2018 Annual Report

ANNUAL
REPORT
SCOTT TECHNOLOGY LIMITED 2018

DIVIDEND
Final dividend: 6.0 cents per share, fully imputed.
Record date: 20 November 2018
Payment date: 27 November 2018
Dividend reinvestment plan applies to this payment for
shareholders who have elected to receive shares in lieu
of a cash dividend.
ANNUAL MEETING
Thursday 29 November 2018 at 3:00pm at Scott Technology
Limited, 10 Maces Rd, Bromley, Christchurch.
Proxies close 3:00pm, Tuesday, 27 November 2018
01
HIGHLIGHTS
02
FIVE YEAR TRENDS
03
GROWTH
04
O U R VA LU E S
05
CHAIRMAN & MANAGING DIRECTOR’S
COMMENTARY
08
50 YEARS’ SERVICE
09
LEADERSHIP
10
REGIONAL & SALES DIRECTORS
12
APPRENTICESHIP & GRADUATE
PROGRAMMES
13
CORPORATE GOVERNANCE
15
STATEMENT OF
CORPORATE GOVERNANCE
20
DIRECTORS' INTERESTS
24
DIRECTORS' RESPONSIBILITY STATEMENT
25
FINANCIAL REPORT
71
AUDITOR'S REPORT
75
ROBOTICS & TECHNOLOGY EDUCATION
76
DIRECTORY
REVENUECOUNTRIES
EMPLOYEES
EARNINGS
PER SHARE
TOTAL ANNUAL

DIVIDEND
ACQUISITIONS
An increase of 37%
on the prior year
An increase of 8%

on the prior year
Per share fully imputed
Products exported to
Across twelve countries
$181 . 8M
10cents
75
778
A LV E Y &
TRANSBOTICS
14.3cents
TABLE OF
CONTENTS
HIGHLIGHTS
PAGE 1

FIVE YEAR TRENDS
FINANCIAL
2014
$‘000s
2015
$‘000s
2016
$‘000s
2017
$‘000s
2018
$‘000s
Total revenue60,31672,298112,044132,631181,779
Net surplus before tax4,2318,10210,96514,91315,046
Cash flow from operating activities1219,98716,10813,407615
Net cash/(overdraft)(4,888)1,28534,24426,67012,473
Bank term loans8,42417,369--7,409
Total assets77,02684,445113,811126,181170,111
Shareholders' equity47,26550,61894,60097,156102,947
DIVIDENDS (CENTS PER SHARE)

Interim2.52.54.04.04.0
Final5.55.55.56.06.0
Total
8.08.09.510.010.0
EMPLOYEES (NUMBER)
New Zealand221194197215249
Australia1770808495
Asia5152332733
Americas3445504474
Europe114053327
Total
324362400423778
In early 2018 Scott announced the acquisition of
Europe based Alvey Group – specialists in palletising,
conveying and warehouse automation.
Alvey is an exciting acquisition for Scott with great
potential for both companies. Strategically this allows
Scott to build an end-to-end automation offering for
the production process from raw materials receipt through
to warehousing and final distribution.
Alvey Group specialises in tailor-made industrial
automation projects. Alvey systems help increase
efficiency in plants, where the handling of secondary
packaging, semifinished or finished products is involved.
Alvey has a wide portfolio of industrial services and
systems including conventional and robotic palletisers,
depalletisers, pallet conveyors, case conveyors, order
preparation systems, stacker cranes and other material
handling equipment, complemented by its warehouse
management software package, Maestro+.
Collaborative Palletiser
Scott and Alvey recently launched the
Collaborative Palletiser. This unique model

is designed for lower capacity palletising
and re-palletising
Automatic Guided Vehicle
11,800 kg capacity AGV Jumbo Roll
Transporter for the paper industry
Shortly after the acquisition of Alvey, Scott announced the
acquisition of Transbotics Corporation, a North Carolina based
Automatic Guided Vehicle (AGV) company in April 2018.
Since 1982, Transbotics Corporation has specialised in the
design, installation and support of AGVs, and Automated Guided
Carts (AGC’s), including custom engineered vehicles to provide
proven, reliable material handling solutions for production and
warehouse facilities.
The acquisition of Transbotics is consistent with Scott’s
acquisition strategy of accelerating market access, while
providing the skills and technologies faster and at a lower cost
than doing it ourselves. Recently Scott has engaged in projects
that have required the integration of AGV systems from third
parties. We will now be able to meet this need in house, while
removing the risk and cost associated with outsourcing. It
has also provided a strong platform to launch Scott’s existing
materials handling and logistics products into the North
American market.
GROWTH
REVENUE BY INDUSTRY
REVENUE BY GEOGRAPHY
Mining
18%
New Zealand
7%
Materials
Handling &
Logistics
15%
Australia
26%
Meat
Processing
24%25%
Asia
24%6%
Appliances
23%22%
Americas
23%32%
Industrial
Automation
20%
Europe
29%
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 2PAGE 3

CHAIRMAN & MANAGING
DIRECTOR'S COMMENTARY
STUART McLAUCHLAN & CHRIS HOPKINS
BUSINESS OVERVIEW
Scott’s strategy of growth through an expanded geographic
presence in major global markets is starting to deliver. Our global
business, through local representation, has achieved several
milestones. Record growth in staff, output and product offerings
has the Company well positioned to consolidate these gains.
During the year, Scott completed two exciting and complementary
acquisitions with Alvey in Europe and Transbotics in the USA. These
businesses strengthen our materials handling and logistics offering
and provide a stronger presence and diversity in key markets.
We have already seen growth opportunities within the acquired
businesses, driven by the wider reach of Scott and the ability to cross
sell between markets. By having capability in multiple industries and
by having people where our customers are, means we are “agile and
capable”, both key factors in winning and keeping customers. We
are now a truly global organisation with our European business now
the same size as our Australasian business, helping to deliver a much
larger proportion of our customers, resources and activities outside
New Zealand.
Our overall strategy is to build one team that delivers seamless
service to our customers in each of our target segments, at the same
time providing local manufacturing, installation, service and support
on the ground in each of our target geographies.
Scott’s diversification strategy has delivered major benefits
and competitive advantages through an exposure to a range
of industries in widespread geographies. Through this diverse
exposure we have been able to position the Company to take
advantage of economic and industry cycles.
Our core values continue to underpin everything we do, and
represent what we stand for as an organisation and sets direction
for the future. We emphasise our commitment to our values
throughout Scott, from our recruitment process through to our
day to day operation. Values awards for our team members were
introduced during the year, along with Scott ‘Safe Mate’ awards.
HEALTH & SAFETY
Health and Safety is an important focus for Scott and we look
for the same commitment from our customers. Although our
track record is good, we continue to strive for even better
standards, with continuous improvement of our health and well-
being outcomes for all our staff and stakeholders. We strive to
implement best practice across the group in all geographies, often
over and above the relevant country legislative requirements.
FINANCIAL PERFORMANCE
For the year ended 31 August 2018 the Company produced
another strong result, with total revenues up 37%, to $181.8m on
the $132.6m revenues achieved in the prior year. Of this revenue
growth, 14% was achieved by the business that we started the
year with and acquisitions added 23%. Operating earnings
before interest tax depreciation and amortisation (Operating
EBITDA) of $19.8m increased 21% from $16.4m in the prior year.
Operating EBITDA in 2018 excludes one-off due diligence and
acquisition costs of $0.5m that are now required by accounting
rules to be expensed, rather than included in the purchase price,
and in 2017 a $0.9m fair value gain on purchase of business.
Two acquisitions were successfully completed in the second
half of the year and this years’ result includes five months from
our Alvey operations in Europe and three months from our
Transbotics operations in the USA.
Sales into our traditional markets of the Appliances, Meat Processing
and Mining sectors all achieved double digit growth, with the
Appliance sector being the stand out performer, with a 56% increase
from the prior year. This reflects several large projects successfully
sold, worked on and completed collaboratively across our New
Zealand, German and Chinese operations.
At balance date the Company had $12.5m of cash in the bank,
with total shareholders’ funds of $102.9m, compared to $97.2m
in 2017. During the year cash was used to settle the acquisitions
of Alvey in Europe and Transbotics in the USA. Deferred
settlements on these purchases will see our surplus cash, held for
acquisitions, fully expended. With these acquisitions complete,
our focus is now firmly on integrating the businesses acquired,
driving synergies, operational benefits and efficiencies expected
from the combined business. The larger Scott Group is now well
positioned to deliver significant growth supported and driven by
our strategy.
Chris
Hopkins
Managing Director
Stuart
McLauchlan
Chairman &
Independent Director
Build
trust and
confidence
with our internal

and external
customers, in the
way we listen, engage
and respond to their needs.
CUSTOMER
FOCUS
Add value and
understand our
customers’
perspectives and
expectations.
Innovate, be

creative and think
lean and efficient.
Be accountable
for your actions,
be positive, flexible
and open minded.
Take care of the
company and our
customers like they
were one’s own.
Act with
honour in

everything
you do.
ATTITUDE
AND
INTEGRITY
Do what
you say you will,
respect, support
others and always give
your best.
All actions and
communications
support ONE Team,
ONE Company.
TEAMS
WHO
TRUST
Empower, share
information and be
accountable.
Persist. Have
strength and act
with urgency.
Continually evaluate
and measure
progress and take
action.
Take part and share
the celebration of
change and
success
.
RESULTS
MATTER
OUR VALUES
WHO WE ARE AND WHO
WE WANT ON OUR TEAM
PAGE 5
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 4

CUSTOMER
O P E R AT I N G
SYSTEM
INTERFACE
M AT E R I A L S
HANDLING
PROCESSING
PACKAGING &
PALLETISING
LOGISTICSSERVICE
bodies and the Governments of Australia and New Zealand.
With their help and Scott’s commitment we have established
Scott as a leader in this field and as a recognised developer of
smart automation. We have also commenced our journey into
digital platforms and now have a growing portfolio of products
and applications ranging from warehouse management software
through to machine visualisations and machine learning with
artificial intelligence.
CUSTOMER AND MARKET FOCUS
It is obvious to ourselves and our customers that there is an
unprecedented shortage of skilled people. Our response is to
establish advanced automation and robot training facilities with
programmes targeted at upskilling our own team members, as
well as customers.
In nearly all the markets we operate, we see common
challenges faced by our customers – declining productivity
growth, labour shortages, rising costs, and the need for safe
operations. Many customers recognise automation and
robotics as a viable solution to these challenges. The move
toward smart factories (Industry 4.0 or the Industrial Internet
of Things) and intelligent manufacturing drives the need
for more and more information about the products being
produced or the food being delivered to consumers. Scott
systems, combined with our digital platforms, can deliver not
only the products, but also the information required.
Across our target market sectors we continue to experience
strong enquiry levels from Appliance customers, particularly
in Europe where new projects have been undertaken for new
customers in associated metal forming industries in Germany.
DIVIDEND
The Directors have declared a final dividend of 6.0 cents
per share for the year ended 31 August 2018, payable on 27
November 2018.
With the interim dividend of 4.0 cents per share paid in April
2018, the total dividend for the year is 10.0 cents per share.
The final dividend will be fully imputed and the Dividend
Reinvestment Plan will apply.
RESEARCH AND DEVELOPMENT
During the year, we added many additional products and
technologies to our offering from commercialising past Research
and Development and through the acquisitions noted above.
To ensure Scott stays relevant and to capitalise on the many
opportunities yet to be exploited, we will maintain a strong
commitment to Research and Development. Scott’s total gross
Research and Development investment exceeded $11.0m in
the current year, representing 6% of our total revenues. Our
development focuses on extending our capability and range of
technologies. In addition to developing new applications across
all key industries served, we have commenced significant projects
aimed at transferring our technology and capability from lamb
deboning to other species. Scott currently has two significant
development projects underway in beef, one in pork and two
in poultry. Other developments are underway in automated
palletising, mining technologies and automatic guided vehicles
(AGV ’s).
Where possible, we seek technical and financial support for our
Research and Development activities from customers, industry
In the Mining sector there is steady demand for standard
products and ongoing demand for system solutions for both
automated laboratories and mine site operations.
Bladestop bandsaw sales met our current year targets and,
combined with ongoing demand for lamb boning automation
solutions in New Zealand and Australia, helped deliver record
sales in our Meat Processing sector.
During the year, Scott took the ‘RobotWorx’ model from the USA
and launched RobotWorx in Australia. This was facilitated by the
opportunity to purchase a quantity of robots disposed of as part
of the shutdown of automotive manufacturing in Australia. These
robots are in the process of being refurbished and sold back into
industry. The RobotWorx model offers the advantage of lower
price and immediate availability.
PEOPLE
Scott’s investment in its people includes leadership training
targeted at further developing front line management to ensure
we have the skills required for future growth. This also allows us
to strengthen our ability to promote internally through effective
succession planning processes.
Scott’s leadership team has been further strengthened through
the acquisitions, as well as through promotions and external
appointments. Having the right people is key to our business.
Over the past two years, in an effort to improve our work
environment, we have relocated our business into new larger
premises in Auckland, Wellington, Sydney and Melbourne. We are
currently planning relocations in Perth and Charlotte and a building
expansion is underway in Dunedin that will double the size of this
facilit y.
THE YEAR AHEAD (OUTLOOK)
Forward project work is at record levels and supports our
objective of strong growth in the year ahead. Progressively
commercialising our Research and Development and expanding
our after sales service, spare parts and maintenance will ensure
our growth is sustainable. We are looking forward to a full
twelve months of operation of our acquisitions and achieving
productivity increases and the synergy benefits that comes from
embedding the acquired businesses into the Scott Group. In
addition, good people are our greatest asset, which is why we will
increase our development and training programmes to build skills
and to create the opportunity for growth and progression.
The Company’s diversification strategy has been delivered, and
the acquisition strategy is well advanced. With the focus shifting
towards operational excellence and delivery, the Directors look
forward to continuing the growth path set over the past two years.
On behalf of the Company and our colleagues, we thank the
Board for their valuable support and guidance throughout the
year. We also thank the people at Scott for their commitment
to, and efforts towards, achieving our mission and upholding the
Company’s values. Finally we thank all of our shareholders and
other stakeholders for their continuing support which has helped
place Scott in the strong position it is in today.
Our acquisition strategy over the last 10 years has provided us with customer and industry diversification:
and critical mass in key markets:
More importantly, our acquisition strategy has now given us the ability to offer complete end to end
automation solutions to our customers across all industries:
APPLIANCES
& METAL
FORMING
MINING
MEAT
PROCESSING
M AT E R I A L S
HANDLING
& LOGISTICS
INDUSTRIAL
AUTOMATION
& ROBOTICS
Oven Chassis assembly line built in Christchurch
CHAIRMAN & MANAGING DIRECTOR'S COMMENTARY (cont.)
Chris C Hopkins
Managing Director
Stuart J McLauchlan
Chairman
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 6PAGE 7
NEW ZEALAND
249 STAFF
CHINA
3 3 S TA F F
AUSTRALIA
95 S TA F F
USA
74 S TA F F
EUROPE
3 27 S TA F F

50 YEARS’ SERVICE
ROBERT (BOB) HYSLOP
This year Scott had the pleasure of celebrating the long service
contribution of Robert (Bob) Hyslop.
Bob (73) retired from Scott in September after five decades of
committed service to the company which was acknowledged
at a function in Dunedin.
Bob, whose father was also an engineer, showed an interest in
engineering from an early age.
He previously worked for seven years at his father’s business,
Hyslop & Foley, completing his apprenticeship as a Fitter
Turner. While still working, he studied hard as an apprentice
and passed his Trade Certificate, Advanced Trade Certificate
and NZCE (Mech) & NZCE (Prod).
Bob wanted to earn more money than his father was prepared
to pay for Bob's qualifications, so he applied for several design
engineer jobs that were being advertised in the paper at the
time. His ambition was to earn 20 pound ($40) a week. He was
successful with three of his applications and had to choose
between A & T Burt Ltd, Bonaire Ltd, and J & AP Scott Ltd.
Bob chose to join Scott, which was then known as J&AP Scott,
at 23 years old, as a design engineer in the Dunedin drawing
office. He went on to become the Chief Design Engineer in
Dunedin for 35 years.
Following on from being Chief Design Engineer, Bob worked in
project management for five years, before moving into his most
recent logistics and procurement role.
During his time with the company Bob has witnessed a lot of
change in engineering including the introduction of computers,
programmable logic controllers, CNC and CAD. In recent
years, Bob has seen robotics become "another whole facet" in
engineering terms for the company.
We are sure Bob will have no problem filling in his retirement
days. Bob’s wife Jenny, three children and nine grandchildren
will no doubt be seeing a lot more of him. He also plans on
continuing his lifelong hobby of music.
Above: Carrol Street staff
Christmas function in 1973
Left: Bob in 1984 as the
Chief Design Engineer for the
Dunedin operation
Chris is responsible for the overall
day to day operation of Scott and
implementation of strategy and business
plans. He is the main point of contact for
media and analysts and regularly visits key
customers to build relationships and assist
the sales and marketing process. Chris
also leads Scott's search for potential
acquisitions, joint ventures and strategic
alliances that will help grow Scott in the
future.
Scott senior management team at a recent conference in New Zealand.
Kate is responsible for the human resource
function. Her responsibility includes
advising and supporting leaders with
respect to strategic planning; project
implementation; and the introduction and
management of best practice HR policies
and procedures. Kate is an experienced
senior human resource practitioner who
has worked in public, private and global
organisations for over 25 years.
Barbara joined Scott in 2013 and is
responsible for innovation in the Company.
She manages new areas of growth as well
as research and development, drawing from
years of experience in science management
and technology commercialisation.
Having trained as a materials scientist,
Barbara's background now spans the entire
commercialisation process from end to end.
She has consulted for the infrastructure and
engineering industries and is an experienced
team builder.
Greg joined the company in 2008 and
is responsible for the Group’s finances,
including cash management, financial
reporting (both internal and to the NZ
Stock Exchange), taxation, insurances,
budgeting, internal audit and controls, and
foreign exchange hedging. Greg’s role
also involves undertaking due diligence on
any businesses that Scott may be looking
to acquire and he attends the Scott Board
meetings in the role of Company Secretary.
Richard joined Scott in May 2018 as Chief
Operating Officer. Richard has broad
experience in New Zealand, Australia and
the United States leading organisations
who manufacture solutions for electrical
and mechanical engineering applications,
telecommunications and data centre power
infrastructure.
Casey joined the company in 2014 and
manages the marketing function for Scott.
Casey is responsible for the delivery of
the overall marketing and communication
strategy for the Scott Group and all
subsidiary companies and brands. Casey
has over 12 years’ experience working
in marketing roles in both the public
and private sector for local and global
organisations.
Chris
Hopkins
Managing Director
& CEO
Kate
Logan
Human Resources
Manager
Barbra
Webster
Director - Group
R&D Strategy
Greg
Chiles
Chief Financial
Officer
Richard
Jenman
Chief Operating
Officer
Casey
Jenkins
Director - Global
Marketing
LEADERSHIP
PAGE 9
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 8

