprehensive income.
3. SUMMARY OF SIGNIFICIANT ACCOUNTING POLICIES
a. Basis of consolidation
The financial statements comprise the financial statements of New Zealand King Salmon Investments Limited and its subsidiaries
(per note 28) as at 30 June each year. Subsidiaries are all those entities over which the Company has control.
The financial statements of the subsidiaries are prepared for the same reporting period as the Parent company using consistent
accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit
and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the
date on which control is transferred out of the Group.
b. Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is
measured at fair value which is calculated as the sum of the acquisition date fair value of assets acquired by the Group and the liabilities
assumed by the Group. Acquisition related costs are expensed as incurred and included in administrative expenses. Any contingent
consideration to be transferred by the Group is recognised at fair value at acquisition date.
c. Financial instruments
All financial instruments are initially recognised at the fair value of the consideration received, less directly attributable transaction costs
in the case of financial assets and liabilities not recorded at fair value through profit or loss. Subsequently the Group applies the following
accounting policies for financial instruments:
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and call deposits. For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and short-term deposits net of outstanding bank overdrafts.
Trade and other receivables
Short term trade and other receivables are not discounted and are initially stated at cost. Gains and losses are recognised in the profit
or loss when the receivables are derecognised or impaired.
Loans
Loans and amounts owing from related companies are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. After initial recognition such assets are carried at amortised cost using the effective interest
method. Gains and losses are recognised in profit or loss when the loans are derecognised or impaired.
Trade and other payables
Trade and other payables are carried at cost due to their short term nature and are not discounted. They represent liabilities for goods
and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within
30-60 days of recognition.
Interest bearing borrowings
After initial recognition interest bearing borrowings are subsequently measured at amortised cost using the effective interest method.
Fees paid on establishment of loan facilities that are yield related are included as part of the carrying amount. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
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balance date. Borrowing costs are generally recognised as an expense when incurred with the exception of borrowing costs associated
with a qualifying asset which are capitalised as part of the cost of that asset.
Financial guarantee
Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder
for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument.
Financial Guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributed
to the issuance of the guarantee. Subsequently the liability is measured at the higher of the best estimate of the expenditure required
to settle the present obligation at balance date and the amount recognised less cumulative amortisation.
Derivative financial instruments and hedging
The Group uses derivative financial instruments including forward currency contracts, options and interest rate swaps to hedge risks
associated with interest rate and foreign currency fluctuations. Such derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are subsequently re-measured to fair value at balance date. Derivatives
are carried as assets when their fair value is positive and as liabilities when their fair value is negative.
The fair values of forward currency contracts are calculated by reference to current forward exchange rates for contracts with similar
maturity profiles. The fair values of interest rate swaps are determined by reference to market values for similar instruments.
The Group designates its derivative financial instruments as hedges of a particular risk associated with a recognised asset or liability
or a highly probable commitment that could affect profit or loss. The effective portion of the gain or loss on the hedging instrument
is recognised directly in other comprehensive income in the hedge reserve, while the ineffective portion is recognised in profit or loss
as other income or expenses.
Amounts accumulated in equity are transferred to profit or loss when the hedged item affects profit or loss.
d. Inventories
Inventories including raw materials, work in progress and finished goods are valued at the lower of cost or net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw materials – the cost of fish is measured at fair value at harvest date. The cost of other raw materials is based on the purchase
price including import duties and other taxes, transport, handling and other costs directly attributable to the acquisition of the goods
and materials. Costs are determined on a weighted average basis.
Manufactured finished goods and work in progress - cost of direct materials, labour and a proportion of manufacturing overheads
appropriate to the state of manufacture. Costs are assigned on the basis of weighted average costs. The cost of items transferred from
biological assets is their fair value less costs to sell at the date of harvest.
Net realisable value - the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated
costs necessary to make the sale.
e. Biological assets
Biological assets include fish livestock measured at fair value less estimated costs to sell. The net gain or loss resulting from the fair
value measurement is recognised in profit or loss.
The fair value of fish livestock is derived from the amount expected to be received from the sale of the asset in an active market.
