2019 Annual Report

Annual
Report
2019
Scales
Corporation
Limited

Introduction 04
Key 2019 Highlights 06
Managing Director and Chair’s Report 08
Sustainability Report 18
Divisional Overview 26
Leadership Profiles 40
Financial Statements 44
Independent Auditor’s Report 88
Corporate Governance 91
Director Disclosures 105
Glossary 110
Directory 111

04
Scales Corporation Limited
Our people are our most
important asset and we want to
ensure we are investing in them
in the best way possible.
Welcome to our Annual Report for our 108th year of trading.
2019 was another exciting year of change for Scales. We said
farewell to Polarcold but welcomed Alliance Group Limited (Alliance)
as a joint venture partner in our Meateor New Zealand (Meateor NZ)
business. That, together with the integration of Shelby Foods
(Shelby), in which we acquired a 60 per cent stake in December
2018, provides Scales with an excellent base on which to grow.
The completion of the sale of Polarcold finalised our strategic
divestment programme and we remain committed to growing your
diversified agribusiness portfolio by reinvesting the proceeds from the
sale of the businesses in a number of focus areas – organic growth
opportunities, acquisition and investment.
It has also been a busy year from an operational point of view, with
strategic progress in each division as well as with our Sustainability
programme and human resource initiatives. Our people are our most
important asset and we want to ensure we are investing in them in
the best way possible.
As we go to print, the impact on Scales from the COVID-19 outbreak
remains uncertain. Whilst the situation is rapidly evolving, we
continue to have confidence in the actions of authorities to both
curb the spread of the disease as well as to facilitate the flow of food
products. Scales will keep investors updated in the usual manner as
information comes to light.
Introduction

Vertically integrated apple grower,
packer & marketer
Apple marketer
Horticulture
Air & sea freight
Logistics
Introduction
Petfood ingredient
procurer, processor
and marketer
Juice manufacturer
MEATEOR
Food Ingredients
Petfood ingredient
procurer, processor
and marketer
Australia
USA
Annual Report - Year Ended 31 December 2019
05

06
Scales Corporation Limited
$121.6m
$104.9m
$52.7m$36.4m
84.2c
(2018: $45.5 million)
(2018: $62.2 million Net Debt)
(2018: $67.1 million)(2018: $35.8 million)
(2018: 32.2 cents)
5.95m
of all apples
exported, up 2%
TCEs
Reported Profit
for the Year
Net Cash
Underlying
EBITDA
Underlying

Net Profit
earnings per
share (EPS)
Second carbon
footprint
certification
39,438
up 12%
TEUs
shipped
Key 2019 Highlights
Strength in
Numbers
4%
process undertaken,
a reduction of

1
Includes 100 per cent of volumes from Meateor NZ; i.e. total volumes controlled directly and indirectly by the Meateor Group.
Annual Report - Year Ended 31 December 2019
07
Key 2019 Highlights
(2018: 17 per cent)
New record Revenue
TCEs
Second staff
engagement survey
carried out,
NZQA qualified
Health & Safety
representatives
people involved in
training schemes,
apprenticeships
or company-
supported studies
$
484.6m
19.0c
16%
61%
46
85
+
20% increase on 2018
(ROCE)
engagement increased to
up 5%
per share
(2018: 18.5 cents)
Return on
Capital Employed
110,970
of petfood ingredients sold
1
,
up 282%
of own-grown
apples exported,
in line with 2018
metric tonnes
3.82m
Dividends
declared of
6.2m
litres of juice
sold,
in line with 2018

Managing Director
and Chair’s Report
Focusing
on what’s
important

$32.7m
$38.6m
$34.8m
Underlying EBITDA
Underlying NPAT
Annual Report - Year Ended 31 December 2019
09
2019
$’000
2018
$’000
Variance
Revenue484,609 402,542 20%
EBITDA79,853 51,744 54%
Underlying EBITDA52,699 67,057 -21%
Net Profit 121,577 45,499 167%
Underlying Net Profit36,399 35,814 2%
On behalf of the Board, we are delighted
to present Scales’ Annual Report for the
year ended 31 December 2019, a year in
which Scales reported a record Net Profit
of $121.6 million. This was another solid
result that was, in part, supported by
gains on the sale of Polarcold and part-
sale of Meateor’s NZ business.
Andy Borland and Tim Goodacre
The Group also reported record Revenue of $484.6
million, a 20 per cent increase on 2018 due mainly
to the acquisition of Shelby. We produced a strong
Underlying result, with Underlying Net Profit of $36.4
million, 2 per cent ahead of 2018. This was a pleasing
outcome in light of mixed regional market returns
for the Horticulture division and a one-off inventory
valuation adjustment affecting the Meateor Group.
The graphs below demonstrate Scales’ 5 year
performance history at an Underlying EBITDA
and Underlying NPAT level. The historic results
have not been adjusted for businesses that
have been divested or acquired; accordingly the
graphs reflect the changes in the Group structure,
particularly over 2018 and 2019.
$67.9m
$61.4m
20182019
2019
201720162015
$67.1m
$52.7m
$62.0m
2018201720162015
$35.8m
$36.4m
Managing Director and Chair’s Report
Directors and management use non-GAAP (Underlying) profit measures when discussing financial performance in this document. The Directors and management believe that these
profit measures provide meaningful information that is helpful to investors and give them a better understanding of a company’s financial performance when presented in addition to
GAAP (NZ IFRS) information. Underlying profit measures are used internally to evaluate performance of our divisions, establish operational goals and to allocate resources. They also
represent some of the profit measures required by Scales’ debt providers. Non-GAAP (Underlying) profit measures are not prepared in accordance with NZ IFRS and are not uniformly
defined, therefore the non-GAAP profit measures reported in this document may not be comparable with those that other entities report and should not be viewed in isolation or
considered as a substitute for GAAP (NZ IFRS) measures reported by Scales. Underlying profit measures were not subject to an audit or review.
A full reconciliation between NZ IFRS and Underlying measures is provided on pages 38 and 39.
Underlying measures for 2019 do not include Polarcold operational earnings and only include 50 per cent of Meateor NZ from 1 April 2019 (2018: includes Polarcold and Meateor NZ
for the full year, Liqueo up to 1 August 2018 and Shelby from 20 December 2018).
All of the above measures (both NZ IFRS and Underlying) are presented before the deduction of Fern Ridge and Shelby non-controlling interests in NPAT of $3.6 million (2018: $0.4 million).

Scales’ Vision
To be the foremost investor in, and grower of, New Zealand
agribusinesses by leveraging its unique insights, experience
and access to collaborative synergies.
Scales’ Long Term Goal
To generate a long-run average 15 per cent ROCE across
the portfolio.
Strategic Update
Having completed our divestment programme, our investment
attention is now focused on 3 main areas:
1. Organic growth opportunities that strengthen our existing
business units.
2. Acquisition growth opportunities that strengthen our
existing business units.
3. Investment opportunities in new sectors where Scales can
add value or enhance an existing business through its
capital resources, agribusiness experience and/or export
network, especially in China.
Strategy
Change in
Accounting Policy
Scales has applied NZ IFRS 16 Leases, effective from
1 January 2019. NZ IFRS 16 eliminates the distinction
between operating and finance lease accounting for lessees.
A right of use asset and a lease liability are recognised for
most leases.
The adoption of NZ IFRS 16 resulted in a $1.0 million
reduction in net profit after tax. Scales adopted the modified
retrospective (full simplified) approach, whereby prior period
comparatives are not restated, and the right of use asset
is assumed to be equal to the lease liability on the date of
transition (1 January 2019).
Shareholder Returns
We continue to be mindful of the long term returns to our
shareholders. Those shareholders who invested in our IPO
in July 2014 have achieved a 227 per cent return
1
on funds
invested to the end of February 2020. By comparison, an
investment in the S&P NZX50 would have delivered a 117 per
cent return on funds invested over the same period.
Meateor NZ
As noted in last year’s Annual Report, Scales entered into a
50/50 petfood joint venture with Alliance, a leading farmer co-
operative and supplier of raw materials to the petfood sector,
on 1 April 2019. Accordingly, Meateor’s New Zealand petfood
business and operations were transferred to a joint venture
that is being run by Scales and Alliance.
We are pleased to advise that the joint venture is progressing
well and it has identified a number of organic growth
opportunities that it is working to develop. This transaction,
together with the acquisition of Shelby, have provided our
Food Ingredients division with a base for continued growth
and set it on the journey to becoming a $25 million
EBITDA division.
Managing Director and Chair’s Report
We are considering a number of opportunities and examples
of this include:
• A significant post-harvest investment in the construction
of a modern coolstore adjacent to Mr Apple’s Whakatu
packhouse. The coolstore will take advantage of modern
technologies and be designed to deliver improved labour
efficiency. The coolstore, which is expected to be operational
during the 2021 season, will achieve improved centralisation
of Mr Apple’s post-harvest operations giving rise to reduced
truck movements – lowering Mr Apple’s carbon footprint as
well as improving transportation efficiencies.
• Continued orchard redevelopment and Recognised Seasonal
Employer (RSE) accommodation investment at Mr Apple.
• A number of organic growth opportunities in the Food
Ingredients division, both domestically and offshore, to
further extend the range of added value petfoods that this
division makes available to its customers.
• Acquisition opportunities, including opportunities that
strengthen existing business units as well as opportunities
in new agribusiness sectors.
Fiona Sharp, John Sainsbury and Tim Harty, Meateor.
10
Scales Corporation Limited
1
Calculated as the difference between the closing share price on 29 February 2020 plus all net dividends paid (a total of $0.915 per share) and the IPO listing price of $1.60.

Managing Director and Chair’s Report
Specific Strategic Targets
DivisionTargetStatus
Group
SustainabilitySignificant Progress
• Further develop and evolve our reporting and
measuring of key sustainability aspects affecting
Scales’ businesses.
• Develop best-in-class sustainability reporting.
• Demonstrate improvements in sustainability.
Second carbon footprint certification process
completed, with a 4 per cent reduction
in emissions.
Energy Efficiency and Conservation Authority
(EECA) audit undertaken at 2 Mr Apple sites.
Second group-wide staff engagement
survey undertaken.
A Mr Apple Environmental Plan developed.
Financial and operationalGood Progress
• Maintain financial returns in line with, or above,
industry returns.
• Continue to seek acquisitive and organic growth
to expand the business.
Strong return achieved.
Divestments settled, a joint venture entered
into and integration of a 60 per cent
acquisition achieved.
A large number of opportunities reviewed.
Shareholder returnsOn Track
• Continue to provide shareholders with an
attractive yield on dividends.
• Deliver capital gains and shareholder liquidity
through careful strategic execution.
Interim dividend maintained at 9.5 cents per share.
Continued to maintain Group ROCE above long-
run target of 15 per cent.
Horticulture
Brand and Intellectual Property developmentGood Progress
• Continue to develop the Mr Apple brand,
particularly within our key markets of Asia and the
Middle East.
Renewed marketing activations and increased in-
market branding initiatives.
Increased presence in China.
VolumesExcellent Progress
• Reach 4 million TCEs of our own grown apples.3.82 million TCEs exported, 6 per cent ahead
of forecast
SalesExcellent Progress
• Continue to increase market penetration
into Asia through services company Primary
Collaboration New Zealand (PCNZ) and strategic
partner China Resources Ng Fung Limited (China
Resources Ng Fung).
Notable increase in volumes to Asia and Middle
East markets.
Increase in retail and e-commerce channel sales.
Plant VarietiesSignificant Progress
• Acquire new Plant Variety Rights (PVRs) to meet
emerging needs.
• Redevelop lower-performing orchards and
varieties into higher value crops.
Marketing for Posy
TM
commenced mid-year and
initial shipment of Posy
TM
airfreighted in
February 2020.
44 hectares of orchard redeveloped during
winter 2019.
Food
Ingredients
Increase scale and expand offeringOn Track
• Review strategic initiatives and consider organic
and acquisition opportunities to increase
divisional scale.
Integration of Shelby and joint venture with
Alliance adding diversification of geographical
exposure and range of protein options.
Further growth opportunities being investigated.
Logistics
Rebalance our portfolio of businesses Completed
• Review investment in the division in line with
Strategy Refresh.
Storage businesses (Polarcold and Liqueo) sold.
Expand logistics offeringsOn Track
• Develop scale to utilise the expertise and capacity
within the team.
Increased throughput of ocean freight volumes.
Increased resource in Christchurch (warehouse)
and Melbourne (sales).
Annual Report - Year Ended 31 December 2019
11

Sustainability
Since starting our sustainability journey, and appointing
a Group Health & Safety, Compliance and Sustainability
Manager, we have made significant progress and continue
to make incremental improvements in a wide range of areas.
We know that meeting our sustainability goals will not be a
sprint to the finish but, instead, it will be a journey where we
are smart about what we do and how we do it, in the most
sustainable way possible.
Climate change is a concern for us, as it is for all global
businesses. During 2020 we will start to look at this in more
depth, consulting the science world for a factual baseline
from which we can assess the potential implications for our
businesses. We look forward to updating you on our progress
next year.
A full update is provided in the Sustainability section.
Scales’ Team
Our results reflect the hard work, skill and positive manner
of each and every staff member within the Scales Group. We
are very conscious that our business is all about our people
and a period of change can be unsettling. We are extremely
pleased by all our teams’ performances during the year and are
delighted by the enthusiasm and commitment that Shelby and
Alliance have brought to Scales.
As in previous years, health and safety continues to be top
of mind for us and is a leading agenda item in our Board
meetings. In addition, we have focussed on leadership,
bullying & harassment and mental health awareness this year.
We are proud of the people-first culture within the Scales
group and we want to ensure that every staff member is happy
to come to work.
The Board would like to thank every member of staff for the
energy and commitment that is brought by them.
Appropriately
Incentivising our Team
Scales’ management team continues to be accountable
for implementing the strategies as directed by the Board.
Accordingly, we continue to have a strong incentive based
remuneration scheme aligned to positive personal performance
and retaining and developing excellent team members over the
long term.
Shorter term incentives are balanced alongside long term
business interests and the incentive based remuneration
schemes are an important part of the Board and Managing
Director’s objectives. Scales’ remuneration philosophy and
a breakdown of executive remuneration is outlined in more
detail in the Corporate Governance Statement.
Mr Apple orchard managers.
12
Scales Corporation Limited
Managing Director and Chair’s Report

Income Statement
2019
$’000
2018
$’000
Revenue484,609 402,542
Underlying EBITDA52,699 67,057
Underlying EBIT42,453 52,274
Underlying Net Profit36,399 35,814
After tax impact of:
Non-cash, NZ IFRS and other adjustments85,178 9,685
Net Profit121,577 45,499
Capital employed280,625 261,339
Return on capital employed16%17%
Summary
We are pleased to present record Revenue and record Net Profit of $484.6 million and
$121.6 million respectively, for the year ended 31 December 2019. The 20 per cent
increase in Revenue was due mainly to the acquisition of Shelby whilst Net Profit for
the year included gains on the sale of Polarcold and from the part-sale of Meateor’s
NZ business.
The individual performance of each division is discussed further in the Divisional
Overview section.
Group Financials
Annual Report - Year Ended 31 December 2019
13
Managing Director and Chair’s Report

Capital Management
ROCE continues to be an important performance metric for each division and the Group.
ROCE is a measure of how efficiently we are generating a return on our assets. It lies at the heart of how we monitor the
performance of the portfolio and make decisions around capital expenditure. Prior to committing to an investment in assets, we
need to be confident that we will generate a return that meets or exceeds our targets. The ROCE targets vary by division, given each
division’s specific asset and risk profiles. However, as a Group, we target a long-run combined ROCE of 15 per cent.
Group capital employed increased by $19.3 million in 2019, principally due to an increase in Horticulture capital employed. This was
as a result of the orchard redevelopment and RSE accommodation capital expenditure, and also reflects the positive revaluation of
land, buildings and apple trees. We expect ROCE to remain at or about 2019 levels until redeveloped orchard reaches maturity from
2022 onwards.
20192018
ROCE
Horticulture17%21%
Food Ingredients
1
16%32%
Logistics
2
70%107%
Group16%17%
Target15%15%
Scales’ Net Tangible Assets as at 31 December 2019 were $2.19 per share (31 December 2018: $1.43 per share)
3
.
Scales’ basic earnings per share for the year ended 31 December 2019 was 84.2 cents per share (32.2 cents per share in the year
ended 31 December 2018).
1
Food Ingredients ROCE in 2018 excludes Shelby.
2
Logistics ROCE for 2018 and 2019 is based only on Scales Logistics.
3
Based on the weighted average number of ordinary shares.
Financing
Average net cash for the year was $82.0 million, a difference of $152.7 million compared to average net debt during 2018 of $70.7
million. The movement from Average Net Debt to Average Net Cash reflects proceeds received from divestments, partially offset by
investments in capital expenditure.
Hedging Strategy
As an exporter, we continue to have significant exposure to foreign exchange movements. This is most prevalent in Mr Apple,
but our Food Ingredients and Logistics divisions are also affected. We also have exposure to movements in interest rates, both on
borrowings and deposits.
Scales has a Board approved Treasury Management Policy, which governs how all foreign exchange, interest rate and related
activities are conducted. This policy is reviewed biennially.
Under this policy we may take foreign exchange cover for Mr Apple for up to 48 months using a variety of foreign exchange
instruments (including options and forward contracts). Scales maintains a blend of instruments. In addition, Scales attempts to
manage the cover levels for seasonal and market variations for future years.
We continue to have a natural hedge covering some of our US dollar exposure as international shipping is payable in US dollars. We
take cover on the remaining expected net US dollar, Euro, British pound and Canadian dollar exposures.
Generally Food Ingredients and Logistics cover foreign currency exposures once contracted.
Euros 22%
Canadian dollars 1%
US dollars 68%
British pounds 9%
The average conversion rate of Mr Apple’s main foreign
currency exposures since 2016 were:
2019201820172016
USD .6664.6790.6858.6866
EUR.5663.5806.5846.5909
GBP.4658.4839.4535.4740
CAD.8650.8582.8625.8614
Foreign currency
In 2019, Mr Apple’s net foreign currency exposures were as
shown below:
14
Scales Corporation Limited
Managing Director and Chair’s Report

The hedging position for Mr Apple’s main foreign currency exposures, as at 6 March 2020, was:
20202021202220232024
USD
% cover of expected exposure80%47%33%17%8%
Average rate of cover.6580.6652.6496.6529.6302
EUR
% cover of expected exposure95%78%75%50%50%
Average rate of cover.5646.5460.5335.5396.5278
Interest rates
We also take out interest rate swaps and forward rate agreements, which provide some certainty on interest costs on Scales’ term
and short-term borrowings. As at 31 December 2019 our NZ dollar term debt was 100% covered by interest rate swaps. We funded
the US dollar investment in Shelby via a US dollar term loan to provide a hedge on the investment.
Dividend
A final 2018 fully imputed cash dividend of 9.5 cents per share (a gross amount of 13.2 cents per share) was paid on 5 July 2019.
Together with an interim dividend of 9.5 cents per share (a gross amount of 13.2 cents per share) that was paid on 18 January 2019,
this brought the annual dividends for 2018 to a total of 19.0 cents per share (a gross amount of 26.4 cents per share).
A fully imputed interim 2019 cash dividend of 9.5 cents per share (a gross amount of 13.2 cents per share) was declared in
December 2019 and paid on 17 January 2020. Our expectation is to declare a final fully imputed cash dividend in respect of 2019 in
May 2020, for payment in July 2020. As always, any dividend is subject to Board approval. It is standard practice for the Directors to
consider all aspects of the Group’s performance and financial position prior to declaring any dividend, but we remain committed to
the current annual dividend level of no less than 19 cents cash per share whilst the Group holds net cash.
Capital Expenditure
Total 2019 capital expenditure of $15.7 million was slightly lower than 2018 ($16.3 million), partially due to the divestments
of Polarcold and Liqueo. Excluding discontinued operations, operational capital expenditure was slightly below 2018, whilst an
additional $5.0 million growth capital expenditure was spent in 2019, reflecting:
• Orchard redevelopment at Mr Apple - approximately 44 hectares at a cost of $5.4 million.
• RSE accommodation upgrade at Mr Apple (an investment of $4.8 million), to improve housing availability as well as the standard
of living for RSE workers.
2019
$’000
2018
$’000
Operational capital expenditure
Horticulture3,139 3,520
Food Ingredients191 518
Logistics470322
Other10 178
Total operational capital expenditure3,811 4,538
Growth capital expenditure
Horticulture11,863 6,476
Food Ingredients--
Logistics - 388
Total growth capital expenditure11,863 6,864
Other capital expenditure
Discontinued Operations (Polarcold & Liqueo)-4,924
Total capital expenditure15,674 16,326
Annual Report - Year Ended 31 December 2019
15
Managing Director and Chair’s Report

Tim Goodacre
Chair
20 March 2020
Andy Borland
Managing Director
16
Scales Corporation Limited
Managing Director and Chair’s Report
Outlook
2019 was a year of change for Scales and marked the completion of the divestment phase of our Strategy Refresh. Scales remains
committed to reinvesting the proceeds from divestments and is making significant progress in developing both organic growth
opportunities as well as reviewing and progressing a number of prospective acquisition opportunities.
As we go to print, the impact on Scales from the COVID-19 outbreak remains uncertain. Whilst the situation is rapidly evolving, we
continue to have confidence in the actions of authorities to both curb the spread of the disease as well as to facilitate the flow of
food products. Scales will keep investors updated in the usual manner as information comes to light.
Within the Horticulture division, the 2020 apple harvest is underway and early indications suggest a crop in line with forecast.
Horticulture is budgeted to continue its investment in orchard redevelopment and RSE accommodation in 2020, together with
construction of its new coolstore later in the year.
In Food Ingredients, both domestic and offshore organic growth opportunities are being developed and we expect a further
improvement in performance from this division this year. Scales Logistics also expects to meet its trading targets.
Thanks, once again, go to all our management and staff, fellow Directors, suppliers, customers and other stakeholders. We greatly
appreciate your collective support and assistance in our 108th year of trading and we look forward with anticipation to 2020.