Cathy
Zhang
Qingdao, China
Renaud
Vanrysselberghe
Deerlijk, Belgium
Maarten
Van Leeuwen
Podivin,
Czech Republic
Tony Joyce
Charlotte, USA
REGIONAL & SALES
DIRECTORS
Ken Snowling
Kürnbach, Germany
Andrew
Arnold
Dunedin,
New Zealand
Troy
Krogh
Sydney, Australia
Steve
Russell
Melbourne,
Australia
Frederic
Hermier
Marseille, France
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 10PAGE 11

Appointed Director 2016
Brisbane, Australia
Brent Eastwood was appointed Chief
Executive Officer of JBS Australia in
September 2012. Prior to this he was
Chief Operating Officer for JBS Australia
(Northern). Brent Eastwood has extensive
international experience in business
leadership, and the sales and marketing of
animal protein. He has worked in executive
roles within JBS USA including Head of JBS
Trading Worldwide, Vice-President Beef
Sales USA and President of JBS Carriers
USA. His prior experience in Australia
included time with JBS’ predecessor
company, Australia Meat Holdings, as
General Manager of AMH Trading Division
for five years, eight years in meat trading
with the DR Johnson Group and three years
as CEO of the ConAgra Trade Group in
Sydney. Brent Eastwood entered the meat
industry in New Zealand in 1984 and spent
five years in management roles including
Production, Quality Assurance, Cold
Storage, Operations and Payroll.
Appointed Director 2016
Greeley, Colorado, USA
Andre Nogueira is President and Chief
Executive Officer of JBS USA, the North
American and Australian subsidiary of
JBS SA, and the second largest global food
company, being appointed on 1 January
2013. JBS USA also holds a majority interest
in Pilgrim’s Pride, the second largest poultry
company in the U.S. Andre Nogueira began
his career with JBS in 2007, serving as Chief
Financial Officer through to 2011. He then
served as CEO of JBS Australia throughout
2012. Prior to working for JBS, Andre
Nogueira worked for Banco do Brasil in
corporate banking positions in the U.S. and
Brazil. Andre Nogueira currently serves
on the Pilgrim’s Pride Corporation Board
of Directors, the North American Meat
Institute (NAMI) Board of Directors, the
NAMI Executive Committee and Rabobank’s
North American Agribusiness Advisory
Board. He has an MBA from Funcado Don
Cabral, a Master’s in Economics from Brasilia
University, a B.A. in Economics from Federal
Fluminese University, and has completed
the Chicago Booth Advanced Management
Program.
Andre
Nogueira
Director
Brent
Eastwood
Director
BCom, FCA(PP), CF Inst D
Appointed Director 2007
Dunedin, New Zealand
Stuart McLauchlan is Chairman of AD
Instruments Group Ltd, UDC Finance Ltd
and University of Otago Foundation Studies
Ltd, and a Director of Ngai Tahu Tourism
Ltd, Scenic Hotel Group, Argosy Property
Ltd and several other companies. He is also
Chairman of the NZ Sports Hall of Fame and
the Otago Community Hospice.
BCom, CA, CF Inst D
Appointed Director 2001
Dunedin, New Zealand
Chris Hopkins joined the Donaghys Group,
which included Scott Technology Ltd, in
1994 as Corporate Services Manager.
In 1996, he assumed responsibility for
finance and administration for Scott
Technology Ltd and oversaw the transition
to a public listed company in 1997. He was
appointed a Director of Scott Technology
Ltd in August 2001 and Managing
Director in 2006. Chris Hopkins is also an
independent Director of Oakwood Group
Limited.
Stuart
McLauchlan
Chairman &
Independent
Director
Chris
Hopkins
Managing Director
& CEO
BOARD OF DIRECTORS
CORPORATE GOVERNANCE
APPRENTICESHIP &
GRADUATE PROGRAMMES
Scott offers engineering apprenticeship and graduate roles
annually. We employ mechanical, mechatronic and controls
engineers to develop and shape the future of our business and
the next generation of engineers.
Scott liaises with secondary schools and with polytechnics to
gain an understanding of their course material, to endeavour
to align it with the Company’s requirements. This ensures a
consistent sound and practical learning experience for our
apprentices on the job.
We provide a comprehensive training programme for our
graduates to develop in all of the key skill areas. In addition,
all graduates will have the opportunity to spend time in our
workshop to ensure practical aligns with the theoretical.
Following the successful completion of our graduate
programme, Scott provides the opportunity to specialise in
different engineering disciplines and industries.
As well as our comprehensive graduate programs, Scott also
offers apprenticeship programmes.
Apprentices are important to the overall workshop
development strategy and are employed in the areas of
machining, tool making and electrical.
At any one time, there will be 15-20 machining and tool
making apprentices working their way through their training
programme. Scott has trained unit standard assessors in-
house and this is supplemented with external assistance.
Apprentices spend time in many aspects of the business
including fabrication, fitting, machine shop surface grinding,
manual milling, manual turning through to CNC milling and
turning, and commissioning.
Heather Robertson – Electrical Apprentice
I WANTED TO WORK AT SCOTT BECAUSE THEY ARE A LEADING
COMPANY IN THE TECHNOLOGY INDUSTRY. THERE ARE ALWAYS NEW
PROJECTS TO WORK ON WHICH MEANS THERE ARE LOTS OF OPPORTUNITIES
TO LEARN NEW SKILLS. I ALSO GET THE OPPORTUNITY TO BE INVOLVED IN
COMMUNITY EVENTS SUCH AS ROBOCUP”
PAGE 13
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 12

Appointed Director 2016
Brisbane, Australia
Edison Alvares has over 20 years experience
in major companies within Brazil and on a
global scale. He holds an Economics degree
and Business Administration degree,
and concluded his Executive Master of
Business Administration (EMBA) in 2015
at Queensland University of Technology
(QUT). His area of expertise is Finance
and Controlling. For over ten years
Edison Alvares has led the Finance and
Administration team of JBS Australia,
from the first stages of JBS’ ownership
and expansion in 2007, through to the
consolidated business today of over 13,000
employees and revenue in excess of AU$7b.
Prior to joining JBS in 2005 in Brazil, he was
employed in finance and controlling roles
within the telecommunications and capital
goods sectors.
Edison
Alvares
Director
Board Health & Safety
Committee
Audit Committee Remuneration
Committee
Eligible to
Attend
Attended Eligible to
Attend
Attended Eligible to
Attend
Attended Eligible to
Attend
Attended
Stuart McLauchlan66663311
John Thorman22222211
Chris Hopkins666633--
Brent Eastwood636331--
Edison Alvares6565----
Andre Nogueira/ John
Berry (as alternate)
6666----
Mark Waller (retired)333322--
Chris Staynes (retired)222211--
This table shows attendances at the Board and committee meetings during the year ended 31 August 2018.
CORPORATE GOVERNANCE (cont.)
BCom, CA, MInst.D
Appointed Director 2018
Auckland, New Zealand
John Thorman is the Managing Director of
TMF Group New Zealand and a director
of a number of other overseas owned
New Zealand businesses. John Thorman
has had a successful career with leading
global professional services firms working
in Europe and New Zealand as well as
holding the position of CFO of an internet
start-up. John Thorman has considerable
experience in assisting companies expand
into new markets, acquire and integrate
businesses and maintain compliance
globally.
John
Thorman
Independant
Director
Alternate Director for Andre Nogueira,
Brent Eastwood & Edison Alvares.
Appointed Alternate Director 2017
Brisbane, Australia
John Berry is a Director and Head of
Corporate and Regulatory Affairs, of JBS
Australia Pty Limited. John Berry has been
involved in the Australian Meat Industry
for over 18 years, and has responsibility
for industry, government and corporate
relations activities within the JBS Australia
business. He has also had responsibility
for mergers, legals and environmental
operations. He possesses a Bachelor of
Business Finance and Masters of Business
Administration.
John
Berry
Alternate
Director
ATTENDANCE
Scott Technology Limited (Scott) believes in the benefit of
good corporate governance and the value it provides for our
shareholders, customers, staff and other stakeholders.
The Company’s approach to applying the recommendations
outlined in the NZX Corporate Governance Code (the Code) are
set out below. This section is set out in the order of the principles
detailed in the Code and explains how Scott is applying the
Code’s recommendations.
Scott’s policy documents referred to in this section are at:
www.scottautomation.com/investor-relations/governance
The Company has a whistleblower and protected disclosure
policy. The purpose of the policy is to protect an employee who
wishes to raise concerns of serious wrongdoing from reprisals or
victimisation for reporting their concerns.
FINANCIAL PRODUCT TRADING POLICY
Scott supports the integrity of New Zealand’s financial markets.
This integrity is maintained, in part, through the insider trading
laws that apply in New Zealand. Scott’s financial product trading
policy outlines how those laws apply, as well as the rules that
Scott has put in place so that those laws are followed.
Directors, certain employees and their related parties, must seek
approval from the Company to trade in the Company’s shares.
Trading is prohibited during the following “black-out” periods:
• 30 days prior to Scott’s half year balance date, until the first
trading day after the half year results are released to NZX;
• 30 days prior to Scott’s year end balance date, until the first
trading day after the full year released to NZX; and
• 30 days prior to release of a prospectus for a general public
offer of the same class of restricted securities.
The Directors’ shareholdings and all trading of shares during the
year by the Directors is disclosed in the section of the Annual
Report headed Directors’ Interests. A Director or senior manager
is obliged to advise the NZX promptly if they trade in the
Company’s shares.
STATEMENT OF
CORPORATE GOVERNANCE
PRINCIPLE 1 – CODE OF
ETHICAL BEHAVIOUR
“Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards
being followed throughout the organisation.”
CODE OF CONDUCT
As part of the Board’s commitment to the highest standards of
behaviour and accountability, the Company has adopted a Code of
Conduct to guide Directors, senior management and employees in
carrying out their duties and responsibilities.
Scott’s Code of Conduct is the framework of standards by which
the Directors, senior management and employees are expected to
conduct their professional lives. It is intended to support decision-
making that is consistent with Scott's values, business goals and
legal and policy obligations, rather than to prescribe an exhaustive
list of acceptable and non-acceptable behaviour.
The Board approves the Code of Conduct, which covers matters
such as:
• Interacting with customers, employees and suppliers.
• Accepting gifts or other benefits.
• Dealing with conflicts of interest.
• Protecting Company assets.
• Protecting Company intellectual property.
• Complying with laws and policies.
• Maintaining confidentiality.
• Reporting breaches.
New employees receive a copy of the Code of Conduct, which
is accessible to all staff on the Scott intranet and the Company
website.
PRINCIPLE 2 – BOARD
COMPOSITION AND
PERFORMANCE
“To ensure an effective Board, there should be
a balance of independence, skills, knowledge,
experience and perspectives.”
THE BOARD OF DIRECTORS
The Directors are responsible for the corporate governance
practices of the Company. The practices adopted by the Board
are prescribed in a Charter that sets out the protocols for how
the Board operates.
The Charter complies with the relevant recommendations in the
NZX Corporate Governance Code and is reviewed annually.
The Board’s primary role is to effectively represent and promote
the interests of shareholders with a view to adding long-term
value to the Company’s shares.
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 14PAGE 15

The Board carries out its responsibilities according to the
following mandate:
• The Board should consist of a majority of Non-Executive
Directors.
• At least a third of the Directors should be independent
of management and free from any business or other
relationship or circumstance that could materially interfere
with the exercise of a Director’s independent judgement.
• The Board’s Chair should be a Non-Executive Director (and
not the Chief Executive).
• Directors should possess a broad range of skills, qualifications
and experience and remain up to date on how best to perform
their duties as Directors.
• Management must provide information of sufficient content,
quality and timeliness as the Board considers necessary to
allow the Board to effectively discharge its duties.
• The effectiveness and performance of the Board and its
individual members should be re-evaluated annually.
The Board currently compromises two Non-Executive
Independent Directors (Stuart McLauchlan (Chair) and John
Thorman), three Directors representing JBS Australia Pty Limited
(Andre Nogueira, Brent Eastwood and Edison Alvares) who are
not Independent Directors, and one Executive Director (Chris
Hopkins) who is not an Independent Director. John Berry is an
Alternate Director for Andre Nogueira, Brent Eastwood and
Edison Alvares and is not an Independent Director.
More information on the Directors, including their interests,
qualifications and shareholdings, is provided in the Directors’ Interests
section the Annual Report and is on the Company’s website.
Day-to-day management of Scott is delegated to the CEO and the
senior management team.
THE BOARD’S RESPONSIBILITIES
The primary responsibilities of the Board are to:
• Ensure the Company’s goals are clearly established and that
strategies are in place for achieving them.
• Establish policies for strengthening the performance of the
Company and ensure that management is proactively seeking
to build the business.
• Monitor the performance of management.
• Appoint the CEO and set the terms of the CEO’s
employment agreement.
• Decide on what steps are needed to protect the Company’s
financial position and its ability to meet its debts and other
obligations when they fall due, and ensure that such steps are
taken.
• Ensure the Company’s financial statements are true and fair
and conform with the law.
• Ensure the Company adheres to high standards of ethics and
corporate behaviour.
• Ensure the Company has appropriate risk management /
regulatory compliance policies in place.
On appointment to the Board by the shareholders, new Directors
sign a written agreement that covers the terms of their appointment.
Every year, the Board, including sub-committees, critically evaluate
their own performance, and their own processes and procedures,
including sub committees. Through this process, the Board identifies
any training opportunities for the individual Directors to ensure they
have relevant and up-to-date skills for performing their role.
In line with NZX Main Board Listing Rules, one third of the
Directors must retire by rotation each year. Scott additionally
requires all Executive Directors (including the Managing Director)
to be included in the rotation process. These Directors may offer
themselves for re-election.
The Governance, Remuneration and Nominations Committee
undertakes the process for nominating and appointing Directors
on behalf of the Board and makes appropriate recommendations to
the Board. The Committee’s terms of reference include the process
for nominating and appointing Directors.
INDEPENDENT PROFESSIONAL ADVICE
With the prior approval of the Chair, each Director has the right
to seek independent legal and other professional advice at the
Company’s expense about any aspect of the Company’s operations
or undertakings to assist in fulfilling their duties and responsibilities
as Directors.
DIVERSITY
The Board and management ensure that all eligible people get an
equal opportunity to demonstrate that they have the right skills and
experience for a role and this is the basis of our Diversity Policy.
Scott embraces the uniqueness in all of our people and welcomes
diversity. We encourage all of our employees to listen to each
other and to our customers and suppliers and to work to meet the
needs of individual people.
Our approach to diversity is to continually develop a work
environment that supports equality and inclusion, regardless of
difference.
The Board sets measurable objectives for assessing performance
against Scott's diversity policy and will assess progress annually.
The Board will also ensure Scott’s objectives are appropriate for
promoting diversity and inclusion.
Through this policy, we have achieved the following gender diversity:
• Of the six members of the senior executive team, three are
female and three are male (2017: two female and eight male).
The senior executive team includes the CEO and his direct
reports. *
• Of the 778 Scott employees, 94 are female and 684 are male.
* In July 2018, the senior management team was restructured, following
the Alvey and Transbotics acquisitions, resulting in the creation of the
senior executive team. At 30 June 2018, the senior management team
consisted of 18 members; four females and fourteen males.
STATEMENT OF CORPORATE GOVERNANCE (cont.)
PRINCIPLE 3 – BOARD
COMMITTEES
“The Board should use Committees where this will
enhance its effectiveness in key areas, while still
retaining Board responsibility.”
of these activities on staff, contractors and visitors to Scott. The
Health & Safety Committee consists of the full Board with Stuart
McLauchlan as its Chair.
The Committee recognises the critical role health and safety forms
as part of its day-to-day operations and wants to ensure a safety-
first culture across all business operations.
The Committee’s responsibilities include:
• Considering and approving health and safety strategies,
policies and procedures.
• Setting health and safety indicators in consultation with
management.
• Ensuring the Board and Directors are properly and
regularly informed on matters relating to health and safety
governance, performance and compliance.
• Conducting regular assessments and audits of the risk profile
and control processes.
GOVERNANCE, REMUNERATION AND NOMINATIONS
COMMITTEE
The Governance, Remuneration and Nominations Committee
assists the Board in establishing remuneration policies
and practices for the Company in discharging the Board’s
responsibilities for remunerations. The Committee also undertakes
the process for nominating and appointing Directors on behalf of
the Board, and makes appropriate recommendations to the Board.
The Committee’s terms of reference include the process for
nominating and appointing Directors.
As at 31 August 2018 the Committee consists of Stuart
McLauchlan (Chair) and John Thorman, the Independent
Directors. Committee members must be Non-Executive
Directors.
Due to a conflict of interest in being the majority shareholder, JBS
Australia Pty Ltd and their Board representatives abstain from
voting on the appointment of Independent Directors.
Management attends Committee meetings only at the invitation of
the Committee.
The Committee’s objectives are to:
• Assist the Board in establishing remuneration policies and
practices for the Company.
• Assist in discharging the Board’s responsibilities for
reviewing the CEO and the Directors’ remuneration.
• Advise and assist the CEO in setting remuneration for the
senior management team.
• Regularly review and recommend changes to the
composition of the Board and identify and recommend
individuals for nomination as members of the Board and its
Committees.
The Directors’ and senior management’s remuneration are set out
in the Directors’ Interests section of the Annual Report, and in
note F3 of the Financial Statements.
TREASURY COMMITTEE
The Treasury Committee overviews the Company’s treasury
practices, including foreign exchange cover, short term cash
investments and borrowings. The Treasury Committee comprises
Stuart McLauchlan (Chair), Chris Hopkins and Edison Alvares.
BOARD COMMITTEES
The Board has four standing committees: Audit and Financial
Risk; Health and Safety; Governance, Remuneration and
Nominations; and Treasury; A separate Independent Directors’
Committee meets as needed.
Each Committee operates under specific terms of reference
approved by the Board. Any recommendations they make are
recommendations to the Board.
The terms of reference for each Committee are reviewed annually.
AUDIT AND FINANCIAL RISK COMMITTEE
The objective of the Audit and Financial Risk Committee (AFRC)
is to assist the Board in discharging its responsibilities for financial
reporting and risk and financial/secretarial compliance.
The Committee makes recommendations to the Board on
appointing external auditors to ensure that they are independent
and to ensure that the Company provides for 5-yearly rotation of
the lead audit partner.
The Committee provides a forum for the effective communication
between the Board and external auditors. The Committee’s
responsibilities include:
• Reviewing the appointment of the external auditor, the
annual audit plan and addressing any recommendations from
the audit.
• Reviewing any financial information and dividend proposals
to be issued to the public.
• Ensuring that appropriate financial systems and internal
controls are in place.
The AFRC must consist of at least three Directors who must
wherever possible be Independent Non-Executive Directors.
The Board Chair must also not be the Chair of the AFRC. The
Chair of the AFRC must be an Independent Director. The current
members are John Thorman (Chair), Stuart McLauchlan and Brent
Eastwood. Stuart McLauchlan is a Fellow and John Thorman a
Member of Chartered Accountants Australia New Zealand.
The Committee generally invites the CEO, Chief Financial
Officer and the external auditors to attend AFRC meetings as
appropriate. The Committee also meets and receives regular
reports from the external auditors without management present,
concerning any matters which arise in connection with the
performance of their role.
HEALTH AND SAFETY COMMITTEE
The Health and Safety Committee assists the Board in
discharging its responsibilities in overseeing and reviewing health
and safety matters arising out of Scott’s activities and the impact
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 16PAGE 17