The target live weight of the harvestable fish is defined as a fish with a live weight of 4kg or greater. Many fish are harvested with a live
weight above or below this weight.
For brood stock and fish where little biological transformation has taken place since initial cost was incurred, cost less impairment
is used as an approximation of fair value. This value is used up to the point at which fish are transferred to sea water. Fish stock is
transferred to inventory at the time of harvest. The transfer is recorded at its fair value which is deemed to be cost for the purposes
of inventory valuation.
f. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment. Depreciation is provided
on a straight line basis over the estimated useful lives of the assets as follows:
Freehold land not depreciated
Freehold buildings twenty to fifty years
Building fit out three to twenty five years
Leasehold improvements five to ten years
Plant, furniture and fittings three to twenty years
Motor vehicles five years
Sea vessels ten to twenty years
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end
and adjusted prospectively if appropriate. An asset’s carrying value is written down immediately to its recoverable amount if its carrying
value is greater than its estimated recoverable amount.
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An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
g. Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement
conveys a right to use the asset.
Group as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. Finance leases, which transfer to the Group
substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the
fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. Lease incentives
are recognised in profit or loss as an integral part of the total lease expense.
h. Intangibles
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired
in a business combination is its fair value as at the date of acquisition. Following initial recognition intangible assets are carried at cost
less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets are not capitalised
and the expenditure is recognised in profit or loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over
the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are
accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change in accounting estimate.
The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the
function of the intangible asset.
Intangible assets with indefinite useful lives are not amortised but are tested for impairment annually, either individually or at the
cash-generating unit level. The assessment of useful life is reviewed annually to determine whether the indefinite life continues to be
supportable. If not, the change in useful life from indefinite to definite is made on a prospective basis.
A summary of the policies applied to the Group’s intangible assets is as follows:
Goodwill and trade marks
Useful lives: Indefinite
Internally generated or acquired: Acquired
Intellectual property, marine farm and hatchery licences and marina berth
Useful lives: Finite
Amortisation method used: Straight line, five to thirty five years
Internally generated or acquired: Acquired
Computer Software
Useful lives: Finite
Amortisation method used: Straight line, four to seven years
Internally generated or acquired: Acquired
i. Research and development costs
Research costs are generally expensed as incurred. Development expenditures are capitalised as intangible assets when the Group
can demonstrate:
- Costs can be reliably measured.
- Completion of the project is technically feasible.
- Resources are available to complete the project.
- There is an intention to use the resulting asset and it will generate future economic benefits.
During the period of development the asset is tested for impairment annually.
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j. Employee benefits
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries including non-monetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured
at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when
the leave is taken and are measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised and measured at the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service.
Defined contribution plans
Contributions made to a defined contribution plan are expensed as incurred.
k. Contributed equity
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction net of tax from the proceeds. Other capital raising costs are expensed as incurred.
l. Revenue Recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the
economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also
be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs
incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are passed to the
buyer depending on the agreed shipping terms. This is typically when legal ownership is passed over.
Interest income
Revenue is recognised as interest accrues using the effective interest method.
Insurance proceeds
Insurance proceeds are recognised in the financial statements when receipt is virtually certain and can be measured reliably.
m. Taxes
Income taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised
deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable
that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST, except when:
- The GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.
- Receivables and payables, which are stated with the amount of GST included.
- The net amount of GST recoverable from or payable to the taxation authority is included as part of receivables or payables
in the balance sheet.
- Commitments and contingencies are disclosed net of the amount of GST recoverable from or payable to the taxation authority.
- The Group recognises uncertain tax positions as a liability where it is probable that an outflow of resources will be required.
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n. Share-based payments
Certain employees of the Group receive remuneration in the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value
at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 26.
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over
the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative
expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in
the statement of comprehensive income for the period represents the movement in cumulative expense recognised as at the beginning
and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards,
but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments
that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached
to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions
are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have
not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether
the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the
unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification,
is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial
to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the
award is expensed immediately through profit or loss.
4. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Various new standards, amendments to standards and interpretations are effective for annual periods beginning on or after
the current reporting period and have not been applied in preparing these consolidated financial statements. The following changes
may have a significant effect on the consolidated financial statements of the group:
NZ IFRS 9: Financial Instruments
NZ IFRS 9, ‘Financial Instruments’ replaces NZ IAS 39 ‘Financial Instruments: Recognition and Measurement’. The standard is effective
for annual periods beginning on or after 1 January 2018 and earlier application is permitted.
The new standard addresses the classification, measurement and de-recognition of financial assets and financial liabilities, introduces
new rules for hedge accounting and introduced a new impairment model.
The Group intends to adopt NZ IFRS 9 on its effective date and is currently assessing its full impact. The standard is not expected
to significantly impact the Group as the valuation and measurement of the Group’s financial assets and liabilities are not
expected to change.
NZ IFRS 15: Revenue from Contracts with Customers
NZ IFRS 15, ‘Revenue from Contracts with Customers’ establishes the framework for revenue recognition. The standard replaces
NZ IAS 18 ‘Revenue’ and NZ IAS 11 ‘Construction Contracts’ and related interpretations. The standard is effective for annual periods
beginning on or after 1 January 2018 and earlier application is permitted.
The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer.
The notion of control replaces the existing notion of risks and rewards.
The Group intends to adopt NZ IFRS 15 on its effective date and is currently assessing its full impact. This standard is not expected to
significantly impact the Group as the majority of sales enable control to be transferred to customers within one to two days of dispatch.
NZ IFRS 16: Leases
NZ IFRS 16, ‘Leases’, replaces the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Under NZ IAS 17,
a lessee was required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet).
NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually
all lease contracts.
The standard is effective for accounting periods beginning on or after 1 January 2019. Early adoption is permitted but only in
conjunction with NZ IFRS 15, ‘Revenue from Contracts with Customers’.
The Group intends to adopt NZ IFRS 16 on its effective date and has yet to assess its full impact. The group currently leases a number
of offices, buildings, vehicles, water space and minor plant and equipment.
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

5. SEGMENT INFORMATION
Segment results
For management purposes, the Group is organised into three business units based on geographical sales market and customer
channel. The operating results of the business units are monitored for the purpose of making decisions about resource allocation
and performance assessment.
The Group’s reportable segments are:
New Zealand Retail
The company provides these customers with pre-packed value-added products (including wood roasted and cold smoked product),
whole fresh fish and pre-cut fillets.
New Zealand Foodservice
The company provides these customers with a broad variety of salmon products including whole fresh fish, pre-cut fillets, portions
and a range of smoked products.
Export
Predominantly customers based outside New Zealand most of whom currently fall into the foodservice category as described above.
Segment performance is evaluated at the EBITDA level and results are as follows:
New
Zealand
Retail
New
Zealand
Foodservice
Export
MarketTotal
$000$000$000$000
Year ended 30 June 2018
Revenue41,415 37,811 81,045 160,271
Segment EBITDA4,904 6,702 16,876 28,482
Year ended 30 June 2017
Revenue35,439 38,385 62,527 136,351
Segment EBITDA7,031 12,101 19,401 38,533
Depreciation, amortisation, finance income and costs, and fair value gains and losses on financial assets are not allocated
to individual segments as the underlying instruments are managed on a group basis.
Segment profit reconciles to profit before income tax as follows:
20182017
$000$000
Segment profit28,482 38,533
Depreciation, amortisation and impairment(5,105) (4,366)
Net finance costs(690) (1,802)
Group profit before tax22,687 32,365
The Group does not prepare information allocating assets and liabilities to the market facing segments as all material assets
and liabilities are managed on a group basis.
20182017
Revenue by geographical location of customers
$000$000
New Zealand79,226 73,824
North America48,435 35,956
Australia11,497 12,035
Japan8,265 6,034
Europe2,860 1,986
Other9,988 6,516
Total revenue160,271 136,351
Sales net of settlement discounts to two major customers for the year totalled $16,595k and $16,535k or 10.4% and 10.3%
respectively (2017 one major customer accounted for $16,511k or 12.1%). In both years, these customers were included in the
New Zealand Retail segment.