From L to R: Tomakin Lai, Jemma McCowan, Mark Hutton, Nick Harris, Alan Isaac, Nadine Tunley,
Andy Borland, Tim Goodacre - Scales’ Directors on the site of Mr Apple’s new coolstore at Whakatu.
17
Annual Report - Year Ended 31 December 2019
Managing Director and Chair’s Report

Sustainability Report
A meaningful
contribution

Our Journey to Date
Progress on our Sustainability journey continued in 2019. In 2018 we began measuring
our impact in, and setting targets for, our key Sustainability focus areas and we sustained
this momentum in 2019.
Our focus remains on the 3 key areas identified
previously, being:
People – in particular, staff engagement,
leadership and health and safety.
Energy – carbon footprint calculation and
emission reduction initiatives.
Waste – in particular, reducing the amount
of waste sent to landfill and increasing
recycling or repurposing.
Due to its size, we continued our focus on the
operations of the Horticulture division. However,
several initiatives were undertaken throughout the
whole Scales group and incremental progress was
made in a wide range of areas.
Community
investment
Water
Energy
WasteBiosecurity
Spray use
& residues
Certification
& traceability
Workforce
stability
Health
& Safety
Employment
practices
P
e
o
p
l
e
M
a
r
k
e
t
p
l
a
c
e
E
n
v
i
r
o
n
m
e
n
t
Annual Report - Year Ended 31 December 2019
19
Sustainability Report
It’s All About Our People
500+
Permanent staff
members
35+
Sustainability framework - areas of focus
Operational sites
43yrs
Longest serving
employee
~25%
Staff with more than
10 years of service
~25%
Permanent female
staff Scales wide
~30%
18
30+
170+
Female senior
management staff
Different ethnicities recorded
in our payroll system
People involved in the Solo

Parent and Seasonal
Employer/Employee
Development programmes
People have undertaken
NZQA
Health and Safety
Representative
training

Our People
Staff Engagement Survey
Following our inaugural Group-wide staff engagement
survey last year, we undertook a second engagement
study this year in conjunction with Kincentric (formerly
part of AON).
Our initial survey identified a few areas for improvement
and during 2019 several initiatives were launched
throughout Scales to achieve better engagement,
understanding and communication with our teams. The
most recent survey reflects the success achieved in a
number of those areas, including our engagement score
being above the New Zealand average of 59 per cent.
It is a privilege to receive such feedback from our staff
and each business unit is committed to working with
their teams to improve the areas identified as requiring
improvement, such as a communicating our wins better
and celebrating achievement.
61
%
Score
Current Year
Current Year
Historical Year
5
25
0
75
100
50
Health and Safety
Safety Vision and Culture
Scales now has 5 dedicated personnel focusing on the safety
and wellbeing of our teams. Together they share resources,
ideas and expertise. At Mr Apple and Balance Cargo, 3 year
Strategic Safety Plans have been created, which will be
implemented throughout 2020-2023. The main focus is on
culture with our vision being:
“Health and safety are an important and integral part of our
everyday practices – safety to the core.”
Health and Safety Highlights
Whist many changes and improvements were made, and a
continuing growth in culture and engagement, there were
a number of health and safety highlights that stood out for
the Group:
• Achievement of ‘Performing’ in our first SafePlus assessment.
• 150 per cent increase in safety observations reported
and an increase in near-miss reporting at Mr Apple and
Balance Cargo.
• Technology improvements such as installation of light halos
and additional sensors for forklifts.
• Standard Operating Procedure improvements, making them
more relatable to the reader.
• Critical Risk training sessions completed throughout the Mr
Apple and Balance Cargo permanent workforce.
• Sharing of resources throughout the group, including the
roll out of the forklift competency framework throughout
Meateor and Balance Cargo.
• Significant traffic management improvements at Mr Apple’s
Whakatu Packhouse and the Balance Cargo Magdala site.
• Over 50 people completing a bespoke Incident Cause
Analysis Method (ICAM) investigation training day.
It should be noted that the physical nature of our businesses
means that our employees can be susceptible to injuries.
However, the majority of our injuries are of a relatively minor
nature. Our Lost Time Injury (LTI) rate continues to be relatively
static, with strains and sprains being our biggest contributor to
days off work.
Our health and safety culture underpins everything that we
do. In 2019, the Mr Apple coolstore took on the challenge of
significantly increasing their overall health and safety culture,
setting ambitious goals. The results were impressive:
• An increase in reporting of 442 per cent.
• A reduction in Infolink impact reports (electronic forklift
records) of 69 per cent.
• A 60 per cent decrease in damages.
• 8 per cent below the coolstore’s operational cost budget by
improving processes and streamlining movements.
20
Scales Corporation Limited
Sustainability Report

An iMove (movement and mechanics) focus started in 2019
and will be expanded during 2020. This is an internal initiative,
currently in operation at Mr Apple, to better understand how
injuries occur and what simple body position adjustments can
be done to prevent them.
SafePlus
SafePlus is a health and safety improvement toolkit for
businesses and other organisations, launched in 2017. It
was developed jointly by WorkSafe New Zealand, Accident
Compensation Corporation and the Ministry of Business,
Innovation and Employment to offer a Government-endorsed
model of what ‘good’ health and safety practices and
performance look like.
It is a framework of 10 performance requirements,
organised under 3 key elements of Leadership, Worker
Engagement and Risk Management. Each element has
between 3 and 5 indicators and a 3 level maturity scale applied
to it (being Developing, Performing and Leading). Continual
improvement underpins all the elements and,
rather than it being an audit, it is an assessment resulting
in recommendations.
A SafePlus assessment was undertaken by an independent
team between June and November at the Mr Apple and
Balance Cargo sites, with a critical risk focus on:
• Long term health impairment through exposure
to pesticides.
• Mobile plant related injuries.
• Fatigue.
Our overall result was that we are a Performing organisation.
Recommendations were given, none of which were of critical
concern, and these have been quickly and easily incorporated
into Mr Apple’s and Balance Cargo’s 3 year Strategic
Safety Plans.
The SafePlus report noted many positives, including how
workers were impressed with how well the business looked
after their welfare. It also highlighted some differences in
health and safety maturity and operational culture within the
Group, but that progress is being made towards a uniform
standard of good practice.
One observation of note was that Scales has an appetite to
improve and keep improving, and that is it willing to try new
ideas, act on suggestions and seize opportunities.
We will continue to take part in SafePlus assessments and act
upon any recommendations given.
Health and Safety Outlook
We are dedicated to continuous improvement in health and
safety. As a result, a number of initiatives have been identified
as a focus for 2020. These include:
• Introduction and roll out of the 3 year Strategic Safety Plans
at Mr Apple and Balance Cargo.
• Implementation of recommendations from a formal
guarding review at the 2 Meateor sites.
• Roll out of our iMove campaign to teach teams how to
move and support their own bodies during movement,
preventing pain and injury to reduce days off work.
• Cross-auditing by the collective safety teams during their
6 monthly meetings, to introduce a fresh perspective and
continue to seek innovative ways to improve our processes
and controls.
Amalia Canterbury, Doug Chapman, Sage Strahl-Johnston (Coolstore Manager, Coolstore Planner, Team Leader, respectively).
Developing
Performing
Leading
Annual Report - Year Ended 31 December 2019
21
Sustainability Report

Governance
At the start of 2019 we were pleased to announce the appointment of Tomakin Lai and Nadine Tunley. Tomakin and
Nadine have brought complementary skills and expertise to our Board and enhanced its diversity.
Jemma McCowan
In June 2019 we were pleased
to appoint Jemma McCowan
as our next Future Director,
continuing our participation
in the Institute of Directors’
programme.
Jemma is General Manager
Marketing at New Zealand
King Salmon Limited, where she has overall responsibility
for delivering the company’s branding and sustainability
programmes. Jemma has 20 years’ experience in marketing
management and international business.
This was Scales Corporation’s fourth appointment under the
Institute of Directors’ Future Directors programme, and we are
pleased to continue our participation. Scales benefits from the
skills and fresh perspective provided by our appointees and
we believe that they, in turn, gain valuable exposure to the
governance of a listed entity, and to Scales’ businesses.
Recognition
To promote an enhanced culture of communicating
our wins and celebrating achievement, we are proud
to note the following achievements of our group
companies and staff members.
Awards
The following businesses were finalists in recent
business awards:
• Balance Cargo – finalist in the Christchurch Casino
Champion Service Delivery for Medium/Large Enterprises
category, Westpac Business Awards.
• Mr Apple – finalist in the Kensington Swan Best Initiative to
Address a Work-Related Health Risk category, New Zealand
Safeguard Awards, for their forklift competency framework
and training scheme.
Fundraising
As well as being proud of our team members’ culture within
Scales, we are also proud of their culture outside of the
work-place.
• Over $19,000 was raised by Kurt Livingstone, a Fern Ridge
team member, and his 3 friends, for the New Zealand
Cancer Society by driving a Fern Ridge sponsored 1,000cc
vehicle for 1,224 hours, 32 minutes and 10.2 seconds
as part of the 2019 Mongol Rally. The route took him
from the Czech Republic, through Eastern Europe, Iran,
Turkmenistan and Uzbekistan, to Ulaanbaatar in Mongolia.
• Over $3,000 was raised for the Westpac Rescue Helicopter
by Steve McKain, a Mr Apple orchard manager, by
swimming 20km from Auckland to Waiheke. In the month
prior, Steve became the 48th person to complete the
40.2km Lake Taupo Marathon Swim, in a time of 13 hours
and 53 seconds.
Ethics
In August 2019, Scales launched
a whistleblower hotline in
partnership with Report it Now
TM
,
an independent organisation that
equips businesses with the tools
and capabilities to foster an open
and honest work environment. Each
staff member received information around warning signals and
how to escalate any problems that they encounter or suspect.
Complementary to this, an Ethics Committee was created to
manage any calls received.
Towards the end of 2019, a group-wide policy review
commenced in conjunction with anti-bribery and corruption
training for the senior financial, operational and sales teams. A
whistleblower policy (to accompany our hotline and reporting
channels) was also implemented in 2019 and, in 2020, anti-
bribery and corruption, and other, policies will be finalised.
22
Scales Corporation Limited
Sustainability Report

Marketplace
Business Continuity
All of Scales’ businesses continue to have an annually updated
Business Continuity Plan, which is supported by the Scales
group-wide Crisis Management Plan. A crisis simulation
training day, our second such event, is scheduled for July 2020,
with the entire senior Scales team to test a real scenario and
our reaction to it.
Technology
Scales views technology as a key business enabler that
underpins the efficient operation of our businesses. We
consistently invest in technology (the application of hardware,
software and data solutions) to drive productivity and
sustainability improvements, to improve customer engagement
and to enhance revenue opportunities. We have developed
strong relationships with local and international technology
partners to provide best-of-breed solutions and help drive
future product developments.
Mr Apple’s Smarter Orchard strategic initiatives have resulted in
mobilising key orchard data, automating on-orchard processes
and providing real-time data across the business to improve
knowledge-based decision making. We have granular datasets
that go back many years and we are constantly adding
additional information, such as environmental data. These
datasets are fundamental to developing our Machine Learning
and Artificial Intelligence initiatives. Mr Apple’s data ensures
that we have strong product traceability, and we are now
providing access to this data direct to consumers to help with
confirming product authenticity and their buying decisions.
Craig Brooker, Mr Apple Refrigeration Manager.
Annual Report - Year Ended 31 December 2019
23
Sustainability Report

Our Environment
Overview
Our ongoing focus in this area is to better utilise what we
have, be smarter in what we do and to tread lightly with our
existing footprint, ensuring the sustainability and success of
our business into the next generation and beyond. Some
highlights from our work in 2019 include:
• An EECA audit at 2 Mr Apple sites showed excellent energy
management. Further savings are expected as a result
of a large lighting replacement scheme underway at the
Hastings coolstore site.
• Creation of the Mr Apple Sustainability Group and
launch of the company-wide Environmental Plan and
reduction projects.
• Purchase of 3 hydraulic balers and a strap-eater to
maximise recycling in Mr Apple’s post-harvest operations.
• Identification of multiple recycling opportunities previously
unavailable for items such as certain types of plastic and
Extenday cloth (reflective groundcover).
• In collaboration with other horticultural companies and
the local Hawke’s Bay councils, the sharing of information
throughout the industry around waste stream solutions.
• Considerable reductions on our emissions targets, with
Environmental Plan reductions on track.
Further detail on Mr Apple’s Environmental Plan and carbon
reduction programme are provided in the following sections.
Mr Apple Environmental Plan
Mr Apple has developed an Environmental Plan, which will
record year-on-year project progress and emissions reductions.
All areas of the business are undertaking projects to further
reduce their carbon footprint.
A team of over 20 people meet quarterly to track progress
and innovate, with an initial focus on the following 4 United
Nations Sustainable Development Goals:
• Goal 6 - to fairly use what water is available to us and
ensure that our practices improves its quality rather than
degrades it, and to develop management techniques that
minimises its use overall.
• Goal 7 - to focus on reducing our energy and fuel
consumption, developing efficient management practices
and working with our energy and fuel partners to secure a
sustainable future source.
• Goal 8 - to be an employer that creates a place to work
that is enjoyable, fair and inclusive.
• Goal 12 - to focus on minimising our footprint on our
existing land space and develop best practice methods to
maximise our output whilst reducing any wastage.
Outlined in this plan are 4 key goals for Mr Apple to achieve
between 2019 and 2023:
• Reduce paper use by 10 per cent per annum.
• Reduce electricity consumption by 3 per cent by 2024.
• Reduce overall fuel use by 5 per cent by 2024.
• Reduce waste to landfill by up to 30 per cent by 2024.
To date, progress has been extremely positive, with reductions
in 3 out of the 4 areas. Whilst overall fuel use has increased,
some areas of the business have achieved reductions and we
will take learnings from those areas to see how they may be
applied elsewhere.
Toitu
-
Envirocare carbonreduce
Certification
Our carbon footprint, and how we can reduce
this, continues to be a key focus.
In February 2020, a second carbon footprint certification
process was carried out at Mr Apple in respect of the 2019
year. This was previously the Enviro-Mark Solutions CEMARs
®

certification and has now been rebranded the Toitu
-
Envirocare
carbonreduce Certification.
Results from this were extremely positive:
• The overall carbon footprint for Mr Apple reduced by 4 per
cent compared to the previous year
1
, down to 21,848.04
tonnes of carbon dioxide equivalent (tCO2e).
• Direct emissions from owned or controlled sources
increased slightly by 2 per cent to 2,954.77.
• Indirect emissions from the generation of purchased energy
decreased by 20 per cent to 1,681.77 tCO2e.
• All other indirect emissions that occur in Mr Apple’s value
chain decreased by 4 per cent to 17,211.51 tCO2e.
In particular, Mr Apple generated excellent reductions in waste
to landfill and electricity use.
24
Scales Corporation Limited
Sustainability Report
1
Our 2018 footprint was recalculated by Toitu
-
as it was noted that a few months of diesel and petrol figures from 2018 had previously been omitted in error. The results
presented are reflective of this change.