INDEPENDENT DIRECTORS’ COMMITTEE
The Independent Directors’ Committee is convened as needed and
consists of Independent Non-Executive Directors who address
significant conflicts of interest and any other matters referred by
the Board.
Scott has protocols that set out the procedures to be followed
if there is a takeover offer. These procedures are set out in the
Takeover Response Protocols that have been adopted by the Board.
PRINCIPLE 5 – REMUNERATION
“The remuneration of Directors and executives
should be transparent, fair and reasonable.”
STATEMENT OF CORPORATE GOVERNANCE (cont.)
PRINCIPLE 6 – RISK
MANAGEMENT
“Directors should have a sound understanding of the
material risks faced by the issuer and how to manage
them. The Board should regularly verify that the
issuer has appropriate processes that identify and
manage potential and material risks.”
PRINCIPLE 8 – SHAREHOLDER
RIGHTS AND RELATIONS
“The Board should respect the rights of shareholders
and foster constructive relationships with
shareholders that encourage them to engage with
the issuer.”
PRINCIPLE 4 – REPORTING
AND DISCLOSURE
“The Board should demand integrity in financial and
non-financial reporting, and in the timeliness and
balance of corporate disclosures.”
REPORTING AND DISCLOSURE
The Board focusses on providing accurate, adequate and timely
information both to existing shareholders and to the market
generally. This enables all investors to make informed decisions
about the Company.
Scott, as a company listed on the NZX Main Board, has an
obligation to comply with the disclosure requirements under
the NZX Main Board Listing Rules. Scott recognises that these
requirements aim to provide equal access for all investors or
potential investors to material price-sensitive information
concerning issuers or their financial products. This, in turn,
promotes confidence in the market.
Scott’s Continuous Disclosure Policy outlines the obligations of
Scott and relevant Scott personnel in satisfying the disclosure
requirements. It also covers other related matters including
external communications by Scott.
Scott publishes its key governance and other relevant documents
in the investor centre of the Company’s website at
scottautomation.com/investor-centre/governance.
All significant announcements made to the NZX and reports issued
are also posted on the Company’s website.
The Governance, Remuneration and Nominations Committee
makes recommendations to the Board on remuneration matters in
keeping with the Committee’s terms of reference.
The Committee is also responsible for approving the
remuneration of the CEO.
The total Director remuneration pool is approved by shareholders
at the annual meeting as required under the NZX Main Board
Listing Rules. The Board is responsible for the setting of individual
Directors’ fees in accordance with the permitted pool.
Details of the Directors’ remuneration for the year are in the
Directors’ Interests section of the Annual Report.
Scott has in place a remuneration policy that outlines the key
principles that influence Scott’s remuneration practices.
The remuneration of the CEO and the senior management team
is determined by the significance of their role and industry
benchmarking. The total remuneration is made up of fixed
remuneration and short-term cash-based incentives, plus long
term incentives. The CEO and some members of the senior
management team are members of the senior management
phantom share scheme (see note C9 of the financial statements).
The short-term incentives are at-risk payments that reward
performance. They are designed to motivate and incentivise
senior staff in the delivery of performance over a 2-year
operating cycle. The amount payable is set annually. The
payment of the short-term incentive depends on achieving
certain results and outcomes. Performance over the financial
year is measured against ‘stretch’ performance targets. The
performance metrics differ with each role.
Every year, the Committee reviews the levels and
appropriateness of these incentives and weighting.
The senior management phantom share scheme is a long-term
incentive linked to the Company’s share price which aligns the
long-term interests of both senior management and shareholders,
as well as acting as a retention incentive to senior management.
EMPLOYEES’ REMUNERATION
The Annual Report details the CEO's remuneration and Scott
employees who have earned over $100,000 during the year. The
remuneration includes salary, benefits, incentives, both short and
long term, and employer’s contribution to superannuation.
INFORMATION FOR SHAREHOLDERS
The Company seeks to ensure that investors understand its
activities by communicating effectively with them and providing
access to clear and balanced information.
The Company website www.scottautomation.com provides an
overview of the business and information about Scott. This
information includes details of operational sites, latest news,
investor information, key corporate governance information
and copies of significant NZX announcements. The website
also provides profiles of the Directors and the senior
management team.
Copies of previous annual reports, financial statements and
results presentations are available on the website.
Shareholders have the right to vote on major decisions of
the Company in accordance with requirements set out in the
Companies Act 1993 and the NZX Main Board Listing Rules.
COMMUNICATING WITH SHAREHOLDERS
Scott’s CEO and Chief Financial Officer develop strong
relationships with the investor community and ensure our
shareholders are kept informed.
The Company sends the notices of the Annual Meeting to
shareholders and publishes it on the Company website at least
20 business days before the meeting each year.
The Board is responsible for overseeing the Company’s system of
internal controls to manage key risks and have overall responsibility
for managing risk.
The Company maintains a group risk register to identify and
manage risk. Specific health and safety risk registers for each site
are separately maintained given the significance of this area to the
business. The senior executive team is responsible for maintaining
the risk registers.
Through the AFRC, the Board considers the recommendations
and advice of external auditors, and ensures that those
recommendations are investigated and, where considered
necessary, appropriate action is taken.
The Board recognises the critical role of Cyber Security and the
importance of having appropriate systems and processes in place
to protect the Company’s data, including financial, employee,
engineering, supplier and customer data.
PRINCIPLE 7 – AUDITORS
“The Board should ensure the quality and
independence of the external audit process:”
The Audit and Financial Risk Committee makes recommendations
to the Board on the appointment of the external auditor as set
out in the terms of reference. The Committee also monitors
the independence and effectiveness of the external auditor and
reviews and approves any non-audit services performed by the
external auditor.
The Committee regularly meets with the external auditor to
approve the terms of engagement, audit partner rotation
(at least every 5 years), the and audit fee, and to review
and provide feedback on the annual audit plan. Every year,
a comprehensive review and formal assessment of the
independence and effectiveness of the external auditor
is undertaken. The assessment uses an external auditors’
assessment tool, which is internationally recognised and
endorsed by the Independent Directors Council. The
Committee routinely has time with Scott’s external auditor,
Deloitte, without management present. Deloitte attends the
Company’s Annual Meeting.
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 18PAGE 19

FOR THE YEAR ENDED 31 AUGUST 2018
DIRECTORS’ SHAREHOLDING AS AT 31 AUGUST 2018
During the year ended 31 August 2018, the total remuneration and other benefits attributed to the Directors of the Company
were as follows:
Beneficially OwnedHeld by
Associated Persons
Non-Beneficially
Held *** (Jointly)
201820172018201720182017
C C Hopkins****55,96454, 5265,612,2975 , 6 0 9, 4101 7, 7 7 91 7, 7 7 9
S J McLauchlan384,994375,096--1 7, 7 7 91 7, 7 7 9
J M Thorman------
M B Waller*n/a90,562----
C J Staynes**n/a228,375----
A Nogueira----38,476,59237,415,058
H B Eastwood----38,476,59237,415,058
E Alvares----38,476,59237,415,058
J K Berry (alternate)---38,476,59237,415,058
Total
440,958748,5595,612,2975,609,410
* Retired 30 April 2018.
** Retired 30 November 2017.
*** The non-beneficially held shares that are held jointly by C C Hopkins and S J McLauchlan are in their capacity as trustees for the Scott
Technology Employee Share Purchase Scheme. The non-beneficially held shares that are jointly attributed to A Nogueira, H B Eastwood, E
Alvares and J K Berry are in their capacity as Directors representing JBS Australia Pty Limited.
**** 5,500,000 associated persons shares are in C C Hopkins’ capacity as a Director of Oakwood Group Limited.
DIRECTORS’ SHARE DEALINGS
The details of disclosures by Directors of acquisitions or disposals of shares Directors held a relevant interest in were:
Number of Shares
Acquired/(Disposed)Date
Consideration
Paid ($’000s)
C C Hopkins (beneficially)83628 November 20173
C C Hopkins (beneficially)60224 April 20182
C C Hopkins (associated person)1,67828 November 20176
C C Hopkins (associated person)1,20924 April 20184
S J McLauchlan (beneficially)5 , 75128 November 201721
S J McLauchlan (beneficially)4,14724 April 201814
The above share acquisitions were all in relation to the dividend reinvestment plan.
USE OF COMPANY INFORMATION
There were no notices from Directors regarding the use of Company information.
DISCLOSURES OF INTEREST BY DIRECTORS
The following are general disclosures of interest given by
Directors of the company under section 140 of the Companies
Ac t 1993:
S J McLauchlan
Analogue Digital Instruments GroupChairman
BPAC Clinical Solutions Management LtdChairman
Compass Agribusiness Management LtdChairman
Dunedin International Airport LtdChairman
Otago Community HospiceChairman
UDC Finance LimitedChairman
University of Otago Foundation Studies LtdChairman
Woodworks Southern LtdChairman
GS McLauchlan & Co LtdPartner/Director
Argosy Property LtdDirector
Cargill Hotel 2002 LtdDirector
Dunedin Casinos LtdDirector
Extra Eight LtdDirector
Ngai Tahu Tourism LtdDirector
Openwave Systems (New Zealand) LtdDirector
QMT Machinery Technology Qingdao Co LtdDirector
Scenic Circle Group & SubsidiariesDirector
Scott Technology NZ LtdDirector
Otago Southland Employers AssociationBoard Member
NZ On AirBoard Member
Scott Technology Employee Share
Purchase Scheme
Trustee
H B Eastwood
JBS Australia Pty Ltd and Associated
Companies
Chief Executive
& Director
Afoofa Development Pty LtdDirector
Andrews Meat Industries Pty LtdDirector
Enunga Enterprises Pty LtdDirector
JBS Holdings Hong Kong Co LtdDirector
Premier Beehive NZDirector
Primo Moraitis Fresh Pty LtdDirector
SPM Fresh 2013 Pty LtdDirector
SPM Fresh Holdings Pty LtdDirector
Business Council of AustraliaMember
A Nogueira
JBS USAChief Executive
Cattle Production Systems IncDirector
Gold’N Plump Farms, LLCDirector
Gold’N Plump Poultry, LLCDirector
JBS Canada Partners, IncDirector
JBS Carriers, IncDirector
JBS Foods Canada, ULCDirector
JBS Finco, IncDirector
JBS Green Bay, IncDirector
JBS Live Pork, LLCDirector
JBS Packerland, IncDirector
JBS Plainwell, IncDirector
JBS Souderton, IncDirector
JBS Tolleson, IncDirector
JBS USA Finance, IncDirector
JBS USA Food CompanyDirector
JBS USA Food Company HoldingsDirector
JBS USA Leather, IncDirector
JFC LLCDirector
Miller Bros Co, IncDirector
Mopac of Virginia, IncDirector
Pilgrim’s Pride CorporationDirector
Pilgrim’s Pride, LLCDirector
Poppsa 3, LLCDirector
Poppsa 4, LLCDirector
S&C Resale CompanyDirector
Sampco, LLCDirector
Sampco Holdings, LLCDirector
Skippack Creek CorporationDirector
Swift & Company International Sales
Corporation
Director
Swift Beef CompanyDirector
Swift Brands CompanyDirector
Swift Pork CompanyDirector
JBS Food Canada ULCDirector
TO-RICOS Distribution LtdDirector
TO-RICOS LtdDirector
North American Meat InstituteDirector
Rabobank’s North American Agribusiness
Advisory Board
Member
DIRECTORS’ INTERESTS

ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 20PAGE 21

E Alvares
JBS Australia Pty Ltd & Associated
Companies
Director
Andrews Meat Industries Pty LtdDirector
JBS (Bejing) Co LtdDirector
JBS Holdings Hong Kong Co LtdDirector
Premier Beehive NZDirector
C C Hopkins
Dunedin Engineering IncChairman
Robotic Technologies LtdChairman
NS Innovations Pty LtdDirector
Alvey Manex a.s Director
Alvey NVDirector
Alvey Samovie sasuDirector
Alvey Systems & Services LtdDirector
Applied Sorting Technologies Pty LtdDirector
City Forests LtdDirector
FLS Group bvbaDirector
FLS Systems NVDirector
Oakwood Group LtdDirector
QMT General Partner LtdDirector
QMT Machinery Technology Qingdao Co LtdDirector
Rocklabs LtdDirector
Rocklabs Automation Canada LtdDirector
Scott Automation LtdDirector
Scott Automation & Robotics Pty LtdDirector
Scott LED LtdDirector
Scott Separation Technology LtdDirector
Scott Systems International IncDirector
Scott Systems (Qingdao) Co LtdDirector
Scott Technology Americas LtdDirector
Scott Technology Australia Pty LtdDirector
Scott Technology Belgium bvbaDirector
Scott Technology Euro LtdDirector
Scott Technology Europe LtdDirector
Scott Technology NZ LtdDirector
Scott Technology USA LtdDirector
Scott Technology Employee Share
Purchase Scheme
Trustee
Penfold Transmission LtdShareholder
J M Thorman
Attenti New Zealand LtdDirector
AVC Title Queenstown LtdDirector
Envision Energy (New Zealand) LtdDirector
EWNZ LtdDirector
Halo Business Intelligence LtdDirector
Haumi Company LtdDirector
Haumi Development Auckland LtdDirector
Hikvision New Zealand LtdDirector
Hoffend International General Partner LtdDirector
International Paper (New Zealand) LtdDirector
Kiri General Partner LtdDirector
LPI Marketing LtdDirector
Oceanbeach Capital LtdDirector
Openbet New Zealand LtdDirector
Ora New Zealand LtdDirector
Orbcomm New Zealand LtdDirector
TBM Finance LtdDirector
Thorman Holdings LtdDirector
TMF Corporate Services New Zealand LtdDirector
TMF Fiduciaries New Zealand LtdDirector
TMF General Partner LtdDirector
TMF Trustees New Zealand LtdDirector
Travel Helpline LtdDirector
Vega Industries LtdDirector
J K Berry (alternate for A Nogueira, H B Eastwood
& E Alvares)
Australian Meat Processor CorporationChairman
JBS Australia Pty Ltd & Associated
Companies
Director
Andrews Meat Industries Pty LtdDirector
Premier Beehive NZDirector
DIRECTORS’ INTERESTS (cont.)
REMUNERATION OF DIRECTORS
During the year ended 31 August 2018, the total remuneration and other benefits attributed to the Directors of the
Company were as follows:
Directors'
Fees
$’000s
Directors'
Salary
$’000s
Other
Remuneration
& Benefits
(Short Term)
$’000s
Other
Remuneration
& Benefits
(Long Term)
$’000s
C C Hopkins*-377230268
S J McLauchlan125---
J M Thorman23---
M B Waller***41---
C J Staynes***19---
A Nogueira**----
H B Eastwood**----
E Alvares**----
J K Berry (alternate)**----

* Denotes an Executive Director who receives a salary.
** Remuneration and meeting costs of Directors representing JBS Australia Pty Limited are paid directly by the JBS Group of Companies.
*** Up to retirement: C J Staynes, 30 November 2017; M B Waller, 30 April 2018.
DIRECTORS’ INDEMNITY & INSURANCE
The Company has made insurance arrangements covering risks arising out of acts or omissions of Directors and officers in their capacity
as such.
GENDER COMPOSITION
The gender composition of the Directors, Officers and Senior Management of the Company as at 31 August was:
2018 2017
MaleFemaleMaleFemale
Directors (excluding alternate)6-7-
Executive Officers3382
Senior Management11193
Total
204245
DONATIONS
The Company made donations of $5,000 during the year (2017: Less than $1,000).
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 22PAGE 23