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6. OTHER INCOME
20182017
Other income
$000$000
Grants received 148 112
Supplier settlement- 1,784
Rebate on supply1,135 -
Insurance settlements188 214
Supplier forgiveness of debt- 348
Contract penalties (received)175 -
Profit on sale of property, plant and equipment19 28
Other income157 88
Total other income1,822 2,574
7. EXPENSES
20182017
Corporate and other expenses include:$000$000
Trade receivables written off10 1
Impairment of trade receivables20 84
Professional fees related to capital raising- 1,970
Research cost660 849
Water space process expense171 846
Loss on Assets Held for Sale113 180
Minimum lease payments - operating leases1,477 1,118
Directors' fees420 320
Other directors' expenses43 18
Donations17 43
20182017
Employee benefits expense$000$000
Wages and salaries29,616 26,445
Defined contribution plan expenses683 569
Restructuring costs40 (4)
Other employee benefits expenses3,933 3,476
Outsourced labour1,399 555
Total employee benefits expense35,671 31,041
8. FINANCE INCOME AND COSTS
20182017
Finance income$000$000
Interest income198 188
Total finance income198 188
20182017
Finance costs$000$000
Bank facility fees293 284
Interest on bank loans and overdrafts595 1,210
Interest on shareholder loans- 496
Total finance costs888 1,990
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

9. INCOME TAX
20182017
Recognised in the consolidated statement of comprehensive income$000$000
Current income tax expense6,143 4,745
Under provision - previous year127 (49)
Deferred tax relating to origination and reversal of temporary differences292 4,905
Total income tax expense/(credit) in the statement of comprehensive income6,562 9,601
Tax amounts posted directly to equity(721) 1,700
Reconciliation of tax expense to statutory income tax rate
Profit /(loss) before tax22,687 32,365
Income tax using the company tax rate 28%6,352 9,063
Non deductible/non assessable items73 617
Under provision - previous year127 (49)
Prior period adjustment(30) -
Other differences40 (30)
Total tax expense6,562 9,601
Statement of financial position deferred tax assets and liabilities20182017
Deferred tax liabilities $000$000
Accelerated depreciation for tax purposes (2,807) (2,853)
Fair value adjustment to biological assets(10,300) (9,640)
Gains on foreign currency hedges(426) (1,108)
Increase accounting cost for finished goods(462) (409)
Total deferred tax liabilities(13,995) (14,010)
Deferred tax assets
Provision for doubtful trade debtors23 43
Provision for employee benefits793 570
Impairment of non-current assets- 176
Share based payments113 40
Losses on foreign currency hedges299 258
Other provisions824 549
Total deferred tax assets2,052 1,636
Net deferred tax liability(11,943) (12,374)
Statement of comprehensive income deferred tax assets and liabilities20182017
Deferred tax liabilities $000$000
Accelerated depreciation for tax purposes (42) 129
Fair value adjustment to biological assets661 4,991
Increase accounting cost for finished goods53 38
Total deferred tax liabilities672 5,158
Deferred tax assets
Provision for doubtful trade debtors20 (26)
Provision for employee benefits(222) (24)
Impairment of non-current assets176 114
Share based payments(74) (40)
Other provisions(280) (277)
Total deferred tax assets(380) (253)
Deferred tax (credit)/expense292 4,905
Imputation credit account
The imputation credit account balance in the New Zealand King Salmon Company Limited as at 30 June 2018 is $3,504k (2017: $1,821k).
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10. COMPONENTS OF OTHER COMPREHENSIVE INCOME
20182017
Movement in reserves$000$000
Forward currency contracts
Reclassification during the year to profit or loss12 (18)
Income tax effect(2) 5
Realised/unrealised net gain/(loss) during the year (2,436) 4,997
Income tax effect682 (1,400)
Interest rate swaps
Realised/unrealised net gain/(loss) during the year (147) 1,084
Income tax effect41 (305)
Currency translation differences
Currency translation differences120 12
Share based payment expenses
Share based payment expense263 142
Net movement in reserves(1,467) 4,517
11. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing the profit for the year attributable to shareholders of the Company
by the weighted average number of ordinary shares on issue during the year. Diluted earnings per share assume conversion of all
potential ordinary shares in determining the weighted average number of ordinary shares on issue.