Carbon Footprint
Our carbon footprint equates to total gross
greenhouse gas (GHG) emissions per:
• All staff (at peak season) of 10.36 tCO2e
(2018: 10.39 tCO2e)
• Bins tipped of 0.083 tCO2e
(2018: 0.085 tCO2e)
• Cartons exported of 0.0043 tCO2e
(2018: 0.0046 tCO2e)
• Hectares planted of 18.45 tCO2e
(2018: 19.75 tCO2e)
• Permanent employees of 57.65 tCO2e
(2018: 60.14 tCO2e)
Carbon sequestration
Carbon sequestration describes long-term storage of carbon
dioxide or other forms of carbon to either mitigate or defer
global warming and climate change. It has been calculated
that an apple tree sequesters 70 tonnes of carbon over a
lifespan of 25 years
1
so, with 1,184 hectares currently planted
at Mr Apple, 82,880 tonnes of carbon would be sequestered
into the soil.
With an overall carbon footprint of 21,848.04 tCO2e, if we
were able to utilise this sequestration, the world would benefit
for only 3.8 years. It is therefore imperative we continue to
reduce and/or offset our carbon usage in other areas.
Climate change
Climate change is a concern for Scales, as it is for all global
businesses. During 2020, we will start to investigate this in
more detail, consulting the science world for a factual baseline
from which we can assess the potential implications to
our business.
Outlook
Our focus for 2020 will be on 3 main areas:
• A continuation of the emission reduction projects and
successes already achieved in those areas.
• Sharing of ideas and innovations throughout the wider
Scales Group.
• A greater ‘circular economy’ approach to items such as
disposable paper cups, in partnership with our suppliers.
1
Carbon Sequestration by Fruit Trees - Chinese Apple Orchards as an Example - https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0038883.
GHG Operational Emissions by Source
(2018 vs 2019)
Electricity
Diesel commercial
2,0002,5001,50050001,000
Freight Refrigerated HGV
Freight road rigid truck
Air travel
Petrol regular
Waste to landfill
LPG
3,000
2018
2019
Annual Report - Year Ended 31 December 2019
25
Sustainability Report

Divisional Overview
Structure
builds
confidence

The following section provides a summary of each of our 3 operating divisions, including
their performance and key operating statistics. In line with our Group results, we focus
on the Underlying financial performance of our business divisions, excluding certain non-
cash NZ IFRS and other adjustments.
Horticulture
Overview
Our Horticulture division continues to be the largest division
within the Scales group and comprises:
• Mr Apple, New Zealand’s largest fully vertically integrated
apple business, based in Hawke’s Bay.
• A 73 per cent stake in Fern Ridge, a fresh produce exporter
in Hawke’s Bay.
It currently operates 3 packhouses, all with high-speed optical
grading machines, and 5 coolstores.
The division produced an excellent result in 2019:
• Revenue of $264.8 million, 4 per cent higher than 2018.
• Underlying EBITDA of $39.7 million, 7 per cent lower
than 2018.
• 5.95 million TCEs of apple sales, 2 per cent higher
than 2018.
• Weighted average FOB apple prices in line with 2018.
Orchard Redevelopment
Our orchard redevelopment programme, which commenced in
2008, is nearing the end of its second phase.
In phase 1, between 2008 and 2014, we undertook an
initial redevelopment of approximately 300 hectares of
orchard. During this time, we observed sales to Asia and
the Middle East increase from 20 per cent in 2007 to 53
per cent in 2015.
Our phase 2 redevelopment is taking place over 2017
to 2020 with a focus on premium brands where we
have a proprietary interest, such as Dazzle
TM
and Posy
TM
,
with redevelopment of around 175 hectares in total. Of
this, approximately 44 hectares were developed over the
2019 winter and a further 32 hectares are scheduled for
redevelopment over the 2020 winter.
When completed, approximately 475 hectares of orchard will
have been redeveloped to premium varieties.
We believe that our long-term investments in orchard
redevelopment have positioned Mr Apple well to deliver
consistent results, with strong diversification of our exposure to
any one region or variety. In our view, a multi-premium variety
strategy is more attractive to global retailers and positions
Mr Apple’s harvest as a leading supplier each season.
The market prospects for our existing varieties are continually
reviewed and a further phase of orchard redevelopment may
be undertaken at a future time.
Apple Brands
The Mr Apple team continues to focus on new variety
development.
During 2019 we launched Posy
TM
, a red, very early apple,
in China. The launch was supported by a number of
positive marketing activations and increased in-market
branding initiatives.
Posy
TM
has already been picked for the 2020 harvest with a
special airfreight shipment sent to China in early February
2020 for sales in selected high-end supermarkets and online
platforms such as Benlai.com and JD.com.
The market feedback from this shipment has been very
positive, with JD.com selling out of all of their stock within a
week, validating our belief in the attractiveness of this type of
premium variety in the Asia market.
Further product launches for both Posy
TM
and other premium
brands are anticipated in the forthcoming year.
Airfreighted Posy™ apples for sale in a Chinese supermarket (February 2020).
Annual Report - Year Ended 31 December 2019
27
Divisional Overview

Markets
New Zealand has a perfect climate to grow apples and has an industry of talented, passionate and innovative people. Combining
these attributes with New Zealand’s clean, green image makes New Zealand apples sought after around the world. The Horticulture
division continues to take advantage of this position and, in 2019, the Horticulture division once again sold apples to more than 160
customers in over 40 countries.
Our presence in Asia and the Middle East continues to grow, with sales to this market accounting for 66 per cent of all exports in
2019. Conversely, sales to Europe decreased due to a larger than normal European crop.
In particular, our presence in China grew strongly during 2019, with sales to China representing 17 per cent of Mr Apple’s export
volumes (2018: 10 per cent). The strong growth reflects multiple factors including our ongoing in-market efforts, support from our
cornerstone shareholder China Resources Ng Fung, increased participation in the market by PCNZ and a smaller domestic crop in
China. As a result of the last factor, we expect that China will represent a smaller percentage of sales in 2020.
Marketing Developments
Our market strategies support, and run in conjunction with, our orchard strategy.
2019 saw increased marketing activations and in-market branding initiatives take place, particularly in Asia and the Middle East, to
support the increased volume of export sales to these regions. Examples of these activities included:
• Demonstrations to customers to support in-store sales.
• Apple sampling in, for example, gyms.
• Office block promotions including at the China Resources Vanguard office in Shenzhen.
We continue to move towards retail and e-commerce sales channels, with these now comprising around half of all sales. Whilst
e-commerce currently represents only 2 per cent of all volume sold, in the markets where this channel is being used, such as China,
e-commerce represents a higher proportion of sales.
28
Scales Corporation Limited
Divisional Overview
Mr Apple - Sales by Region (TCEs)
20182019
Asia &
Middle East
53%
Europe
34%
UK
9%
North
America
4%
Asia &
Middle East
66%
Europe
21%
UK
11%
North
America
2%

Financial Performance and Key Operating Statistics
Summary Performance
The table below shows the financial performance of our Horticulture division for 2019 and 2018:
Horticulture Financial Performance
2019
$’000
2018
$’000
Horticulture revenue264,782 254,569
Underlying EBITDA
Mr Apple 37,357 40,690
Fern Ridge 2,294 1,899
Underlying Horticulture EBITDA39,651 42,589
Depreciation and amortisation(8,781)(8,387)
Underlying Horticulture EBIT30,870 34,202
Horticulture EBITDA47,909 43,466
Horticulture EBIT32,005 35,079
Capital employed187,768 169,499
Return on capital employed17%21%
NB. The table above includes 100 per cent of the EBITDA contribution from Fern Ridge. Approximately 27 per cent of Fern Ridge is owned by non-controlling
interests. We record a non-controlling interest of $0.4 million (2018: $0.4 million) in our group results reflecting their share of tax paid profit from Fern Ridge.
A reconciliation of Reported to Underlying profit measures follows this Divisional Overview section.
Annual Report - Year Ended 31 December 2019
29
Divisional Overview
The Horticulture division generated record revenue of $265
million, up 4 per cent on the prior year (2018: $255 million)
due to a higher than expected Mr Apple export crop, a 9 per
cent increase in external grower volumes and an excellent
export packout of 79 per cent (2018: 76 per cent).
Whilst Underlying EBITDA of $39.7 million was down 7 per
cent on the previous year (2018: $42.6 million), this was an
excellent result having regard to the mixed regional market
returns. Mitigating reduction in profitability margin is a key
focus for Mr Apple, with a number of initiatives in progress
such as investment in automation and construction of the new
coolstore at Whakatu, which is expected to be operational
during the 2021 season. In addition, Mr Apple anticipates a
net improvement in margin as fruit volumes from the Phase 2
orchard redevelopment increase from 2022 onwards.

20192018201720162015
Orchard
Total planted orchard (at time of harvest)
1
Ha.1,158 1,149 1,142 1,042 1,052
Fully mature equivalent planted orchardHa.1,023 1,057 1,043 922 902
Apples picked (Mr Apple orchards)TCE 000s4,841 5,090 4,434 4,360 4,433
Apples packed (Mr Apple + external growers
(Hawke’s Bay))TCE 000s4,747 4,739 4,354 4,150 3,809
Exported volume
Mr AppleTCE 000s3,822 3,867 3,545 3,546 3,155
External growers
2
TCE 000s2,132 1,964 2,078 1,187 1,019
TotalTCE 000s5,953 5,831 5,622 4,733 4,174
Mr Apple packout %%79%76%80%81%71%
Total NZ productionTCE 000s21,755 20,687 18,956 19,346 18,360
Mr Apple own grown volume share of NZ production%17.6%18.7%18.7%18.3%17.2%
In summary:
• Assuming an average of 116 apples per TCE, over 560 million apples were picked from Mr Apple’s planted apple orchards.
• Gross production was 4.84 million TCEs from which 3.82 million TCEs were exported.
• Together with our external growers, the division sold 5.95 million TCEs, up 2 per cent on 2018.
• Production from our owned and leased orchards continued to be significant to the national apple crop, accounting for 17.6 per
cent of the national crop (2018: 18.7 per cent).
Orchard Statistics
We continue to monitor and report against various operating statistics, a selection of which are noted below.
Scales Corporation Limited
30
Divisional Overview
1
Planted orchard at the end of the year was 1,183 hectares.
2
External grower volumes in 2017 to 2019 include Fern Ridge Fresh.

Volumes and Prices
Volumes and prices (on a NZD FOB basis) for 2019 and 2018 are noted below.
Volumes by Variety (TCE 000s)20192018
Premium Varieties
NZ Queen538 457
Pink Lady378 359
Red Sports (Fuji and Royal Gala)1,046 959
Other199 126
Total2,161 1,901
Growth14%18%
% premium57%49%
Traditional Varieties
Braeburn561 742
Royal Gala494557
Other606 667
Total1,661 1,966
Growth(16%)2%
Total Mr Apple owned and leased orchards3,822 3,867
Growth(1%)9%
Prices by Variety (NZD / TCE (FOB))
Weighted average price for premium varieties 39.8 38.8
Weighted average price for traditional varieties 29.3 32.7
Total weighted average price 35.2 35.7
The 2019 total own grown export crop of 3.8m TCEs was an excellent result having regards to the recent orchard redevelopment,
and was 6 per cent ahead of forecast levels.
Our weighted average FOB price was similar to 2018. This reflected the change in mix and improved pricing for premium varieties,
including solid performance from proprietary varieties and brands and was despite smaller fruit size. Premium pricing was offset by
more mixed results for traditional varieties, which were affected by adverse market conditions in Europe.
Annual Report - Year Ended 31 December 2019
31
Divisional Overview

Our premium variety volumes were up 14 per cent on 2018, resulting in a crop mix where premium volumes now exceed traditional
varieties, accounting for nearly 57 per cent of all sales (2018: 49 per cent). Strong volume growth was achieved in NZ Queen (up 18
per cent), Red Sports (high colour Fuji and Royal Gala) (up 9 per cent) and other premium brand apples including Dazzle
TM
, Posy
TM

and Rose
TM
, validating our strategy to focus on varieties that appeal to the Asia and Middle East markets.
32
Scales Corporation Limited
Divisional Overview
3,500
3,000
2,500
2,000
1,500
1,000
500
0
201020112012201320142015201620172018
4,000
2019
Other Premium
Red Sports
(Fuji and Royal Gala)
Pink Lady
NZ Queen
Other Traditional
Royal Gala
Braeburn
Volumes by Variety

2020 Outlook
In our 2018 annual report we provided a volume forecast for the Horticulture division reflecting actual and expected redevelopment.
We have updated this forecast to reflect actual volumes achieved in 2019 as well as actual redevelopments (including both new
orchard plantings and orchard redevelopment) and movements in other orchard land (including small leases that may have been
taken on or discontinued through the year).
Whilst the updated projection continues to forecast a softening in volumes in 2020 and 2021, the decrease is less than that
previously forecast, and volumes are now forecast to increase to over 4 million TCEs in 2023.
Assuming 2019 apple prices are maintained, and based on our price expectations for new varieties, we believe that the weighted
average NZ FOB price per TCE will increase to approximately $37 by 2023 (noting that future sale prices will depend on market
conditions at the time).
In conjunction with this, we will also continue our marketing and branding efforts to drive brand awareness and loyalty in Asia.
Annual Report - Year Ended 31 December 2019
Divisional Overview
33
2017201920182020F2021F2022F2023F2024F
3,545
3,822
3,867
3,803
3,778
3,911
4,044
4,153
1,616
1,929
2,165
1,656
1,901
1,966
2,202
1,601
2,258
1,520
2,378
1,533
2,503
1,541
2,607
1,546
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties

Food Ingredients
Overview
Our Food Ingredients division converts agricultural by-
products into valuable food commodities. The division
comprises 4 businesses:
• Meateor NZ – a processor and marketer of petfood
ingredients for the global petfood industry with
processing plants in Whakatu and Dunedin. In April 2019,
Alliance acquired a 50 per cent interest in Meateor’s New
Zealand business.
• Meateor International – 100 per cent ownership of a
supplier and marketer of petfood ingredients in Australia
and other markets.
• Shelby – 60 per cent ownership of a US procurer,
processor and marketer of ingredients for the petfood
industry, purchased in December 2018.
• Profruit – 50 per cent ownership of a manufacturer of
high quality apple, kiwifruit and pear juice concentrates,
located in Hawke’s Bay.
Divisional Developments
In a year of change, Food Ingredients has retained its history
of positive momentum, both in terms of financial results and
opportunities ahead.
The acquisition of Shelby significantly enhanced the volumes of
petfood ingredients sold and this, together with the investment
partnership with Alliance, allowed the division to make
significant progress in diversifying its geographical exposure and
range of protein options. The division continues to consider and
develop a number of organic growth opportunities.
Profruit also continued to operate well, with juice concentrate
volumes in line with last year at 6.2 million litres (2018: 6.2
million litres).
1
Equity accounted.
2
Fully consolidated into Scales’ financial results, with Shelby non-controlling interest deducted from NPAT (2019: $3.1 million).
Meateor NZ
1
Petfood ingredient
processor and marketer,
New Zealand (50%)
Profruit
1
Juice concentrate processor,
New Zealand
(50%)
Food Ingredients Structure
Meateor Group
Meateor
International
2
Petfood ingredient supplier,
Australia & other markets
(100%)
Shelby
2
Petfood ingredient procurer,
processor and marketer, USA
(60%)
Profruit management team.
34
Scales Corporation Limited
Divisional Overview

Financial Performance
The table below outlines key operational metrics and the summarised financial performance for Food Ingredients:
Food Ingredients
20192018
Key Operational Metrics
Food Ingredients volume soldMT110,970 29,028
Juice concentrate soldlitres 000s6,170 6,219
Financial Performance$’000$’000
Food Ingredients revenue155,077 83,054
Underlying Food Ingredients EBITDA 13,486 10,225
Depreciation and amortisation(1,018)(582)
Underlying Food Ingredients EBIT12,468 9,643
Food Ingredients EBITDA 32,921 11,021
Food Ingredients EBIT31,842 10,439
Capital employed79,347 35,324
Return on capital employed16%32%
NB: 2018 capital employed and ROCE exclude Shelby. A reconciliation of Reported to Underlying profit measures follows this Divisional Overview section.
Food Ingredients delivered improved revenue, earnings
and operational metrics in 2019 in the first year of its new
expanded structure. Revenue was $155.1 million, an 87 per
cent increase on 2018 ($83.1 million) whilst Underlying EBITDA
was $13.5 million compared to $10.2 million in 2018, an
increase of 32 per cent.
Volumes also increased significantly showing a step-change of
282 per cent compared to 2018.
Profruit delivered an excellent result, with our share of earnings
being $2.0 million, an increase of 16 per cent on 2018 (2018:
$1.7 million). Sales volumes were in line with 2018.
Divisional Strategy
Our initial investments have provided Food Ingredients with
a basis for continued growth and set it on the journey to
becoming a $25 million EBITDA division.
Market research suggests that the worldwide petfood
ingredients sector is an attractive investment proposition, with
the worldwide petcare industry being estimated at over US$100
billion
1
and growing. By itself, the China petfood market has
been valued at US$1.7 billion, with continued growth forecast
2
.
Our global strategy is to be a key provider of petfood ingredients
to a wide range of international brands and our transactions
in this area provides us with a significant foothold towards
satisfying this strategy.
2020 Outlook
We expect a further improvement in performance from the Food
Ingredients division in 2020 as the individual businesses continue
to develop organic growth opportunities both domestically and
offshore. In addition, market demand continues to remain firm
and the one-off challenges we encountered in 2019 are not
expected to repeat.
The inclusion of petfood in the recent US/China trade
agreement, which provides for improved and faster access
for US manufactured petfood to China, supports the medium
term outlook for both Shelby and the divisions’ other
petfood interests.
We are pleased to report that the financial performance from
the acquisition of Shelby was consistent with our forecasts.
Profitability of the division was impacted by a one-off
inventory valuation adjustment resulting from an isolated
operational decision to purchase stock outside of normal
contract terms. No ongoing effect on forecast trading or
volumes is anticipated.
It is also noted that our 50 per cent share of the earnings of
Meateor NZ are now equity accounted.
Annual Report - Year Ended 31 December 2019
35
Divisional Overview
2015201720162018
20.2
2019
23.0
27.7
29.0
111.0
Petfood Ingredients Sold (MT 000s)
1
Source: Euromonitor , The State of Global Petfood : New Trends and Growth Opportunities, November 2016.
2
Source: Mordor Intelligence.

Logistics
Overview and Divisional Developments
2019 was a year of change for our Logistics division, with the Polarcold settlement in May resulting in an update to the division’s
name. As a result, the Logistics division now comprises:
• Scales Logistics – leaders in ocean freight services to exporters and importers of perishable products, with offices in Auckland,
Christchurch, Tauranga, Hawke’s Bay, and Melbourne.
• Balance Cargo – providers of air freight services, including a purpose-built chiller and warehousing facilities, based
in Christchurch.
Financial Performance
The key operational metrics and the summarised financial performance for the Logistics division are shown below.
Logistics
20192018
Key Operational Metrics
TEUs shippedTEUs39,438 35,210
Airfreight tonnes managedMT6,184 9,251
Financial Performance$’000$’000
Revenue87,07689,270
Underlying Logistics EBITDA3,3024,882
Depreciation and amortisation(364)(237)
Underlying Logistics EBIT2,9384,645
Logistics EBITDA 4,058 4,902
Logistics EBIT3,111 4,665
Capital employed3,381 4,959
Return on capital employed70%107%
2019 saw a return to long-run performance for Scales Logistics
following a particularly strong 2018 year, which benefitted
from large airfreight volumes due to stock-building orders for
our customers. Underlying EBITDA was $3.3 million compared
to Underlying EBITDA of $4.9 million in 2018.
Logistics arranged ocean freight for the equivalent of 39,438
TEUs, an increase of 12 per cent on 2018 (35,210 TEUs)
whilst 6,184 tonnes of airfreight were transported in 2019
compared to 9,251 tonnes in 2018. The increase in sea freight
and reduction in air freight volumes marks a return to normal
trading patterns for this division.
During the year, Logistics leased additional warehouse
space in Christchurch and recruited additional sales resource
in Melbourne.
2020 Outlook
Given the recent growth in Australasian agricultural products,
together with Scales Logistics’ specialist expertise in moving
food and perishable produce, we believe there are opportunities
to grow this division through the medium term. Accordingly,
we are committed to seeking further opportunities for growth,
both organic and through acquisition.
With our export focus, we expect to meet our trading targets
in the forthcoming year.
NB: As a result of the divestment of Polarcold and Liqueo, only the metrics and results from Logistics are shown for both 2019 and 2018. A reconciliation of Reported
to Underlying profit measures follows this Divisional Overview section.
36
Scales Corporation Limited
Divisional Overview

Scales’ Senior Management Team.
From L to R: John Sainsbury, Kent Ritchie, Karen Morrish, Andrew van Workum, Steve Kennelly, Andy Borland.
37
Annual Report - Year Ended 31 December 2019
Divisional Overview

GroupHorticultureFood IngredientsLogisticsCorporate and eliminations
2019201820192018201920182019201820192018
$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000
Reported EBITDA79,853 51,744 47,909 43,466 32,921 11,0214,058 4,902 (5,035)(7,645)
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases(9,535)- (8,640)- (73)- (756)- (66)-
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs418 - - - - - - - 418 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(21)- (21)(987)- (796)- 474 - 1,309
Discontinued operations EBITDA- 14,323 - - - - - 15,741 - (1,418)
Underlying EBITDA52,699 67,057 39,65142,58913,486 10,225 3,302 21,117(3,740)(6,874)
Reported EBIT61,783 42,49732,005 35,079 31,842 10,4393,1114,665 (5,175)(7,686)
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases(1,711)- (1,517)- (12)- (173)- (9)-
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs418 - - - - - - - 418 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(21)- (21)(987)- (796)- 474 - 1,309
Discontinued operations EBITDA- 8,787- - - - - 10,202- (1,415)
Underlying EBIT42,453 52,27430,870 34,20212,468 9,643 2,938 15,341 (3,823)(6,912)
Reported Net Profit121,577 45,499 21,038 25,510 30,057 8,183 1,917 3,360 68,5658,446
Gain on disposal of Polarcold(73,002)- - - - - - - (73,002)-
Interest on settlement of Polarcold, net of tax4,131 -- - - - - - 4,131 -
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases981- 879 - 6 - 92 - 4 -
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs414 - - - - - - - 414 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(56)- (21)(986)- (795)- 459 (35)1,322
Taxation effect370 (80)(93)(72)485 - - - (22)(8)
Discontinued operations - Polarcold and Liqueo- (8,174)- - - - - 7,155 - (15,329)
Depreciation after transfer to disposal- (2,421)- - - - - - (2,421)
Underlying Net Profit36,39935,81422,206 24,562 11,186 7,388 2,009 10,974 998 (7,110)
Reconciliation of Reported to Underlying Profit Measures
The following table provides a reconciliation of Reported profitability to Underlying profitability for the Group and each division.
38
Scales Corporation Limited
Divisional Overview

GroupHorticultureFood IngredientsLogisticsCorporate and eliminations
2019201820192018201920182019201820192018
$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000
Reported EBITDA79,853 51,744 47,909 43,466 32,921 11,0214,058 4,902 (5,035)(7,645)
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases(9,535)- (8,640)- (73)- (756)- (66)-
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs418 - - - - - - - 418 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(21)- (21)(987)- (796)- 474 - 1,309
Discontinued operations EBITDA- 14,323 - - - - - 15,741 - (1,418)
Underlying EBITDA52,699 67,057 39,65142,58913,486 10,225 3,302 21,117(3,740)(6,874)
Reported EBIT61,783 42,49732,005 35,079 31,842 10,4393,1114,665 (5,175)(7,686)
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases(1,711)- (1,517)- (12)- (173)- (9)-
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs418 - - - - - - - 418 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(21)- (21)(987)- (796)- 474 - 1,309
Discontinued operations EBITDA- 8,787- - - - - 10,202- (1,415)
Underlying EBIT42,453 52,27430,870 34,20212,468 9,643 2,938 15,341 (3,823)(6,912)
Reported Net Profit121,577 45,499 21,038 25,510 30,057 8,183 1,917 3,360 68,5658,446
Gain on disposal of Polarcold(73,002)- - - - - - - (73,002)-
Interest on settlement of Polarcold, net of tax4,131 -- - - - - - 4,131 -
Fair value gain on recognition of investment in joint venture(9,782)- - - (9,782)- - - - -
Gain on disposal of Meateor New Zealand business(9,782)- - - (9,782)- - - - -
NZ IFRS 16 Leases981- 879 - 6 - 92 - 4 -
Equity settled employee benefits866 849 - - - - - - 866 849
Meateor NZ business disposal transaction costs414 - - - - - - - 414 -
Change in fair value gain on apple inventory332 256 332 256 - - - - - -
Change in gross liability for Non-Controlling Interests273 (146)71 (146)202- - - - -
Share based payments77 31 - - - - - - 77 31
Intercompany transactions with discontinued operations(56)- (21)(986)- (795)- 459 (35)1,322
Taxation effect370 (80)(93)(72)485 - - - (22)(8)
Discontinued operations - Polarcold and Liqueo- (8,174)- - - - - 7,155 - (15,329)
Depreciation after transfer to disposal- (2,421)- - - - - - (2,421)
Underlying Net Profit36,39935,81422,206 24,562 11,186 7,388 2,009 10,974 998 (7,110)
Annual Report - Year Ended 31 December 2019
39
Divisional Overview

Leadership Profiles
Team effort

Tim was elected to the Board in 2014, having been
appointed Chair of Scales’ Horticulture division in 2012.
He has been involved in agribusiness for over 40 years and
was CEO of Zespri International from 2003 to 2007. Tim is
currently: Chair of The Nutritious Kiwifruit Company Limited,
which is a consortium of New Zealand kiwifruit suppliers
selling under a new single brand, based around nutrition
and health, on the Australian market; Director of Prevar
Limited, an Australian and New Zealand joint venture apple
and pear industry company, supporting the development
and commercialisation of new apple and pear varieties;
Director of Nagambie Healthcare, a community hospital
and aged care facility, based in regional Victoria, Australia
and President of Nagambie Lakes Tourism and Commerce
Incorporated. Tim is a member of Scales’ Nominations and
Remuneration Committee.
Board of Directors (as at 20 March 2020)
Andy joined Scales in 2007 and became Managing Director
in 2011. Prior to joining Scales he had a 20 year career in
banking, with his final role being Head of Corporate at
Westpac New Zealand. Andy has overall responsibility for the
strategic direction and day-to-day management of Scales. In
addition to his directorships of the Group, Andy is currently
the Chair of Akaroa Salmon Limited, Primary Collaboration
New Zealand Limited and Primary Collaboration New
Zealand (Shanghai) Co. Limited, and is a Director of George
H Investments Limited, Rabobank New Zealand Limited,
Rabobank Australia Limited and Rabo Australia Limited. Andy
is a member of Scales’ Finance and Treasury Committee and
Scales’ Health & Safety and Sustainability Committee.
Nick was elected to the Board in 2014, having been appointed
a Director of both Scales’ Storage & Logistics division and
Meateor in 2012. Nick was previously the Managing Director,
and was one of the founding shareholders of Hellers Limited,
New Zealand’s largest bacon, ham and small goods company.
Nick is a shareholder and Director of several private companies,
and is Deputy Chair of the Canterbury Hockey Association.
Nick is Chair of Scales’ Health & Safety and Sustainability
Committee and is a member of Scales’ Audit and Risk
Management Committee.
Mark was elected to the Board in 2011. He is a founding
partner of Direct Capital. Mark has a background in private
equity, specialising in portfolio management with a focus
on strategy, growth and capital funding. Mark is currently a
Director of a number of Direct Capital entities and portfolio
companies including George H Investments Limited. Mark is
also a Director of Evergreen Partners Limited. Mark is Chair
of Scales’ Nominations and Remuneration Committee and of
Scales’ Finance and Treasury Committee and is a member of
Scales’ Audit and Risk Management Committee.
Tim Goodacre,
Non-Executive
Independent Chair
Nick Harris,
Non-Executive
Independent Director
Andrew (Andy)
Borland,
Executive Director
Mark Hutton,
Non-Executive
Independent Director
Annual Report - Year Ended 31 December 2019
41
Leadership Profiles

Board of Directors (continued)
Alan was elected to the Board in 2014. Alan was the
President of the International Cricket Council between 2012
and 2014 and is currently; Chair of the Basin Reserve Trust;
a Director of Oceania Healthcare (NZ) Limited, Skellerup
Holdings Limited and a number of private companies. Alan
has an extensive background in the accounting and finance
field and is a former National Chair of KPMG. He was made
a Companion of the New Zealand Order of Merit (CNZM)
in 2013 for services to cricket and business. Alan is Chair of
Scales’ Audit and Risk Management Committee.
Tomakin was appointed to the Board on 28 January 2019.
He is a Director of China Resources Ng Fung Limited, which
holds a 15.19% shareholding in the Company, and is also
the Vice President, Chief Financial Officer and Company
Secretary of China Resources Enterprise, Limited. Tomakin
joined the China Resources Group in 2008, and holds both a
Business Administration degree from the Chinese University of
Hong Kong, and a Master of Business Administration degree
from the University of Manchester. Tomakin is a Director
of New Zealand King Salmon Investments Limited. He has
extensive experience in internal and external auditing, finance
and accounting, mergers and acquisitions, regulatory and
compliance, and as a company secretary.
Nadine was appointed to the Board on 26 February 2019.
Nadine is currently CEO of Ngai Tahu owned, Oha Honey
LP, which farms in excess of 35,000 bee hives nationwide.
Nadine has extensive horticulture and wider primary industry
management experience from a number of previous roles.
Nadine also brings experience from a wide variety of
governance and advisory roles, including as a member of
the Primary Sector Council, and as the former Chair of New
Zealand Apples & Pears Incorporated. Nadine is a member of
Scales’ Health & Safety and Sustainability Committee.
Alan Isaac,
Non-Executive
Independent Director
Nadine Tunley,
Non-Executive
Independent Director
Lai Po Sing, Tomakin,
Non-Executive Director
42
Scales Corporation Limited
Leadership Profiles

Andy Borland, Managing Director
Andy joined Scales in 2007 and became Managing Director in
2011. Andy’s full biography is set out in the previous section.
Hamish Davis, Managing Director Fern Ridge
Hamish joined Fern Ridge in 2001, becoming Managing
Director in 2008 following supply management and sales roles.
He has over 30 years’ experience in the growing and post-
harvest sectors of the apple industry, and remains very active in
export sales for the company.
Brett Frankel, President Shelby Foods
Brett established United States based Shelby Foods in 2007,
and has been its President since inception. Brett has over 20
years’ experience in petfood, having had a senior procurement
role prior to starting Shelby. He also represents the third
generation of family involvement in the sector, following in
the footsteps of both his father and grandfather.
Steve Kennelly, Chief Financial Officer
Steve has been with Scales since 1993 in a variety of
accounting and financial roles. As CFO, Steve is responsible for
finance, funding, legal, company secretarial and information
technology. Steve is a member of Chartered Accountants
Australia and New Zealand.
Karen Morrish, Group Health & Safety,
Compliance and Sustainability Manager
Karen was appointed to this Group role in 2017. Prior to that
Karen was the Health & Safety and Compliance Manager for
Mr Apple, where she has worked for 15 years. In 2019 Karen
also took on the role as a Director of New Zealand Apples &
Pears Incorporated.
Kent Ritchie, CEO Scales Logistics
Kent joined Scales in 1998, and has spent over 30 years in the
shipping industry. He has been involved in setting up shipping
services from New Zealand, has experience in all aspects of
the transport industry and has led Scales’ expansion into the
logistics arena.
John Sainsbury, CEO Meateor Group
John has been with Meateor in various management roles
for the last 19 years. Prior to that, John worked in senior
management, marketing and operational roles in the United
States. John was appointed CEO of Meateor Foods in March
2015, and CEO of Meateor Group during 2019.
Andrew van Workum, CEO Mr Apple
Andrew has worked in the apple industry for over 30 years. He
joined Mr Apple at its inception in 2001 and prior to that was
General Manager of Mr Apple’s predecessor, Grocorp Pacific
Limited, where he worked for 16 years. He has extensive
experience in the production aspects of the apple industry,
and was previously a Director of Pipfruit New Zealand.
Management Profiles
Annual Report - Year Ended 31 December 2019
43
Leadership Profiles

Financial Statements
Detail is
everything

Contents
Comprehensive income 46
The income earned and operating expenditure incurred
by the Scales Group during the financial year (profit or
loss) followed by the other comprehensive income that is
taken to reserves in equity.
Changes in equity 48
The opening balance, details of movements during
the year and the balance of each component of
shareholders’ equity at the end of the financial year.
Financial position 49
The Scales Group assets, liabilities and equity at the end
of the financial year.
Cash flows 51
Cash generated and used in the operating, investing and
financing activities of the Scales Group.
Notes to the Financial Statements 54
A. Segment information 56
B. Financial performance 58
B1. Revenue
B2. Cost of sales, administration and
operating expenses
B3. Other income and losses
B4. Finance cost
B5. Taxation
B6. Foreign currency transactions
C. Key assets 63
C1. Property, plant and equipment
C2. Unharvested agricultural produce
C3. Investments accounted for using the
equity method
C4. Goodwill
C5. Inventories
C6. Impairment of assets
D. Capital funding 69
D1. Share capital
D2. Reserves
D3. Dividends
D4. Imputation credit account
D5. Earnings per share
E. Financial assets and liabilities 73
E1. Trade and other receivables
E2. Other financial assets
E3. Trade and other payables
E4. Borrowings
E5. Other financial liabilities
E6. Interest rate risk
E7. Foreign currency risk
E8. Categories of financial instruments
E9. Maturity profile of financial liabilities
F. Group structure 80
F1. Subsidiary companies
F2. Discontinued operations
G. Other 83
G1. Capital commitments
G2. Leases
G3. Related party disclosures
G4. Contingent liability
G5. Events occurring after balance date
H. Adoption of NZ IFRS 16 Leases
86
Annual Report - Year Ended 31 December 2019
45
Financial Statements

20192018
NOTE$’000$’000
Continuing operations
RevenueB1 484,609 402,542
Cost of salesB2(383,126)(312,228)
101,483 90,314
Administration and operating expensesB2(43,965)(40,512)
Fair value gain on recognition of investment in joint ventureC39,782-
Gain on disposal of Meateor New Zealand businessC39,782-
Share of profit of entities accounted for using the equity methodC32,9971,706
Other incomeB3421236
Other lossesB3(647)-
EBITDA79,853 51,744
Amortisation (592)(534)
DepreciationC1(9,654)(8,713)
Depreciation of right of use assetG2(7,824)-
EBIT61,783 42,497
Finance revenue2,834 265
Finance costB4(3,549)(2,695)
Finance cost of lease liabilityG2(3,075)-
PROFIT BEFORE INCOME TAX EXPENSE FROM CONTINUING OPERATIONS57,993 40,067
Income tax expense B5(9,418)(11,044)
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS48,575 29,023
Profit from discontinued operations (net of tax)F273,002 16,476
PROFIT FOR THE YEAR121,577 45,499
Profit for the year from continuing operations is attributable to:
Equity holders of the Company45,000 28,608
Non-controlling interests 3,575 415
48,575 29,023
Profit for the year from discontinued operations is fully attributable to equity holders of the Company.
EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY:
Basic earnings per share (cents):
Continuing operations D532.1 20.5
Discontinued operationsD552.111.8
TotalD584.232.2
Diluted earnings per share (cents):
Continuing operationsD532.020.4
Discontinued operationsD551.9 11.7
Total D583.932.1
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.
46
Scales Corporation Limited
Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2019

20192018
NOTE$’000$’000
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Gain (loss) on cash flow hedges 6,496(6,775)
Income tax relating to cash flow hedges (1,819)1,897
Share of other comprehensive income of joint venturesC3 209-
Income tax relating to share of other comprehensive income of joint ventures(58)-
Foreign exchange (loss) gain on translating foreign operations (125) 49
4,703 (4,829)
Items that will not be reclassified to profit or loss:
Revaluation of land and buildings 11,117 9,762
Income tax relating to buildings(818)(175)
Revaluation of apple trees1,431 (466)
Income tax relating to apple trees(401)131
11,329 9,252
OTHER COMPREHENSIVE INCOME FOR THE YEARD216,032 4,423
TOTAL COMPREHENSIVE INCOME FOR THE YEAR137,609 49,922
Total comprehensive income for the year attributable to:
Equity holders of the Company134,034 49,507
Non-controlling interests3,575 415
137,609 49,922
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.
Annual Report - Year Ended 31 December 2019
47
Financial Statements
Consolidated Statement of Comprehensive Income (continued)
for the year ended 31 December 2019

48
Scales Corporation Limited
Financial Statements
Share capitalReserves
Retained
earnings
Attributable
to owners
of the
Company
Non-
controlling
interestsTotal
NOTE$’000$’000$’000$’000$’000$’000
Balance at 1 January 201893,750 66,887 60,839 221,476 441 221,917
Profit for the year- - 45,084 45,084 415 45,499
Other comprehensive income for the year- 4,423 - 4,423 - 4,423
Total comprehensive income for the year- 4,423 45,084 49,507 41549,922
Business acquisition- - - - 3,165 3,165
Reclassification of
revaluation reserveD2-(129)129---
Recognition of
share-based paymentsD2- 849 - 849 - 849
Shares soldD1, D2109- - 109 - 109
Shares fully vestedD1, D2325 (31)(46)248 - 248
DividendsD3- - (25,897)(25,897)(440)(26,337)
Balance at 31 December 201894,184 71,999 80,109 246,292 3,581 249,873
Profit for the year- - 118,002 118,002 3,575 121,577
Other comprehensive income for the year- 16,032 - 16,032 - 16,032
Total comprehensive income for the year- 16,032 118,002 134,034 3,575 137,609
Reclassification of revaluation reserveD2-(25,912) 25,912 - --
Recognition of share-based paymentsD2- 866 - 866 - 866
Shares fully vestedD1, D21,089 (474)(139)476 - 476
DividendsD3- - (26,654)(26,654)(3,167)(29,821)
Balance at 31 December 201995,273 62,511 197,230355,0143,989 359,003
Consolidated Statement of Changes in Equity
for the year ended 31 December 2019
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.

Annual Report - Year Ended 31 December 2019
49
Financial Statements
20192018
NOTE$’000$’000
EQUITY
Share capitalD195,273 94,184
ReservesD262,51171,999
Retained earningsD2197,230 80,109
Equity attributable to Scales Corporation Limited shareholders355,014 246,292
Equity attributable to non-controlling interests3,989 3,581
TOTAL EQUITY359,003 249,873
CURRENT ASSETS
Cash and bank balances18,632 2,790
Term deposits142,000-
Trade and other receivablesE120,59322,910
Current tax assets164-
Other financial assetsE24,571 3,921
Unharvested agricultural produceC221,619 20,547
InventoriesC526,422 45,442
Prepayments3,482 3,391
237,483 99,001
Assets held for sale-104,378
TOTAL CURRENT ASSETS237,483 203,379
NON-CURRENT ASSETS
Property, plant and equipmentC1165,741 150,586
Investments accounted for using the equity methodC324,973 5,213
GoodwillC443,784 43,875
Other financial assetsE27,117 6,903
Computer software 807 1,131
Right of use asset G278,775-
TOTAL NON-CURRENT ASSETS321,197 207,708
TOTAL ASSETS558,680 411,087
Consolidated Statement of Financial Position
as at 31 December 2019
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.

50
Scales Corporation Limited
Financial Statements
20192018
NOTE$’000$’000
CURRENT LIABILITIES
Bank overdrafts1,188 3,749
Trade and other payablesE319,843 27,282
Dividend declaredD313,328 13,299
BorrowingsE4-2,000
Related party borrowingsG3-1,329
Current tax liabilities2,842 845
Other financial liabilitiesE54,377 5,663
Lease liabilityG29,427-
51,005 54,167
Liabilities associated with assets held for sale-19,281
TOTAL CURRENT LIABILITIES51,005 73,448
NON-CURRENT LIABILITIES
BorrowingsE454,55164,664
Deferred tax liabilitiesB519,44215,588
Other financial liabilitiesE53,9667,514
Lease liabilityG270,713-
TOTAL NON-CURRENT LIABILITIES148,672 87,766
TOTAL LIABILITIES199,677 161,214
NET ASSETS359,003 249,873

Consolidated Statement of Financial Position (continued)
as at 31 December 2019
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.

Annual Report - Year Ended 31 December 2019
51
Financial Statements
Consolidated Statement of Cash Flows
for the year ended 31 December 2019
20192018
NOTE$’000$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers511,371 460,458
Dividends received1,517 1,019
Interest received791 280
513,679 461,757
Cash was disbursed to:
Payments to suppliers and employees(442,424)(409,843)
Interest paid(6,624)(2,695)
Income tax paid(8,532)(12,652)
(457,580)(425,190)
NET CASH PROVIDED BY OPERATING ACTIVITIES56,099 36,567
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of storage businesses148,882 20,323
Proceeds from sale of Meateor New Zealand businessC315,000 -
Advances repaid722 487
Sale of property, plant and equipment and computer software57 120
164,661 20,930
Cash was applied to:
Net cash outflow on acquisition of businesses- (35,269)
Investment in term deposits(142,000)-
Purchase of computer software(495)(827)
Purchase of financial instruments(497)(932)
Purchase of property, plant and equipment(16,313)(15,589)
(159,305)(52,617)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES5,356 (31,687)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Proceeds from term facility borrowings- 33,945
Proceeds from seasonal facility borrowingsE479,000 67,500
Proceeds from related party borrowings- 1,329
Treasury stock sold- 109
79,000 102,883
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.

52
Scales Corporation Limited
Financial Statements
20192018
NOTE$’000$’000
Cash was applied to:
Repayments of term facility borrowingsE4(10,000)(10,000)
Repayments of seasonal facility borrowingsE4(81,000)(72,000)
Repayments of related party borrowings(1,329)-
Repayments of lease liabilities(6,459)-
Dividends paid(26,625)(25,184)
Dividends paid to non-controlling interests(3,167)(440)
(128,580)(107,624)
NET CASH USED IN FINANCING ACTIVITIES(49,580)(4,741)
NET INCREASE IN NET CASH11,875 139
Net foreign exchange difference(201)(59)
Cash and cash equivalents at the beginning of the year5,770 5,690
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR17,444 5,770
Represented by:
Cash and bank balances 18,632 2,790
Bank overdrafts(1,188)(3,749)
Cash and bank balances attributable to discontinued operations- 6,729
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR17,444 5,770
Consolidated Statement of Cash Flows (continued)
for the year ended 31 December 2019
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.

Annual Report - Year Ended 31 December 2019
53
Financial Statements
Andy Borland, Managing Director Tim Goodacre, Chair
The notes to the financial statements on pages 54 to 87 form part of and should be read in conjunction with this statement.
Consolidated Statement of Cash Flows (continued)
for the year ended 31 December 2019
20192018
NOTE$’000$’000
NET CASH GENERATED BY OPERATING ACTIVITIES
Reconciliation of profit for the year to net cash generated by operating activities:
Profit for the year 121,577 45,499
Non-cash items:
Gain on disposal of storage businessesF2(68,131)(8,174)
Gain on disposal of Meateor New Zealand businessC3(9,782)-
Fair value gain on recognition of investment in joint ventureC3(9,782)-
(Gain) loss on disposal of property, plant and equipment(57)127
Amortisation 592 643
Depreciation (including on right-of-use asset)17,478 10,779
FX option premiums639 -
Deferred tax941 1,306
Share of equity accounted results(2,997)(1,706)
Share-based payments1,000 983
Change in gross liability on put options273 (147)
Items classified as investing and financing activities:
Dividends received from equity accounted entities1,500 1,000
Changes in net assets and liabilities:
Working capital amounts included in acquisition of businesses- 8,180
Trade and other receivables(579)(8,599)
Unharvested agricultural produce(1,072)(358)
Inventories 3,540 (23,345)
Prepayments(975)(302)
Trade and other payables(235)9,733
Current tax 2,169 948
NET CASH PROVIDED BY OPERATING ACTIVITIES56,099 36,567
Statement of Cash Flows
For the purpose of the statement of cash flows, cash and cash equivalents include cash and bank balances and bank overdrafts.

The following terms are used in the statement of cash flows:
Operating activities are the principal revenue producing activities of the Group and other activities that are not investing or
financing activities.
Investing activities are the acquisition and disposal of long-term assets and other investments not included in
cash equivalents.
Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of
the Group.
For and on behalf of the Board of Directors who authorised the issue of the financial statements on 25 February 2020.

The notes to the financial statements include information which is considered relevant and material to assist the
reader in understanding the financial performance and financial position of the Scales Corporation Limited Group
(“Scales” or the “Group”). Information is considered relevant and material if:
• the amount is significant because of its size and nature;
• it is important for understanding the results of Scales;
• it helps to explain changes in Scales’ business; or
• it relates to an aspect of Scales’ operations that is important to future performance.
Scales Corporation Limited (the “Company”) is a for-profit entity domiciled and registered under the Companies Act 1993 in New
Zealand. It is an FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013. The Group consists of Scales
Corporation Limited, its subsidiaries and joint ventures. The principal activities of the Group are to provide logistics services, grow
apples, export products, provide insurance services to companies within the Group and operate storage and processing facilities.
The financial statements have been prepared:
• in accordance with Generally Accepted Accounting Practice (GAAP), International Financial Reporting Standards (IFRS), the New
Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable financial reporting standards,
as appropriate for a Tier 1 for-profit entity;
• in accordance with the requirements of the Financial Markets Conduct Act 2013;
• in accordance with accounting policies that are consistent with those applied in the previous year except for adoption of
NZ IFRS 16 Leases (note H);
• on the basis of historical cost, except for certain assets and financial instruments that are measured at fair values; and
• in New Zealand dollars with all values rounded to the nearest thousand dollars.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or liability, the Group takes into account the characteristics of the asset or liability if
market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable. The levels are described as:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
• Level 2 inputs are inputs, other than quoted prices within Level 1, that are observable for the asset or liability, either directly or
indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
Key judgements and estimates
In the process of applying the Group’s accounting policies and the application of financial reporting standards, Scales has made a
number of judgements and estimates. The estimates and underlying assumptions are based on historical experience and various
other factors that are considered to be appropriate under the circumstances. Actual results may differ from these estimates.
Judgements and estimates which are considered material to understanding the performance of Scales are explained in the
following notes:
• Apple trees in note C1;
• Unharvested agricultural produce in note C2.
54
Scales Corporation Limited
Financial Statements
Notes to the Financial Statements
for the year ended 31 December 2019

Annual Report - Year Ended 31 December 2019
55
Financial Statements
Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and its subsidiaries (being entities controlled by
Scales Corporation Limited), and the equity accounted result, assets and liabilities of the joint ventures.
The financial statements of members of the Group are prepared for the same reporting period as the parent company, using
consistent accounting policies.
In preparing the Group financial statements, all material intra-group transactions, balances, income, expenses and cash flows have
been eliminated. Subsidiaries are consolidated from the date on which control is obtained to the date on which control is lost.
Other accounting policies
Other accounting policies that are relevant to an understanding of the financial statements are provided throughout the notes to the
financial statements.
Change in accounting policy on adoption of NZ IFRS 16 Leases
See Note H.
Adoption of new and revised standards and interpretations - standards and interpretations in issue not yet effective
The Group has reviewed all Standards, Interpretations and Amendments to existing Standards in issue not yet effective and does not
expect these Standards to have a material effect on the financial statements of the Group.

56
Scales Corporation Limited
Financial Statements
A. Segment Information
This section explains the financial performance of the operating segments of Scales, providing additional information
about individual segments, including:
• total segment revenue and revenue from external customers;
• segment profit before income tax; and
• total segment assets and liabilities.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker,
being the Managing Director. The Managing Director monitors the operating performance of each segment for the purpose of
making decisions on resource allocation and strategic direction. Inter-segment pricing is determined on an arm’s length basis.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. No
single external customer’s revenue accounts for 10% or more of the Group’s revenue. All non-current assets are located in New
Zealand and United States of America.
The Group comprises the following operating segments:
Food Ingredients: processing and marketing of food ingredients such as pet food ingredients and juice concentrate. Meateor
Foods Limited, Meateor Foods Australia Pty Limited, Meateor Group Limited, Meateor US LLC, Shelby JV LLC Group
(Shelby Cold Storage LLC, Shelby Exports Inc, Shelby Foods LLC, Shelby JV LLC, Shelby Properties LLC,Shelby Trucking LLC),
Meateor GP Limited, Meateor Pet Foods Limited Partnership and Profruit (2006) Limited.
Horticulture: orchards, fruit packing and marketing. Mr Apple New Zealand Limited, New Zealand Apple Limited, Fern Ridge Produce
Limited and Longview Group Holdings Limited.
Logistics: logistics services. Scales Logistics Limited and Scales Logistics Australia Pty Ltd.
Other: Scales Corporation Limited, Geo. H. Scales Limited, Scales Employees Limited, Scales Holdings Limited and Selacs
Insurance Limited.
Horticulture
Food
IngredientsLogisticsOtherEliminationsTotal
$’000$’000$’000$’000$’000$’000
2019 (continuing operations)
Total segment revenue264,782 155,077 87,076 3,461 (25,787)484,609
Inter-segment revenue- - (22,948)(2,839)25,787 -
Revenue from external customers264,782 155,077 64,128 622 - 484,609
Gain on sale of non-current assets45 - - 1 - 46
Share of profit of entities accounted for
using the equity method
- 2,997 - - - 2,997
EBITDA47,909 32,921 4,058 (5,035)- 79,853
Amortisation expense(486)(1)(36)(69)- (592)
Depreciation expense(8,296)(1,016)(328)(14)- (9,654)
Depreciation of right of use asset(7,122)(62)(583)(57)- (7,824)
Finance revenue19 10 3 2,802 - 2,834
Finance costs(16)(23)(33)(3,477)- (3,549)
Finance cost of lease liability(2,739)(20)(301)(15)- (3,075)
Segment profit (loss) before income tax29,269 31,809 2,780 (5,865)- 57,993

Annual Report - Year Ended 31 December 2019
57
Financial Statements
Segment Reporting (continued)
Horticulture
Food
IngredientsLogisticsOtherEliminationsTotal
$’000$’000$’000$’000$’000$’000
Segment assets293,249 101,091 18,619 145,721 - 558,680
Segment liabilities112,426 11,110 12,269 63,872 - 199,677
Segment carrying value of investment
accounted for using the equity method
- 24,973 - - - 24,973
Segment acquisition of property, plant
and equipment and computer software
15,002 191 470 10 - 15,673
2018 (continuing operations)
Total segment revenue254,568 83,053 89,270 3,756 (28,105)402,542
Inter-segment revenue- - (24,783)(3,322)28,105 -
Revenue from external customers254,568 83,053 64,487 434 - 402,542
Gain on sale of non-current assets72 - - - - 72
Share of profit of entity accounted for
using the equity method
- 1,706 - - - 1,706
EBITDA43,466 11,021 4,902 (7,645)- 51,744
Amortisation expense(471)(4)(31)(28)- (534)
Depreciation expense(7,916)(578)(206)(13)- (8,713)
Finance revenue189 4 1 71 - 265
Finance costs(14)- (34)(2,647)- (2,695)
Segment profit (loss) before income tax35,254 10,443 4,632 (10,262)- 40,067
Segment assets198,761 92,382 10,706 4,860 - 306,709
Segment liabilities43,958 20,330 6,650 70,995 - 141,933
Segment carrying value of investment
accounted for using the equity method
- 5,213 - - - 5,213
Segment acquisition of property, plant
and equipment and computer software
10,002 516 780 171 - 11,469
Property, plant and equipment and
computer software included in
business acquisitions
- 4,900 - - - 4,900

58
Scales Corporation Limited
Financial Statements
B. Financial Performance
This section explains the financial performance of Scales, providing additional information about individual items in the
statement of comprehensive income, including:
• accounting policies, judgements and estimates that are relevant for understanding items recognised in the statement of
comprehensive income; and
• analysis of Scales’ performance for the year by reference to key areas including revenue, expenses and taxation.
B1. Revenue
2019
$’000
2018
$’000
By nature:
Revenue from the sale of goods390,855 312,890
Revenue from the rendering of services90,280 84,918
Fees and commission8984
Net foreign exchange (loss) gain(127) 1,688
Rental revenue3,512 2,962
484,609 402,542
By market:
New Zealand 107,465 106,543
Asia153,301 117,938
Europe64,621 93,853
North America154,994 82,968
Other4,228 1,240
484,609 402,542
By segment and type:
Horticulture - sale of agricultural produce237,584 232,041
Horticulture - agricultural produce related services23,695 19,572
Horticulture - other3,503 2,955
Food ingredients - sale of pet food ingredients152,963 82,246
Food ingredients - other2,114 807
Logistics services64,12864,487
Other622 434
484,609 402,542
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf
of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

Annual Report - Year Ended 31 December 2019
59
Financial Statements
B1. Revenue (continued)
Sale of agricultural produce
The Group sells apples to more than 160 customers in 40 countries. Sales-related quality claim provisions are recorded in accordance
with NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Revenue is recognised when control of the goods has
transferred, being when the goods have been shipped to the customer (“outright sales”) or when the goods have been sold by
the customer (“consignment sales”). In addition, the apple season finishes before the end of the calendar year, with performance
obligations under both sales types satisfied for all sales made during that season.
Outright sales
Following shipment, revenue is recognised when the customer obtains control as it has full discretion over the manner of distribution
and price to sell the goods, has the primary responsibility when onselling the goods and bears the risks of loss in relation to the
goods. A receivable is recognised by the Group when it loses control, which is when the goods are delivered on the ship at the port
of shipment as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of
time is required before the payment is due. Terms of payment are up to 45 days on arrival.
Consignment sales
Revenue is recognised by the Group when it loses control, which is when the goods are confirmed to be on-sold to the ultimate
customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time
is required before the payment is due. Terms of payment are immediate upon on-sale.
Sale of petfood ingredients
The Group sells petfood ingredients to a number of international and domestic customers. Revenue is recognised when control of
the goods has transferred, being when the goods have been delivered to the customer (“delivered to destination sales”) or when
shipped to the customer (“outright sales”). Terms of payments are up to 120 days.
Delivered to destination sales
Following delivery, revenue is recognised when the customer obtains control as it has full discretion over the manner of distribution
and price to sell the goods, has the primary responsibility when onselling the goods and bears the risks of loss in relation to goods. A
receivable is recognised by the Group when it loses control, which is when the goods are delivered to the destination named by the
customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time
is required before the payment is due.
Outright sales
Same as above under “Sale of agricultural produce - outright sales”.
Agricultural produce related services
The Group provides a number of agricultural produce related services to external apple growers, including packaging, cartage, export
documentation and export services. Each of those services is considered to be a distinct service as it is both regularly supplied by the
Group to customers on a stand-alone basis and is available for customers from other providers in the market.
A receivable is recognised by the Group when the service performance has been completed, and the performance obligation is
satisfied as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is
required before the payment is due. Terms of payment are up to 45 days.
Logistics services
The Group provides marine and air logistics services to domestic customers. Revenue is recognised by the Group at the point in time,
which is when the shipment is organised and the goods are on the ship or the aeroplane. The performance obligation is satisfied as
this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required
before the payment is due. Terms of payments are up to 60 days.
B2. Cost of Sales, Administration and Operating Expenses
20192018
$’000$’000
Auditor’s remuneration:
Deloitte (New Zealand):
Audit of the financial statements:
Audit of the annual financial statements168 159
Review of interim financial statements 45 41
Other services:
Audit of solvency certificate for Selacs Insurance Limited6 6
Anti-bribery and corruption awareness training- 6
Sheehan & Company CPA, PC (United States):
Component auditor’s fee for group audit69 -
Component auditor’s fee for review of subsidiary financial statements30 -

60
Scales Corporation Limited
Financial Statements
B2. Cost of Sales, Administration and Operating Expenses (continued)
20192018
$’000$’000
Bad debts (recovered) incurred(168)522
Change in fair value adjustment to unharvested agricultural produce332 256
Change in inventories3,540 (17,510)
Direct expenses65,987 47,037
Directors’ fees555 463
Donations13 7
Electricity2,774 3,174
Employee benefits expense:
Post employment benefits - defined contribution plans1,401 1,227
Post employment benefits - defined benefit plans409 -
Salaries, wages and related benefits73,754 67,426
Other employee benefits743 1,049
Grower payments62,376 53,036
Insurance3,589 3,594
Management fees97 141
Materials and consumables102,877 78,802
Ocean and air freight81,154 77,903
Operating lease expenses2,089 10,672
Packaging18,940 18,684
Provision for write-down of inventories1,168 -
Repairs and maintenance5,143 6,045
427,091 352,740
Disclosed as:
Cost of sales383,126 312,228
Administration and operating expenses43,965 40,512
427,091 352,740

Employee benefits
An accrual is made for benefits due to employees in respect of wages and salaries, annual leave and long service leave when it is
probable that settlement will be required and they are capable of being measured reliably. Accruals are measured at their nominal
values using the remuneration rate expected to apply at the time of settlement.
Contributions to defined contribution plans are recognised as an expense when employees have rendered service entitling them to
the contributions.
The costs relating to shares issued in accordance with the Senior Executive Share Scheme are explained in note D2.
B3. Other Income and Losses
2019 2018
$’000$’000
Dividends118
Gain on disposal of property, plant and equipment46 72
Reinsurance income (Note G4)374-
Insurance claims expense paid (Note G4)(374)-
Remeasurement of gross liability to non-controlling interest(273)146
(226)236
Disclosed as:
Other income421236
Other losses(647)-
(226) 236

Annual Report - Year Ended 31 December 2019
61
Financial Statements
B4. Finance Cost
2019 2018
$’000$’000
Interest on loans3,298 2,417
Other interest12394
Bank facility fees 128184
3,5492,695
Finance costs consist of interest and other costs incurred in connection with the borrowing of funds. Interest expense is accrued on a
time basis using the effective interest method.
B5. Taxation
Income tax recognised in profit or loss
Income tax expense comprises:
Current tax expense from continuing operations8,795 10,892
Current tax expense from discontinued operations2,483 2,736
Total current tax expense11,278 13,628
Adjustments recognised in the current year in relation to the current tax of prior years (74)-
Deferred tax expense relating to the origination and reversal of temporary differences4381,277
11,64214,905
Total income tax expense recognised in profit or loss from continuing operations9,418 11,044
Total income tax expense recognised in profit or loss from discontinued operations (Note F2)2,224 3,861
Total income tax expense recognised in profit or loss11,642 14,905
The prima facie income tax expense on pre-tax accounting profit reconciles to the income tax expense in the financial statements
as follows:
Profit from continuing operations57,993 40,067
Profit from discontinued operations (Note F2)75,226 20,337
Total profit before tax133,219 60,404
Income tax expense calculated at applicable corporate tax rates37,128 16,913
Non-assessable income(26,278)(2,772)
Non-deductible expenses688 726
Under (over) provision of income tax in previous year - current tax(73) 11
Under provision of income tax in previous year - deferred tax17727
11,642 14,905

The tax rates used in the above reconciliation are the corporate tax rate of 28% payable by New Zealand companies under New
Zealand tax law, 30% payable by Australian companies under Australian tax law and 25.5% payable by US entities under US tax
law (being federal tax 21% and weighted average state tax 4.5%).

62
Scales Corporation Limited
Financial Statements

Opening
balance
Charged to
profit or loss
Charged to other
comprehensive
income
Discontinued
operations
Closing
balance
$’000$’000$’000$’000$’000
Deferred tax liability
Taxable and deductible temporary differences
arise from the following:
31 December 2019
Deferred tax liabilities (assets):
Trade and other receivables(140)117- -(23)
Unharvested agricultural produce5,558 490- - 6,048
Property, plant and equipment and
computer software10,833 7681,219-12,820
Trade and other payables(467)(236)- -(703)
Lease liability and right-of-use asset (NZ IFRS 16)-(381)--(381)
Other financial assets and liabilities and
joint ventures (196)- 1,877- 1,681
Net deferred tax liability15,5887583,096-19,442
31 December 2018
Deferred tax liabilities (assets):
Trade and other receivables(5)(134) - (1) (140)
Unharvested agricultural produce5,652 (94)- - 5,558
Property, plant and equipment and
computer software21,496 1,611 44 (12,318)10,833
Trade and other payables(669)(106)- 308(467)
Other financial assets and liabilities 1,701 -(1,897)- (196)
Net deferred tax liability28,175 1,277 (1,853)(12,011)15,588
Current tax is the taxation expected to be paid to taxation authorities in respect of the current year. Deferred taxation is recognised
in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Financial
Statements. Current and deferred tax is calculated on the basis of the laws enacted or substantively enacted at balance date.
Income tax
Current and deferred tax are recognised in profit or loss, except when the tax relates to items charged or credited to other
comprehensive income, in which case the tax is also recognised in other comprehensive income.
B6. Foreign Currency Transactions
In preparing the financial statements of the individual entities, the transactions in currencies other than New Zealand dollars are
recorded at the rates of exchange prevailing at the dates of the transaction. At the end of each reporting period financial assets
and liabilities denominated in foreign currencies are retranslated into New Zealand dollars at the rates prevailing at the end of the
reporting period.
Exchange differences from these transactions are recognised in profit or loss in the period in which they arise.
Income and expenses for each subsidiary whose functional currency is not New Zealand dollars are translated at exchange rates that
approximate the rates at the actual dates of the transactions. Assets and liabilities of each subsidiary are translated at exchange rates
at balance date.
All resulting exchange differences are recognised in the foreign exchange translation reserve, which is a separate component of equity.
The effective portion of exchange differences on foreign currency borrowings designated as hedges of net investments in foreign
operations is also recognised in the foreign exchange translation reserve.
B5. Taxation (continued)

Annual Report - Year Ended 31 December 2019
63
Financial Statements
C. Key Assets
This section shows the key assets Scales uses to generate operating revenues. There is information about:
• property, plant and equipment;
• unharvested agricultural produce;
• investments accounted for using the equity method;
• goodwill; and
• inventories.

C1. Property, Plant and Equipment
Land and
buildings at
fair value
Apple trees
at fair value
Plant and
equipment
at cost
Office
equipment
& motor
vehicles
at cost
Capital work
in progress
at costTotal
$’000$’000$’000$’000$’000$’000
Gross carrying amount
Balance at 1 January 2018142,625 33,348 115,775 20,802 4,174 316,724
Additions843 3,857 6,019 1,187 19 11,925
Acquisition of businesses2,187 - 2,691 22 - 4,900
Reclassified as held for sale(65,450)- (38,596)(7,912)(2,179)(114,137)
Sale of bulk storage assets(2,132)- (14,752)(182)- (17,066)
Disposals(219)- (3,477)(1,953)- (5,649)
Revaluation8,794 (5,605)- - - 3,189
Effect of foreign currency translation21 - 26 - - 47
Balance at 31 December 201886,669 31,600 67,686 11,964 2,014 199,933
Additions96 3,656 5,011 1,132 5,506 15,401
Disposals- - (11,532)(994)- (12,526)
Revaluation10,020 (1,342)- - - 8,678
Effect of foreign currency translation(6)- (13)- (7)(26)
Balance at 31 December 201996,779 33,914 61,152 12,102 7,513 211,460
Accumulated depreciation
and impairment
Balance at 1 January 2018- 2,617 70,603 14,623 - 87,843
Depreciation expense1,609 2,522 5,030 1,618 - 10,779
Reclassified as held for sale(607)- (24,345)(5,368)- (30,320)
Sale of bulk storage assets- - (7,380)(65)- (7,445)
Disposals(34)- (3,461)(1,908)- (5,403)
Revaluation(968)(5,139)- - - (6,107)
Balance at 31 December 2018- - 40,447 8,900 - 49,347
Depreciation expense1,097 2,773 4,573 1,211 - 9,654
Disposals- - (8,477)(918)- (9,395)
Revaluation(1,097)(2,773)- - - (3,870)
Effect of foreign currency translation- - (17)- - (17)
Balance at 31 December 2019- - 36,526 9,193 - 45,719
Net book value
As at 31 December 201886,669 31,600 27,239 3,064 2,014 150,586
As at 31 December 201996,779 33,914 24,626 2,909 7,513 165,741
The preceding disclosure includes both continuing and discontinued operations up to the date of sale or reclassification into held for
sale. Depreciation expense includes both continuing and discontinued operations.

64
Scales Corporation Limited
Financial Statements
Accounting policy
Land, buildings and apple trees are included in the statement of financial position at their fair value at the date of revaluation, less
any subsequent accumulated depreciation and subsequent accumulated impairment losses. Valuations are performed with sufficient
regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of
the reporting period.
Any valuation increase arising on the revaluation of such land, buildings and apple trees is recognised in other comprehensive
income and accumulated as a separate component of equity in the revaluation reserve, except to the extent that it reverses a
valuation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss
to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such land, buildings
and apple trees is charged to profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating
to a previous revaluation of that asset.
Depreciation on revalued buildings and apple trees is charged to profit or loss. On the subsequent sale or retirement of revalued
property or apple trees, the attributable revaluation surplus remaining in the revaluation reserve is transferred directly to retained
earnings. No transfer is made from the revaluation reserve to retained earnings except when an asset is derecognised.
Office equipment, motor vehicles, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation is provided on property, plant and equipment, including buildings and apple trees but excluding land and capital work
in progress. Depreciation is charged so as to write off the cost or valuation of assets, other than land and capital work in progress,
over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method
are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. The following
estimated useful lives are used in the calculation of depreciation:
Apple trees 30 years
Buildings 10 to 50 years
Office equipment and motor vehicles 2 to 20 years
Plant and equipment 2 to 25 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sale proceeds and the carrying amount of the asset and is recognised in profit or loss.
Land and buildings carried at fair value
Land and buildings shown at valuation were valued at fair value as at 31 December 2019 by independent registered valuers Added
Valuation Limited and Logan Stone Limited. The valuations were arrived at by reference to market evidence of transaction prices for
similar properties.
The fair value of land and buildings is calculated on the basis of market value. Market value is determined by applying income
capitalisation and comparative sales calculations which are benchmarked against depreciated replacement cost calculations. The
valuations include adjustments to observable data for similar properties to take into account property-specific attributes.
The significant unobservable inputs, based on regional averages, for the land and buildings (mainly coolstores and packhouses) are
potential market comparative rentals $5 - $155 per square metre and the capitalisation rates of 8.5% - 12%. The higher the rental
rates the higher the fair value. The higher the capitalisation rates the lower the fair value. Significant changes in either of these
inputs would result in significant changes to the fair value measurement. Orchard land is valued within the range of $28,300 to
$123,000 per hectare.
The Group’s land and buildings are classified as Level 3 in the fair value hierarchy.
The carrying amount of land and buildings had it been recognised under the cost model is $48,077,000
(31 December 2018: $48,774,000).
Apple trees carried at fair value
The Group’s apple orchards, being the apple trees other than the existing crop on the trees, were valued at fair value by Boyd Gross
B.Agr (Rural Val), Dip Bus Std, FNZIV, FPINZ of Logan Stone Limited as at 31 December 2019. The market valuations completed by
Boyd Gross were based on a DCF analysis of forecast income streams and costs. This was benchmarked against a comparison of sales
of other orchards adjusted to reflect the location, plantings, age and varieties of trees and productive capabilities of the orchards.
The significant unobservable inputs, based on district averages, for the apple trees are:
20192018
Production levels (gross tray carton equivalent
(tce)) per hectare
3,495 - 6,0213,250 - 5,950
Orchard gate returns per tce$25.00 - $38.00$25.75 - $45.54
Orchard costs per tce$15.31 - $28.34$19.55 - $32.45
Discount rate15.58% - 19.40%16.0% - 19.40%
The higher the production levels and orchard gate return the higher the fair value. The higher the orchard costs and discount rate
the lower the fair value. Significant changes in any of these inputs would result in significant changes to the fair value measurement.
The Group’s apple trees are classified as level 3 in the fair value hierarchy.
C1. Property, Plant and Equipment (continued)

Annual Report - Year Ended 31 December 2019
65
Financial Statements
C1. Property, Plant and Equipment (continued)
The apple trees, on owned and leased orchards, have the following planting profile:
Total Hectares Planted
20192018
Premium varieties:
NZ Queen210 211
Pink Lady123 120
Red sports (Fuji and Royal Gala)259 247
Other premium151122
Traditional varieties:
Braeburn110128
Royal Gala176 182
Other traditional153145
1,1821,155

Risk management strategy:
The Group is exposed to financial risks arising from changes in climatic conditions, market prices and the value of the New Zealand
dollar. The Group mitigates these risks by installing hail and frost protection on orchards which have shown to be more susceptible to
these risks, obtaining hail insurance cover, utilising foreign currency derivative instruments and building close working relationships
with key customers.
C2. Unharvested Agricultural Produce
20192018
$’000$’000
Balance at beginning of the year20,547 20,189
Decrease due to harvest(20,547)(20,189)
Development expenditure21,254 19,850
Fair value adjustment365697
Balance at end of the year21,619 20,547
The assessment of the value of unharvested agricultural produce was undertaken by management, using a discounted cash flow
model, and is calculated as the fair value less estimated harvest and post-harvest costs of the unharvested crop on the trees at the
reporting date. The risk adjusting discount rate represents an allowance for adverse events that may affect crop, harvest and/or
market conditions. This calculation is also benchmarked against orchard costs incurred during the current growing cycle.
The Group’s unharvested agricultural produce is classified as Level 3 in the fair value hierarchy.
The significant unobservable inputs included in the model are the:
20192018
Production levels (tonnes per hectare per annum)63 - 10859 - 115
Orchard gate returns per tce$23 to $43$24 to $41
Risk adjusting discount rates 53% to 71%55% to 73%
The higher the yield per hectare and the higher the orchard gate returns per tce, the higher the fair value. The higher the risk
adjusting discount rate, the lower the fair value.

66
Scales Corporation Limited
Financial Statements
C3. Investments Accounted for Using the Equity Method
Details of each of the Group’s material joint ventures at the end of the reporting period are as follows:
Joint venturesPrincipal activity
Country of
incorporation HoldingBalance date
20192018
Profruit (2006) LimitedTrading companyNew Zealand 50%50%31 December
Meateor Pet Foods Limited PartnershipTrading companyNew Zealand 50%0%31 December
Summarised financial information in respect of the Group’s joint ventures is set out below. The aggregate summarised financial
information below represents amounts in joint ventures’ financial statements prepared in accordance with NZ IFRS Standards.
20192018
$’000$’000
Current assets31,110 11,437
Non-current assets30,218 2,984
Current liabilities(8,233)(3,628)
Non-current liabilities(3,149)(367)
Net assets49,946 10,426
Group’s share in the net assets of equity accounted entities (50%)24,973 5,213
Carrying amount of investment in equity accounted entities24,973 5,213
The above amounts of assets and liabilities include the following:
Cash and cash equivalents2,243 226
Current financial liabilities (excluding trade and other payables and provisions)(1,340)(1,315)
Non-current financial liabilities (excluding trade and other payables and provisions)(3,114)(332)
Revenue54,892 21,554
Profit for the year after tax5,994 3,412
Other comprehensive income attributable to the owners of the company418 -
Total comprehensive income6,412 3,412
The above profit for the year includes the following:
Depreciation and amortisation817 524
Interest expense325 321
Income tax expense1,542 1,326
Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint
ventures recognised in the consolidated financial statements:
Share of profit before taxation3,768 2,369
Share of income tax(771)(663)
Share of other comprehensive income (net of tax)209 -
Share of net profit for the year and total comprehensive income3,206 1,706
Carrying value at beginning of the year5,213 4,507
Interest retained in Meateor Pet Foods Limited Partnership18,054 -
Dividend paid by Profruit (2006) Limited(1,500)(1,000)
Investment in equity accounted entities24,973 5,213

Annual Report - Year Ended 31 December 2019
67
Financial Statements

C3. Investments Accounted for Using the Equity Method (continued)
The Scales Corporation Limited Group share of the guarantee of the Profruit (2006) Limited bank loan facilities is $2,052,808
(2018: $691,092).
On 7 March 2019, the Company announced an agreement to enter into a pet food Joint Venture (JV) with Alliance Group Limited
(Alliance). Under the terms of the JV, Alliance would pay $15 million to acquire a 50% interest in Meateor Food Limited’s (a wholly
owned subsidiary of the Group) New Zealand business and operations. The sale settled on 1 April 2019. Accordingly, Meateor
Pet Foods Limited Partnership (MPFLP) was incorporated on 13 March 2019. The general partner of MPFLP is Meateor GP Limited
incorporated on 12 March 2019, which is owned 50/50 by the Group and Alliance.
MPFLP acquired Meateor Foods Limited’s New Zealand business and operations for $30 million. The Group and Alliance each
contributed $15 million in exchange for a 50% limited partnership interest. $15 million capital contribution from the Group was set
off against $30 million receivable from MPFLP. A total $19.6 million gain was recognised which includes gain on sale of the Meateor
New Zealand business to the JV and gain on fair value measurement of the interest in the JV.
$’000
Net proceeds on disposal15,000
Plus: Difference between target and actual working capital receivable 3,054
Plus: Fair value of investment retained (50% of MPFLP)18,054
Less: Net assets disposed(16,544)
Gain on sale19,564
Total gain on sale is allocated as follows:
Fair value gain on recognition of investment in joint venture9,782
Gain on disposal of Meateor New Zealand business9,782

The Group accounted for the loss of control under NZ IFRS 10 Consolidated Financial Statements and recognised the full gain within
profit or loss.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements using the equity
method of accounting. Under the equity method, an investment in 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. Dividends or distributions received from a joint venture reduce the carrying amount
of the investment in that joint venture in the Group financial statements. When the Group’s share of losses of a joint venture
exceeds the Group’s interest in that joint venture, the Group discontinues recognising its share of further losses. Additional losses
are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the
joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee becomes a joint
venture until the date it ceases to be a joint venture. On acquisition of the investment in a joint venture, any excess of the cost of
the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as
goodwill, which is included within the carrying value of the investment. The requirements of NZ IAS 36 Impairment of Assets are
applied to determine whether it is necessary to recognise any impairment loss.

C4. Goodwill
20192018
$’000$’000
Gross carrying amount
Balance at beginning of the year43,87518,177
Disposal of Liqueo Bulk Storage Limited-(1,989)
Acquisition of 60% in Shelby JV LLC Group-27,421
Effect of foreign currency exchange differences(91)266
Balance at end of the year43,78443,875
Goodwill arising on the acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment losses, if any. Goodwill is tested for impairment annually, or more frequently if there are indications that
goodwill might be impaired. For the purpose of impairment testing, goodwill has been allocated to the cash-generating units
(“CGUs”) listed below which represent the lowest level at which the Directors monitor goodwill.

68
Scales Corporation Limited
Financial Statements
C4. Goodwill (continued)
20192018
$’000$’000
Logistics1,955 1,955
Mr Apple14,233 14,233
Shelby27,596 27,687
43,784 43,875
As at 31 December 2019, the Directors have determined, based on discounted cash flow and value in use calculations, that there is
no impairment of goodwill associated with any of the above CGUs.
The discounted cash flow and value in use calculations uses future cash flows covering a 5 year period based on a Board approved
budget. The model was based on the following key assumptions:
20192018
Pre-tax discount rates12-13%13-15%
Annual growth rates2-3%2-3%
The Directors consider that any reasonably possible changes in the key assumptions would not cause the carrying amount of any of
the CGUs to exceed their recoverable amount.
C5. Inventories
20192018
$’000$’000
Finished goods21,583 40,483
Other4,839 4,959
26,422 45,442
Inventories are stated at the lower of cost and net realisable value. Cost means the actual cost of the inventory and in determining
cost the first in first out basis of stock movement is followed, with due allowance having been made for obsolescence. Net realisable
value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
C6. Impairment of Assets
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs.
A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that
the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss and is not reversed
in subsequent periods.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future pre-
tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or
CGU) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Annual Report - Year Ended 31 December 2019
69
Financial Statements
D. Capital Funding
This section explains how Scales manages its capital structure and how dividends are returned to shareholders. In this
section there is information about:
• equity;
• dividends paid; and
• earnings per share.
Capital management
The Group’s capital includes share capital, reserves and retained earnings. The Group’s policy is to maintain a strong capital base so
as to maintain investor, creditor and customer confidence and to sustain the future development of the business. The impact of the
level of capital on shareholders’ return is also recognised and the Group recognises the need to maintain a balance between the
higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position.
D1. Share Capital
Issued and paid up capital consists of 141,579,238 fully paid ordinary shares (2018: 141,103,597) less treasury stock of 1,383,659
shares (2018: 1,195,664 shares) (refer to note D2). All shares rank equally in all respects.
Shares issued or purchased on market under the Senior Executive Share Scheme (“Share Scheme”) (note D2) are treated as treasury
stock until vesting to the employee.
Number of shares
20192018
Fully paid ordinary shares
Opening balance141,103,597140,510,292
Share Scheme - shares issued475,641593,305
Closing balance141,579,238141,103,597
Treasury stock
Opening balance1,195,664 721,056
Share Scheme - shares issued475,641 593,305
Share Scheme - shares forfeited and sold on market-(22,504)
Share Scheme - shares fully vested(287,646)(96,193)
Closing balance1,383,659 1,195,664

The available subscribed capital of $42,808,000 (2018: $41,230,000) represents the amount of the shareholders’ equity that is
available to be returned to shareholders on a tax-free basis.
In accordance with the Companies Act 1993 the Company does not have a limited amount of authorised capital and issued shares
do not have a par value.
20192018
$’000$’000
Movement in share capital related to share-based payments:
Cash-settled share based payment scheme vested134 134
Equity-settled employee benefit share scheme vested
Interest-free loan became full recourse342 114
Accumulated share option value reclassified from reserve into share capital474 31
Accumulated dividends reclassified from retained earnings into share capital139 46
1,089 325

70
Scales Corporation Limited
Financial Statements
D2. Reserves
Revaluation
Cash
flow
hedge
Share
of joint
ventures
Equity-
settled
employee
benefits
Foreign
exchange
translation
Revaluation
related to
discontinued
operations
Total
reserves
$’000$’000$’000$’000$’000$’000$’000
Balance at 1 January 201861,329 5,128 - 430 - - 66,887
Other comprehensive income (loss) for the year9,252 (4,878)- - 49 - 4,423
Transfer to retained earnings(129)- - - - - (129)
Transfer to discontinued operations(25,912)- - - - 25,912 -
Recognition of share-based payments- - - 849 - - 849
Shares fully vested- - - (31)- - (31)
Balance at 31 December 201844,540 250 - 1,248 49 25,912 71,999

Other comprehensive income (loss) for the year11,329 4,677 151 - (125)- 16,032
Reclassification of revaluation reserve to RE- - - - - (25,912)(25,912)
Recognition of share-based payments- - - 866 - - 866
Shares fully vested- - - (474)- - (474)
Balance at 31 December 201955,869 4,927 151 1,640 (76)- 62,511
Revaluation reserve
The revaluation reserve arises on the revaluation of land, buildings and apple trees, net of the related deferred tax.
Cash flow hedge reserve
The cash flow hedge reserve represents the unrealised gains and losses on interest rate and foreign currency contracts taken out to
manage the Group interest rate and foreign currency risks, net of the related deferred tax.
Equity-settled employee benefits reserve
The Senior Executive Share Scheme involves the Company making available interest-free loans to selected senior executives to
acquire shares in the Company. The senior executives will not gain any benefit with respect to the shares purchased under the
Scheme unless they remain in employment with the Group for a period of 3 years from the date of acquisition of those shares.
The shares are held by a custodian during the restrictive period and are then transferred to the senior executive. All net dividends or
distributions received in respect of the shares must be applied to repayment of the interest-free loan.
Grant dateVesting dateExercise price, $Number of shares
Opening
balanceGrantedForfeited
Vested and
exercised
Closing
balance
22 April 2016 - FY1522 April 20191.67287,646 - - (287,646)-
5 May 2017 - FY16A5 May 20201.70278,879 - - - 278,879
5 May 2017 - FY16B5 May 20202.4535,834 - - - 35,834
20 April 2018 - FY17A20 April 20211.70309,698 - - - 309,698
20 April 2018 - FY17B 20 April 20212.5136,007 - - - 36,007
20 April 2018 - FY17C20 April 20213.6240,577 - - - 40,577
28 June 2018 - FY17R28 June 20214.13207,023 - - - 207,023
30 April 2019 - FY1830 April 20222.71- 261,356 - - 261,356
28 June 2019 - FY18R28 June 20224.06- 214,285 - - 214,285
Total1,195,664 475,641 - (287,646)1,383,659
The weighted average share price for shares that vested on 22 April 2019 was $5.01.

Annual Report - Year Ended 31 December 2019
71
Financial Statements
D2. Reserves (continued)
The shares issued vest over 3 years. The estimated value of the share options was determined using the Black-Scholes pricing
calculator and is being amortised over the restrictive period. This cost is expensed with the corresponding credit included in the equity-
settled employee benefits reserve. Expected share price volatility was based on historical volatility of the Company’s ordinary shares.
The inputs into the “option pricing calculator” are:
20192018
FY18FY18RFY17AFY17BFY17CFY17R
Acquisition date share price, $5.004.754.46 4.46 4.46 4.71
Expected share price volatility, %222022 22 22 22
Option life, years333 3 3 3
Risk-free interest rate, %1.471.132.11 2.11 2.11 2.01
Exercise price, $2.714.061.70 2.51 3.62 4.13
Fair value, at the grant date, $2.431.102.87 2.13 1.27 1.14
Foreign exchange translation reserve
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net
investment, are accounted for in 2 ways. Gains or losses relating to the effective portion of the hedge are recognised in other
comprehensive income. Any gains or losses relating to the ineffective portion of the hedge are recognised in profit or loss.
Gains or losses arising on translation of foreign subsidiaries results (Note B6) are also recognised in this reserve.
Retained earnings
Retained earnings represents the profits retained in the business.
D3. Dividends
20192018
$’000$’000
Final dividend paid - 9.50 (2018: 9.00) cents per share13,326 12,598
Interim dividend declared - 9.50 (2018: 9.50) cents per share13,328 13,299
26,654 25,897
All above dividends were fully imputed.
The 2019 interim dividend was declared on 5 December 2019 and paid on 17 January 2020.
D4. Imputation Credit Account
20192018
$’000$’000
Balance at end of the year23,194 21,794
The imputation credit account balance represents the net amount available at the reporting date that can be attached to future
dividends declared.
The Scales Corporation Limited consolidated tax group for income tax includes Scales Corporation Limited and all New Zealand
registered subsidiary companies other than Scales Employees Limited.

72
Scales Corporation Limited
Financial Statements
D5. Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the company by the weighted average
number of ordinary shares on issue during the year, excluding shares held as treasury stock. Diluted earnings per share assumes
conversion of all dilutive potential ordinary shares in determining the denominator.
20192018
Profit attributable to equity holders of the Company ($’000):
From continuing operations45,000 28,608
From discontinued operations73,002 16,476
Total118,002 45,084
Weighted average number of shares:
Ordinary shares140,108,891 139,869,055
Effect of dilutive ordinary shares (non-vested Share Scheme)481,924 447,143
Weighted average number of Ordinary Shares for diluted earnings per share 140,590,815 140,316,198
Earnings per share (cents):
Basic - continuing32.1 20.5
Basic - discontinued52.1 11.8
Basic - total 84.2 32.2
Diluted - continuing32.0 20.4
Diluted - discontinued51.9 11.7
Diluted - total83.9 32.1

Annual Report - Year Ended 31 December 2019
73
Financial Statements
E. Financial Assets and Liabilities
This section explains the financial assets and liabilities of Scales, the related risks and how Scales manages these risks.
In this section of the notes there is information on:
• the accounting policies, judgements and estimates relating to financial assets and liabilities; and
• the financial instruments used to manage risk.
Accounting Policies
Financial assets
Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL) and
‘measured at amortised cost’.
The classification depends on the business model for managing the financial asset and the cash flow characteristics of the financial
asset and is determined at the time of initial recognition or when a change in the business model occurs.
Financial assets at FVTPL
Financial assets are classified at FVTPL if they are not measured at cost or amortised cost. Gains and losses on a financial asset
designated in this category and not part of a hedging relationship are recognised in profit or loss.
Financial assets measured at amortised cost
The Group’s financial assets held in order to collect contractual cash flows that are solely payments of principal and interest on the
principal outstanding are measured at amortised cost. Cash and cash equivalents, trade receivables and employee loans are classified
in this category.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses (“ECL”) on investments in debt instruments that are measured at
amortised cost, trade and other receivables. The amount of ECL is updated at each reporting date to reflect changes in credit risk
since initial recognition of the respective financial instrument.
The Group always recognises lifetime ECL for trade receivables. The ECL on these financial assets are estimated using a provision
matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time
value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since
initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the
Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial instrument.
In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.
For financial assets, the ECL is estimated as the difference between all contractual cash flows that are due to the Group in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.
Financial liabilities measured at amortised cost
The Group’s financial liabilities include trade and other payables and borrowings. These financial liabilities are initially recognised
at fair value plus any directly attributable costs. Subsequent to initial recognition, they are measured at amortised cost using the
effective interest method.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to
their fair value with reference to observable market data at the end of each reporting period. The resulting gain or loss is recognised
in profit or loss immediately unless the derivative is designated as an effective hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as cash flow
hedges. A derivative is presented as a non-current asset or a non-current liability where the cash flow will occur after 12 months and
it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
Hedge accounting
At the inception of a hedge relationship, the Group documents the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging
relationship is highly effective in offsetting changes in cash flows of the hedged item, attributable to the hedged risk.

74
Scales Corporation Limited
Financial Statements
E1. Trade and Other Receivables
20192018
$’000$’000
Trade receivables13,400 17,646
Interest receivable2,043 -
Other receivables1,504 1,149
Owing by entity accounted for using the equity method97 97
Goods and services tax3,549 4,018
20,593 22,910
Credit risk management
The Group activities expose it to credit risk, which refers to the risk that a counterparty will default on its contractual obligations
resulting in financial loss to the Group. Financial instruments which potentially subject the Group to credit risk principally consist of
cash and cash equivalents, trade and other receivables and advances. The Group performs credit evaluations on trade customers,
and obtains trade credit insurance as appropriate but generally does not require collateral. The Group continuously monitors the
credit quality of its major receivables and does not anticipate non-performance of those customers. Cash and cash equivalents are
placed with high credit quality financial institutions.
There is a significant concentration of credit risk with 5 customers who represent 45.47% (2018: 5 customers who represent
49.06%) of trade and other receivables.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum exposure to credit risk.
Included in trade receivables are debtors which are past due at balance date, as payment was not received within one month, and
for which provision for ECLs was not material as there has not been a significant change in credit quality and the amounts are still
considered recoverable. No collateral is held over these balances although trade credit insurance cover is obtained in respect of some
specific receivables. Interest is not charged on overdue debtors. The ageing of these past due trade receivables is:
One month2,086 3,979
Two months 979 714
More than two months1,827 4,034
4,892 8,727
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
other comprehensive income and accumulated as a separate component of equity in the hedging reserve. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss, and is included in ‘other income’ or ‘other losses’.
Amounts recognised in the hedging reserve are reclassified from equity to profit or loss in the periods when the hedged item is
recognised in profit or loss, in the same line as the recognised hedged item. Hedge accounting is discontinued when the Group
revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge
accounting. Any cumulative gain or loss deferred in the hedging reserve at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was deferred in the hedging reserve is recognised immediately in profit or loss.
Hedges of net investments in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated under the
heading of foreign exchange translation reserve. The gain or loss relating to the ineffective portion is recognised immediately in
profit or loss. Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign
exchange translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

Annual Report - Year Ended 31 December 2019
75
Financial Statements
E2. Other Financial Assets
Current:
20192018
$’000$’000
At fair value:
Foreign currency derivative instruments4,571 3,921
4,571 3,921
Non-current:
At fair value:
Foreign currency derivative instruments6,593 6,024
Shares in unlisted companies221 211
At amortised cost:
Employee loans 303 668
7,117 6,903
E3. Trade and Other Payables
Trade payables11,628 14,029
Accruals4,433 9,599
Employee entitlements3,782 3,654
19,843 27,282
E4. Borrowings
Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured
at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit
or loss over the period of the borrowing using the effective interest method. The fair value of current and non-current borrowings is
approximately equal to their carrying amount.
The Group signed Multi-Option Facility Agreements with Coöperatieve Rabobank U.A., New Zealand Branch (“Rabobank”)
and Westpac New Zealand Limited (“Westpac”) on 22 March 2013. The total facility is $23,000,000 (2018: $80,000,000).
At 31 December 2019 the undrawn amount under these facilities was $3,000,000 (2018: $48,000,000).
On 17 December 2018, the Group obtained an additional USD 11,635,000 term loan from Rabobank and USD 11,635,000 from
Westpac. These facilities were utilised to finance the acquisition of Shelby JV LLC Group. The USD denominated loans are designated
as a hedge of net investment in foreign operations.
The floating interest rate is 2.03% to 3.06% (2018: 2.87% to 3.16%) and the term borrowing facility expiry date is 1 July 2021.
Seasonal facility presented as current borrowings is due for repayment within one year. The bank facilities are secured by a first
ranking security interest granted by each of the Charging Group* Companies over all its present and after-acquired property
(including proceeds) and a first ranking security interest over any of the Charging Group Companies present and future assets and
undertakings which are not personal property. The bank facilities are also secured by first and exclusive registered mortgages over
property comprising coolstores, orchards and industrial and commercial property owned by members of the Charging Group.
*Charging Group Companies as at 31 December 2019 are Scales Corporation Limited, Scales Holdings Limited, Mr Apple New
Zealand Limited, New Zealand Apple Limited, Geo.H.Scales Limited, Meateor Foods Limited, Scales Logistics Limited and Meateor
Group Limited.
The Multi-Option Facility Agreements with the Group’s banks include the requirement that at all times the Tangible Net Worth of the
Group, being Tangible Assets less Total Liabilities (excluding deferred tax liabilities), be not less than $100,000,000. The Group has
complied with this requirement since the facility was established. The Group policies in respect of capital management and allocation
are reviewed regularly by the Board of Directors. There have been no material changes to the Group’s management of capital during
the year.

76
Scales Corporation Limited
Financial Statements
E4. Borrowings (continued)
Seasonal facilityTerm borrowings
2019201820192018
$’000$’000$’000$’000
Seasonal (current) and term (non-current) borrowings:
Opening balance2,000 6,500 64,664 40,000
Drawdowns79,000 67,500 - 33,945
Repayments(81,000)(72,000)(10,000)(10,000)
Effect of foreign currency translation- - (113)719
- 2,000 54,551 64,664
E5. Other Financial Liabilities
Current financial liabilities at fair value:
20192018
$’000$’000
Foreign currency derivative instruments785 2,662
Interest rate swap contracts and forward rate agreements537 577
Put option3,055 2,424
4,377 5,663
Non-current financial liabilities at fair value:
Foreign currency derivative instruments1,459 4,646
Interest rate swap contracts and forward rate agreements762 780
Put option1,745 2,088
3,966 7,514
On 11 January 2016 the Group increased its shareholding in Fern Ridge Produce Limited (“Fern Ridge”) to 75%. As part of the
transaction, 2.12% of the shares were then sold to an employee of Fern Ridge, and Scales entered into agreements with the
remaining shareholders of Fern Ridge whereby those shareholders have an option to “put” their shares to Scales at a value based on
a multiple of Fern Ridge profits, but with a minimum value equivalent to that paid to the selling shareholders.
On 20 December 2018 the Group acquired 60% of Shelby JV LLC and its subsidiaries Shelby Foods LLC, Shelby Exports Inc, Shelby
Cold Storage LLC, Shelby Trucking LLC and Shelby Properties LLC (collectively, “Shelby Group”).
As part of the transaction, the Company entered into an agreement with the vendor whereby the vendor has an option to put a
further 5% of total units in Shelby Group to Scales at a value based on a multiple of Shelby Group EBITDA. The obligation to acquire
the ownership interest under the put option is included in other financial liabilities.
E6. Interest Rate Risk
Interest rate risk management
The Group is exposed to interest rate risk as it borrows funds at floating interest rates. Management monitors the level of interest
rates on an ongoing basis and may use interest rate swaps and forward rate agreements to manage interest rate risk.
Interest rate swap contracts and forward rate agreements
Under interest rate swap contracts and forward rate agreements, the Group agrees to exchange the difference between fixed and
floating rate interest amounts calculated on agreed notional principal amounts. Such contracts, some of which commence in future
reporting years, enable the Group to mitigate the risk of changing interest rates on the cash flow exposures on the issued floating
rate debt. The fair value of these contracts at the reporting date is determined by discounting the future cash flows using the
forward interest rate curves at reporting date and the credit risk inherent in the contracts. The average contracted fixed interest rate
is based on the notional principal amount at balance date.

Annual Report - Year Ended 31 December 2019
77
Financial Statements
E6. Interest Rate Risk (continued)
Details of interest rate swap contracts and forward rate agreements for the Group are:
Fixed Interest
Rate
Notional Principal
AmountFair Value
201920182019201820192018
%%$’000$’000$’000$’000
Maturity date
- Interest rate swap contracts:
Within one year- 3.05 - 35,000 - (241)
Two to five years3.93 3.93 20,000 20,000 (1,299)(1,116)
After five years- - - - - -
20,000 55,000 (1,299)(1,357)
These interest rate swap contracts and forward rate agreements, exchanging floating rate interest amounts for fixed rate interest
amounts, are designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting from floating interest
rates on borrowings. The interest rate swap and forward rate agreement payments, and the interest payments on the loans occur
simultaneously, and the amount deferred in equity is recognised in profit or loss over the period that the floating rate interest
payments on debt impact profit or loss.
The Group’s interest rate swap contracts and forward rate agreements are classified as Level 2 in the fair value hierarchy.
As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the Group performs
a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of
the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying
interest rates. The main source of hedge ineffectiveness in these hedge relationships (which is not material) is the effect of the
counterparty and the Group’s own credit risk on the fair value of the interest rate swap contract, which is not reflected in the fair
value of the hedged item attributable to the change in interest rates. No other sources of ineffectiveness emerged from these
hedging relationships.
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivative
instruments at the reporting date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at
reporting date was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in interest rates. Impact on
net profit after tax assumes that none of the floating interest rate borrowings were hedged.
20192018
+1%-1%+1%-1%
$’000$’000$’000$’000
Impact on net profit after tax(187)187 (427)427
Impact on cash flow hedge reserve net of tax371 (389)598 (632)
E7. Foreign Currency Risk
Foreign currency risk management
Foreign currency risk is the risk that the value of the Group’s assets and liabilities or revenues and expenses will fluctuate due to
changes in foreign exchange rates. The Group is exposed to currency risk as a result of normal trading transactions denominated in
foreign currencies. The currencies in which the Group primarily trades are the Australian dollar, Euro, Canadian dollar, Great Britain
pound and United States dollar, with the largest exposure being to the United States dollar.
Currency risk is managed by the natural hedge of foreign currency receivables and payables and the use of foreign currency
derivative financial instruments. The fair value of foreign currency derivative financial instruments at the reporting date is determined
on a discounted cash flow basis whereby future cash flows are estimated based on forward exchange rates and contract forward
rates, discounted at a rate that reflects the credit risk of various counterparties.
The Group’s forward foreign exchange contracts and foreign exchange options are classified as Level 2 in the fair value hierarchy.
Details of foreign currency instruments at balance date for the Group are:
20192018
Contract ValueFair ValueContract ValueFair Value
$’000$’000$’000$’000
Sale commitments forward foreign exchange contracts210,587 5,224 204,693 (1,308)
Sale commitments foreign exchange options90,410 3,696 168,079 3,945

78
Scales Corporation Limited
Financial Statements
E7. Foreign Currency Risk (continued)
These foreign currency instruments are designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting
from movements in foreign currency exchange rates on anticipated future transactions. It is anticipated that the sales will take place
during the 2020 to 2024 financial years at which stage the amount deferred in equity will be released into profit or loss.
For hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life and underlying) of
the foreign exchange forward contracts and their corresponding hedged items are the same, the Group performs a qualitative
assessment of effectiveness and it is expected that the value of the forward contracts and the value of the corresponding hedged
items will systematically change in opposite direction in response to movements in the underlying exchange rates. The Group uses
the hypothetical derivative method for the hedge effectiveness assessment and measurement of hedge ineffectiveness. As for the
hedge of the net investment in Meateor US LLC sub-group, the Group assesses effectiveness by comparing the nominal amount
of the net assets designated in the hedge relationship with the nominal amount of the hedging instrument. This is a simplified
approach because the currency of the exposure and hedging instruments perfectly match and the Group excludes from the
designation the foreign currency basis spread.
The following table demonstrates the sensitivity to a reasonably possible change of 5% in the value of New Zealand dollar against
other foreign currencies, with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the
fair value of monetary assets and liabilities. The impact on the Group’s equity is due to changes in the fair value of forward exchange
contracts designated as cash flow hedges.
20192018
+5%-5%+5%-5%
$’000$’000$’000$’000
Impact on net profit after tax(214)194 (284)257
Impact on cash flow hedge reserve net of tax(10,861)10,309 (11,846)10,960
E8. Categories of Financial Instruments
2019 2018
$’000$’000
Financial assets:
Amortised cost35,979 22,350
Derivative instruments in designated hedge accounting relationships11,164 9,945
Fair value through profit or loss221 211
47,364 32,506
Financial liabilities:
Amortised cost88,910 110,994
Derivative instruments in designated hedge accounting relationships3,543 8,665
Fair value through profit or loss4,800 4,512
97,253 124,171
The carrying amount of financial instruments at amortised cost appoximates their fair value.

Annual Report - Year Ended 31 December 2019
79
Financial Statements
E9. Maturity Profile of Financial Liabilities
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.
The table includes both interest and principal cash flows.
Within three
months
Four months
to one year
One to
five yearsTotal
$’000$’000$’000$’000
2019
Trade and other payables19,843 - - 19,843
Dividend declared13,328 - - 13,328
Put options3,055 - 1,745 4,800
Borrowings410 1,230 55,366 57,006
Interest rate swaps and forward rate agreements198 595 1,244 2,037
36,834 1,825 58,355 97,014
2018
Trade and other payables27,282 - - 27,282
Dividend declared13,299 - - 13,299
Put options2,424 - 2,088 4,512
Borrowings2,593 1,797 65,862 70,252
Interest rate swaps and forward rate agreements323 968 2,033 3,324
45,921 2,765 69,983 118,669

80
Scales Corporation Limited
Financial Statements
F. Group Structure
This section provides information to help readers understand the Scales Group structure and how it affects the financial
position and performance of the Group. In this section there is information about:
• subsidiaries;
• the sale of Polarcold Stores Limited and Whakatu Coldstores Limited.
F1. Subsidiary Companies
Subsidiary Companies:Principal Activity
Country of
Incorporation
Holding
2019 2018Balance Date
Fern Ridge Produce LimitedTrading companyNew Zealand 72.88%72.88%31 December
Geo. H. Scales Limited Non trading companyNew Zealand 100%100%31 December
Longview Group Holdings LimitedNon trading companyNew Zealand 100%100%31 December
Meateor Foods Australia Pty LimitedTrading companyAustralia100%100%31 December
Meateor Foods LimitedTrading companyNew Zealand 100%100%31 December
Meateor Group LimitedHolding companyNew Zealand 100%100%31 December
Meateor US LLCHolding companyUnited States100%100%31 December
Mr Apple New Zealand LimitedTrading companyNew Zealand 100%100%31 December
New Zealand Apple LimitedTrading companyNew Zealand 100%100%31 December
Scales Employees LimitedCustodial companyNew Zealand 100%100%31 December
Scales Holdings LimitedHolding companyNew Zealand 100%100%31 December
Scales Logistics LimitedFreight consolidatorNew Zealand 100%100%31 December
Scales Logistics Australia Pty LtdFreight consolidatorAustralia100%100%31 December
Selacs Insurance LimitedInsurance companyNew Zealand 100%100%31 December
Shelby Cold Storage, LLC Coldstore operatorUnited States60%60%31 December
Shelby Exports, IncNon trading companyUnited States60%60%31 December
Shelby Foods, LLC Trading companyUnited States60%60%31 December
Shelby JV LLCHolding companyUnited States60%60%31 December
Shelby Properties LLCNon trading companyUnited States60%60%31 December
Shelby Trucking LLCTrading companyUnited States60%60%31 December
Polarcold Stores LimitedColdstore operatorNew Zealand 0%100%31 December
Whakatu Coldstores LimitedNon trading companyNew Zealand 0%100%31 December
Subsidiary companies are controlled by the Company. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses
control of the subsidiary.

Annual Report - Year Ended 31 December 2019
81
Financial Statements
F2. Discontinued Operations
On 9 May 2018 the Company announced an agreement to sell its cold storage businesses, Polarcold Stores Limited and
Whakatu Coldstores Limited (which were merged on 1 January 2018 under the Polarcold brand). The sale, for consideration of
$151.4 million, was to Emergent Cold, a global cold chain company. The sale became effective from 1 June 2018 and settled on
17 May 2019. All earnings post 1 June 2018 accrued to the purchaser. Interest was charged on the purchase price until the sole
condition, being OIO approval, was satisfied on 17 May 2019. These 2 elements were reflected as a purchase price adjustment
and have been factored into the consideration referred to above.
On 13 August 2018 the Company entered into an unconditional agreement to sell its bulk liquid storage business, Liqueo Bulk
Storage Limited. Settlement occurred on the same date. The sale, for consideration of $20 million, was to a company related to
the SBT Group, a Taranaki based Group with interests in rendering and animal by-products.
The results of discontinued operations are set out below:
20192018
$’000$’000
Revenue24,491 62,164
Cost of sales(9,502)(25,873)
14,989 36,291
Other operating expenses including transaction costs(7,894)(21,968)
EBITDA7,095 14,323
Amortisation- (109)
Depreciation- (2,066)
EBIT7,095 12,148
Finance revenue- 15
Profit before tax from discontinued operations7,095 12,163
Income tax expense(2,224)(3,861)
Profit after tax from discontinued operations4,871 8,302
Gain on disposal net of tax68,131 8,174
Profit from discontinued operations net of tax attributable to equity holders73,002 16,476
The net cash flows pertaining to the entities referred to above are as follows:
Operating5,972 13,612
Investing(1,140)(4,908)
Financing- -
Net cash inflow4,832 8,704
Total consideration received on 17 May 2019 in respect of cold storage businesses is set out below:$’000
Sale and purchase price151,400
Plus: Working capital and other adjustments to sale and purchase price3,362
Plus: Interest payable on purchase price5,737
Less: Cash dividends received post 1 June 2018(8,000)
152,499
All of the above consideration was received in cash. There was no non-cash consideration received.

82
Scales Corporation Limited
Financial Statements
F2. Discontinued Operations (continued)
Assets and liabilities in the cold storage businesses as at the loss of control date (17 May 2019):
Assets$’000
Cash and bank balances3,617
Trade and other receivables11,695
Prepayments150
Property, plant and equipment88,285
Computer software1,091
104,838
Liabilities
Trade and other payables5,446
Current tax liabilities4,729
Deferred tax liabilities11,902
22,077
Net assets directly associated with disposal group82,761
Gain on disposal net of tax:
Net proceeds on disposal152,499
Less: net assets disposed(82,761)
Less: tax payable on disposal (related to interest payable on purchase price)(1,607)
68,131

Annual Report - Year Ended 31 December 2019
83
Financial Statements
G. Other
This section includes the remaining information relating to Scales’ financial statements which is required to comply
with NZ IFRS.
G1. Capital Commitments
20192018
$’000$’000
Commitments entered into in respect of apple trees as at balance date1,192 1,199
G2. Leases
Right-of-use assets
Land and buildings
Plant and
equipment
Office equipment
motor and vehiclesTotal
$’000$’000$’000$’000
Cost
Balance at 1 January 201977,651 294 5,025 82,970
Additions2,440 136 1,053 3,629
Balance at 31 December 201980,091 430 6,078 86,599
Accumulated depreciation
Balance at 1 January 2019- - - -
Depreciation expense6,013 216 1,595 7,824
Balance at 31 December 20196,013 216 1,595 7,824
Net book value
As at 31 December 201974,078 214 4,483 78,775
2019
$’000
Amounts recognised in profit and loss
Depreciation expense on right-of-use assets7,824
Interest expense on lease liabilities3,075
Expense relating to short-term leases and low-value assets2,089
Lease liabilities
Current9,427
Non-current70,713

84
Scales Corporation Limited
Financial Statements
G2. Leases (continued)
2019
$’000
Maturity analysis
Year 19,427
Year 28,850
Year 38,098
Year 47,330
Year 56,779
Onwards65,077
105,561
Cash outflows for leases
Interest on lease liabilities3,075
Repayments of lease liabilities6,459
Short-term leases and low-value asset leases2,089
11,623
Disclosure required by NZ IAS 17 - the Group as lessee
Operating leases relate to coolstores, packhouses, orchards, offices, vehicles and office equipment with lease terms of between 3
to 9 years, generally with options to extend for further periods. All operating lease contracts contain review clauses that provide for
reviews at regular intervals and in the event that the Group exercises its options to renew.
2018
Non-cancellable operating lease commitments: $’000
Not later than 1 year9,095
Later than 1 year and not later than 5 years27,298
Later than 5 years13,382
G3. Related Party Disclosures
Transactions with related parties
Certain Directors or senior management have relevant interests in companies with which Scales has transactions in the normal
course of business. A number of Scales directors are also non-executive directors of other companies. Any transactions undertaken
with these entities have been entered in the ordinary course of business.
The compensation of the directors and executives, being the key management personnel of the Group, is as follows:
20192018
Key management personnel remuneration$’000$’000
Short-term employee benefits2,956 3,002
Share-based payments218 963
Post-employment benefits104 111
3,278 4,076
During 2019, 740,968 (2018: 379,082) shares were issued to key management personnel in accordance with the senior executive
share scheme described in note D2.
Transactions with equity accounted entities
Revenue from sale of goods1,409 1,306
Revenue from services2,564 1,322
Dividends received1,500 1,000
Trade receivables at balance date182 97
Short-term borrowings from non-controlling interest in Shelby JV LLC group obtained in December 2018 were fully repaid during
the year.

Annual Report - Year Ended 31 December 2019
85
Financial Statements
G4. Contingent Liability
In December 2018 an insurance claim was notified to Selacs Insurance Limited, a wholly owned subsidiary of Scales Holdings
Limited, which in turn is a wholly owned subsidiary of Scales Corporation Limited.
The claim arises in consequence of the collapse of the roof of a leased coldstore located in Hastings, Hawke’s Bay.
The event is under investigation by specialists and has not yet been accepted.
The risk is fully reinsured, and in the event the claim is accepted and becomes payable, there will be no impact on net income or net
assets of the Group.
No claim expense, reinsurance revenue, claim payable and reinsurance receivable have been recorded in the financial statements,
except ex-gratia payments from reinsurers to the insured party recorded as claim expense and reinsurance revenue (as disclosed in
Note B3).
G5. Events Occurring After Balance Date
There were no events occurring subsequent to balance date which require adjustment to or disclosure in the financial statements.

86
Scales Corporation Limited
Financial Statements
H. Adoption of NZ IFRS 16 Leases
This section summarises the effect of the change in accounting policy from the application of NZ IFRS 16 Leases.
Transition
NZ IFRS 16 Leases introduced a comprehensive model for the identification of lease arrangements and accounting treatments
for both lessors and lessees. NZ IFRS 16 superseded the previous lease guidance including NZ IAS 17 Leases and the related
interpretations when it became effective on 1 January 2019.
NZ IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by a customer. The
distinction between operating leases (off balance sheet) and finance leases (on balance sheet) is removed for lessee accounting, and
is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees (i.e. all
on balance sheet) except for short-term leases and leases of low value assets.
Furthermore, the classification of cash flows is also affected as operating lease payments under NZ IAS 17 were presented as
operating cash flows; whereas under the NZ IFRS 16 model, the lease payments are split into a principal and an interest portion
which will be presented as financing and operating cash flows respectively.
The Group applied NZ IFRS 16 on 1 January 2019 using the modified retrospective (full simplified) transition method. At transition,
lease liabilities were measured at the present value of the remaining lease payments, discounted at the incremental borrowing rate
(“IBR”) as at 1 January 2019. Right-of-use assets are measured equal to lease liabilities. Comparative periods presented were
not restated.
The Group applied the practical expedients available under NZ IFRS 16 C3 (a) and (b). That is, instead of reassessing all contracts to
identify leases using new NZ IFRS 16 guidance on transition date, all existing contracts that were previously identified as leases using
the old NZ IAS 17 and NZ IFRIC 4 Determining whether an arrangement contains a lease guidance are treated as leases under
NZ IFRS 16. Any contracts that were not identified as leases under NZ IAS 17 and NZ IFRIC 4 as at transition date, were not treated
as leases upon adoption of NZ IFRS 16.
Most of the Group’s non-cancellable operating lease commitments met the definition of a lease under NZ IFRS 16, and hence the
Group recognised a right-of-use asset and a corresponding liability in respect of all these leases unless they qualified for low value
or short-term lease exemptions upon the application of NZ IFRS 16. The expense that would previously be recorded in relation to
operating leases moved from being included in operating expenses (and within EBITDA), to depreciation and finance expense for the
periods beginning on or after 1 January 2019.
The impact on net earnings before income tax of an individual lease over its term remains the same, however, the new standard
results in a higher interest expense in early years, and lower in later years of a lease, compared with the previous straight-line
expense profile of an operating lease.
IBR is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR was determined
based on the interest rate on the external borrowing facilities available to the Group (since those rates incorporate a risk-free rate
for the primary economic environment the Group operates in and the credit spread specific to the Group), adjusted for the weighted
average lease term by reference to the interest swap rates published by the Reserve Bank of New Zealand, adjusted for asset type
and subsidiary credit spread.
The weighted average IBR applied to lease liabilities on 1 January 2019 was 3.82%.
The aggregate lease liability and right-of-use asset recognised in the statement of financial position at 1 January 2019 and the
Group’s operating lease commitment at 31 December 2018 can be reconciled as follows:
Lease liability recognised on transition$’000
Future minimum lease payments under non-cancellable operating leases as at 31 December 201849,775
Future lease payments on renewal options that are reasonably certain63,547
Future lease payments on short-term and low value leases(2,525)
Effect of discounting(27,827)
Lease liability as at 1 January 201982,970
The Group is reasonably certain it will exercise options to extend the lease on all material leases.
Right-of-use asset recognised on transitionNature of leased assetsLease term$’000
Land and buildingsOrchards, packhouses, coolstores, office buildings1-25 years77,651
Plant and equipmentLabelling systems and vehicle monitoring systems1-4 years294
Office equipment and motor vehiclesTractors, utes, forklifts, sprayers1-5 years5,025
Right-of-use asset as at 1 January 201982,970

Annual Report - Year Ended 31 December 2019
87
Financial Statements
In applying the modified retrospective approach, the Group has taken advantage of the following practical expedients:
• A single discount rate has been applied to portfolios of leases with reasonably similar characteristics; and
• Leases with a remaining term of twelve months or less from the date of application have been accounted for as short-term leases
(i.e. not recognised on balance sheet) even though the initial term of the leases from lease commencement date may have been
more than twelve months.
New accounting policy from 1 January 2019
The Group as a lessee
The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognised a right-of-use asset
and a corresponding liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as
leases with a lease term of twelve months or less) and leases of low value assets. For these leases, the Group applies the practical
expedient and recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless
another systematic basis is more representative of the time pattern in which economic benefits from the lease assets are consumed.
The lease liability is initially measured as the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its IBR.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in-substance fixed payments), less any lease incentives;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate;
• the lease payments change due to changes in an index or rate or a change in expected payment under aguaranteed residual
value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate;
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before
the commencement date and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and
impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and
measured under NZ IAS 37.
Right-of-use assets are depreciated over the shorter period of either the lease term or the useful life of the underlying asset. If a
lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies NZ IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss
under this standard.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use
asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments
occurs and are included in the line “Administration and operating expenses” in the statement of comprehensive income.
As a practical expedient, NZ IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and
associated non-lease components as a single arrangement.

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SCALES CORPORATION LIMITED
OpinionWe have audited the consolidated financial statements of Scales Corporation Limited and its
subsidiaries (the ‘Group’), which comprise the consolidated statement of financial position as
at 31 December 2019, 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 46 to 87, present
fairly, in all material respects, the consolidated financial position of the Group as at 31 December
2019, and its consolidated financial performance and cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (‘NZ
IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor and the provision of other assurance services, we have no
relationship with or interests in the Company or any of its subsidiaries. These services have not
impaired our independence as auditor of the Company and Group.
Audit materialityWe consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative‘ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or influence the decisions of such a
person (the ‘qualitative’ materiality). We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $2 million.
Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
88
Scales Corporation Limited
Financial Statements

Key audit matterHow our audit addressed the key audit matter
Valuation of Unharvested Agricultural Produce
Unharvested agricultural produce growing on bearer plants (e.g.
fruit), is measured at fair value less costs to sell in accordance
with NZ IAS 41 Agriculture.
The Group’s unharvested agricultural produce was valued
at $21.6 million at balance date as described in note C2. A
revaluation gain of $0.3 million is recorded in profit or loss.
Fair value less cost to sell is calculated by the Group using a
discounted cash flow model. The model includes significant
unobservable inputs and assumptions including, for each
variety, the forecast production per hectare per annum by
weight, sales prices, and risk-adjusting discount rates, as well as
costs to harvest and sell.
The risk-adjusting discount rates take into account the risk of
unknown adverse events that may affect crop, harvest and/or
market conditions.
The valuation of unharvested agricultural produce is considered
to be a key audit matter due to the level of judgement required
to determine the fair value less costs to sell.
Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the internal
valuation model.
Our procedures included, amongst others:
• Holding discussions with management and considering market
information to identify factors, including environmental or
market risks, that would impact the current crop valuation.
• Engaging a Deloitte valuation specialist to consider whether
the valuation method applied was appropriate and whether
the risk-adjusting discount rates were reasonable based on
market information and risks relating to the unharvested
agricultural produce.
• Challenging the reasonableness of the key assumptions by
comparing the forecast production, prices, and costs to harvest
and sell for the current growing season to the approved budgets
for each orchard.
• Assessing the historical accuracy of the Group’s budget forecasts
by comparing to the actual results.
• Checking the mechanical accuracy of the discounted cash
flow model.
Valuation of Apple Trees
As disclosed in note C1 the Group has apple trees valued at
$33.9 million. A revaluation gain of $1.4 million has been
recorded in other comprehensive income.
The Group has a policy of recording apple trees at fair value
with valuations performed with sufficient regularity that the
carrying amount at the end of a reporting period does not differ
materially from their fair value.
Apple trees are valued on the basis of a discounted cash
flow analysis of forecast income streams and costs from each
orchard. The model uses a number of significant unobservable
inputs, in particular: production levels per hectare, orchard gate
returns (market prices), orchard costs, and discount rates.
Valuation of apple trees is considered to be a key audit matter
due to the significance of the assets to the Group’s consolidated
statement of financial position, and the level of judgement
involved in valuing the apple trees.
Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the model.
Our procedures included, amongst others:
• Evaluating the Group’s processes in respect of the independent
valuation of the apple trees including its review of the
valuation methodology and determination of the key
valuation assumptions.
• Engaging a Deloitte valuation specialist to consider whether the
valuation methods applied were reasonable.
• Assessing the competence, objectivity and integrity of the
Group’s independent registered valuer. This included assessing
the valuer’s professional qualifications, experience and
independence. It also included meeting with the valuer to
understand the valuation process adopted and to identify and
challenge the critical judgement areas in the valuation.
• Assessing the valuation methodology for consistency with the
the most recent valuation (“2018 valuation”) and determining
whether any changes to the methodology were appropriate.
• Challenging the reasonableness of the key assumptions by
comparing them to the 2018 valuation, the Group’s internal
data and current market evidence. We focused on the
assumptions relating to production levels per hectare, orchard
gate returns (market prices), orchard costs, and discount rates.
–We tested estimated production levels per hectare by
comparing orchard hectares in production with the 2018
valuation. We compared the production levels per hectare to
external production data as well as internal production data
for the previous season.
–We tested the orchard gate returns by comparing these to
actual sales returns received during the previous year.
–We challenged orchard costs by comparing orchard costs to
the 2018 valuation and available market data.
–We challenged the discount rates by comparing them with
2018 valuation discount rates and considering the risks
associated with the orchards.
• Checking the mechanical accuracy of the discounted cash flow
models on a sample basis.
Annual Report - Year Ended 31 December 2019
89
Financial Statements

Other informationThe directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report. The Annual Report is expected to be made available to
us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information identified above when it becomes available
and consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
When we read the other information in the Annual Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and consider
further appropriate actions.
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
for the audit of the
consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs and ISAs (NZ)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Restriction on useThis report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Company’s shareholders
as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Bryden, Partner
for Deloitte Limited
Christchurch, New Zealand
25 February 2020
90
Scales Corporation Limited
Financial Statements

Annual Report - Year Ended 31 December 2019
91
Corporate Governance
CORPORATE GOVERNANCE STATEMENT
The Board of Scales Corporation Limited (Scales or the Company) is committed to ensuring that the Company meets best practice
governance principles and maintains the highest ethical standards. This Corporate Governance Statement provides an overview of
the Company’s governance framework. It is structured to follow the NZX Corporate Governance Code (NZX Code) and discloses the
practices relating to the NZX Code’s recommendations.
The Board’s view is that Scales complies with the corporate governance principles and recommendations set out in the NZX Code.
The Board believes our governance structures, in particular our approach to remuneration, meets our strategic objectives. In forming
our conclusions we have sought external feedback from shareholders and advisors to challenge our thinking and validate our
findings, which we have appreciated.
The Company also complies with the corporate governance requirements of the NZX Main Board Listing Rules (NZX Listing Rules). The
Board regularly reviews and assesses Scales’ governance structures and processes to ensure that they are consistent with best practice.
Scales transitioned to the new NZX Listing Rules with effect from 1 May 2019. Accordingly, this Corporate Governance Statement
has been prepared in accordance with the NZX Code dated 1 January 2019.
Scales’ key corporate governance documents referred to in this statement, including charters and policies, can be found at
www.scalescorporation.co.nz/about-us/governance.
Scales’ Corporate Governance Code (the Scales Code) was reviewed and updated in February 2019 and is reviewed annually. This
Corporate Governance Statement was approved by the Board on 20 March 2020.
Principle 1 – Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management accountable for
these standards being followed throughout the organisation.
RECOMMENDATION 1.1
The Board should document minimum standards of ethical behaviour to which the issuer’s Directors and employees are
expected to adhere (a Code of Ethics).
Code of Ethics
Scales’ Board sets a framework of ethical standards for the Company via its Code of Ethics, which is contained in the Scales Code.
These standards are expected of all Directors and employees of Scales and its subsidiaries.
The Code of Ethics covers a wide range of areas including:
• Standards of behaviour.
• Conflicts of interest.
• Proper use of Company information and assets.
• Accepting gifts.
• Delegated authorities.
• Compliance with laws and policies.
• Reporting concerns.
• Corporate opportunities.
The procedure for advising the Company of a suspected breach is set out in the Code of Ethics. No breaches were identified during
the year.
Every new Director, employee and contractor is to be provided with a copy of the Code of Ethics and must confirm that they have
read and understand the Code of Ethics. The Code of Ethics is also available on the Company’s website.
During 2019 there were a number of initiatives undertaken in relation to ethics. One of these intiatives, as part of the Internal Audit
programme, was further training in Anti-Bribery and Corruption for the Company’s senior management. The Board sees this first
step in a wider training programme as meeting the NZX Code’s ethics training recommendation.
The Code of Ethics is subject to biennial review by the Board.
RECOMMENDATION 1.2
An issuer should have a financial product dealing policy which applies to employees and Directors.
Share trading by Company Directors and Employees
The Board has implemented formal procedures to handle trading in the Company’s securities by Directors, employees and advisors
of the Company, with approval being required before trading can occur. Approval is required to be obtained from the Chair, other
Directors, CEO or the Chief Financial Officer depending on who is trading. A blackout period is imposed for all Directors and
employees between the end of the half year and full year and the release to NZX of the result for that period.
The policy provides that shares may not be traded at any time by any individual holding material information. The full procedures are
outlined in the Securities Trading Policy and Guidelines, which is contained in the Scales Code.
The fundamental rule in the policy is that insider trading is prohibited at all times. The requirements of the policy are separate from,
and in addition to, the legal prohibitions on insider trading in New Zealand.