Statement of Comprehensive Income26
Statement of Changes in Equity27
Balance Sheet28
Statement of Cash Flows29
Notes to the Financial Statements30
Summary of Accounting Policies30
A. Financial Performance32
A1. Income & Operating Expenses32
A2. Income Taxes34
A3. Segment Information36
B. Assets39
B1. Trade Debtors39
B2. Inventories40
B3. Contract Work In Progress40
B4. Property, Plant & Equipment41
B5. Goodwill42
B6. Intangible Assets44
B7. Research & Development Costs46
B8. Commitments for Expenditure46
C. Capital & Funding47
C1. Share Capital47
C2. Earnings & Net Tangible Assets Per Share47
C3. Borrowings48
C4. Trade Creditors & Accruals49
C5. Leases50
C6. Derivatives51
C7. Employee Benefits52
C8. Provision for Warranty53
C9. Share Based Payment Arrangements53
D. Risk Management54
D1. Financial Instruments54
E. Group Structure & Subsidiaries61
E1. Acquisition of Business61
E2. Subsidiaries63
E3. Investments Accounted for Using the Equity Method 65
E4. Related Party Transactions67
F. Other Disclosures68
F1. Notes to the Cash Flow Statement68
F2. Contingent Liabilities69
F3. Key Management Personnel Compensation69
F4. Subsequent Events69
Additional Stock Exchange Information70
Auditor's Report71
DIRECTORS’ RESPONSIBILITY
STATEMENT
The Directors are responsible for the preparation, in accordance
with New Zealand law and generally accepted accounting
practice, of financial statements which present fairly, in all
material respects, the consolidated financial position of Scott
Technology Limited and its subsidiaries (“the Group”) as at 31
August 2018 and the results of their operations and cash flows
for the year ended 31 August 2018.
The Directors consider that the financial statements of the Group
have been prepared using accounting policies appropriate to the
Group circumstances, consistently applied and supported by
reasonable and prudent judgments and estimates, and that all
applicable New Zealand equivalents to International Financial
Reporting Standards have been followed.
The Directors have responsibility for ensuring that proper
accounting records have been kept which enable them to ensure
that the financial statements comply with the Companies Act
1993 and the Financial Markets Conduct Act 2013.
The Directors have responsibility for the maintenance of a system
of internal control designed to provide reasonable assurance as to
the integrity and reliability of financial reporting. The Directors
consider that adequate steps have been taken to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
The Directors present the financial statements of Scott
Technology Limited for the year ended 31 August 2018.
These financial statements are dated 25 October 2018 and are
signed in accordance with a resolution of the Directors made
pursuant to section 461(1)(b) of the Financial Markets Conduct
Act 2013.
For and behalf of the Directors
C C Hopkins
Managing Director
S J McLauchlan
Chairman
INDEX TO THE FINANCIAL STATEMENTS
PAGE 25
FINANCIAL REPORT
Key
Accounting Policy
Key judgements and
other judgements made
PAGE 25
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 24

STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CHANGES IN EQUITY
Note
2018
$’000s
2017
$’000s
RevenueA1181,779132,631
Other operating incomeA12,064999
Share of joint ventures’ net surplusE3510220
Raw materials, consumables used & operating expenses(10 9, 3 81)( 7 7, 3 4 0 )
Employee benefits expense(55,171)(4 0,143)
OPERATING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION (OPERATING EBITDA)
19, 8 0116,367
Fair value gain on purchase of businessE1-936
Due diligence & acquisition costsA1(496)-
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (EBITDA)
19, 3 0 51 7, 3 0 3
Interest received369664
Depreciation & amortisationB4, B6(4, 225)(2,987)
Finance costs(403)(67)
NET SURPLUS BEFORE TAXATIONA115,04614,913
Taxation expenseA2(4 , 274)(4,648)
NET SURPLUS FOR THE YEAR AFTER TAX10,77210,265
Other Comprehensive Income/(Deficit)
Items that may be reclassified to profit or loss:
Cash flow hedges(370)-
Translation of foreign operations(1 ,4 49)(607)
Total comprehensive income for the year net of tax8,9539, 658
Net surplus for the year after tax is attributable to:
Members of the parent entity (used in the calculation of earnings per share)10 ,76 89, 89 0
Non controlling interests4375
10,77210,265
Total comprehensive income is attributable to:
Members of the parent entity8,9499, 28 3
Non controlling interests4375
8,9539, 658
2018
Cents Per
Share
2017
Cents
Per Share
Earnings per share (weighted average shares on issue):
BasicC214.313.2
DilutedC214.313.2
Net tangible assets per ordinary share (at year end):
BasicC247.073.5
DilutedC247.073.5
Note
Fully Paid
Ordinary
Shares
$’000s
Retained
Earnings
$’000s
Foreign
Currency
Translation
Reserve
$’000s
Non
Controlling
Assets
$’000s
Cash Flow
Hedge
Reserve
$’000s
Total
$’000s
Balance at 31 August 201671,31224, 279(1,660)669-94,600
Net surplus for the year after tax-9, 89 0-375-10,265
Other comprehensive income/(deficit)
for the year net of tax
--(607)--(607)
Dividends paid (9.50 cents per share)-( 7, 0 9 5 )---( 7, 0 9 5 )
Acquisition of minority interest in subsidiary-990-(997)-(7)
Balance at 31 August 201771,31228,064(2, 267)47-9 7,1 5 6
Net surplus for the year after tax- 10 ,76 8-4-10,772
Other comprehensive income/(deficit)
for the year net of tax
--(1 ,4 49)-(370)(1 , 819)
Dividends paid (10.0 cents per share)-( 7, 4 9 7 )---( 7, 4 9 7 )
Issue of shares under dividend reinvestment planC14,335----4,335
Balance at 31 August 201875,64731,335(3,716)51(370)102,947
FOR THE YEAR ENDED 31 AUGUST 2018FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 26PAGE 27

Note
2018
$’000s
2017
$’000s
CURRENT ASSETS
Cash and cash equivalents12,47326,670
Trade debtorsB13 7, 0 6 41 7, 8 3 3
Other financial assetsC61,22914 4
Sundry debtors3, 523947
InventoriesB222,82516,272
Contract work in progressB33,0774,108
Receivable from joint venturesE42,3151,909
Plant and equipment held for sale345345
8 2 , 8 5168,228
NON CURRENT ASSETS
Property, plant and equipmentB416,84514, 249
Capital work in progress254319
Investment in joint venturesE39281,118
Other financial assetsC6350-
GoodwillB553,78029,9 87
Deferred tax assetA2-969
Intangible assetsB615,10311,311
8 7, 2 6 05 7,9 5 3
TOTAL ASSETS170,111126,181
CURRENT LIABILITIES
Trade creditors and accrualsC430,32216,590
Finance lease liabilitiesC518730
Other financial liabilitiesC62,0131
Employee entitlementsC 7, C 911, 2864,272
Provision for warrantyC81,8571,300
Taxation payable2,7383,691
Payable to joint venturesE4673547
Current portion of term loansC33,321-
Deferred settlement on purchase of business6, 275-
58,67226,431
NON CURRENT LIABILITIES
Other financial liabilitiesC6964-
Employee entitlementsC 7, C 91,6432,568
Finance lease liabilitiesC515926
Deferred tax liabilityA21,638-
Term loansC34,088-
8,4922 , 594
EQUITY
Share capitalC175,64771,312
Retained earnings31,33528,064
Foreign currency translation reserve(3,716)(2, 267)
Cash flow hedge reserve(370)-
Equity attributable to equity holders of the parent102,8969 7,1 0 9
Non controlling interests5147
TOTAL EQUITY102,9479 7,1 5 6
TOTAL LIABILITIES & EQUITY 170,111126,181
Note
2018
$’000s
2017
$’000s
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from/(applied to):
Receipts from operations178,338126,908
Interest received369664
Net GST paid(825)(65)
Payments to suppliers and employees(172 , 597 )(111,365)
Interest paid(403)(67)
Taxation paid(4, 267)(2,668)
Net cash inflow from operating activitiesF161 513,407
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from/(applied to):
Purchase of non-controlling interest in subsidiary-(550)
Purchase of property, plant, equipment and intangible assets(2,434)(1 2 ,976)
Sale of property, plant and equipment21337
Net advances from/(to) joint ventures420(293)
Purchase of businessE1(14,479)(375)
Repayment of advance to Employee Share Purchase Scheme-2
Net cash outflow from investing activities(16 ,472)(13 , 855)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from/(applied to):
Repayment of borrowings(257)(31)
Dividends paid(3,162)( 7, 0 9 5 )
Proceeds from borrowings5,079-
Net cash inflow/(outflow) from financing activities1,660( 7,1 2 6 )
Net decrease in cash held(14 ,197 )( 7, 5 74 )
Add cash and cash equivalents at start of period26,67034, 24 4
Balance at end of period12,47326,670
Comprised of:
Cash and bank balances12,47326,670
BALANCE SHEET
AS AT 31 AUGUST 2018
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 28PAGE 29

SUMMARY OF ACCOUNTING
POLICIES
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
STATEMENT OF COMPLIANCE
The consolidated financial statements presented are those
of Scott Technology Limited (“Company”) and its subsidiaries
(“Group”).
The Company is a profit oriented entity, registered in New
Zealand under the Companies Act 1993. The Company is an
FMC reporting entity for the purposes of the Financial Markets
Conduct Act 2013 and its annual financial statements comply
with these Acts.
The Group’s principal activities are the design, manufacture,
sales and servicing of automated and robotic production lines
and processes for a wide variety of industries in New Zealand
and overseas.
The financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice (“NZ
GAAP”) and, for the purposes of complying with GAAP, it is a
for profit entity. They comply with New Zealand equivalents
to International Financial Reporting Standards (“NZ IFRS”) and
other applicable financial reporting standards as appropriate for
profit oriented entities. The financial statements also comply
with International Financial Reporting Standards (“IFRS”).
The financial statements were authorised for issue by the Board
of Directors on 25 October 2018.
BASIS OF PREPARATION
The financial statements have been prepared on the basis of
historical cost except for the revaluation of certain financial
instruments.
Cost is based on the fair value of the consideration given in
exchange for assets.
Accounting policies are selected and applied in a manner which
ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that the
substance of the underlying transactions or other events is
reported.
The accounting policies set out below have been applied in
preparing the financial statements for the year ended 31 August
2018 and the comparative information presented in these
financial statements for the year ended 31 August 2017.
There have been no changes in accounting policy during the year.
The information is presented in thousands of New Zealand
dollars, which is the functional currency of the Company and the
presentation currency of the Group.
CRITICAL JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
In the application of NZ IFRS the Directors are required to make
judgements, estimates and assumptions about carrying values
of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstance, the results of which
form the basis of making the judgements. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and
future periods if the revision affects both current and future
periods. There are no significant estimates.
Judgements made by the Directors in the application of NZ IFRS
that have significant effects on the financial statements and
estimates with a significant risk of material adjustments in the
next year include:
• Estimating the percentage of completion for long term
construction contracts (note A1)
• Goodwill impairment (note B5)
• Valuation of intangibles recognised on acquisition (note E1)
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
the financial report are set out within the particular note to
which they relate. These policies have been consistently applied
unless otherwise stated.
CONSOLIDATION OF SUBSIDIARIES
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the
Company and its subsidiaries. Control is achieved when the
Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Group financial statements are prepared by combining the
financial statements of all the entities that comprise the Group,
being the Company and its subsidiaries as defined by NZ IFRS-10
“Consolidated Financial Statements”. Consistent accounting
policies are employed in the preparation and presentation of the
Group financial statements.
Accounting policies of subsidiaries are consistent with the
policies of the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
On acquisition, the assets, liabilities and contingent liabilities
of a subsidiary are measured at their fair values at the date of
acquisition. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the
fair values of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to profit and loss in the period of acquisition.
The results of subsidiaries acquired or disposed of during the
year are included in the Group Statement of Comprehensive
Income from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
STANDARDS & INTERPRETATIONS EFFECTIVE IN THE
CURRENT PERIOD
In the current year the Group adopted all mandatory new and
amended Standards and Interpretations. None of the new
and amended standards had a material impact on the amounts
recognised in these financial statements.
STANDARDS & INTERPRETATIONS IN ISSUE NOT YET
ADOPTED
The Group has reviewed all standards and interpretations to
existing standards in issue not yet adopted, with the exception of:
• NZ IFRS 15 Revenue from Contracts with Customers which
is effective for annual periods beginning on or after 1 January
2018. NZ IFRS 15 was issued on 3 July 2014 and establishes
principles for reporting useful information about the nature,
amount, timing and uncertainty of revenue and cash flows
arising from an entity's contracts with customers. Although
the Group has made progress in its implementation of NZ
IFRS 15, it is not yet possible to make a reliable estimate
of the impact of the new standard on the Group’s financial
statements as the Group is required to implement significant
changes to its systems and processes across the Group in
order to collect the new data requirements, as well as compile
historical comparatives. The Group intends to apply the
standard from the period ending 31 August 2019.
• NZ IFRS 9 Financial Instruments is effective for annual periods
beginning on or after 1 January 2018. NZ IFRS 9 addresses
the classification, measurement and recognition of financial
assets and financial liabilities and relaxes the current NZ IAS
39 requirements for hedge accounting. Although the Group
has made progress in its implementation of NZ IFRS 9, it is
not yet possible to make a reliable estimate of the impact of
the new standard on the Group’s financial statements. The
Group intends to apply the standard from the period ending 31
A u g us t 2 019.
• NZ IFRS 16 Leases is effective for periods beginning on or
after 1 January 2019. NZ IFRS 16 sets out the principles for
the recognition, measurement, presentation and disclosure
of leases. Although the Group has made progress in its
implementation of NZ IFRS 16, it is not yet possible to make
a reliable estimate of the impact of the new standard on the
Group’s financial statements. The Group intends to apply the
standard for the period ending 31 August 2020.
Except for the three standards specified above, the Group does
not expect the standards and amendments in issue and not yet
adopted will have a material impact on the financial statements.
GOODS & SERVICES TAX & VALUE ADDED TAX (“GST”)
All items in the Balance Sheet are stated exclusive of GST, with
the exception of receivables and payables, which include GST.
All items in the Statement of Comprehensive Income are stated
exclusive of GST.
Cash flows are included in the cash flow statement on a net
basis. The GST component of cash flows arising from investing
and financing activities which is recoverable from, or payable to,
the taxation authority is classified as operating cash flows.
FOREIGN CURRENCIES
The individual financial statements of each group entity are
presented in the currency of the primary economic environment
in which the entity operates (its functional currency). For the
purpose of the consolidated financial statements, the results
and position of each group entity are expressed in New Zealand
dollars, which is the functional currency of the Company and the
presentation currency for the consolidated financial statements.
In preparing the financial statements of each individual group
entity, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing at the dates of the transactions. At
the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at
that date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined. Non-
monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
For the purposes of presenting these consolidated financial
statements, the assets and liabilities of the Group's foreign
operations are translated into New Zealand dollars using
exchange rates prevailing at the end of each reporting period.
Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates
at the dates of the transactions are used. Exchange differences
arising, if any, are recognised in other comprehensive income
and accumulated in equity (and attributed to non-controlling
interests as appropriate).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 30PAGE 31

2018
$’000s
2017
$’000s
(a) Revenue
Revenue from long term projects104,75681, 282
Sale of goods55,4 4640,200
Other revenue (including service and short term projects)21,57711,149
181,779132,631
(b) Other operating income
Rental income203-
Government grants related to research and development1 , 8 61926
Gain on sale of property, plant and equipment-73
2,064999
(c) Non recurring income
Fair value gain on purchase of business-936
2018
$’000s
2017
$’000s
(d) Operating expenses

The surplus is stated after charging:
Auditor’s remuneration- audit of financial statements2101 51
- other assurance services59
- taxation services5519
- due diligence services271-
The auditor of the Group is Deloitte Limited
Due diligence services on business combinations have been performed by a Deloitte network firm
that is not involved in the Group audit. These are included in Due Diligence & Acquisition Costs in the
Statement of Comprehensive Income.
Directors’ fees208193
Superannuation scheme contributions4,14 82, 275
Fair value losses on firm commitments-1
Leasing and rental costs3,0271,391
Unrealised fair value losses on foreign exchange derivatives271-
Loss on disposal of property, plant and equipment21-
Fair value losses on derivatives held as fair value hedges1,579-
Unrealised fair value losses on interest rate swap contracts43-
and after crediting:
Fair value gains on derivatives held as fair value hedges-1
Foreign exchange gains1,627269
Unrealised fair value gains on foreign exchange derivatives-143
Fair value gains on firm commitments1,579-
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
A1. INCOME & OPERATING EXPENSES
(cont.)
SECTION A – FINANCIAL PERFORMANCE
A1. INCOME & OPERATING EXPENSES
REVENUE RECOGNITION – LONG TERM PROJECTS
Policy
Profit on long term contracts is accounted for using the percentage of completion method. At balance date an assessment is
made of the percentage of completion and costs associated with the work done to date relative to the total forecast cost to
complete. Included in revenue is the value attributed to work completed, which includes direct costs, overhead and profit.
At the point at which a project is expected to be loss making, losses would be recognised immediately in profit or loss.
Judgement
The estimation of percentage of completion relies on the Directors estimating future time and costs to complete long
term contracts. If the actual time and costs incurred to complete the long term contracts differ from the estimates
completed by management, the Directors could be over or under estimating the percentage of completion on the
project, and consequently revenue and profit to date may also be over or under estimated.
REVENUE RECOGNITION – SALE OF GOODS & OTHER REVENUE
Policy
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer or
when services are provided.
GOVERNMENT GRANTS
Policy
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions
attaching to them and that the grants will be received.
Government grants are recognised as other income over the periods necessary to match them with the costs for which
they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future
related costs are recognised in profit or loss in the period in which they become receivable.
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 32PAGE 33

2018
$’000s
2017
$’000s
Net surplus before tax 15,04614,913
Income tax expense calculated at 28% (2017: 28%)4,2134,175
Non-deductible expenses426439
Research & development tax credits claimed (Australia)(563)-
Under provision of income tax in previous year19834
Taxation expense4,2744,648
Represented by:
Current tax2,7334,4 47
Deferred tax1 , 5 41201
4,2744,648
2018
Opening
Balance
$’000s
Charged to
Income
$’000s
Charged
to Other
Comprehensive
Income
$’000s
Acquisition of
Subsidiary/
Business
$’000s
Closing
Balance
$’000s
Gross deferred tax assets:
Trade debtors154262-22438
Other financial assets160(14)143194483
Employee entitlements1,373(201)-111,183
Provisions799(284)-181696
Ta x l o s s e s539(532)--7
3,025( 769)1434082,807
Gross deferred tax liabilities:
Inventories(206)836--630
Property, plant and equipment2,173(221)--1,952
Intangible assets89157-1 , 6171,863
2,056772-1 , 6174,445
969(1,541)143(1,209)(1,638)
A2. INCOME TAXES (cont.)
2018
$’000s
2017
$’000s
Imputation credits available to shareholders1,9062,567
2017
Opening
Balance
$’000s
Charged to
Income
$’000s
Acquisition of
Subsidiary/
Business
$’000s
Closing
Balance
$’000s
Gross deferred tax assets:
Trade debtors12925-154
Inventories336(13 0)-206
Other financial assets(65)225-160
Employee entitlements1,073300-1,373
Provisions370429-799
Ta x l o s s e s905(371)5539
2,74847853,231
Gross deferred tax liabilities:
Property, plant and equipment1,1456793492,173
Intangible assets--8989
1,1456794382,262
1,603(201)(433)969

IMPUTATION CREDIT ACCOUNT BALANCES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
A2. INCOME TAXES
INCOME TAX RECOGNISED IN NET SURPLUS
Policy
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or
tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting
date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent it is unpaid (or refundable).
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the
financial statements as follows:
PRIMA FACIE TAX RATE
The prima facie tax rate used in the above reconciliation is the corporate tax rate of 28% payable by New Zealand corporate
entities on taxable profits under New Zealand tax law for the 2018 income tax year.
DEFERRED TAX BALANCES
Policy
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences
arising from differences between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to
the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences
or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the
temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a
business combination) which affects neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability is
settled or the asset is realised based on tax rates that have been enacted or substantively enacted at reporting date. Deferred
tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income
or directly to equity, in which case the deferred tax is also dealt with in other comprehensive income or in equity.
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 34PAGE 35

2017
Australasia
Manufacturing
$’000s
Americas
Manufacturing
$’000s
Asia & Europe
Manufacturing
$’000s
Unallocated
$’000s
Total
$’000s
Revenue99,84617,05515,730-132,631
Segment profit19, 3 0 92,068(509)-20,868
Fair value gain on purchase of business (refer Note A1)---936936
Depreciation and amortisation(2, 267)(155)(197 )(368)(2,987)
Share of net surplus of joint ventures175441-220
Interest revenue1-26 61664
Central administration costs---(4,721)(4,721)
Finance costs(4)--(63)(67)
Net surplus before taxation1 7, 2 141,957(703)(3,555)14,913
Taxation expense(5,031)(670)191,034(4,648)
Net surplus after taxation12,1831,287(684)(2,521)10,265

2018
$’000s
2017
$’000s
Appliances41,06926,308
Materials handling and logistics26,708-
Meat processing45,03239,581
Mining33,31326,461
Other industrial automation, including robotics35,65740,281
181,779132,631
A3. SEGMENT INFORMATION (cont.)
A3. SEGMENT INFORMATION
Policy
The group has adopted NZ IFRS-8 Operating Segments. NZ IFRS-8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker (the
Board) in order to allocate resources to the segments and to assess its performance.
The Group’s Board allocates resources and assesses performance of the Group by manufacturing base, therefore under NZ
IFRS-8 the Group’s reportable segments are:
• Australasia manufacturing
• Americas manufacturing
• Asia and Europe manufacturing
Australasia is reported as a single segment due to the integrated nature of customers, management, manufacturing, sales
and financing activities across New Zealand and Australia.
Americas is reported as a single segment due to the integrated nature of customers, management, manufacturing, sales
and financing activities across North and South America.
Asia and Europe is reported as a single segment due to the integrated nature of customers, management, manufacturing
and sales activities across Asia and Europe
SEGMENT REVENUES & RESULTS
The following is an analysis of the Group’s revenue and results by reportable segment. For the purposes of NZ IFRS-8 allocations are
based on the operating results by segment. The Group does not allocate certain resources (such as senior executive management
time) and central administration costs by segment for internal reporting purposes and therefore these allocations may not result in a
meaningful and comparable measure of profitability by segment.

Revenue reported above represents revenue generated from external customers. Inter-segment sales, which are eliminated on
consolidation, were $7.1 million for the year ended 31 August 2018 (2017: $7.9 million).
The accounting policies of the reportable segments are the same as the Group’s accounting policies. Segment profit represents the
profit earned by each segment without allocation of central administration costs and investment revenue.
INDUSTRY INFORMATION
The Group focuses its marketing on five principal industries: appliances, materials handling and logistics, meat processing, mining,
and other industrial automation, including robotics. The Group’s revenue from external customers by industry is detailed below:

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018

2018
Australasia
Manufacturing
$’000s
Americas
Manufacturing
$’000s
Asia & Europe
Manufacturing
$’000s
Unallocated
$’000s
Total
$’000s
Revenue100,49229,14152,146-181,779
Segment profit19, 0 293 ,4591 ,745-24, 233
Due diligence & acquisition costs---(496)(496)
Depreciation and amortisation(2,633)(16 4)(941)(487)(4, 225)
Share of net surplus of joint ventures26824 02-510
Interest revenue112-356369
Central administration costs---(4,942)(4,942)
Finance costs(1)(8)(187 )(207)(403)
Net surplus before taxation16,6643,539619(5 ,7 76)15,046
Taxation expense(4 ,765)(1 , 0 49)(178)1,718(4 , 274)
Net surplus after taxation11,8992,4904 41(4,058)10,772
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 36PAGE 37

SECTION B – ASSETS
B1. TRADE DEBTORS

2018
$’000s
2017
$’000s
New Zealand (country of domicile)11,8408,267
North America, including Mexico51,45035,614
Australia and Pacific Islands47,50549,632
South America6,2703,215
Asia10,60915,987
Russia and former states2,9834,955
Africa and Middle East4,7522,327
Other Europe46,37012,634
181,779132,631

The Group holds $20.2 million of non-current assets in geographical areas outside of New Zealand, the country of domicile
(2017: $12.1 million).
INFORMATION ABOUT MAJOR CUSTOMERS
Sales to the Group’s largest single customer, who is from the Australasia Manufacturing segment and the Meat industry, accounted
for approximately 6.7% of total Group sales (2017: Australasia Manufacturing segment and the Meat Industry 10.6%).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
A3. SEGMENT INFORMATION
(cont.)
Policy
Trade debtors are initially recognised at fair value and are subsequently measured at amortised cost using the effective
interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when
there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate
computed at initial recognition.

2018
$’000s
2017
$’000s
Trade debtors37,62518,574
Allowance for doubtful debts (561)(741)
37,06417,833
CREDIT PERIOD
The credit period on sales of goods ranges from 30 to 120 days depending on the terms negotiated by the customer for large
contracts. No interest is charged on the trade debtors.
ALLOWANCE FOR DOUBTFUL DEBTS2018
$’000s
2017
$’000s
Balance at beginning of financial year741452
Recovery of trade debtors previously treated as doubtful(188)-
Doubtful debts written off(53)-
Impairment loss recognised on trade debtors61289
Balance at end of financial year561741
RECOVERABILITY
In determining the recoverability of trade debtors, the Group considers any change in the credit quality of the trade debtor from the
date credit was initially granted up to the reporting date. The Directors believe that there is no further credit provision required in
excess of the allowance for doubtful debts. All doubtful debts are aged beyond 90 days (2017: all aged beyond 90 days).
PAST DUE BUT NOT IMPAIRED
Included in the Group’s trade debtors are debtors with a carrying amount of $10.1 million (2017: $2.9 million) which are past due at
the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts
are considered recoverable.
2018
$’000s
2017
$’000s
Ageing of past due but not impaired:
30 – 60 days5,132981
60 – 90 days1,0481,089
90 days +3,942831
10,1222,901
Projects are invoiced on achieving agreed milestones, however customers may delay payment until agreed warranty issues are
resolved, which then impacts on the ageing of past due debtors.
GEOGRAPHICAL INFORMATION
The Group operates in eight principal geographical areas. The Group’s revenue from external customers by geographical location (of
the customer) is detailed below:
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 38PAGE 39

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
B2. INVENTORIES
Policy
Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed
and variable overhead expenses, are assigned to inventories by the method most appropriate to the particular class
of inventory, with the majority being valued on a first-in-first-out basis. Net realisable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

2018
$’000s
2017
$’000s
Raw materials5,3963,158
Work in progress713416
Finished goods16,71612,698
22,82522,82516,272
WRITE DOWNS
The cost of inventories recognised as an expense during the year includes $0.3 million (2017: $0.3 million) in respect of write downs
of inventory to net realisable value.
B3. CONTRACT WORK IN PROGRESS
Policy
Contract work in progress is recorded as an accumulation of the costs incurred to date, including overhead, plus any
recognised profit less amounts received or receivable by way of progress payments on each particular contract.

2018
$’000s
2017
$’000s
Costs incurred and estimated earnings on uncompleted contracts205,396110,372
Progress claims received or receivable(202,319)(106,264)
3,0774,108
Represented by:
Sales recognised to be recovered by invoices24,49522,761
Contracts invoiced in advance of sales recognised(21,418)(18,653)
3,0774,108

B4. PROPERTY, PLANT & EQUIPMENT
Policy
All items of Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part
of a purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their
present value as at the date of acquisition.
Depreciation is calculated on a straight line basis so as to write off the net cost of the asset over its expected useful life
to its estimated residual value. The following estimated useful lives are used in the calculation of depreciation:
Buildings 40 years
Plant, equipment & vehicles 1 - 13 years
Freehold
Land at Cost
$’000s
Freehold
Buildings at
Cost
$’000s
Plant,
Equipment &
Vehicles at Cost
$’000s
Total
$’000s
Gross carrying amount
As at 31 August 20162,4296,98019,92129,330
Acquisitions through business combinations--1,6311,631
Additions-851,6591,744
Disposals--(1,483)(1,483)
As at 31 August 20172,4297,06521,72831,222
Acquisitions through business combinations36292,7673,399
Additions-841,7231,807
Disposals--(533)(533)
As at 31 August 20182,4327,77825,68535,895
Accumulated depreciation & impairment
As at 31 August 2016-1,75614,74316,499
Disposals--(1,220)(1,220)
Depreciation expense-2161,4781,694
As at 31 August 2017-1,97215,00116,973
Disposals--(490)(490)
Depreciation expense-2172,3502,567
As at 31 August 2018-2,18916,86119,050
Net book value
As at 31 August 20172,4295,0936,72714,249
As at 31 August 20182,4325,5898,82416,845
Aggregate depreciation allocated during the year:
2018
$’000s
2017
$’000s
Freehold buildings217216
Plant, equipment and vehicles2,3501,478
2,5671,694
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 40PAGE 41

B5. GOODWILL
B5. GOODWILL (cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
B5. GOODWILL
Policy
Goodwill represents the excess of the purchase consideration over the fair value of the identifiable tangible and
identifiable intangible assets, liabilities and contingent liabilities of the subsidiary recognised at the time of acquisition of
a business or subsidiary. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
Gross carrying amount:
2018
$’000s
2017
$’000s
Balance at beginning of financial year29,98729,911
Additional amounts recognised from business combinations occurring during the period (refer Note E1)23,79376
Balance at end of financial year53,78029,987
There has been no impairment recognised during the year or in prior periods.

Judgement
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to
which goodwill has been allocated. The value in use calculation requires the Directors to estimate the future cash flows,
particularly in relation to future project wins and market conditions, expected to arise from the cash-generating unit and
a suitable discount rate in order to calculate present value.
ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS
The Group’s cash-generating units are:
• Australasia manufacturing
• Americas manufacturing
• Asia and Europe manufacturing
Australasia is reported as a single cash-generating unit due to the integrated nature of customers, management, manufacturing, sales
and financing activities across New Zealand and Australia.
Americas is reported as a single cash-generating unit due to the integrated nature of customers, management, manufacturing, sales and
financing activities across North and South America.
Asia and Europe is reported as a single cash-generating unit due to the integrated nature of customers, management, manufacturing and
sales activities across Asia and Europe.
Goodwill has been allocated for impairment testing purposes to the cash-generating units:

2018
$’000s
2017
$’000s
Australasia manufacturing24,05124,051
Americas manufacturing12,5225,422
Asia and Europe Manufacturing17,207514
53,78029,987
AUSTRALASIA MANUFACTURING
The recoverable amount of the Australasia Manufacturing cash-generating unit is determined based on a value in use calculation which
uses cashflow projections based on financial budgets and forecasts covering a five-year period, and using the Group’s approximate
weighted average cost of capital as the discount rate. The discount rate used is 10%.
Cashflow projections during the budget and forecast period for the Australasia Manufacturing cash-generating unit are also based on
historical gross margins during the budget and forecast period and a constant rate of revenue and materials price inflation during the
budget period of 3% reflecting a growing global demand for automation and robotics and consistent with past experience. Cashflows
beyond that five year period have been extrapolated using a steady 2% p.a. growth rate. Management believes that any reasonably
possible change in the key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount to
exceed the aggregate recoverable amount of the Australasian Manufacturing cash-generating unit.
AMERICAS MANUFACTURING
The recoverable amount of the Americas Manufacturing cash-generating unit is determined based on a value in use calculation which
uses cashflow projections based on financial budgets and forecasts covering a five-year period, and using the Group’s approximate
weighted average cost of capital as the discount rate. The discount rate used is 10%.
Cashflow projections during the budget and forecast period for the Americas Manufacturing cash-generating unit are also based on
historical gross margins during the budget and forecast period and a constant rate of revenue and materials price inflation during the
budget period of 3% reflecting a growing global demand for automation and robotics and consistent with past experience. Cashflows
beyond that five year period have been extrapolated using a steady 2% p.a. growth rate. Management believes that any reasonably
possible change in the key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount to
exceed the aggregate recoverable amount of the Americas Manufacturing cash-generating unit.
ASIA & EUROPE MANUFACTURING
The recoverable amount of the Asia and Europe Manufacturing cash-generating unit is determined based on a value in use calculation
which uses cashflow projections based on financial budgets and forecasts covering a five-year period, and using the Group’s approximate
weighted average cost of capital as the discount rate. The discount rate used is 10%.
Cashflow projections during the budget and forecast period for the Asia and Europe Manufacturing cash-generating unit are also based
on historical gross margins during the budget and forecast period and a constant rate of revenue and materials price inflation during the
budget period of 3% reflecting a growing global demand for automation and robotics and consistent with past experience. Cashflows
beyond that five year period have been extrapolated using a steady 2% p.a. growth rate. Management believes that any reasonably
possible change in the key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount to
exceed the aggregate recoverable amount of the Asia and Europe Manufacturing cash-generating unit.
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 42PAGE 43

Conveyor
& Palletiser
Technology
at Cost

$’000s
Bladestop
Technology
at Cost

$’000s
URLs
at Cost

$’000s
Non-
Compete
at Cost

$’000s
HTS
Technology
at Cost

$’000s
Centrifuge
Technology
at Cost

$’000s
Total

$’000s
Gross carrying amount
As at 31 August 2016--1,49269271-1,832
Acquisitions through business combinations-----338338
Additions-10,568----10,568
As at 31 August 2017-10,5681,4926927133812,738
Acquisitions through business combinations4,758-----4,758
Additions681---11-692
As at 31 August 20185,43910,5681,4926928233818,188
Accumulated amortisation and impairment
As at 31 August 2016---20114-134
Amortisation expense-1 , 261-12561,293
As at 31 August 2017-1,261-2113961,427
Amortisation expense2011,366-659261,658
As at 31 August 20182012,627-27198323,085
Net book value
As at 31 August 2017-9, 3 071,4924813233211,311
As at 31 August 20185,2387,9411,492428430615,103
ASSETS
Intangible assets comprise:
• Conveyor and palletiser technology used in the materials handling industry purchased through the acquisition of the Alvey
business in April 2018 and is being amortised on a straight line basis over an estimated remaining useful life at the time of
purchase of ten years.
• Bladestop bandsaw safety technology purchased in October 2017 which is being amortised on a straight line basis over an
estimated remaining useful life at the time of purchase of eight years.
• Domain names (URLs) and a non-compete arrangement resulting from the purchase of the RobotWorx business in May 2014.
• Intangible assets associated with the RobotWorx non-compete arrangement are being amortised on a straight line basis over a
fifteen year period, while intangible assets related to the URLs are indefinite life intangibles as the rights to the URLs are held
indefinitely and are assessed for impairment annually.
• Intellectual property associated with current leads and flux pumps which were largely acquired on the purchase of HTS-
110 Limited and are being amortised over an estimated remaining useful life at the time of purchase of eight years.
• Centrifuge technology used in the honey and fish oil industry purchased through the acquisition of the other joint venture
partners’ interests in Scott Separation Technology Limited in May 2017 and is being amortised on a straight line basis over
an estimated remaining useful life at the time of purchase of thirteen years.
The amortisation expense has been included in the line item “depreciation and amortisation” in the Statement of
Comprehensive Income.
B6. INTANGIBLE ASSETS (cont.)
Policy
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a straight line basis over their estimated useful lives. Intangible
assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Intangible assets that are acquired in a business combination and recognised separately from goodwill are initially recognised at
fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in
a business combination are recognised on the same basis as intangible assets that are acquired separately.
At each balance sheet date, the Group reviews the carrying amounts of its non financial tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Goodwill is tested
for impairment annually. Where the asset does not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or
loss immediately, unless the asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit)
in prior years. A reversal of an impairment loss is recognised as income immediately unless the asset is carried at fair value, in
which case the reversal of the impairment loss is treated as a revaluation increase. Impairment losses in relation to goodwill are
not reversed.
B6. INTANGIBLE ASSETS
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 44PAGE 45

SECTION C – CAPITAL & FUNDING
C1. SHARE CAPITAL
C2. EARNINGS & NET TANGIBLE ASSETS PER SHARE
Earnings per share from continuing operations:
2018
Cents Per
Share
2017
Cents Per
Share
Basic14.313.2
Diluted14.313.2
Net tangible assets per ordinary share:
Basic 47.073.5
Diluted47.073.5

2018
$’000s
2017
$’000s
Net surplus for the year used in the calculation of basic and diluted earnings per share from continuing
operations
10 ,76 89, 89 0
Net tangible assets (excluding goodwill, intangible assets and deferred tax)35,70254,889
2018
000s
2017
000s
Weighted average number of ordinary shares used in the calculation of basic and diluted earnings per
share from continuing operations
75,39474 , 6 81
Ordinary shares at year end used in the calculation of net tangible assets per ordinary share (Note C1)75,90374 , 6 81
B7. RESEARCH & DEVELOPMENT COSTS
Policy
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An asset arising from development (or from the development phase of an internal project) is recognised if, and only if,
all of the following are demonstrated:
• The technical feasibility of completing the asset so that it will be available for use or sale
• The intention to complete the asset and use or sell it
• The ability to use or sell the asset
• How the asset will generate probable future economic benefits
• The availability of adequate technical, financial and other resources to complete the development and
to use or sell the asset
• The ability to measure reliably the expenditure attributable to the asset during the development

B8. COMMITMENTS FOR EXPENDITURE

2018
$’000s
2017
$’000s
Commitments for future capital expenditure for purchase of property, plant and equipment4,045139
In June 2017 Scott Technology Limited announced plans to extend the building and associated facilities at 630 Kaikorai Valley Road,
Dunedin, New Zealand with the expectation that it would nearly double the available floor space. As at 31 August 2018 designs
have been completed, building consents have been granted, preliminary groundwork is in progress and contracts for the extension
have been entered into.
Policy
Equity instruments issued by the Group are recorded at the proceeds received (net of issue costs).

2018
Number
2017
Number
2018
$’000s
2017
$’000s
Fully paid ordinary shares at beginning of financial year74,680,75474,680,75471,31271,312
Issue of shares under dividend reinvestment plan1,222,185-4,335-
Balance at end of financial year75,902,93974,680,75475,64771,312
All shares have equal voting rights and participate equally in any dividend distribution or any surplus on the winding up of the Group.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 46PAGE 47

C3. BORROWINGS
C4. TRADE CREDITORS & ACCRUALS
Policy
Trade creditors are initially measured at fair value and subsequently measured at amortised cost using the effective
interest rate method.

2018
$’000s
2017
$’000s
Trade creditors18,45310,866
Accruals11,8695,724
30,32216,590
Te r m s
All trade creditors are current and paid within the terms agreed with individual suppliers.
Policy
Borrowings are recorded initially at fair value, net of transaction costs.
Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial
recognised amount and the redemption value being recognised in the profit or loss over the period of the borrowings
using the effective interest rate method.
LenderCurrency Limit Utilised Interest Rate
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
2018

%
2017

%
Working Capital Facilities
ANZ Bank New Zealand LtdNZD5,000500--5.98%10.50%
BB&T Bank (USA)USD752-582-6.00%-
5,752500582-
Loan Facilities
ANZ Bank New Zealand LtdUSD3, 524-3, 524-4.82%-
Equal monthly principal repayments of US$28,571 over a five year period, followed by a lump sum payment of US$714,286 in May 2023.
KBC Bank (Belgium)EUR878-878-2.20%-
Working capital loan, maturing monthly.
KBC Bank (Belgium)EUR483-483-1.75%-
Working capital (vacation pay) loan, repayable in equal instalments over one year with a final repayment in July 2019.
KBC Bank (Belgium)EUR241-241-0.75%-
Working capital (prepaid tax) loan, repayable in equal instalments over one year with a final repayment in July 2019.
Ceskoslovenska obchodni banka a.s.
(Czech Republic)
CZK682-43-4.95%-
Working capital loan, maturing monthly.
Participatiemaatschappij Vlaanderen (PMV)
(Belgium)
EUR1,713-1,713-8.00%-
Subordinated business development loan taken over on the acquisition of the Alvey business. Repayable in equal quarterly installments
of €90,228, with a final lump sum repayment of deferred interest in June 2020. The intention is to repay or refinance this loan through a
commercial bank.
Maarten van LeeuwenEUR527-527-8.00%-
Subordinated loan from the previous owner of the Alvey business, but under the terms of the PMV loan the Maarten van Leeuwen loan can only
be repaid following repayment of the PMV loan. Maarten van Leeuwen is an employee of the business and therefore is a related party.
8,048-7,409-
The outstanding portion of the loan facilities is disclosed in the financial statements as:
2018
$’000s
2017
$’000s
Current liability3,321-
Non current liability4,088-
7,409-
LenderCurrency Limit Utilised
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
Financial Guarantee & Trade Performance Bonds
ANZ Bank New Zealand LtdVaries20,40010,7007,9 3 87, 6 3 4
KBC Bank (Belgium)EUR8,775-4, 569 -
Bank of ChinaCNY-152-152
(Refer note F2, Contingent Liabilities)29,17510,85212,5077,786
Credit Card Facilities
ANZ Bank New Zealand LtdNZD75075010161
Australia and New Zealand Banking Group LtdAUD328220173178
PNC Bank (USA)USD3011399759
KBL Bank (Belgium) EUR28-1-
1,4071,109372298
The total amount of credit card facilities used is included in trade creditors and accruals.
SECURITY
The bank facilities from ANZ Bank New Zealand Limited are secured by general security agreements over all the present and after
acquired property of Scott Technology Limited and its subsidiaries, and therefore all property, plant and equipment assets are
pledged as security for these facilities. The bank facilities from ANZ Bank New Zealand Limited are also secured by mortgages over
the 630 Kaikorai Valley Road, Dunedin and 10 Maces Road, Christchurch properties.
The bank facilities from KBC Bank are secured by a registered pledge on the business assets of Alvey NV for a total of €3.8 million
and a registered pledge on the bank guarantee line of 50% of any amount exceeding €3.5 million.
C3. BORROWINGS (cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 48PAGE 49

C5. LEASES
OPERATING LEASES
Policy
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
NON CANCELLABLE OPERATING LEASE PAYMENTS
Operating leases relate to vehicles, printers and manufacturing and warehouse facilities with original lease terms of between six
months to six years. All operating lease contracts contain market review clauses in the event that the Group exercises its option to
renew. The Group has an option to purchase the leased property used for the RobotWorx business and for Alvey's Belgium business.

2018
$’000s
2017
$’000s
Not later than one year3,5351,941
Later than one year and not later than two years2,3031,685
Later than two years and not later than five years3,6412,624
Later than five years2,405399
11,8846,649
FINANCE LEASES
Policy
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Group Entity as Lessor
Amounts due from finance leases are recorded as receivables. Finance lease receivables are initially recognised
at amounts equal to the present value of the minimum lease payments receivable plus the present value of any
unguaranteed residual value expected to accrue at the end of the lease term. Finance lease payments are allocated
between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant
periodic rate of return on the net investment outstanding in respect of the lease.
Group Entity as Lessee
Assets held under finance lease are initially recorded at their fair value or, if lower, at amounts equal to the present value
of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is
included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligations so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset or the lease term,
whichever is shorter.
NON CANCELLABLE FINANCE LEASE PAYMENTS

Minimum Future
Lease Payments
Present Value of
Minimum Lease
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
Not later than one year1973118730
Later than one year and not later than five years1642715726
Later than five years2-2-
Minimum future lease payments3635834656
Less future finance charges(17 )(2)--
Present value of minimum lease payments3465634656
Classified as:
Current borrowings18730
Non-current borrowings15926
34656
C5. LEASES (cont.)
C6. DERIVATIVES
Policy
Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently re-
measured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss unless the derivative
is designated and effective as a hedging instrument, in which event, the timing of the recognition depends on the nature of the
hedge relationship.
The Group entity designates certain derivatives as hedges of the fair value of firm commitments (fair value hedge) or as hedges
of forecast future sales (cash flow hedge). Open firm commitments reflect contractual agreements to provide goods to
customers at an agreed price denominated in a foreign currency on specified future dates.
Fair Value Hedge
Changes in fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit and loss
immediately, together with any changes in the fair value of the firm commitment that is attributable to the hedged risk.
Hedge accounting is discontinued when the hedge instrument expires, or is sold, terminated, exercised, or no longer qualifies
for hedge accounting. The carrying amount of the firm commitment at that time continues to be recognised as a firm
commitment until the forecast transaction ultimately impacts profit or loss.
Cash Flow Hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are
recognised in other comprehensive income and accumulated as a separate component of equity in the hedging reserve.
The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the other
expenses line.
Amounts recognised in the hedging reserve are reclassified from equity to profit or loss (as a reclassification adjustment) in the
periods when the hedged item is recognised in profit or loss, in the same line as the recognised hedged item.
However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognised in the hedging reserve are reclassified from equity and included in the initial
measurement of the cost of the asset or liability (as a reclassification adjustment).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 50PAGE 51

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold,
terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss recognised in the hedging
reserve at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit
or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in the
hedging reserve is recognised immediately in profit or loss.
2018
$’000s
2017
$’000s
ASSETS
At fair value:
Foreign currency forward contracts held as effective fair value hedges-1
Fair value hedge of open firm commitments 1,579-
Foreign exchange derivatives-143
1,579144
Represented by:
Current financial assets1,229144
Non current financial assets350-
1,579144
LIABILITIES
At fair value:
Foreign currency forward contracts held as effective fair value hedges1,579-
Foreign exchange derivatives271-
Foreign currency forward contacts held as cash flow hedges 513-
Interest rate swap contracts614-
Fair value hedge of open firm commitments-1
2,9771
Represented by:
Current financial liabilities2,0131
Non current financial liabilities964-
2,9771
Policy
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave
and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Provision made in respect of employee benefits expected to be settled within twelve months are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits which are not expected to be settled within twelve months are
measured at the present value of the estimated future cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
C7. EMPLOYEE BENEFITS
C6. DERIVATIVES (cont.)
Policy
The provision for warranty claims represents the present value of the Directors’ best estimate of the future outflow of
economic benefits that will be required under the Group’s twelve month warranty programme for certain equipment.
The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered
manufacturing processes or other events affecting product quality.

2018
$’000s
2017
$’000s
Balance at beginning of financial year1,3001,100
Provisions recognised on acquisition of business460-
Additional provisions recognised 874550
Reductions arising from payments(777)(350)
Balance at end of financial year1,8571,300
OBLIGATION
The provision for warranty reflects an obligation for after sales service work in relation to completed contracts and products sold to
customers. The provision is expected to be utilised within two years of balance date, however this timing is uncertain and dependent
upon the actual level of after sales service work required.
C8. PROVISION FOR WARRANTY
Policy
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at
the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement,
the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
DETAILS OF ARRANGEMENT
The Group has a long term bonus scheme for certain executives and senior employees of the Group. In accordance with the terms
of the plan, executives and senior employees who remain in employment with the Group at the vesting dates will be granted a cash
incentive based on the movement in Scott Technology Limited’s share price from the beginning of the scheme to the vesting date.
The fair value of the scheme is measured at year end with reference to the share price. At balance date there is a liability of $2.3
million (2017: $1.4 million) included in employee entitlements in the balance sheet. The impact of the movement in the liability on
profit for the year was $0.9 million (2017: $0.8 million) and is included in the employee benefits expenses. No shares or share options
in Scott Technology Limited are issued under the plan.
C9. SHARE BASED PAYMENT ARRANGEMENTS
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 52PAGE 53

Policy
The Group enters into derivative financial instruments to manage its exposure to foreign exchange rate risk.
IMPAIRMENT OF FINANCIAL ASSETS
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is
objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future
cash flows of the investment have been impacted.
Objective evidence of impairment could include:
• Significant financial difficulty of the issuer or counterparty; or
• Default or delinquency in interest or principal payments; or
• It becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past an
average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and
the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
receivables, where the carrying amount is reduced through the use of an allowance for doubtful debts. When a trade receivable is
considered uncollectible, it is written off against the allowance account.
Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of
the allowance account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the
extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group’s finance function provides services to the business, co-ordinates access to domestic and international financial markets and
monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyse exposures
by degree and magnitude of risks. These risks include market risk (including currency risk and fair value interest rate risk), credit risk,
liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge certain of these risk exposures.
The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the
investment of excess liquidity. Compliance with policies and exposure limits is reviewed on a continuous basis. The Group does not
enter into or trade financial instruments, including derivative financial instruments, for speculative purpose.
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return
to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2017.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital and retained
earnings.
SECTION D – RISK MANAGEMENT
D1. FINANCIAL INSTRUMENTS
The Group has sufficient liquid assets to fund the operational assets. To the extent that additional working capital funding is required
the Group has bank facilities available as disclosed in note C3. Where the Group requires funding for a significant capital acquisition,
separate funding facilities are established, provided the Directors consider that the Group has adequate equity to support these
facilities.
MARKET RISK
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group enters into
a variety of derivative financial instruments to manage its exposure to foreign currency risk, including forward foreign exchange
contracts to hedge the exchange rate risk arising on the export of manufactured products.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.
FOREIGN CURRENCY RISK MANAGEMENT
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise.
Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts. The carrying
amounts in New Zealand Dollars of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:

Assets Liabilities
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
United States Dollar20,07313,16910,7952,810
Euros16,0772,54216 ,1981 ,974
Australian Dollar5,9088,4601,4914,956
Japanese Yen67--
Great Britain Pound16813036
Chinese Yuan3,93 07972,103931
Czech Koruna544-1 ,141-
46,70624,97631,75810,707
D1. FINANCIAL INSTRUMENTS (cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 54PAGE 55

FORWARD FOREIGN EXCHANGE CONTRACTS
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts. The
Group also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales and purchase transactions.
The following table details the forward foreign currency (FC) contracts outstanding as at reporting date:

Average Exchange Rate Foreign Currency NZ$ Contract Value Fair Value
2018 2017 2018
FC’000s
2017
FC’000s
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
Foreign currency forward contracts
held as effective fair value hedges
Sell United States Dollars
Less than 3 months0.69290.72041,315791,898110(80)(1)
3 to 6 months0 . 69 510.69996,0841, 2758,7531,822(392)35
6 to 12 months0.70030.692110, 21782314, 59 01,189(725)34
1 to 2 years0.7010-5, 275-7, 52 5-(350)-
22,8912,17732 ,76 63,121(1 , 5 47 )68
Sell Euros
Less than 3 months-0 . 6 511-118-181-(16)
3 to 6 months0.57890 . 6 4 6156599791(3)(8)
5617797272(3)(24)
Sell Australian Dollars
Less than 3 months0.93430.9 0596561,4007021,545(14)1
3 to 6 months0.93330.90 485251,4705621,625(10)2
6 to 12 months0.93330.933 02631,4442821,548(5)(46)
1,4444,3141,5464,718(29)(43)
34,4098,111(1,579)1
Foreign exchange derivatives
Sell United States Dollars
Less than 3 months0.69630.69721,5402 ,4592,2123, 527(105)86
3 to 6 months0.72020.68431,6755732,326837(192)35
6 to 12 months-0.7012-1,820-2 , 595-39
3,2154,8524,5386 ,959(297)160
Sell Euros
Less than 3 months0.5808-92-158-(4)-
3 to 6 months0.5662-6,93 0-12,239-(10 6)-
7, 0 2 2-12,397-(110)-
Buy Euros
Less than 3 months0.5840-2,793-4,783-136-
Sell Australian Dollars
Less than 3 months-0.9346-525-562-(17 )
21,7187,521(271)143
D1. FINANCIAL INSTRUMENTS (cont.)D1. FINANCIAL INSTRUMENTS (cont.)

Average Exchange Rate Foreign Currency NZ$ Contract Value Fair Value
2018 2017 2018
FC’000s
2017
FC’000s
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
Foreign currency forward contracts
held as cash flow hedges
Sell United States Dollars
Less than 3 months0. 6919-3,000-4,336-(17 7 )-
3 to 6 months0.6888-3,000-4,356-(15 4)-
6 to 12 months 0.6901-5,165-7, 4 8 5-(264)-
11,165-16,177-(595)-
Sell Australian Dollars
Less than 3 months0.8994-2,250-2,502-46-
3 to 6 months0.8994-1,750-1,946-36-
4,000-4,448-82-
20,625-(513)-
The fair value of foreign exchange contracts outstanding is recognised as other financial assets/liabilities.
INTEREST RATE SWAP CONTRACTS
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on
the fair value of issued fixed rate debt and the cash flow exposures on the issued floating rate debt. The fair value of interest rate
swaps at the reporting date is determined by discounting the future cash flows using the curves at reporting date and the credit risk
inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at 31 August.
The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at 31 August.
Outstanding receive floating pay fixed contracts

Average Contracted
Fixed Interest Rate
Notional Principal
AmountFair Value
2018
%
2017
%
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
5 years +2.17%-3,3767,521(614)-
The interest rate swap contract obligation was taken over through the acquisition of the Alvey business. The loan facility is not
currently being used.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 56PAGE 57

FOREIGN CURRENCY SENSITIVITY ANALYSIS
The Group is mainly exposed to the United States Dollar, the Euro, the Australian Dollar and the Chinese Yuan.
The following table details the Group’s sensitivity to a 10% increase and decrease in the New Zealand Dollar against the relevant
foreign currencies. 10% represents management’s assessment of the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and equity where the
New Zealand Dollar weakens 10% against the relevant currency.

10% Increase in
New Zealand Dollar
10% Decrease in
New Zealand Dollar
2018
$’000s
2017
$’000s
2018
$’000s
2017
$’000s
United States Dollar(474)(340)474340
Euro(450)(57)45057
Australian Dollar(4 42)(294)442294
Japanese Yen(1)-1-
Great Britain Pound(14)-14-
Chinese Yuan(182)(13)18213
Czech Koruna60-(60)-
These movements are mainly attributable to the exposure to outstanding foreign currency bank accounts, receivables, payables and
derivatives at year end in the Group.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure
does not reflect the exposure during the year.
CREDIT RISK MANAGEMENT
In the normal course of business, the Group incurs credit risk from trade receivables and transactions with financial institutions. The
Group has a credit policy which is used to manage this exposure to credit risk, including requiring payment prior to shipping to high credit
risk countries and customers, the use of Export Credit Office financing facilities and customer credit checks. The Group, as a result of
the industries in which they operate, can be exposed to significant concentrations of credit risk from trade receivables and counterparty
risk with the bank in relation to the outstanding forward exchange contracts. They do not require any collateral or security to support
financial instruments as these represent deposits with, or loans to, banks and other financial institutions with high credit ratings.
At year end the amount receivable from the five largest trade debtors is $7.9 million (2017: $3.8 million).
The maximum credit risk of on balance sheet financial instruments is their carrying amount.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group’s
maximum exposure to credit risk without taking account of the value of any collateral obtained.
LIQUIDITY & INTEREST RATE RISK MANAGEMENT
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Included in Note C3 are details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.
There is no reasonable movement in interest rates that could have a material impact on the financial statements.
D1. FINANCIAL INSTRUMENTS (cont.)D1. FINANCIAL INSTRUMENTS (cont.)
The following table details the Group’s remaining undiscounted contractual maturity for its non derivative financial liabilities. The
tables below have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Group can be required to pay.
The tables include both interest and principal cash flows.
Weighted
Average Effective
Interest Rate
%
On
Demand
$’000s
Less
than
1 Year
$’000s
1-2 Years
$’000s
2-3 Years
$’000s
3-5 Years
$’000s
5+ Years
$’000s
Total
$’000s
2018
Financial Liabilities
Finance lease liabilities3.89%-1979744232363
Term loans5.14%5913,0001,7986242 ,113-8,126
Deferred settlement on purchase
of business
--6, 275----6, 275
Payable to joint ventures--673----673
Trade creditors & accruals -30,322-----30,322
30,91310,1451,8956682,136245,759
2017
Financial Liabilities
Finance lease liabilities3.47%-311287-58
Payable to joint ventures--547----547
Trade creditors & accruals-16,590-----16,590
16,5905781287-17,195
The Group has access to financing facilities, of which the total unused amount is $23.3 million at the balance sheet date
(2017: $4.4 million). The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
FAIR VALUE MEASUREMENTS RECOGNISED IN THE BALANCE SHEET
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 on the degree to which fair value is observable:
The fair values of financial assets and financial liabilities are determined as follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and;
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
The fair value of forward exchange contracts and options is based on their quoted market price, if available. If a quoted market price
is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current
forward price for the residual maturity and options of the contract using a market rate of interest.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 58PAGE 59

PAGE 61
D1. FINANCIAL INSTRUMENTS (cont.)
Level 1
$’000s
Level 2
$’000s
Level 3
$’000s
Total
$’000s
2018
Financial assets at fair value through profit and loss
Fair value hedge of open firm commitments-1,579-1,579
Financial liabilities at fair value through profit and loss
Foreign currency forward contracts held as effective fair value hedges-(1,579)-(1,579)
Foreign exchange derivatives-(271)-(271)
Foreign currency forward contracts held as cash flow hedges-(513 )-(513 )
Interest rate swap contracts-(614)-(614)
-(1,398)-(1,398)
2017
Financial assets at fair value through profit and loss
Foreign currency forward contracts held as effective fair value hedges-1-1
Foreign exchange derivatives-143-143
Financial liabilities at fair value through profit and loss
Fair value hedge of open firm commitments-(1)-(1)
-143-143
FA I R VA LU E
The fair value of financial instruments not already measured at fair value approximates their carrying value.
SECTION E – GROUP STRUCTURE & SUBSIDIARIES
E1. ACQUISITION OF BUSINESS
BUSINESS ACQUIRED
Location
Date of
Acquisition
Proportion of
Shares / Assets
Acquired
Cost of
Acquisition
$’000sNamePrincipal Activity
AlveyMaterials handling & logistics automationEurope23 April 2018100%19,303
TransboticsAutomated guided vehiclesUSA31 May 2018100%4,873
The Alvey acquisition was by way of the purchase of 100% of the shares in various Alvey group companies, while the Transbotics
acquisition was by way of the purchase of the net business assets. Both businesses acquired were for the purpose of expanding the
Group’s business in key geographies and to expand and enhance the solutions that the Group can offer to its customers.
ANALYSIS OF ASSETS & LIABILITIES ACQUIRED AND PROVISIONAL FAIR VALUES
AlveyTransbotics
Total Fair
Value on
Acquisition
$’000s
Book Value
$’000s
Fair Value
Adjustment
$’000s
Fair Value on
Acquisition
$’000s
Book
Value
$’000s
Fair Value
Adjustment
$’000s
Fair Value On
Acquisition
$’000s
Assets & Liabilities
Cash & bank balances4,039-4,039---4,039
Trade debtors & other receivables11,992-11,9921,429(105)1,32413,316
Inventories 946-946827-8271,773
Plant & equipment3,475(220)3, 25514 4-14 43,399
Intangible assets4,5482104,758---4,758
Contract work in progress1,609(1 , 391)218(1 , 893)(16 8)(2 , 0 61)(1 , 8 4 3)
Bank overdraft---(558)-(558)(558)
Trade creditors & accruals(12 ,175)-(12 ,175)(1,179)(573)(1 ,752)(13 ,927 )
Taxation payable(582)-(582)---(582)
Provision for warranty(173)-(173)-(287)(287)(460)
Employee entitlements(4,797)-(4,797)(78)-(78)(4,875)
Financial liabilities-(571)(571)---(571)
Finance leases(379)-(379)---(379)
Term loans(2,498)-(2,498)---(2,498)
Deferred tax-(1 ,423)(1 ,423)-214214(1 , 209)
Total assets & liabilities6,005(3,395)2 , 610(1 , 3 0 8)(919)(2,227)383
Goodwill on acquisition16,6937,1 0 023,793
Cost of acquisition19,3034,87324,176

COST OF ACQUISITION
The cost of acquisition of the Alvey and Transbotics businesses was paid in a combination of cash and a deferred portion.
Alvey
$’000s
Transbotics
$’000s
Total
$’000s
Cash14, 5223,4381 7,9 6 0
Deferred settlement on purchase of business4,7811,4356,216
19,3034,87324,176
The deferred settlement on the Alvey business is contingent on the vendor and the acquirer completing agreed post-acquisition
conditions of the sale agreement. The deferred settlement on the Transbotics business is contingent on the business achieving agreed
revenue targets. The fair values on acquisition are based on the expectation that all post-acquisition conditions and targets will be met.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 60PAGE 61

Country of
Incorporation
Ownership Interest
& Voting Rights

Name of Entity Balance Date
2018
%
2017
%
Parent Entity
Scott Technology Limited (i)31 AugustNew Zealand
New Zealand Trading Subsidiaries
Scott Technology NZ Limited (ii)31 AugustNew Zealand100100
Scott Automation Limited (iii)31 AugustNew Zealand100100
Scott Technology USA Limited (iv)31 AugustNew Zealand100100
QMT General Partner Limited (v)31 AugustNew Zealand9393
QMT New Zealand Limited Partnership (vi)31 AugustNew Zealand9292
Scott Separation Technology (vii)31 AugustNew Zealand100100
Scott Technology Americas Limited (viii)31 AugustNew Zealand100-
Scott Technology Europe Limited (ix)31 AugustNew Zealand100-
New Zealand Non Trading Subsidiaries
Scott LED Limited31 AugustNew Zealand100100
Rocklabs Limited 31 AugustNew Zealand100100
Overseas Subsidiaries
Scott Technology Australia Pty Ltd (x) 31 AugustAustralia100100
Applied Sorting Technologies Pty Ltd (xi)31 AugustAustralia100100
Scott Automation & Robotics Pty Ltd (xii)31 AugustAustralia100100
QMT Machinery Technology (Qingdao) Co Limited (xiii)31 December (*)China7070
Scott Systems International Incorporated (xiv)31 AugustUSA100100
Scott Systems (Qingdao) Co Limited (xv)31 December (*)China9595
Scott Technology GmbH (xvi)31 December (*)Germany100100
Scott Technology Belgium bvba (xvii)31 AugustBelgium100-
Alvey NV (xviii)31 MarchBelgium100-
FLS Group bvba (xix)31 DecemberBelgium100-
FLS Systems NV (xx)31 DecemberBelgium100-
Alvey do Brazil Comercio de Maquinas de Automacao (xxi)31 DecemberBrazil100-
Alvey Manex a.s. (xxii)31 MarchCzech Republic100-
Alvey Samovie sasu (xxiii)31 MarchFrance100-
Alvey Systems & Services Limited (xxiv)31 MarchUnited Kingdom100-
(*) Determined by local regulatory requirements
E2. SUBSIDIARIES
IMPACT OF ACQUISITION ON THE RESULTS OF THE GROUP
Included in the Group financial statements is revenue of $26.7 million and an operating EBITDA of $0.9 million attributable to the
purchase of the Alvey business and revenue of $4.0 million and an operating EBITDA of $0.8 million attributable to the purchase of
the Transbotics business.
Had these acquisitions been effected at 1 September 2017, the revenue of the Group from continuing operations would have
been approximately $225 million and the operating EBITDA would have been approximately $22 million. The Directors of the
Group consider these '‘pro-forma’ numbers to represent an approximate measure of the performance of the combined Group on an
annualised basis and to provide a reference point for comparison in future periods.

NET CASH OUTFLOW ON ACQUISITION
Alvey
$’000s
Transbotics
$’000s
Total
$’000s
Total purchase consideration paid in cash14, 5223,4381 7,9 6 0
Overdraft/(cash at bank) acquired(4,039)558(3,481)
Net cash outflow on acquisition10,4833,99614,479

GOODWILL ARISING ON ACQUISITION
The consideration paid for the acquisition of Alvey and Transbotics businesses effectively included amounts in relation to the benefit
of expected synergies, current product development and knowhow. These benefits are not recognised separately from goodwill
as the future economic benefits arising from them cannot be readily measured and they do not meet the definition of identifiable
intangible assets. It will not be deductible for tax purposes.

FAIR VALUE GAIN ON PURCHASE OF BUSINESS
In 2017 the inventories, plant and equipment of the DC Ross business were purchased from DC Ross’ receivers for an agreed total
value which was less than market value resulting in a fair value gain on acquisition.
Judgement
The Group acquired a 100% equity interest in Alvey and the business of Transbotics between April and May 2018
for $24.2 million. Due to the timing of the acquisitions, the acquisition accounting fair value adjustments have been
identified as being on a provisional basis. On completion of final valuations the balances for the acquisition may be
revised since the valuation exercise is not yet finalised.
The provisional fair value of intellectual property was based on a valuation performed at acquisition. The intellectual
property was provisionally valued using the relief from royalty method. Key assumptions used in the valuation were:
royalty rate of 5% to 12%, depending on the nature of the intellectual property being valued; cashflow projections
based on financial budgets and forecasts covering a five year period and an annual revenue growth rate of 2% beyond
the initial five year period for a further five years; and a discount rate of 12% to 20%, depending on the nature of the
intellectual property being valued.
E1. ACQUISITION OF BUSINESS (cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 62PAGE 63

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
E3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

INTERESTS IN JOINT VENTURES
Policy
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements using the
equity method of accounting. Under the equity method a joint venture is initially recognised in the consolidated statement of
financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the joint venture. In assessing the Group’s share of the profit or loss or other comprehensive income of the joint
venture, the Group’s share of any unrealised profits or losses on transactions between Group companies and the joint venture is
eliminated. Dividends or distributions received from a joint venture reduce the carrying amount of the investment in that joint
venture in the Group financial statements. When the Group’s share of losses of a joint venture exceeds the Group’s interest in
that joint venture, the Group discontinues its share of further losses. Additional losses are recognised only to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee becomes a
joint venture until the date it ceases to be a joint venture. On acquisition of the investment in a joint venture, any excess of
the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee
is recognised as goodwill, which is included within the carrying value of the investment. Any excess of the Group’s share of
the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised
immediately in profit or loss in the period in which the investment is acquired.

Name of Entity
Country of
Incorporation
Ownership
Interest

Carrying Value
2018
%
2017
%
2018
$’000s
2017
$’000s
Robotic Technologies Limited (i)New Zealand5050552983
Scott Technology Euro Limited (ii)Ireland50508078
NS Innovations Pty Limited (iii)Australia5050--
Scott Technology S.A. (iv)Chile5050750
Rocklabs Automation Canada Limited (v)Canada50502897
Balance at end of financial year9281,118
(i) Scott Technology Limited’s joint venture with Silver Fern Farms Limited, Robotic Technologies Limited (RTL), was formed in
October 2003 and has a balance date of 31 August. RTL’s principal activity is the marketing and development of (primarily)
lamb meat processing equipment and the management of the intellectual property associated with these developments. Scott
Technology Limited’s share of RTL’s net surplus was $268,000 (2017: $176,000) and RTL paid a dividend to Scott Technology
Limited of $700,000 (2017: $Nil).
(ii) Scott Technology Euro Limited (STEL) is a European sales agency for Scott Technology Limited and is a joint venture between Scott
Technology Limited and Industrial Process Solution of Italy. STEL was formed in 2009 and has a balance date of 31 August. Scott
Technology Limited’s share of STEL’s net surplus was $2,000 (2017: $1,000).
(iii) NS Innovations Pty Limited (NSIL) is a joint venture between Scott Technology Limited and Northern Co-Operative Meat
Company Limited of Australia. NSIL was formed in August 2009 and has a balance date of 30 June, in line with Australian tax rules.
NSIL’s principal activity was the marketing and development of (primarily) beef meat processing equipment and the management of
the intellectual property associated with these developments. NSIL is no longer operating and is in the process of being wound up.
Scott Technology Limited’s share of NSIL’s net surplus was $Nil (2017: $Nil).
New Zealand Trading Subsidiaries
(i) Scott Technology Limited is the ultimate parent entity of the Group. It is an investment holding company and owns all New
Zealand properties.
(ii) Scott Technology NZ Limited is the main trading company for New Zealand operations, including the design and manufacture of
automated and robotic systems (under the “Scott” brand), the service and upgrade of Scott equipment worldwide (under the “Scott
Service International” brand), the manufacture and sale of automated laboratory sampling equipment for the mining industry
(under the “Rocklabs” brand) and development, design and manufacture of high temperature superconductor equipment (under
the “HTS-110” brand).
(iii) Scott Automation Limited’s principal activity is the design and manufacture of automation systems.
(iv) Scott Technology USA Limited is a financing subsidiary for the USA businesses, as well as owning a number of domain names
(URLs) associated with the RobotWorx business.
(v) QMT General Partner Limited is the general partner for the QMT New Zealand Limited Partnership and directly owns 1% of QMT
New Zealand Limited Partnership.
(vi) QMT New Zealand Limited Partnership is an investment holding entity and owns 75% of QMT Machinery Technology (Qingdao)
Co Limited.
(vii) Scott Separation Technology Limited develops and markets patented centrifuge technology with particular application to the
honey and fish processing industries.
(viii) Scott Technology Americas Limited is a holding company for Americas operations
(ix) Scott Technology Europe Limited is a holding company for European operations
Overseas Subsidiaries
(x) Scott Technology Australia Pty Limited is a holding company for Australian activities.
(xi) Applied Sorting Technologies Pty Limited’s principal activity was the manufacture and sale of x-ray and sorting technology. These
activities are now conducted through Scott Automation & Robotics Pty Limited.
(xii) Scott Automation & Robotics Pty Limited is the main trading company for Australia operations, designing and manufacturing
automated and robotic systems.
(xiii) QMT Machinery Technology (Qingdao) Co Limited is a general engineering business located in Qingdao, China. The woodworking
lathes and parts business has ceased and the automation engineering business has been transferred to Scott Systems (Qingdao) Co
Limited. The company is currently being wound up.
(xiv) Scott Systems International Incorporated’s principal activities are in North America for the sale of robot systems under the
“RobotWorx” brand, the design and manufacture of automated guided vehicles under the “Transbotics” brand and undertaking
sales and service for the wider Group.
(xv) Scott Systems (Qingdao) Co Limited is a general engineering business located in Qingdao, China.
(xvi) Scott Technology GmbH designs and manufactures automation and robotic systems and is located in Kurnbach, Germany.
(xvii) Scott Technology Belgium bvba is a holding company for Belgium operations.
(xviii) Alvey NV designs and manufactures automation and robotic systems and is located in Deerlijk, Belgium.
(xix) FLS Group bvba designs and manufactures automation and robotic systems and is located in Deerlijk, Belgium.
(xx) FLS Sysytems NV designs and manufactures automation and robotic systems and is located in Deerlijk, Belgium.
(xxi) Alvey do Brazil Comercio de Maquinas de Automacao is a non-trading Brazilian subsidiary.
(xxii) Alvey Manex a.s. is a general engineering business located in Podivin, Czech Republic.
(xxiii) Alvey Samovie sasu’s principal activity is the sale and service of automated and robotic equipment and is based in Ploemeur and
Marseille, France.
(xxiv) Alvey Systems & Service Limited’s principal activity us the sale and service of automated and robotic equipment and is based in
Warrington and Glasgow, United Kingdom.
E2. SUBSIDIARIES (cont.)
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 64PAGE 65

(iv) Scott Technology S.A. (STSA) is a joint venture between Scott Technology Limited and Canadian private company STG Holdings
Limited. STSA commenced trading in June 2014 and has a balance date of 31 August. STSA is a sales agency for mining equipment
in the Americas and is based in Chile. Scott Technology Limited’s share of STSA’s net deficit was $42,000 (2017: share of net
deficit $38,000).
(v) Rocklabs Automation Canada Limited (RAC) is a joint venture between Scott Technology Limited and Canadian private company
STG Holdings Limited. RAC commenced trading in 2013 and has a balance date of 31 August. RAC is a sales agency for mining
equipment in North America. Scott Technology Limited’s share of RAC’s net surplus was $282,000 (2017: $82,000).

Carrying value of equity accounted investments:
2018
$’000s
2017
$’000s
Balance at beginning of financial year1,118923
Share of net surplus510220
Share of dividends(700)-
Sale of interest in joint venture-(25)
Balance at end of financial year9281,118
Joint Ventures
Summarised statement of comprehensive income of joint ventures from continuing operations:
2018
$’000s
2017
$’000s
Income16,94512,136
Expenses(15,925)(11,696)
Net surplus and total comprehensive income1,020440
Group share of net surplus510220
Joint Ventures
Summarised balance sheets of joint ventures:
2018
$’000s
2017
$’000s
Current assets3,8513,937
Non-current assets1,9641,731
Current liabilities(1,601)(2,049)
Non-current liabilities(2,316)(1,349)
Net assets1,8982,270
Group share of net assets9491,135
RTL, STEL, NSIL, STSA and RAC do not have any contingent assets, contingent liabilities or commitments for capital expenditure.
The Group is not jointly and severally liable for any of the joint ventures’ liabilities.
Joint Ventures:
2018
$’000s
2017
$’000s
Project work undertaken by the Group for RTL6,0928,095
Administration, sales and marketing fees charged by the Group to RTL234173
Sales revenue received by RTL from the Group13,6168,875
Advance from RTL to Scott Technology(585)(371)
Interest charged by RTL to Scott Technology on advance9629
Administration fees charged by the Group to STEL66
Commission received by STEL from the Group211199
Advance from STEL to Scott Technology(88)(176)
Project work undertaken by the Group for SSTL-2
Project work undertaken by the Group for STSA4061,466
Advance from Scott Technology to STSA1,2981,223
Project work undertaken by the Group for RAC2,4591,583
Advance from Scott Technology to RAC1,017686
E4. RELATED PARTY TRANSACTIONS
E3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (cont.)

ADVANCES
Advances to/from joint ventures are unsecured, interest free and repayable on demand.

DIRECTORS
C C Hopkins and S J McLauchlan are trustees of the Scott Technology Employee Share Purchase Scheme. The balance of the interest
free advance owing to the scheme at 31 August 2018 was $3,000 (2017: $4,000). During the year no shares vested with employees
and no shares (2017: no shares) which had not vested with employees were disposed of at market value. As at 31 August 2018
17,779 (2017: 17,779) shares were being held on trust which had vested with the Trustees upon the resignation of employees during
the period of the Scheme and are available for sale. These shares have been treated as equity under share capital.

SUBSTANTIAL SHAREHOLDERS
C C Hopkins is a Director of Oakwood Group Limited, which owns Oakwood Securities Limited, a substantial shareholder of Scott
Technology Limited. C C Hopkins has received Directors’ fees of $21,000 from Oakwood Group Limited during the year (2017:
$17,000).
JBS Australia Pty Limited owns a 50.1% shareholding in Scott Technology Limited. The Group has recognised sales to JBS Companies
of $5.6 million (2017: $3.2 million) and has made purchases from JBS Companies of $1.8 million (2017: $2.5 million).
As at balance date the Group had $0.8 million receivable from JBS Companies (2017: $1.4 million).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 66PAGE 67

SECTION F – OTHER DISCLOSURES
F1. NOTES TO THE CASH FLOW STATEMENT
Policy
The Statement of Cash Flows is prepared exclusive of GST, which is consistent with the method used in the Statement of
Comprehensive Income.
Definition of terms used in the Statement of Cash Flows:
• Cash includes cash on hand, demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of change in value, net of bank overdrafts.
• Operating activities include all transactions and other events that are not investing or financing activities.
• Investing activities are those activities relating to the acquisition and disposal of current and non-current
investments and any other non-current assets.
• Financing activities are those activities relating to changes in the equity and debt capital structure of the Group and
those activities relating to the cost of servicing the Group’s equity.

2018
$’000s
2017
$’000s
Net surplus for the year 10,77210,265
Adjustments for non-cash items:
Depreciation and amortisation4,2252,987
Net loss/(gain) on sale of property, plant and equipment21(73)
Deferred tax1,541201
Share of net surplus of joint ventures and associates(510)(220)
Fair value gain on purchase of business-(936)
Add / (less) movement in working capital:
Trade debtors(19,231)(2,000)
Other financial assets – derivatives(1,435)1,332
Sundry debtors(2,576)174
Inventories(6,553)(3,929)
Contract work in progress1,031(5,245)
Taxation payable(953)1,779
Trade creditors and accruals13,7328,228
Other financial liabilities – derivatives2,463(619)
Employee entitlements6,0891,195
Provision for warranty557200
Movements in working capital disclosed in investing/financing activities:
Working capital relating to purchase of business and non controlling interest(7,109)675
Movement in foreign exchange translation reserve relating to working capital(1,449)(607)
Net cash inflow from operating activities61513,407
F2. CONTINGENT LIABILITIES

2018
$’000s
2017
$’000s
Payment guarantees and performance bonds12,4327,711
Stock Exchange bond7575
Maximum contract penalty clause exposure6,9791,501
Payment guarantees are provided to customers in respect of advance payments received by the Group for contract work in progress,
while performance bonds are provided to some customers for a period of up to one year from final acceptance of the equipment.
Scott Technology Limited has a payment bond to the value of $75,000 in place with ANZ Bank New Zealand Limited in favour of the
New Zealand Stock Exchange.
The Group has exposure to penalty clauses on its projects. These clauses relate to delivery criteria and are becoming increasingly
common in international contractual agreements. There is a clearly defined sequence of events that needs to occur before penalty
clauses are imposed.
F3. KEY MANAGEMENT PERSONNEL COMPENSATION
The compensation of the Directors and executives, being the key management personnel of the entity, is set out below:

2018
$’000s
2017
$’000s
Short term benefits - employees2,1562,535
Short term benefits – executive Director607708
Short term benefits – non-executive Directors208193
Long term benefits – employees494604
Long term benefits – executive Director268284
3,7334,324
The composition of the executive team changed during the year following the acquisition of the Alvey and Transbotics businesses.
F1. NOTES TO THE CASHFLOW STATEMENT (cont.)

RECONCILIATION OF MOVEMENT IN DEBT FACILITIES
1 September
2017
$’000s
Acquisitions
$’000s
Net
Drawings
$’000s
Net
Repayment
$’000s
31 August
2018
$’000s
Bank loans-2,4985,079(168)7,409
Finance leases56379-(89)346
562,8775,079(257)7,755
F4. SUBSEQUENT EVENTS
DIVIDEND
On 25 October 2018 the Board of Directors approved a final dividend of six cents per share with full imputation credits attached to
be paid for the 2018 year (2017: six cents per share).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 68PAGE 69

ADDITIONAL STOCK EXCHANGE INFORMATION
FOR THE YEAR ENDED 31 AUGUST 2018
AUDITOR'S REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SCOTT TECHNOLOGY LIMITED
OPINION
We have audited the consolidated financial statements of
Scott Technology Limited and its subsidiaries (the ‘Group’),
which comprise the consolidated balance sheet as at 31 August
2018, and the consolidated statement of comprehensive income,
statement of changes in equity and statement of cash flows for
the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements,
on pages 26 to 69, present fairly, in all material respects, the
consolidated financial position of the Group as at 31 August 2018,
and its consolidated financial performance and cash flows for the
year then ended in accordance with New Zealand Equivalents
to International Financial Reporting Standards (‘NZ IFRS’) and
International Financial Reporting Standards (‘IFRS’).
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (‘ISAs’) and International Standards
on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with
Professional and Ethical Standard 1 (Revised) Code of Ethics
for Assurance Practitioners issued by the New Zealand
Auditing and Assurance Standards Board and the International
Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Our firm carries out other assignments for the Group in the area
of taxation advice, due diligence services and other assurance
services. These services have not impaired our independence
as auditor of the Company and Group. In addition to this,
partners and employees of our firm deal with the Company
and its subsidiaries on normal terms within the ordinary course
of trading activities of the business of the Company and its
subsidiaries. The firm has no other relationship with, or interest
in, the Company or any of its subsidiaries.
AUDIT MATERIALITY
We consider materiality primarily in terms of the magnitude of
misstatement in the financial statements of the Group that in our
judgement would make it probable that the economic decisions
of a reasonably knowledgeable person would be changed or
influenced (the ‘quantitative’ materiality). In addition, we also
assess whether other matters that come to our attention during
the audit would in our judgement change or influence the
decisions of such a person (the ‘qualitative’ materiality). We use
materiality both in planning the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the Group financial statements as
a whole to be $750,000.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
SUBSTANTIAL SHAREHOLDERS
Names of Substantial Security HolderNumber of shares in which a relevant interest
was held as at 17 September 2018
1. JBS Australia Pty Limited38,476,592
2. Oakwood Securities Limited5,500,000
The total number of issued voting securities of the company as at 17 September 2018 was 75,902,939 ordinary shares.
Distribution of Shares by Holding Size
# of
Shareholders% of TotalNumber% of Total
1 - 1,00072627.12367,5530.49
1,001 - 5,0001,12041.842,847,8583.75
5,001 - 10,00039714.832,880,1353.79
10,001 - 50,00036613.677,080,9019.33
50,001 - 100,000341.272,325,7413.06
100,001 and over341.2760,400,75179.58
Total and percentage2,677100.0075,902,939100.00
Twenty Largest Shareholders as at 17 September 2018Shares% of Total
1. JBS Australia Pty Limited38,476,59250.69
2. Oakwood Securities Limited5,500,0007.25
3. New Zealand Central Securities Depository Limited5,020,9926.62
4. Russell John Field & Anthony James Palmer (JI Urquart Family A/C)2,000,0002.63
5. JB Were (NZ) Nominees Limited 1,645,8882.17
6. Forsyth Barr Custodians Limited (1-33 A/C)1,062,7951.40
7. Leveraged Equities Finance Limited706,5630.93
8. Jarden Custodians Limited479,9820.63
9. Jack William Allan & Helen Lynette Allan450,0000.59
10. FNZ Custodians Limited403,7900.53
11. Rosebery Holdings Limited384,9940.51
12. Forsyth Barr Custodians Limited379,8900.50
13. Kenneth William Wigley373,7090.49
14. Custodial Services Limited (4 A/C)324,3330.43
15. Michael Walter Daniel, Nigel Geoffrey Burton and Michael Murray Benjamin290,0000.38
16. Margaret Ann Ring & Melissa A Henderson270,0000.36
17. Opito Investments Pty Ltd220,0000.29
18. Investment Custodial Services Limited218,6910.29
19. Custodial Services Limited (3 A/C)206,7130.27
20. Harry McMillan Hearsay Salmon200,0000.26
58,614,93277.22
EMPLOYEE REMUNERATION
Remuneration and other benefits of $100,000 per annum or more, received or receivable by employees in their capacity as employees
were:
Salary Range
Number of
EmployeesSalary Range
Number of
EmployeesSalary Range
Number of
Employees
$100,000 - $110,00027$180,001 - $190,0005$270,001 - $280,0001
$110,001 - $120,00020$190,001 - $200,0002$320,001 - $330,0001
$120,001 - $130,00015$200,001 - $210,0005$340,001 - $350,0001
$130,001 - $140,00021$210,001 - $220,0001$350,001 - $360,0001
$140,001 - $150,00013$220,001 - $230,0002$360,001 - $370,0001
$150,001 - $160,0009$230,001 - $240,0005$370,001 - $380,0001
$160,001 - $170,0006$240,001 - $250,0001$490,001 - $500,0001
$170,001 - $180,0009$250,001 - $260,0001
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 70PAGE 71

Key audit matterHow our audit addressed the key audit matter
RECOGNITION OF PROFIT ON LONG TERM
PROJECTS
The Group’s most significant revenue stream relates
to long term projects for customers in various
industries. Revenue and profit on long term
projects are accounted for based on management’s
estimate of the percentage of completion of the
individual contracts as detailed in note A1.
There is a significant level of judgement involved in
the recognition of revenue and profit on long term
projects driven by factors which arise throughout
the life of the project requiring estimation, and
contract conditions differing between projects. For
these reasons, we have identified this area as a key
audit matter.
AUDITOR'S REPORT (cont.)
Key audit matterHow our audit addressed the key audit matter
ACQUISITION ACCOUNTING
As detailed in note E1, the Group acquired 100%
of the shares in a variety of companies comprising
Alvey Group (“Alvey”) and the business of Transbotics
Corporation (“Transbotics”) for a total consideration
of NZD $24.2 million between April 2018 and
May 2018. Due to the timing of the acquisitions,
the acquisition balance sheets were assessed on a
provisional basis.
Accounting for these acquisitions involved judgement
in order to:
• Measure the provisional fair value of assets and
liabilities recorded in the financial records of the
entities acquired;
• Identify and measure the provisional fair value
of intangible assets not recorded in the financial
records of the entities acquired; and
• Allocate the purchase price between all the
identifiable assets and liabilities, and goodwill.
We included the Alvey and Transbotics acquisitions
as a key audit matter given the level of estimation and
judgement required in identifying and establishing the
fair values.
In particular, there is significant judgement relating to
identifying the fair value of unrecognised intangible
assets.
The acquisition accounting resulted in the recognition
of finite life intangible assets, comprising intellectual
property provisionally valued at $4.8 million, and $23.8
million of goodwill.
The intellectual property has been valued using the
the relief from royalty method. The key assumptions
applied in the model were:
• cashflow projections;
• discount rate;
• royalty rate; and
• terminal growth rate.
Our procedures included, amongst others:
• Considering the completeness of the identified assets and liabilities
acquired by comparison to the sale and purchase agreement, through
discussions with the Group and internal experts, and based on our
understanding of the acquired business;
• Utilising industry knowledge to assess the Group’s identification of
intangible assets and consider what the residual goodwill represents;
• Assessing the Group’s determinations of provisional fair values for assets
and liabilities acquired and the methods used to value the underlying
assets; and
• Challenging the rationale for allocation of goodwill to CGU’s or groups of
CGU’s and evaluating the Group’s assessment that there is no impairment
of goodwill by comparing the forecast results included in their impairment
models to the due diligence reports and group budgets.
We used our internal valuation specialists to assess the appropriateness of
the nature and provisional valuation of the intellectual property identified by
the Group as part of the acquisitions. This assessment included:
• evaluating the appropriateness of the valuation methodology and
testing the mathematical integrity of the model;
• evaluating the discount rate applied in the model through comparison to
the cost of capital for the business and to external market data; and
• comparing the Group’s assumed royalty rate charge to market data for
similar intangible assets.
Our procedures included, among others:
• Assessment of controls – Assessing the group’s processes and controls
around preparation/calculation of the percentage of completion.
• Hindsight consideration – For a sample of projects in place at the end of
the prior year, we compared the current year actual results to prior year
forecasts to assess the reliability of management estimates relating to
the cost of completion.
• Testing of contract revenue – For a sample of contracts, we performed
the following procedures:
- Assessed whether the key estimates made by management reflect the
terms and conditions of the contract;
- Evaluated cost to complete forecasts by challenging management’s key
assumptions and comparing revenue recognition calculations to project
cost forecasts prepared by project managers;
- Obtained evidence of scope variations and claims and verified that
these have not been included in management’s determination of
revenue recognition until agreed with the customer; and
- Tested contract costs incurred during the year to validate the costs and
assess whether they have been applied to contracts appropriately.
We considered whether the Group’s methodology for assessing impairment
is compliant with NZ IAS 36. We focused on testing and challenging the
suitability of the models and reasonableness of the assumptions used by the
Group in conducting their impairment reviews.
Our procedures included, among others:
• Assessment of controls – Assessing the group’s processes and controls
around the value in use calculation.
• Cash generating units (CGU) – We assessed management’s determination
of cash generating units and our understanding of the Group’s business
and operating environment.
• Past performance – We assessed the reasonableness of forecast figures
by looking at historical performance against past forecasts.
• Use of specialists – We used our internal valuation experts to assist in
our evaluation of the reasonableness of the discount rates applied by the
Group through consideration of the relevant risk factors for each CGU or
impairment model, the cost of capital for the Group, and market data on
comparable businesses.
• Integrity check – We assessed the mathematical accuracy of the models.
• Sensitivity analysis – We evaluated the sensitivity analysis performed by
management to consider the extent to which a change in one or more of
the key assumptions could give rise to impairment in the goodwill.
GOODWILL IMPAIRMENT ASSESSMENT
As at 31 August 2018, there is $53.8 million
(including goodwill in respect of the current year
acquisitions which is addressed below) (2017: $30
million) of goodwill included on the balance sheet
of the Group as detailed in note B5. The balance is
held across three cash generating units.
NZ IAS 36: Impairment of Assets require the
Group to complete an impairment test related to
goodwill annually. The assessment of value in use is
performed using a discounted cash flow calculation.
This calculation is subjective, and requires the use
of judgement, primarily in respect of:
• Forecast cash flows, particularly in relation to
future project wins and market conditions; and
• Discount rates.
We have assessed a key audit matter in relation to
the significant judgements and estimates required
in preparing the value in use model.
AUDITOR'S REPORT (cont.)
ANNUAL REPORT SCOTT TECHNOLOGY LIMITED 2018
PAGE 72PAGE 73