20182017
Earnings per share$000$000
Profit attributable to ordinary equity holders 16,125 22,764
# of Shares# of Shares
000000
Weighted average number of ordinary shares for diluted earnings per share138,475138,158
Basic earnings per share$0.12$0.16
Diluted earnings per share$0.12$0.16
12. CASH AND CASH EQUIVALENTS
20182017
Cash and cash equivalents$000$000
Cash at bank and on hand14,021 10,175
Short-term deposits407 472
Total cash and cash equivalents14,428 10,647
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

13. TRADE AND OTHER RECEIVABLES
20182017
Trade and other receivables$000$000
Trade receivables11,016 10,848
Allowance for impairment loss(110) (153)
Prepayments1,103 970
Other receivables417 23
Total trade and other receivables12,426 11,688
Trade receivables generally have 20-30 day terms and are recognised at their realisable value. Collectability of trade receivables
is reviewed on an ongoing basis. Debts that are known to be uncollectable are written off when identified. Impairment losses are
recognised net of insurance proceeds when there is objective evidence that the Group will not be able to collect the debt.
20182017
Ageing analysis of trade receivables$000$000
> 90 days overdue112 90
31 - 90 days overdue141 68
15 - 30 days overdue784 49
< 15 days overdue356 1,867
Not yet due9,623 8,774
Total receivables11,016 10,848
20182017
Receivables impairment movement$000$000
As at 1 July153 69
Additional provisions for impairment130 151
Receivables written off during the year(10) 1
Reversal of unused amounts(163) (68)
As at 30 June110 153
14. INVENTORIES
20182017
Inventories$000$000
Raw materials9,822 9,525
Work in progress106 -
Finished goods6,654 7,149
Total inventories16,582 16,674
The closing cost of finished goods as at 30 June 2018 includes a fair value uplift at point of harvest of $2,354k (2017: $2,391k)
and an impairment provision of $1,638k (2017: $1,446k).
20182017
Amount of inventories recognised as an expense in the statement of comprehensive income$000$000
Cost of inventories recognised as an expense145,093 119,627
Movement in net realisable value of inventory decrease227 252
Total cost of goods sold145,320 119,879
The cost of inventories recognised as an expense for the year ended 30 June 2018 includes a fair value uplift at point of harvest
of $47,988k (2017: $37,135k).
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

15. BIOLOGICAL ASSETS
The Group has three hatcheries in the South Island and eight operational marine salmon farms in the Marlborough Sounds.
The fish livestock typically grow for up to 31 months before harvest.
Cost Fair Value GainTotal
Biological assets$000$000$000
As at 1 July 201745,087 34,429 79,516
Increase due to biological transformation
1
67,846 36,692 104,538
Decrease due to harvest
2
(57,768) (47,951) (105,719)
Decrease due to mortality
3
(12,498) - (12,498)
Changes in fair value
4
- 13,617 13,617
As at 30 June 201842,667 36,787 79,454
1
Biological transformation fair value is impacted by volume increases and fish weight at reporting date relative to the target
fish harvest weight of 4 kgs (proportional recognition).
2
Harvested fair value is included in cost of goods sold in the statement of comprehensive income and is calculated by multiplying
the current years harvest (biomass) by the prior years estimated gross margin per kg (recognised at 100%).
3
Mortality cost is expensed directly to the statement of comprehensive income in the period which it occurs and is not subject
to a fair value uplift.
4
Changes in fair value are impacted by movements in margin primarily being changes in sales price and costs to sell
(fish cost, harvest, processing and freight to market).
Cost Fair Value GainTotal
Biological assets$000$000$000
As at 1 July 201636,347 16,603 52,950
Increase due to biological transformation70,330 50,606 120,936
Decrease due to harvest(56,346) (37,019) (93,365)
Decrease due to mortality(5,244) - (5,244)
Changes in fair value- 4,239 4,239
As at 30 June 201745,087 34,429 79,516
20182017
Fair value gain/(loss) recognised in profit and loss$000$000
Gain arising from growth of biological assets36,692 50,606
Movement in fair value of biological assets13,617 4,239
Total fair value gain on biological transformation50,309 54,845
20182017
Harvested biomassmtmt
Harvested live weight biomass9,112 8,218
Total live weight harvested for the period (metric tonne)9,112 8,218
20182017
Estimated closing biomassmtmt
Closing fresh water stocks105 142
Closing sea water stocks5,286 6,085
Total estimated closing biomass live weight as at period end5,391 6,227
Fair value measurement
Measurement of fair value is performed using a fair value model. The method of valuation therefore falls into level 3 of the fair value
hierarchy as the inputs are unobservable inputs.
The valuation of biological assets is carried out separately for each site at a brood and strategy level. Estimated actual cost up
to the date of harvest per site is used to measure the expected margin at the time the fish is defined as ready for harvest, being
4.0kg live weight. Selling price is estimated at balance date based on the most relevant future market price at expected harvest date.
The expected gross margin is recognised proportionately based on average biomass at reporting date. Fair value measurement
commences at the date of transfer to sea water as this is considered the point at which the fish commence their grow out cycle.
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

Fair value risk and sensitivity
The Group is exposed to financial risks relating to the production of salmon stocks including climatic events, disease and contamination
of water space.
The Group seeks to produce and market the highest quality salmon products. Extensive monitoring and benchmarking is carried out
to provide optimum conditions and diets to maximise fish performance during the grow out cycle. Sales are maintained in a range
of brands, products and markets to maximise returns from the quality mix of fish harvested. The Group has insurance to cover some
of the risks relating to the livestock.
The estimate of unrealised fair value gain from cost is based on several assumptions. Changes in these assumptions will impact the fair
value calculation. The realised profit which is achieved on the sale of inventory will differ from the calculations of fair value of biological
assets because of changes in key factors such as the final market destinations of inventory sold, changes in price, foreign exchange rates,
harvest weight, growth rates, mortality, cost levels and differences in harvested fish quality.
Leaving all other variables constant a 10.0% increase/decrease in average future sales prices would increase/decrease the fair value of
biological assets on hand and profit before tax by $10.8m (2017: 5% increase/decrease $5.4m) (excludes the impact of finished goods),
while a 10.0% increase/decrease in future harvest volume would increase/decrease the fair value of biological assets on hand and profit
before tax by $3.6m (2017: 5% increase/decrease $1.7m).
A 10% increase/decrease in costs to sell would decrease/increase the fair value of biological assets on hand and profit before tax by
$7.0m (2017: 5% increase/decrease $3.5m). Changes in fish health and environmental factors may affect the quality of harvested fish,
which may be reflected in realised profit via both achieved sales price and production costs.
16. PROPERTY, PLANT AND EQUIPMENT
Freehold
land and
buildings
Plant,
equipment
and fittings
Vehicles and
sea vessels
Construction
in progressTotal
Cost$000$000$000$000$000
As at 1 July 20179,029 50,919 2,385 1,085 63,418
Additions715 4,744 137 7,573 13,169
Disposals(49) (4,456) (157) (5,724) (10,386)
As at 30 June 20179,695 51,207 2,365 2,934 66,201
Additions301 10,427 334 12,009 23,071
Disposals- (116) (97) (10,209) (10,422)
As at 30 June 20189,996 61,518 2,602 4,734 78,850
Depreciation and impairment
As at 1 July 20171,442 27,685 1,694 - 30,821
Depreciation250 3,748 125 - 4,123
Impairment- - - - -
Disposals(33) (4,285) (151) - (4,469)
As at 30 June 20171,659 27,148 1,668 - 30,475
Depreciation281 4,437 145 - 4,863
Impairment- - - - -
Disposals- (113) (97) - (210)
As at 30 June 20181,940 31,472 1,716 - 35,128
Net Book Value
As at 30 June 20178,036 24,059 697 2,934 35,726
As at 30 June 20188,056 30,046 886 4,734 43,722
Borrowing costs
There were no borrowing costs capitalised in 2018 (2017: $nil).
Impairment
There were no impairment losses recognised in 2018 (2017: $nil).
Finance Leases
The carrying value of property, plant and equipment held under finance leases as at 30 June 2018 was $310k (2017: $353k).
There were no additions of property, plant and equipment under finance leases in the 2018 year, $nil (2017: $136k). Leased assets
are pledged as security for the related finance lease liabilities.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

17. INTANGIBLES
Development
in progressTrademarks
Farm and
hatchery
licensesSoftwareGoodwillTotal
Cost$000$000$000$000$000$000
As at 1 July 20163 242 4,322 3,927 39,255 47, 749
Additions457 - 57 11 - 525
Disposals(452) - - (1,817) - (2,269)
Transferred to assets held for sale- - - - - -
As at 30 June 20178 242 4,379 2,121 39,255 46,005
Additions1,363 - 6 524 - 1,893
Disposals(541) - - - - (541)
Transferred from assets held for sale- - 308 - - 308
As at 30 June 2018830 242 4,693 2,645 39,255 47,665
Depreciation and impairment
As at 1 July 2016- 200 680 3,743 - 4,623
Amortisation- - 131 112 - 243
Disposals- - - (1,812) - (1,812)
Impairment- - - - - -
As at 30 June 2017- 200 811 2,043 - 3,054
Amortisation- - 141 101 - 242
Disposals- - - - - -
Impairment- - - - - -
As at 30 June 2018- 200 952 2,144 - 3,296
Net Book Value
As at 30 June 20178 42 3,568 78 39,255 42,951
As at 30 June 2018830 42 3,741 501 39,255 44,369
Goodwill
Goodwill resulted from the acquisition of The New Zealand King Salmon Co. Limited and is subject to annual impairment testing.
The Group performs an annual impairment test in June each year. The Group considers the relationship between its market capitalisation
and its book value, among other indicators, when reviewing for indicators of impairment.
The goodwill is notionally allocated to the New Zealand King Salmon Company’s operating segments as cash generating units.
The recoverable amounts of the cash generating units have been determined based on a value in use calculation using future estimated
cash flows, capital expenditure and changes in working capital over a five year period, plus an estimated terminal value. The forecasts
were based on actual results and expected future use of water space licences currently held, before fair value adjustments to biological
assets. The growth rate used to estimate the cash flows of the unit beyond the five-year period is 1.7% p.a. (2017: 3.3% p.a.). A discount
rate of 10.36% p.a. (2017: 11.1% p.a.) has been applied to discount future estimated cash flows to their present value. The net present
value of these future estimated cash flows exceeds the carrying amount of goodwill therefore the Company has concluded that there
is no impairment to the goodwill.
The calculation of value in use is most sensitive to changes in sales prices, exchange rates, sales volumes and fish performance.
Reasonably probable changes in the assumptions used would not cause the carrying value of goodwill to exceed the recoverable
amount for any of the cash generating units.
Trade marks
Trademarks are externally acquired and are carried at cost less impairment. They have indefinite useful lives and are assessed
annually for impairment. No impairment has been recognised during the period (2017: Nil).
18. NON-CURRENT ASSETS HELD FOR SALE
The Marlborough Salmon Farm Relocations Advisory Panel report (made publicly available in February 2018) did not recommend the
relocation of New Zealand King Salmon Crail Bay sites which were previously classified as Marine Licence Held for Sale. This has resulted
in the reintroduction of these licences to intangibles. In accordance with NZ IFRS 5 this has been at the amortised value that would have
been recognised if the asset had not been held for sale, $308K (FY17: $421K). The difference has been recognised as an Expense in the
Statement of Comprehensive Income.
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

19. INTEREST BEARING LOANS AND BORROWINGS
20182017
Current interest bearing loans and borrowings$000$000
Finance lease liabilities133 144
Secured bank loans- -
Other borrowings328 270
Total current interest bearing loans and borrowings461 414
Non-current interest bearing loans and borrowings
Finance lease liabilities- 124
Secured bank loans10,000 10,000
Other borrowings- -
Total non-current interest bearing loans and borrowings10,000 10,124
The Company has facilities with BNZ for $30m, secured by a general security deed over the assets of the Group. The expiry date of
facility A of $18m is 25 November 2020, and facility B of $12m expires on 18 October 2019. At balance date $10m of facility A was drawn
(June 2017: $10m).
20. TRADE AND OTHER PAYABLES
20182017
Trade and other payables$000$000
Trade payables11,170 11,318
Other payables2,754 1,964
Total trade and other payables13,924 13,282
21. EMPLOYEE BENEFITS
20182017
Current employee benefits$000$000
Bonuses1,193 903
Employee annual and sick leave benefits 2,022 1,956
Long service leave169 169
Total current employee benefits3,384 3,028
Non-current employee benefits
Long service leave473 451
Total non-current employee benefits473 451
Long service leave
Long service leave provisions are calculated based on the expected future payments to employees, discounted to their net present value.
NEW ZEALAND KING SALMON | ANNUAL REPORT FY18
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

22. COMMITMENTS AND CONTINGENCIES
Operating leases
The Group has entered into various operating lease arrangements with providers of premises, vehicles, water space and equipment.
Many of these arrangements are for specified terms with rights of renewal on expiry of the terms. The commitments under
non-cancellable operating leases take into account the renewal periods existing at balance date and are as follows:
20182017
Operating lease commitments as a lessee$000$000
Less than one year568 607
Between one and five years1,052 948
More than five years- 722
Total operating lease commitments as a lessee1,620 2,277
Finance leases
The Group has finance leases for various items of plant and machinery. The Group’s obligations under finance leases are secured
by the lessor’s title to the leased assets. Future minimum lease payments under finance leases, together with the present value of
the net minimum lease payments are as follows:
Minimum lease
payments
Present value
of payments
Finance lease commitments as at 30 June 2018$000$000
Less than one year133 133
Between one and five years- -
Total finance lease commitments as at 30 June 2018133 133
Finance lease commitments as at 30 June 2017
Less than one year143 125
Between one and five years124 108
Total finance lease commitments as at 30 June 2017267 233
Capital commitments
The Group has entered into agreements to purchase plant and equipment. As at 30 June 2018 the total commitment is $1,547k
(2017: $1,137k).
Contingencies
The Group has a contingent liability of $1,066k in respect of a fish transport contract requiring the Group to purchase three bulk
tankers (including modifications made in 2018), should the fish transport contract be terminated early. (2017: $995k).
Guarantees
The group has three guarantee facilities totalling $115k.
23. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group uses derivative financial
instruments to hedge certain risk exposures. Financial risk management is the responsibility of the Chief Financial Officer in accordance
with the Treasury Policy approved by the Board of Directors. In addition, the Group has a Treasury Committee, a sub-committee of the
Board that oversees financial risk management.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
This comprises of two key types of risks; currency and interest rate risk.
Currency risk
The Group has exposure to foreign exchange risk as a result of transactions denominated in foreign currency, arising primarily from
normal trading activities, but also from the net investment in the foreign subsidiary.
The Group manages its foreign currency risk by hedging its future exposure in respect of its import purchases and its export sales,
over a maximum of five years, when exposures are considered highly probable. The Group hedges this exposure with the use of forward
foreign exchange contracts and options. The notional contract amounts of forward foreign exchange contracts and options outstanding
at balance date were $47.5m on the import side (2017: $57.6m) and $126.2m on the export side (2017: $79.3m), for delivery over the next
five financial years, in line with anticipated payment dates.
The Group imports feed from Chile and Australia, purchases of which are in US and Australian dollars respectively. In order to protect
against exchange rate movements and to manage the inventory costing process, the Group has entered into forward exchange
contracts to purchase Australian, United States dollars and Japanese yen.
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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS