Annual Report and Section 209c Notice

Moving forward
Freightways Limited and its subsidiaries
Annual Report Financial Year ended 30 June 2020

We’ve never
been afraid to
be the first to do
something –
if it’s the right
thing to do.
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freightways.co.nzIntroduction
This year we’ve successfully
expanded into new areas
because we saw opportunities
to add value across several
sectors. We invested in Big
Chill because we knew there
was growth potential in the
food supply chain. We’ve
revamped and strengthened
courier businesses like
NOW to continue delivering
at the high service levels
our customers expect.
We introduced a trans-Tasman
air freight service to help
exporters deliver to their
Australian markets. And we
introduced Pricing For Effort
(PFE) to ensure our drivers
take home the earnings they
deserve, and the business
improved its margin on
residential deliveries.
Of course the country’s
response to the threat of
COVID-19 affected us, just
like it did all New Zealand
businesses. But it also
brought out the best in
our culture.
Right across our brands,
people stepped in to help
where help was needed.
Good things happened.
Every day.
Like all businesses, we’ll
respond to the ebbs and
flows of what has happened
in ways that protect our
business and respect the
expectations of our investors.
But entrepreneurship will
remain our constant.
We have always been,
and will always be, a
company that grows on
the strengths of what we
accomplish together.

Contents
The Freighways family:
A warm welcome to Big Chill
22
Our people during lockdown:
Leaning into lockdown
12
International airfreight service:
Keeping the freight moving
28
Using data to re-think our
customer journeys
38
NOW Couriers:
NOW changes the rules
44
KidsCan partnership:
Can do for KidsCan
42
The true cost to serve:
Pricing for effort
24
06 Highlights
08 Growth strategy
10 Business impacts and actions - COVID 19
14 Chairman and CEO’s report
22 The Freightways family
24 The true cost to serve
26 People
28 International airfreight service
30 Sustainable Development Goals
38 Using data for customers
40 Community
42 KidsCan partnership
44 NOW Couriers
46 Our Board
47 Our leadership team
48 Directors’ report
56 Independent auditor’s report
118 Shareholder information
120 Corporate governance
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzContents

Lockdown challenged us.
But it also motivated us.
Thinking laterally, understanding our capability deeply
and acting quickly gave us the ability to pivot in lockdown
and take advantage of opportunities that emerged.
In COVID-19 Alert Level 3 the unprecedented freight
volumes that passed through the Express Package
network - plus the commencement of our international
scheduling for our 737 fleet - characterised lockdown
for many of our people.
Delivered 87% of residential items within
1 day and 95% within 2 days during the level 3
online shopping boom
Provided 1.4 million kgs of
international airfreight capacity
Hosted 2.5TB of eDiscovery data
every month
Lost Time Injury Frequency Rate
of 10 (LTIFR)
Improved pricing by $0.73 per item for
residential addressed parcels
An increase of 50% in residential
volumes during level 3 lockdown
Processed 2,700,000 kgs of
non-paper destruction
2.7million
Facilitated 200 staff through leadership
development training and 250 leaders through
Mental Health Awareness training
Our Business Mail division continues
to perform well despite current
market and competitive dynamics.
Nimbleness and a culture of
customer care keeps brands DX
Mail and Dataprint in a good position
leading into 2021.
Airfreight volumes increased this year
(30 million kgs domestically and 1.4
million kgs internationally) with the lift-off
of our daily trans-Tasman 737 freight
service. Excited by the ability to use our
aircraft assets around the clock, the
service enabled exporters to get product
to Australian markets at a time when
passenger aircraft freight capacity had
dropped dramatically.
38 million
mail items
31.4
million kgs
Total gross GHG emissions (tCO2e)
per million dollars of revenue
Toitū carbonreduce certified
FY20 to be certified in November 2020
FY13/14
136.64
FY14/15
123.02
FY15/16
105.01
FY16/17
102.93
FY17/18
95.57
FY18/19
90.85
FY19/20
103.40
Year-on-year reduction
10.0%
14.6%
2.0%
7.2%
4.9%
(13.8%)
FY19/20 emissions excludes Big Chill emissions which will be included from FY21 onwards.
FY19/20 total gross GHG emissions per million dollars of revenue increased due to international airfreight flown during the year (see page 28) and
the impact of reduced revenue as a result of COVID-19 but with minimal reduction in network emissions to maintain the level of reach and service.
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzHighlights

Freightways Limited
and its subsidiaries
freightways.co.nz
Our market leading brands combine density with specialist knowledge in each niche.
We work across a range of business sectors, achieving high levels of quality and efficiency,
through our focus on adding value to how we pick-up, process and deliver. Our strong culture
and commitment unifies our people and feeds our deep team spirit. That spirit shone through
this year in the way our people came together to help each other out during lockdown.
Express Package
Our multi-brand strategy in the
New Zealand courier market caters
to a range of customer needs and
delivery timeframes. All share branch
networks, air and road linehaul, and
IT. These brands include New Zealand
Couriers, Post Haste, Castle Parcels,
NOW Couriers, SUB60, Security
Express, Kiwi Express, Stuck, Pass
the Parcel and most recently Big Chill
Distribution. We also offer airfreight
capability for our overnight Express
Package delivery service through our
joint venture airline, Parcelair.
Mail Delivery
DX Mail is New Zealand’s only
dedicated Business Mail specialist;
offering time-sensitive, physical
postal services, from door-to-door
to box-to-box.
Digital Mailhouse
Dataprint offers mailhouse-print
services and digital mail presentation
platforms across New Zealand.
Our technology and solutions
transform data into effective
communications for customers.
The Information Management Group
The Information Management Group
helps businesses protect and add-
value to the data they entrust us with.
It offers physical storage and
information management services,
as well as digital information
processing services such as
digitalisation, business process
outsourcing, online back-up and
eDiscovery services.
Secure Destruction
Shred-X offers document destruction,
eDestruction and product destruction
services. The business also provides
medical waste services under the
Med-X brand.
That spirit shone
through this year
in the way our
people came
together to help
each other out
during lockdown
Express
Courier
Temperature
Controlled
Aviation
Mail Delivery
Document Media
& Storage
Digital Information
Processing
Online
Back-up
Document &
eDestruction
Product
Destruction
Medical
Waste
Digital
Mailhouse
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Freightways’ market leading brands
Our business model
is highly responsive
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzFreightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Growth Strategy

COVID 19
By division
ACTIONSIMPACTS
Led the industry with contactless
deliveries
1,000 staff worked from home
Range of onsite precautionary
measures
Reduced hours worked
through lockdown
Elimination of travel and
discretionary spending
Savings in salaries, wages and
directors fees
Extended and renegotiated
lending facilities
Heightened focus on
cash collection
Business impact and actions
Range of health and
safety measures
Streamlined overtime
and use of casual labour
Reduced non-essential
capital expenditure
$
Of new equity through use of the
Dividend Reinvestment Plan and partial
payment of the Big Chill acquisition
$54
million
Information Management
Revenue comparison year-on-year
Apr
May
Jul-Mar
Jun
-19. 6%
-18.7%
-0.7%
2.8%
Express Package
Revenue comparison year-on-year
Jul-Mar
Apr
May
Jun
2.4%
-33.0%
4.8%
10 .1%
Network Courier Items by Delivery Point
B2B, B2C Mix (in 2020)
Rural
Business
Residential
Note: For like for like comparison,
the Express Package graph
excludes contribution from Big Chill
Note: For like for like comparison,
the Express Package graph
excludes contribution from Big Chill
Mar
Apr
May
Jun
Jul
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzBusiness impacts and actions

Our people during lockdown
It all happened so quickly, says
Lorna Fisher (National Sales
Manager - Business Development
for New Zealand Couriers).
“One minute we were working as
normal and then overnight we were
in COVID-19 level 4, faced with the
technical challenges of enabling
our teams to efficiently look after
our customers while safely working
away from the office.”
There were upsides. Lorna said
working from home meant she was
able to do a 7km walk in the morning
and still be at work by 7:30 am. That
got her ready for the emotional
challenges of the day ahead as
customers tried to either get their
freight on the essential service list,
or had to change their business model
completely and set up new systems
and sales solutions.
“My core objective during COVID-19
was to intensify communication with
our managers to empower them to
effectively lead their teams,” she
says. “We also proactively sought out
potential customers to see if they
needed assistance. This approach
proved to be really valuable for these
customers - they commented that they
could not believe how much we were
going out of our way to accommodate
their needs.
Jillian Hedgman is Regional Sales
Manager for Auckland, overseeing
sales for North Harbour, West
Auckland, parts of Manukau, as
well as Whangarei.
During lockdown, many customers
shifted their focus from B2B (business
to business) to B2C (business to
consumer), she says. “Without any
hesitation we all mucked in to make
sure that we were able to deliver for
New Zealand businesses, with a focus
on recovering cost to ensure our
couriers were getting paid for the effort
they put in.”
People stepped up in all sorts of ways.
Team members who didn’t need to
look after dependants during lockdown
were literally helping the operations
team and courier drivers during the
week days. Others who did need to stay
at home to look after family members
spent their weeks working with
customers over email/phone and other
online portals.
“On the weekends we were all doing
deliveries and assisting our couriers
where they needed us the most.”
Jillian was one of many doing
deliveries over the weekends and says
the experience gave her an incredible
insight into what couriers do each day.
“Part of being inducted into the
business is to go out and do deliveries.
Having been here 16 years, it was
good to see this again and how the
day in a courier van has changed.
Our couriers worked so hard every
day throughout lockdown.”
Leaning into
lockdown
“We had record new business
numbers in these months due to
our team’s tenacity and customer-
centric attitude.”
One of the most humbling solutions
Lorna was involved with was for
Auckland Council, who aligned
themselves with Countdown, Spark
Arena and New Zealand Couriers
to send out essential care packages
containing food and toiletries for
families in need. Couriers picked
up and delivered over 60,000 care
packages over COVID-19.
The contractors also soon understood
the impact they were having on these
families from the feedback they were
getting on delivery. They even managed
to make a delivery to an address given
as: “Man in the van in a parking lot”.
“ I have been with New
Zealand Couriers for
13 years and I have
never been more proud
of the company that I
work for or the people
I am privileged to call
colleagues and friends,”
says Lorna.
Leseia Fewtrell (National
Business Development Manager)
and Stacey Collis (Commercial
Manager) normally work in the
National Sales team at Post Haste
Group head office.
During COVID-19 level 3, they swapped
corporate attire for active wear,
their cars became courier vehicles
and their mobile phones transformed
into scanners.
“Our primary focus was to deliver the
Ministry of Education packs direct to
the homes of school children. The first
part of our morning was spent sorting
the school packs into streets, then
building our runs to ensure we got as
much density as possible.”
Leseia and Stacey’s story
Some days were much better than
others, they say, with average
deliveries being around 80 items each,
with a peak of around 160 items.
“We were presented with hundreds
and hundreds of items every day...
and just when we thought we had
made progress another large load
would arrive.”
There were plenty of challenges,
with homes they couldn’t reach
because of locked gates, residents
not willing to open their doors and
incorrect addresses. There were many
hair-raising moments too, particularly
with dogs that simply appeared out of
nowhere. Both Stacey and Leseia had
times when they had to jump into their
cars to avoid potentially being bitten.
“ We got to meet many
lovely people,” the
women say. “The
highlight was seeing the
pure joy and excitement
on the faces of the
younger children when
they received their
school packs. The older
children were perhaps
not as enthusiastic.
We felt the huge relief
from the parents too.”
Lorna and Jillian’s stories
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nz
1213
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Our people during lockdownfreightways.co.nz

Full year
review
The response by our teams across
all businesses was outstanding.
We would like to acknowledge the
extraordinary efforts of all of our
staff and contractors in delivering for
our customers during the year, and
particularly in the challenging last few
months - where COVID-19 has changed
the shape of the environments in which
we operate. There have been so many
heart-warming stories of the efforts
our people made to connect essential
goods to their intended recipients, on
time and in full.
Just days into level 4 lockdown in
New Zealand the company also
completed the acquisition of Big Chill
Distribution Limited (Big Chill) after
receiving approval from the Overseas
Investment Office (OIO). The forced
timing of the transaction along with
the dramatic drop in volume in the
initial week of level 4 lockdown
trading, resulted in us renegotiating
the terms of the deal to partly settle
the transaction in shares, thus
preserving cash.
The business has demonstrated strong
resilience. Our financial results in FY20
are naturally affected by the lockdowns
in both New Zealand and Australia.
Pleasingly, following the initial drop in
activity during lockdowns, our position
has steadily improved through the lifting
of restrictions, although the recovery in
Australia has now been affected by the
situation in Victoria and New Zealand
has experienced another lockdown,
albeit not to the extent of the level 4
lockdown which restricted our customer
activity to only essential services.
The current environment remains
highly uncertain, with a resurgence of
COVID-19 across the globe increasing
the risk of further trading and travel
restrictions. The board feels the
prudent course of action is to not
declare a final dividend for FY20 given
the uncertainty in both the NZ and
Australian markets. While recent
trading has been strong in NZ, there
has been a recent return to level 3
lockdown in Auckland and level 2
nationally along with a continued
severe lockdown in Victoria. The
consensus is the full economic impact
has yet to be felt in either country
at this stage. Notwithstanding our
current performance, this decision
also better positions our balance
sheet for an uncertain wider economic
impact and preserves headroom
for potential growth opportunities
which may emerge from the current
environment. It is also important to
acknowledge that many of our team,
including management and directors,
took pay cuts through the quarter and
that some of our businesses accessed
the government wage subsidy to
ensure that we kept our people in
work. For all of these reasons we
feel not declaring a final dividend for
FY20 is a one-off decision and is the
right thing to do. At this point, we do
envisage a resumption of dividends
in the current financial year (FY21),
subject to a continuation of our current
trading conditions.
Getting through the work
COVID-19 drove changes in consumer
behaviour and, following the initial
impact of lockdowns in NZ, the
courier industry has seen a surge in
the number of parcels. While some
of our competitors struggled to cope
with that flow, our people responded
to the change in volumes and got on
with making it work. The teamwork
amongst the businesses was inspiring.
Our people volunteered for roles as
freight sorters and couriers to get the
job done.
Mark Verbiest
Freightways Chairman
In the last quarter of this financial year, every one
of Freightways’ business units was called upon to
provide essential services during the COVID-19
lockdowns in New Zealand and Australia.
The challenges were many and varied: from the
delivery of food and personal protective equipment
(PPE), the retrieval of hospital files held in offsite
storage and the establishment of new trans-Tasman
airfreight services to keep export markets open, to
the collection of medical waste from newly formed
quarantine facilities. Freightways’ brands helped to
pick-up, process and deliver over 20 million essential
items for our customers.
Chairman and CEO’s report
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freightways.co.nz
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
15
Chairman and CEO’s reportfreightways.co.nzFreightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
14

73c
An additional 73cents per item has been
achieved through Pricing For Effort (PFE)
for items delivered to residential addresses.
Of international trans-Tasman airfreight capacity as part
of the International Air Freight Capacity Scheme.
1.4m kgs
We had to react quickly and decisively
because level 4 lockdown had such
a deep and immediate effect on us.
Express Package volumes initially
dropped by 65% while Information
Management activity in New Zealand
ground to a halt, leaving us with just
storage revenue. In Australia, the
decrease in Information Management
activity was around 25% but while
the impact has been shallower, it has
also been more prolonged than in
New Zealand and continues into FY21
particularly in Victoria and NSW.
We quickly adapted to this dramatic
reduction in activity, cutting our
discretionary costs, reducing our wage
and salary costs by rostering for lower
volumes, taking leave without pay and
through most of our team working
less hours to reduce our overall labour
costs. In line with lower volumes, our
businesses moved quickly to right
size operations by removing linehaul
runs, flights and other variable costs
to minimise the impact on profitability.
In addition, Directors and senior
executives took a 20% cut in fees and
fixed salaries in the quarter.
We applied for the New Zealand
Government Wage Subsidy for those
businesses that incurred a greater-
than-30% decline in revenue. This
enabled us to continue to retain our
staff in those businesses. A number
of our businesses did not meet this
threshold and either did not apply or
promptly returned the subsidy when
that became clear.
Our unfaltering entrepreneurial spirit
During this period of time, we managed
to do three things that perfectly capture
the entrepreneurial spirit that makes
Freightways successful.
We commenced new services and
quickly grew existing ones, such as
trans-Tasman airfreight charters
through our aviation joint venture
with Airwork, rapidly expanded medical
waste collections through Med-X in
Australia in response to the need to
dispose of PPE, and a new premium
same-day guaranteed delivery service
across Auckland with NOW Couriers.
Secondly, we maintained our service
levels through the spikes in B2C (home
delivery) volumes which occurred
during level 3 lockdown.
Finally, while we were in lockdown
(4 days in, in fact) we completed the
acquisition of Big Chill, settling the
transaction with a combination of cash
and shares.
• This has accelerated a trend that
was already expected before the
epidemic, and for which we had
been preparing through our Pricing
For Effort (PFE) programme. B2C
deliveries attract lower margins
than B2B, but this situation is
improving and we expect to continue
to make progress in this area over
the coming years;
• Pricing for Effort (PFE) of 73c per
item has thus helped considerably
through the heightened B2C volumes
our brands have experienced since
level 3 lockdown;
• Residential productivity through the
lockdown period increased by 17%,
assisted by less congested roads
and a greater proportion of first-time
deliveries because receivers were
home to accept items;
• Courier pay was impacted by the
COVID-19 lockdown period, being 2%
behind last year’s average of $103k
p.a. per contractor. Self-employed
Business Unit performance
Each line of business experienced
a range of impacts through the year.
The highlights are listed below along
with our strategic direction in the
near term.
Express Package
• Steady increases in organic volume
up until March 25th (when level 4
lockdown began in New Zealand) had
generated encouraging revenue and
margin gains in that month;
• As New Zealand moved through
lockdown levels 4 to 2, we
experienced growth in the proportion
of B2C freight from the combination
of supporting our customers who
were changing their models to
enable B2C for their essential items
as well as increasing charitable
deliveries (performed at cost).
By June, this B2C proportion had
moderated from around half of
all deliveries back to 24%, still 4%
higher than pre- COVID-19;
“ Our financial results in
FY20 are naturally affected
by the lockdowns in both
New Zealand and Australia.
Pleasingly, following the
initial drop in activity during
lockdowns, our position has
steadily improved through
the lifting of restrictions”
contractors were able to draw on
the government wage subsidy if
their income dropped by 30% in a
given month;
• Volumes in June, July and August
to date have been stronger than
expected, which we attribute to
market share gains and also
higher levels of organic trade
from many customers;
Freightways CEO,
Mark Troughear
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
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Chairman and CEO’s reportfreightways.co.nz
16

The year ahead
Express Package will continue
to focus on building our market
positions through providing superior
levels of service and pricing our
services appropriately.
This focus will include introducing a
further phase of our PFE strategy
for B2C deliveries. It is critical that our
contractors are remunerated through
item revenue (rather than company
subsidies) for the effort required
for residential deliveries. We will
implement additional customer-facing
IT systems to make it even easier for
customers to deal with us and provide
them and their receivers with greater
visibility. We will also continue to exploit
our multi-brand strategy through
positioning our brands to meet the
needs of different customer segments.
Our latest initiative sees us position
NOW Couriers as our guaranteed same-
day Auckland service provider, giving
customers peace of mind and surety.
Big Chill’s expansion into 3PL in
Auckland will be a focus as well
as taking advantage of a larger
temperature-controlled Wellington hub.
Customers will be able to benefit from
a fully outsourced storage, picking &
labelling service that links seamlessly
into Big Chill’s national delivery
network. There are a number of new
market opportunities for Big Chill,
some of which will leverage the ability
to provide a last-mile express delivery
service to customers as well as
improving their customer experience
by leveraging our suite of express
package technology.
Business Mail
• The volume trajectory for Business
Mail followed a similar trend to that
of Express Package. By the end of
June, volumes had recovered to be
marginally higher than the previous
year. This was particularly pleasing,
although we received slightly lower
revenue per item as a result of direct
price-based competition for mail
being delivered to those areas that
DX Mail services;
• Through lockdown, DX demonstrated
the ability to flex its cost base to a
greater degree than larger fixed cost
operators. It was satisfying to see the
co-operation between businesses
• We remain wary as volumes are
still sensitive to overall economic
conditions. At this stage, they seem
to be driven by a combination of
pent up demand, stronger than
expected retail sales and sustained
B2C volumes;
• Big Chill initially suffered a 22%
decline in revenue through level 4
and 15% through nationwide level 3.
Despite this, the business was able
to adjust quickly and reduce costs in
response to lower demand. Business
conditions had improved by June, with
the last month of the year delivering
revenue growth of 15% on the pcp;
• Through Q4 we provided 1.4m kgs
of international trans-Tasman
airfreight capacity as part of the
Government’s International Airfreight
Capacity Scheme. The profitability of
this service depends heavily on the
degree of utilisation. This has varied,
as the Australian States transition
through various phases of lockdown
but is overall a positive contributor
to performance. The agreement has
been extended through until the
end of August when it will again be
reviewed by the Government.
“ Express Package will
continue to focus on
building our market
positions through
providing superior
levels of service and
pricing our services
appropriately. ”
to lend support as volumes ramped
up in the Express Package division.
DX employees offered to assist
the courier brands, helping us to
maintain very high standard of
on-time delivery.
• Despite a 30% reduction in mail
volumes during the months of April
and May overall, DX Mail volumes
for the full year grew by 4%. This
growth was achieved through market
share gains obtained on the basis
of better and more frequent mail
delivery services.
The year ahead
DX will expand its delivery network
in response to customer demand.
We expect demand to remain strong
although with a lower margin than
in previous years due to the ongoing
impact of our competitor’s zonal
pricing programme. Our experience
is that many customers request and
reward high levels of service and we
will continue to focus on providing
a high delivery standard to those
customers who require it.
Information Management
• Storage revenue was solid through
the year and particularly resilient to
the impacts of COVID-19. However,
the number of new archives coming
into facilities virtually halted as
lockdowns occurred in New Zealand
and Australia;
• Collection and retrieval of archives
and media tapes reduced by 90%
in New Zealand and by about 25%
in Australia in the last quarter of
the year;
• Our litigation support services – in
particular print and copy services
were also heavily impacted as
lawyers vacated their offices as
a result of COVID-19 and have
remained working from home, in
many cases reducing the demand
by up to 50% for printed material.
• There have been positive signs
of recovery in New Zealand, but
Australia will take longer to recover
because staff in many organisations
continue to work from home. CBD
areas in particular are still devoid of
many of their office staff;
• The digitalisation project that
TIMG had geared up for late last
year did eventually commence,
but at lower levels of activity than
expected because physical data
was difficult to collect during COVID
restrictions. This project is expected
to be broken into stages and will
take longer to process than initially
anticipated. The combination of these
various negative trends
has led to our decision to partially
impair our litigation support
business in Australia.
The year ahead
With a lower level of storage facility
utilisation than we would have liked,
we will assess a number of alternate
opportunities to generate revenue from
our warehousing footprint. There is an
encouraging pipeline of digitalisation
opportunities in Australia, which
our team will look to capitalise on to
provide on-going revenue in FY21.
We will also continue to review
our range of services. In FY20,
we created a Product Development
team to look at ways we can grow
our existing services as well as
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and its subsidiaries
Annual Report Financial Year
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Chairman and CEO’s reportfreightways.co.nz

look to systematically develop new
revenue opportunities. The team
has assessed 12 concepts to date with
3 progressing to prototypes and early
stage customer acquisition.
Secure Destruction
• In New Zealand, document
destruction came to a complete
standstill in April but has recovered
well since level 2 lockdown came
into effect. In Australia, there was a
15% reduction in activity from March
and, despite pockets of recovery,
the recent lockdown in Victoria
has meant that it is likely to take
longer to return to pre-COVID-19
levels. However, volumes of paper
collected by both businesses have
been encouraging and paper pricing
is stable;
• The collection of medical waste
experienced two opposing impacts
with many hospitals and clinics
seeing fewer patients, but newly
established quarantine facilities
requiring brand new services;
• Revenue from high-value recyclables
(eWaste, coffee cups, packaging
waste) had been growing well off
a very small base but also took a
hit during the close down of Quick
Service Restaurants in Australia.
However, it remains an area of focus
for the business as we develop our
networks and capabilities.
The year ahead
Growing non-paper sources of waste
that can be diverted from landfill,
or treated to add value, will be a key
strategy for Shred-X in FY21 as will
taking advantage of newly acquired
medical waste processing capability
in New South Wales.
Balance sheet strength
Freightways has always been
particularly disciplined around capital
management, and capital expenditure
and management of cash will remain
a clear focus. While the initial 65%
drop in activity, which occurred the
same week that OIO granted approval
for the completion of the Big Chill
transaction, did present an interesting
challenge, the company has managed
its position well and is well placed for
the opportunities ahead.
Capital expenditure for FY20 was
$23m. In FY21 capital expenditure will
be carefully managed and targeted
toward projects that realise the
greatest returns. Despite the addition
of Big Chill to the group, capital
expenditure is expected to be managed
to a range of $20-22m in FY21 and
spent on a range of IT development
projects, replacement of vehicles and
freight handling equipment.
Outlook
We are encouraged by strong early
trading results consistently achieved
in the last few months, however the
economic backdrop to FY21 can best
be described as uncertain for all
business units in Australia and
New Zealand.
In Express Package, the current higher
level of volume, which includes a
slightly higher proportion of lower-
margin B2C deliveries, will likely
eventually track the level of macro-
economic activity and of business and
consumer confidence. In Information
Management, whilst storage revenues
are reasonably resilient, the activity-
based revenue streams will be driven
by the number of people returning
to office environments and, in some
cases, this will be lower than pre-
COVID-19.
In both divisions, we will react quickly
to any reduction or growth in volumes
to ensure we are providing services
as efficiently as possible whilst
maintaining the service standards
our customers expect. Using what we
learnt during the period of COVID-19
lockdowns, we will adjust our cost
base to protect our margins. We will
also assess the portfolio of services
we provide and make decisions on
the best strategies to deliver value to
shareholders over the long term.
We expect that COVID-19
will also continue to
provide opportunities
that our teams can
capitalise on, either for
new services, market
share opportunities from
customers valuing our
reliability or the potential
for accretive acquisitions.
While Freightways is not alone in
being cautious around the outlook for
FY21 in a macro-economic sense, our
stakeholders can be assured that our
response to movements in volume will
be swift but will not compromise on
service to customers and the safety of
our people.
Mark Verbiest
Chairman
Mark Troughear
CEO
The Freightways directors would again
like to acknowledge the efforts of every
one of our team across Australasia
during these exceptional times.
We also thank you, our shareholders,
for your continuing support.
“ There is an encouraging
pipeline of digitalisation
opportunities in
Australia, which our team
will look to capitalise
on to provide on-going
revenue in FY21.”
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Annual Report Financial Year
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and its subsidiaries
Annual Report Financial Year
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21
Chairman and CEO’s reportfreightways.co.nz
21

Acquiring Big Chill will enable us
to further expand our Express Package
delivery services into the fast-growing
chilled and frozen goods sector as well
as further diversifying Group earnings.
A warm
welcome
to Big Chill
The Freightways family
Big Chill is a New Zealand market
leader in temperature-controlled
transport, specialising in fast moving
consumer goods and time-critical
parcel freight, both chilled and frozen.
The company operates a fleet of over
200 temperature-controlled trucks
and trailers and last year delivered
more than 2 million shipments
through its nationwide network.
The Big Chill team are experienced
and dedicated, with a culture that fits
very well with Freightways.
The acquisition offers both
companies opportunities to explore
how they can provide customers
with the best in technology, service
quality, national reach and range of
service options. We will be able to
adapt our business intelligence tools
to provide data on consignments
and margins, and share sales and
marketing efforts across a wider
customer base.
For example, Big Chill customers will
be able to use our market-leading
track and trace systems to have end-
to-end visibility of journeys and delivery
confirmation. We will also be able
to explore opportunities for express
courier delivery off the back of
Big Chill linehaul for the last mile
(residential delivery), and make
the most of the new temperature-
controlled 3PL offering.
Temperature-controlled express
delivery is a logical extension to the
suite of express services that we
currently offer. This has been a smart
buy for us, and we are excited by the
growth prospects the business has in
front of it.
The company operates
a fleet of over 200
temperature-controlled
trucks and trailers.
200+
Last year delivered more than
2 million shipments through
its nationwide network.
2m
Mike Roberts
General Manager Big Chill Distribution
2223
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzFreightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
The Freightways family

The true cost to serve
Historically, our customer pricing
structures have been calculated on
a business to business (B2B) cost
model. That’s because for many years
B2B accounted for the majority of our
deliveries. More recently, the mix of
business versus residential deliveries
has started to change as more and
more clients adopt an e-commerce
channel. Many new customers want a
significant proportion of their freight
delivered to residential addresses.
That has important implications for
how we cost what we do. We calculate
our delivery prices based on a concept
called “cost to serve”. This approach
considers all the elements that add
cost and potential value to a delivery:
from the number of items that pay
for the “stop” to any special
requirements for signatures, site
access and potential rework.
Not all deliveries are the same
The cost to serve a business address is
generally lower than for a residential
address. This is because there are more
items handled (pick-up or delivered) per
stop at a business address than there
are for a residential address. 99% of
business deliveries are completed on
the first attempt so there is less need to
return to the same address twice and
there is a much lower level of customer
inquiry. That means key factors that
add cost to a delivery - including
redirections and collections from depots
are limited for business deliveries.
By contrast, the cost to serve a
residential address is generally higher
because couriers are typically delivering
only one item per stop, and delivery
points can be far less densely located.
That means courier routes also change
day to day, depending on delivery
addresses, with 12-18 items delivered/
picked up per hour.
It can also be challenging to reach
people. For signature services,
receivers are often not at home
on the first attempt, so the driver
cannot get a signature. A significant
proportion of first attempt deliveries are
unsuccessful. This results in the courier
having to leave a card, which means
increased manual handling by freight
office personnel at local branches.
This increases labour costs associated
with delivery and the cost to deliver, as
two delivery attempts are required for
Pricing For Effort is another example
of how Freightways is assuming
leadership in the market.
Pricing
For Effort
one item. Issues surrounding
delivery can also be more complex.
This results in customer support being
more time consuming.
Correcting a market weakness
Differentiating the price of a business
delivery from a residential delivery is
important to avoid introducing cross
subsidies and to ensure courier income
fairly represents the effort required
to deliver an item. So this year we
introduced a new pricing strategy to
recover these extra costs called Pricing
For Effort. It’s meant that since July
2019 we’ve been charging appropriately
for what it takes us to deliver a package
to residential addresses. We were the
first business in the industry to do
this - it’s simply the right thing to do -
and it enables us to provide long term
sustainable services.
Pricing For Effort is the first step in our
pricing strategy to generate sustainable
margins for residential deliveries and
improve earnings for our residential
fleet of courier contractors. It’s been
good to see our customers being so
supportive of our approach. They have
been genuine in their understanding of
the problem and our B2C market share
has actually increased this year. We lost
very few clients and achieved both our
financial objectives for Freightways and
for courier income. Pricing for Effort is
about offering a transparent cost
to serve.
Up until the start of the COVID-19
lockdown, we were extremely happy
with the growth in contractor earnings
which were ahead of the previous year at
that point. Inevitably, lockdown did slow
growth, with overall contractor pays at
the end of the financial year being 1.8%
behind the previous year. Nevertheless,
in the past year, we’ve paid our couriers
over $3 million in PFE payments.
A long-term strategy
In the year ahead, we plan to further
extend our residential delivery charge.
From August 3 2020, residential
charges will increase by a further
50c per delivery and this will bring us
closer to fully recognising the costs
of a residential service. We are also
exploring other areas of our business
where our current pricing model
does not reflect the level of effort
it takes to deliver. We will be
prioritising the review of these
areas in the next financial year and
implementing strategies that improve
our margins responsibly.
Pricing For Effort is a long-term
strategy to recognise the true
handling and delivery costs involved
for a range of item types and to
ensure that our pricing properly
reflects the effort required to deliver
on-time, every time. We will continue
to focus on improving the incomes of
our contractors through increased
remuneration, and a continued focus
on achieving greater efficiency by
improving volume/delivery density.
The economics require
seeing past the traditional
view of treating all freight
deliveries the same - and
paying contractors the right
amount per stop. Unless
residential deliveries are
priced for their true cost,
companies are subsiding
their deliveries elsewhere,
which effectively means
B2B customers are helping
pay for B2C deliveries.
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The true cost to serve
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250
leaders attended Mental Health
Awareness training in FY20.
Diversity and commitment
Freightways is made up of a range of
businesses operating across many
sectors. But that diversity is balanced
by a strong commitment to each other
and to the overall cultural and financial
health of the Group. We have a clear
purpose and strong values.
Our expectation of everyone here is
that they will treat others with respect
and kindness, and that they will step
up as needed to make things happen.
That certainly happened during
lockdown. As the stories in this
Report attest, people from across
the organisation put up their hands
to help wherever it was needed.
As a result, after the initial shock of
a huge drop in business, Freightways
rallied and we all worked together
to ensure essential services were
delivered on time and to the very best
of our abilities.
Putting people first has always served
this company well – and this year, we
made good headway tackling a range
of issues that affect our workforce.
Access to opportunities
One of the key concerns to emerge
from our Diversity & Inclusion Survey
was that people didn’t understand
how they could plan their career with
us. Many said they were excited by
the opportunities that Freightways
offered, but they needed to better
understand how to make the most
of what was available.
To help make that clearer, we’ve taken
steps to publicise the training and
learning and development that we have
available; so that people can decide
where they want to go in their time
with us, and more easily gain access
to the skills and training they need to
make that happen.
We also progressed a further 200 of our
team through leadership training which
comprised; Freightways Fundamentals,
Management Concepts and the
Freightways LEAD programme.
Our culture proved
itself this year
Managing mental health
and wellbeing
Another issue to emerge from the
survey was that people were dealing
with a full range of pressures both
inside and outside work. Respondents
told us they wanted support with
dealing with the things that were
affecting them. Our response started
from the premise that the best people
to offer immediate support and
empathy were leaders. With that in
mind, we put 250 leaders from across
the business through a course to help
them understand and recognise signs
of risk to mental health and wellbeing.
Our goal is to ensure that everyone
receives the assistance they need,
in the form they need it, within a
caring and compassionate work
environment – and that they receive
that assistance in a timely manner.
Keeping our people safe throughout
their working day
Across the Group, our people work in
a range of dynamic environments.
Those in our Information Management
businesses are often working at
height; a business like Big Chill has
dockways and coolstores where
serious accidents can occur if
procedures are not followed; and
our DX Mail teams are subject to the
dangers of riding motorbikes through
busy streets. Our couriers are subject
to similar road risks and being around
forklifts in the depot. Add in the heavy
machinery at our Shred-X plants and
the ground handling risks of loading
our planes, it’s clear that our risks are
many and varied, requiring monitoring
in different ways.
This year, we reported an LTIFR rate
of 10 (triggered where injuries were
serious enough for people to be off
work for a day). Our numbers are
lower than many in the transport,
postal and logistics sector; but based
on our commitment to safety we are
constantly striving to improve and in
FY21 will introduce a number of new
initiatives to help ensure our people go
home safely each day.
Every individual Freightways site has
its own Health and Safety committee
which report to an over-arching
Freightways committee represented
by the businesses within our group.
The Freightways committee, in turn,
considers and implements initiatives
through all group companies and
provides reporting through the CEO
to the Board.
To ensure we continue
to improve, we recently
appointed a new Head
of Safety who will be
responsible for creating
and implementing a new
vision for health and
safety across the Group.
Lost Time Injury Frequency
Rate of 10
LTIFR
200
of our team went through
leadership development training
with a 50:50 gender mix.
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freightways.co.nzPeople

International airfreight service
The call went out
When the Ministry of Transport issued
an RFP for aviation businesses to
provide solutions to deliver international
airfreight capacity, we responded. Our
solution leveraged our specialised
airfreight domestic network, our team
of experienced and dedicated pilots, our
knowledgeable sales professionals and
our many customer relationships. In fact,
Freightways stepping up and providing
a solution was essential for NZ Inc as
it leveraged higher capacity specialist
freighter aircraft on critical routes.
Our project team called on all their
experience to pull together numerous
Freightways brands and partners
including Fieldair, Parceline, New
Zealand Couriers, DX Mail, Parcelair
and Airwork. We signed our contract
with the Ministry on May 1 and a week
later Freightways were operating
services on the Tasman.
Freightways new international airfreight service has
enabled us to use our assets around the clock to help
New Zealand businesses and open up new
opportunities for Freightways. The new service has
enabled us to make use of an existing resource,
expertise and assets during the day to operate the
Tasman, while continuing to service our overnight
domestic express airfreight network.
Keeping the
freight moving
A lot can happen in one week
Setting up this new service in one
week was a staggering achievement
given that we had to build this
international service from scratch.
We secured the aircraft we needed
through a collaboration with Airwork,
our joint venture partner and Parcelair,
then developed trans-Tasman services
and customer-focused schedules
using existing crew and resources.
Ground handling processes and
agreements with partners were
confirmed on both sides of the
Tasman, unit load devices procured,
specialist personnel developed,
and operational processes finalised.
Our finance team implemented
systems and processes in both
countries to support our customers
and meet the Ministry’s requirements.
Meanwhile, our sales teams in
Australia and New Zealand canvassed
potential customers, including existing
Freightways customers, to understand
pain points and identify key routes
where exporters were struggling
to find capacity. Our involvement
ensured exporters could access
more competitive international
freight prices. The essential trans-
Tasman link has also strengthened our
existing relationships with many
of our domestic customers who are
also exporters.
“ When borders closed and commercial
flights dwindled, it wasn’t just
passengers who were affected.
International freight capacity also
reduced to a trickle, and that dramatic
fall-off presented challenges for
importers and New Zealand exporters
looking to get their goods to market.”
Maximising what we already had
What made the trans-Tasman services
both possible and profitable for us was
that we have been able to leverage the
experience of operating our existing
domestic fleet which fly between
Auckland, Palmerston North and
Christchurch during the night.
Trans-Tasman flights operate during
the day using the same aircraft type,
enabling the existing assets to be used
more productively.
Freightways is now being recognised
as a leading Australasian supply chain
specialist. Not only is our cost per kg
more competitive because we use
freighter aircraft, but we have also
been able to operate on any trans-
Tasman route to meet the needs
of New Zealand exporters. We’ve
been able to provide vital services to
perishable exporters from the South
Island, and Christchurch, in particular.
Looking ahead
We’re keen to work with key exporters
and freight forwarders to continue
developing our trans-Tasman service.
Our goal is to ensure New Zealand
exporters can position their products
in the Australian market in ways
that suit their customers, and at a
competitive price.
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Freightways Limited
and its subsidiaries

Materiality matrix
Impact on business
Stakeholder importance
7.0 7.2 7.4 7.6 7.8 8.0 8.2 8.4 8.6 8.8 9.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
SDG 8
SDG 3
SDG 16
SDG 9
SDG 13
M
a
t
e
r
i
a
l
i
t
y

c
u
r
v
e
Building on
our goals
To meet growing demand by stakeholders for
broader information about our activities, we
continue to incorporate non-financial criteria
into our decision-making and public reporting.
Two years ago we conducted an assessment
to determine the issues most material to our
business and public reporting.
SDG 16 Peace, justice
and strong institutions
• Ethics, bribery and corruption
(integrity)
•Transparency
SDG 13 Climate action
•GHG emissions
SDG 9 Industry, innovation
and infrastructure
•Product and process innovation
•Customer experience
•Data security
•New business opportunities
(e.g. medical waste management)
SDG 8 Decent work
and economic growth
•Profitability
•Organisational culture
•Growing the incomes of
our contractors
•SDG 3 Good health
and well-being
• Health and Safety in Employment –
injury reduction
•Non-GHG emissions (e.g.
particulate, NOx)
•Road safety
•wEmployee wellness programme
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Annual Report Financial Year
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freightways.co.nzSustainable Development Goals

1. W ELC OME
2. ON THE JOB
TRAINING
3. COMMERCIAL
TRAINEES
4. FUNDAMENTALS
5. MANAGEMENT
CONCEPTS
6. LEAD
Looking after our people is
integral to our SDG3 efforts:
Good health and well-being
The well-being of our people is critical
to the success of our culture and
our business. It is something we are
strongly committed to, and an area
where we seek continual improvement.
We take a holistic approach,
recognising our people and their
contributions individually at the same
time as we promote a strong and
deep team culture. That’s where
The Movement comes in.
The Movement is our employee
wellness programme. It was
established after we ran a survey
that helped us understand the wider
challenges our people were facing in
their lives and lifestyles. The feedback
showed that people were affected by
a whole range of factors, both in and
outside of work, that influenced how
they felt about themselves and their
relationships with others.
They told us they were looking for a
programme that would help them
improve their lives by providing advice
and motivation on a range of fronts –
from how to handle family pressures
through to losing weight or changing
bad lifestyle habits.
In order to make it as easy as possible
for everyone in the business to
access the assistance they needed,
we established The Movement online
portal. It’s where our people can find
everything from gym memberships,
to information on ear and eye tests, to
advice on well-being and mindfulness.
The Movement works in different ways
across the business, with each company
in the Group having its own version
that caters to the needs of its teams.
That means The Movement takes many
forms, depending on demographics,
teams and geographies. Our IT team,
for example might focus on different
initiatives than those of our staff in Post
Haste and our other courier companies,
because their day to day work is desk-
focused, whereas our couriers are out
and about.
The individual interpretations of
The Movement mean that each
business on both sides of the Tasman
can also tailor its campaigns and
offers. In New Zealand, during Mental
Health Week, for example, our
businesses offer activities and ideas
that align with what the Mental Health
Foundation suggests. In Australia, they
will tag their programme to fit what’s
going on there.
Some common themes have emerged
over the range of activities that are
offered. We’re finding, for example,
that The Movement works very well
for team-based activities such as
walking challenges where people enjoy
a combination of team support, peer
pressure and competitiveness.
In the first 12 months, 1000 of our
people have engaged with The
Movement. That’s a high percentage
already, but our goal is to double that
participation in the year ahead.
A strong organisational culture is a key
part of our commitment to SDG8:
Decent work and economic growth
It’s part of our entrepreneurial
mindset to encourage our people to
progress their careers with us.
We want them to earn more by
moving up through the roles and
developing their leadership skills.
Our Freightways Development
Programme is key to that.
At Freightways, we look for a few
things in particular from our potential
leaders; people who treat others with
respect, live our values and act with
integrity; and people who perform well
in their current role, take ownership
and demonstrate the capability to take
on more responsibility.
There are three programmes available
to develop leadership capability.
Those entering our Fundamentals
programme, a training programme
designed for those new to supervisory
and management positions,
are normally nominated for the
programme by their manager. The
programme itself covers a wide
range of topics, including leadership,
coaching and development,
performance management and
financials. Our Management
Concepts is designed for people who
are prepared to move into senior
leadership roles covering negotiation,
commercial acumen, acquisition and
business strategy.
Our Freightways LEAD programme
is a customised leadership course to
grow emerging management talent
that takes place over three modules
and three months.
This year 200 people attended our
various Freightways Development
programmes. Our focus on diversity
and inclusion is also reflected in
the mix of those who completed the
programmes. For example, the mix of
male/female graduates through these
programmes was 50:50.
One of the key reasons our leadership
programmes are so successful is
because they are largely run by our
own people. Our leaders are trained by
other Freightways leaders, meaning
each person is trained by those who’ve
walked the walk. That not only makes
the programmes very relatable, it also
means that those in our programmes
can easily access and talk to the people
running the programmes.
As we continue to adapt to doing
business in a COVID-19 world,
we’ve recognised that leadership is
fundamental to our ability to prepare
for change. COVID-19 has accelerated
change at an extraordinary rate.
We calculate that we have seen the
equivalent of three years change in
almost every one of our businesses
in a matter of weeks. From consumer
deliveries to the decline in print/copy
in Australia, things have changed
suddenly – and our leaders need the
skills and mindsets to make things
happen decisively and effectively.
In a people-focused business like
ours, we need leaders who will step
in, get involved and guide and give
vision to our teams. Our Freightways
Development Programme gives them
the skills, confidence and tools to do
exactly that.
1000+
people
Engaged with The Movement
in the first 12 months
Two
countries
Four business activities
15 brands
One wellness platform
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and its subsidiaries
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freightways.co.nzSustainable Development Goals

Industry, innovation and infrastructure
Starting in the document destruction and
paper recycling industry in Queensland 20
years ago, Shred-X continues to expand
its landfill diversion - processing almost
50,000 tonnes of paper per year for
recycling. It also repurposes and recycles
an array of products including used coffee
cups, QSR waste, electronics (e-waste)
and textiles.
Shred-X has Secure Destruction facilities
and operations in every state and
territory of Australia. These incorporate
the latest and most environmentally-
sustainable shredding technologies
which have achieved the highest industry
certifications. Through the company’s
partnership with Australian recyclers,
Shred-X recovers 98.5% of the material
collected and processed through
its facilities.
We pursue product and
process innovation to help
us meet the goals of SDG9:
Continuing to pioneer
Shred-X pioneered IT asset management,
destruction and recycling solutions when
Australian businesses were beginning
to become paperless. Today, it’s a leader
in removing the information stored on
electronic and IT assets such as hard disc
and solid-state drives, mobile phones and
digital media. By partnering with selected
and certified ethical electronic recyclers,
we ensure the recycling of all electronic
components of e-waste, including
precious metals, glass and plastic, as well
as repurposing assets once confidential
information has been removed.
One of the reasons the company has
been able to expand so successfully is
that Shred-X continues to explore further
opportunities with e-waste, textile and
fibre recycling and repurposing partners,
promoting product stewardship and a
true circular economy. Recognised for its
collection and processing capabilities and
national infrastructure, the brand has been
approached by various organisations to
partner with on their disposable coffee cup,
Quick Service Restaurant (QSR) and food
packaging sustainability programmes.
One of these programmes is Detpak
RecycleMe
™
which has been endorsed by
Planet Ark. Shred-X collect and process
RecycleMe
TM
100% recyclable coffee cups
from cafes and restaurants throughout
Australia. Once processed, these cups
can be recycled in the same manner as
office paper. Shred-X has also invested in
new ways of processing millions of ‘non-
recyclable’ coffee cups, partnering with
Closed Loop Environmental Solutions and
the Simply Cups programme to find
innovative solutions for recycling and
repurposing used coffee cups and
spent coffee grounds.
Shred-X has also introduced a range of
innovative Secure Destruction solutions
for textiles and uniforms, high-end
garments and accessories, seized goods,
recalled items and liquids to ensure
ethical disposal and landfill diversion
wherever possible. These disposal
solutions include waste to energy and
recycling with various new technologies
currently being explored.
To support this strategy, we’ve partnered
with an Australian sustainability company
to participate in QSR waste trials set to
commence in late 2020.
Blunting the impact of medical sharps
The company has applied the same
foundational goals of sustainability
and innovation to the medical waste
industry through its Med-X Healthcare
Solutions brand. Shred-X and Med-X
have continued to invest in technology
and innovation that support the
reduction of landfill and promote
recycling, even during the peak of the
COVID-19 pandemic.
In fact, Med-X operations ramped up
during the pandemic, spotlighting the
company’s goal to invest in robotic
technology to encourage human
contactless waste disposal and
recovery. Traditionally clinical and
sharps waste has been problematic
with landfill; however Med-X is now
investigating the recovery of small
single-use containers by separating
them at source and using automated
mechanical separation at its medical
waste facilities. Single-use containers
will be milled following treatment
and sent to local plastic moulding
companies for reuse.
This should mean the clinical waste
segment represented by single-
use sharps would be almost fully
recoverable and diverted from landfill.
It is expected that this recovery system
would reduce landfill volumes for
medical waste by over 28%.
Helping Australia hit its
packaging targets
By 2025, Australia has
committed to National
Packaging Targets
ensuring 100% of
packaging is either
reused, recycled or
repurposed. This is in
line with the National
Food Waste Strategy,
that is committing to
halving Australia’s
food waste by 2030.
50,000
tonnes
of paper diverted from
landfill each year
28%
projected
reduction in landfill volumes
for medical waste
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freightways.co.nzSustainable Development Goals

Reducing the impact of single-use
plastics is part of how we approach
SDG13: Climate Action
The majority of ‘single-use plastics’
that are either used or passed onto
customers by Freightways’ New
Zealand businesses fall into 2 key
categories: i. Express Packs (courier
satchels) – that are sold to customers
to carry and protect products
and documents for NZC, DX Mail,
Castle Parcel, Post Haste and MSL
customers; ii. ‘Mother Bags’ (freight
consolidation bags) – these are clear
plastic bags that are used to group
satchels together for line haul freight
movement. Currently, Freightways
New Zealand uses or passes on
around 135,000 kgs of single-use
plastic – approximately 50,000 kgs
of which are ‘mother bags’.
Right now we have no choice but to
use plastic substrates. Our packaging
needs to be tough enough to not
puncture or fall apart in use or in
transit. Most existing bio/compostable
plastics either don’t have the
performance we need or represent
risks in terms of contamination of the
‘soft-plastics recycling process’.
At the same time, we are highly
aware of the environmental impacts
of single-use plastics. Reducing the
amount of plastic we use offers three
big business wins: we reduce the
amount of plastic taken to landfill; we
reduce our overall emissions, and we
reduce fossil fuel use.
Eliminating single-use plastics
completely is a long-haul ambition, but
we are making significant progress.
We have reduced the amount of plastic
required to make our courier satchels
by more than 30% over recent years,
and we offer a wide range of packaging
choices so our customers can select
the right size to avoid waste.
• Increase the recycled content in our
plastic packaging.
Getting more recycled material into
the substrate and getting more use
from the substrate we do use,
are our priorities. Recycled material
comes from industry waste more
than domestic waste. So we want
to make sure that where we do
use single-use plastics, the plastics
themselves are made from recycled
materials rather than virgin,
fossil-fuel-based materials.
Over the past 12 months we have been
working hard to deliver on our four
commitments with a range of projects
across the Group:
1. Recycled Content Satchels –
we are progressively introducing
locally made satchels where 80%
of the plastic used is coming from
packaging previously sent to landfill.
We are currently developing and
field-testing the new material to
ensure our satchels are tough
enough to cope with the wide range
of products our customers ship.
2. Reusable Packaging - we are
converting our freight consolidation
bags (mother bags) to a recyclable,
reusable bag design. During our
sorting process, we consolidate
satchels going to the same town or
city to make shipping more efficient.
The freight consolidation bags are
central to this process. These new
bags that we are trialling, will be
able to be used again and again,
avoiding a significant amount
of waste.
3. Bio-Based Plastic Packaging –
we have identified opportunities
for bio-based plastic materials
made from natural resources
such as sugar cane. We are now
investigating using two different
forms of bio-based plastics: one
is compostable at home or in
industrial facilities, and the other
can be recycled along with standard
plastics. The technology doesn’t
yet make these materials suitable
for all our customers, however,
we are working to commercialise
the new packaging.
Right now we have various trials
underway within the NZC network.
Once we have proven viability, these
products will then be rolled out across
the Freightways Group. Our goals
are to replace all our single-use
plastics with recyclable, reusable and
compostable plastics by 2025 and
to continue to reduce the amount of
virgin material we consume relative to
revenue. We intend to have measures
in place to report on our progress
within two years.
80%
of the plastic used is coming
from packaging previously
sent to landfill
We have a Greenpac™ range made
from recycled paper and card.
We are also partnering with Soft
Plastic Recycling to increase recycling
of soft plastics in New Zealand. That
scheme currently ensures that over
60% of Kiwis have access to soft plastic
recycling within 20km of their home.
Looking forward, we are working to
four principles:
• Eliminate the plastics we don’t need;
• Reduce the amount of virgin plastic
we use and ensuring any plastics we
do use are reusable, recyclable or
compostable by 2025;
• Circulate the plastic produced as
much as possible, by significantly
increasing the amounts of plastics
we reuse or recycle and have made
into new packaging or products; and
30%
We have reduced the amount
of plastic required to make our
courier satchels by more than 30%
Transparency and integrity underpin
our commitment to SDG16:
Peace, justice and strong institutions
Increasingly, companies are under
pressure to reveal more of their
internal workings than ever before.
Consumers want to feel they are
buying products and services from
companies that behave well. That
same expectation is also present in
business-to-business interactions
as organisations look to work with
other businesses that reflect their
sustainability stances and values.
At Freightways, we’ve always prided
ourselves on being straight up, leading
by example and doing the right thing.
Our history is one of standing up for the
things we believe in, and making calls
where we believe they need making.
Our Pricing for Effort is an example
of how we chose to make a stand for
our contractors.
In recent years, we’ve evolved our
Annual Reports to offer a higher level
of disclosure as part of our sharing our
stories and intentions with regulators,
investors, customers, communities and
other stakeholders. We’ve also offered
investors and analysts unfettered
access to our senior executives.
Looking ahead, we plan to introduce
concrete measures around things like
our ESG initiatives so that everyone
can see how our actions align with our
intentions. Quantifying our progress in
areas such as waste reduction, plastics
and of course carbon not only aligns
with where we think disclosure is
heading generally. It’s also part of our
commitment to ensuring we remain
open and honest about the success of
all our initiatives – including those that
are challenging and for which there are
no easy or immediate answers.
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freightways.co.nzSustainable Development Goals

Using data for customers
Every footprint or scan on a package is
a data point we can use to understand a
parcel’s journey, and ultimately deliver
better service to our customers.
Using data to re-think
our customer journeys
“ Accurate item data, combined
with information on cube/
weight and revenue per item,
enables us to understand our
margins by customer, route,
service type and brand.”
Our Express Package Business
Intelligence team combines data-
crunchers and graphic designers.
They work to understand the flow
of data we collect, and how to
effectively communicate insights
with simple, interactive dashboards
and infographics.
Leveraging our investment data lakes
and the Microsoft PowerBI platform is
all about delivering actionable insights
to our sales and operations teams
to improve business productivity and
customer journeys. This investment
in data has given us the ability to
completely re-think the way we
measure and improve our business
for the future.
Accurate item data, combined with
information on cube/weight and
revenue per item, enables us to
understand our margins by customer,
route, service type and brand. This data
also gives valuable insights into our
changing business mix and provides
predictive analytics to help our teams
forecast demand on a monthly, weekly
or daily basis.
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Using data for customersfreightways.co.nz

Key community initiatives
Kidsline (part of Lifeline)
Keep New Zealand Beautiful
The Hearing House (Loud Shirt Day)
Beanies for Babies
Cancer Society
Auckland Kidney Society
McGrath Foundation
Clontarf Foundation
Child Cancer Foundation
KidsCan Shoes for Kids
Duffy Books in Schools
New Zealand Breast Cancer
Foundation
Rotary St Johns
Standing with
communities
Supporting young Kiwis to hear
This year marks 15 years of partnership
between New Zealand Couriers (NZC) and
The Hearing House. The Hearing House’s
amazing team of medical specialists
and committed volunteers are dedicated
to teaching children with hearing loss
to listen and speak. Through cochlear
implant and hearing technologies, along
with appropriate support and therapy,
thousands of Kiwis have been able to
live independent lives and reach their
full potential, in ways that were simply
impossible for other generations.
The team at NZC contributes to helping
young Kiwis hear and talk in a whole
range of ways: from hands-on support
moving fundraising items nationwide
during Loud Shirt Day, to hosting
youngsters at our workplaces and
encouraging our branch staff to bring
out their ‘Loudest Shirts’.
To learn more, go to
www.hearinghouse.co.nz
Helping those affected by the bushfires
The Australian Bushfires in late 2019
raged on for over 200 days into the
early months of 2020. The crisis made
international headlines with over 18
million hectares of land destroyed
– more than the size of some small
countries – and more than 2000 homes
lost. The human cost included more than
30 fatalities. More than a billion animals
are also thought to have perished.
2
raised by Shred X for the bushfire
initiative via a share of national
sales over a period of one month
$20k
donation which was shared equally
between WIRES and Wildlife Victoria.
In addition to the work around the
bushfires, Shred-X have supported a
variety of community initiatives over
FY19/20, often through a combination
of company sponsorship and seeking
support from our employees through
their own fundraising activities and
time. Our team is genuinely invested in
supporting worthy and charitable causes
and it is heartwarming to be part of this
generous giving company culture. Other
fundraising and community initiatives we
supported this year included:
• NBCF (National Breast Cancer
Foundation)
• Jeans for Genes
• Movember
• Convoy For Kids
• Special Children’s Christmas Party
Encouraging the potential of young
Aboriginal men
At TIMG Australia, we celebrate the rich
cultural diversity of our workforce. By
partnering with the Clontarf Foundation,
we look to make our business even
more inclusive and representative of the
communities that we work and live in.
Australian and global support of
the disaster was immense. From
international celebrities, corporate
philanthropists, listed companies and
small businesses, to individual members
of the public, $500 million was raised in
support of the ‘Firies’, the Australian Red
Cross and Wildlife groups affected by the
bushfire crisis.
Shred-X began planning our bushfire
fundraising campaigns at the start of
2020. After some research, we chose to
align our company fundraising efforts
with two wildlife organisations in the
areas that were most fire-affected -
one in Victoria (Wildlife Victoria) and
the other in NSW (WIRES). We ran a
marketing campaign as well as an
internal/ staff fundraising initiative for
wildlife requiring immediate veterinary
care and ongoing support as a direct
result of their injuries.
The marketing sponsorship campaign
focused on donating a percentage
of our national Shred-X sales over a
period of one month, while a concurrent
staff fundraising initiative included the
opportunity for Med-X and Shred-X
employees to make a personal
contribution to the wildlife funds.
We are proud to have raised over $20,000
for the bushfire initiative, making a
The Clontarf Foundation exists to
improve the education, discipline,
self-esteem, life skills and employment
prospects of young Aboriginal men
and to equip them to participate more
meaningfully in society. As a corporate
partner of the Foundation, we look to
invest in the “capacity building” of young
Aboriginal men, empowering them to
develop as individuals who will in turn,
bring their positive energies and skills to
their communities.
The current health pandemic has
temporarily slowed efforts to implement
our mentorship programme at TIMG,
but we continue to communicate with
Clontarf on ways and means to articulate
our mutual commitment.
Last November, TIMG was invited to the
Fox Sports Oz Tag Carnival in Sydney
as a corporate partner. There we joined
the likes of Qantas Airways, Fox Sports
Australia, National Rugby League (NRL)
and QBE, meeting and spending time
with Clontarf students on and off the
field. Sport and communication were
the overriding themes for this highly
successful event and TIMG will definitely
be attending the next Carnival.
To learn more about Clontarf Foundation
please visit:
www.clontarf.org.au
Companywide Freightways
supports 13 key community
initiatives, across New Zealand
and Australia.
13
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and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzCommunity

Freightways is the lead partner for the
KidsCan ‘Shoes for Kids’ programme.
This programme is designed to help
disadvantaged Kiwi kids get to and
through the school gates safely.
Shoes are not only considered a
required part of the school uniform but
without them many children are unable
to participate fully in school activities
and excursions. The ‘Shoes for Kids’
programme breaks down these barriers
and enables children to become more
engaged in their learning.
The partnership also provides
Freightways the opportunity to give
back to communities in a variety
of ways.
A week prior to level 4 lockdown,
we again sponsored the Rotary of St
Johns annual Charity Golf Day. A great
turnout saw us raise much-needed
funds for KidsCan. Thanks to all our
customers and suppliers for their
support in making the day a success.
Can do for
KidsCan
“ The partnership
also provides
Freightways
the opportunity
to give back to
communities in a
variety of ways.”
When lockdown hit, children who would
usually have received a guaranteed meal
through their school were no longer
getting this vital meal every day. KidsCan
identified the need to reach these
families, and the Freightways team
was on board to help. We mobilised sales
team members to pack food parcels
and utilised our network to deliver
the food parcels to homes across the
North Island.
With schools coming fully back to
normal for term 3, our team at North
Harbour provided KidsCan with
warehousing space to store the required
food supplies in preparation for delivery
out to schools nationwide.
Our assistance also extends through to
one of our key customers. Countdown is
a partner for the KidsCan Early Childhood
Programme, which is designed to help
New Zealand’s most vulnerable kids get a
great start to their education. Each week,
our contractors deliver Early Childhood
Centres (ECE) a menu and ingredients for
five fresh meals.
www.kidscan.org.nz
KidsCan partnership
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NOW Couriers
NOW is Freightways’ ‘sand-box brand’.
It has a key role to play in introducing
and testing customer innovations
before they are more broadly adopted
by the wider business. This reliable,
urban delivery service is redefining
customer expectations in a busy,
dispersed and time-sensitive market.
NOW’s commercial advantage lies in
their ability to combine a guaranteed,
same-day service across much of
Auckland at a highly competitive price
point. In fact, the NOW offer bridges the
gap between two traditional offerings:
the more economical hub-and-spoke
arrangement, and the customised
point-to-point service.
NOW knows Auckland better than anyone.
This year we revamped the brand to reflect its
modern, responsive character and to position
NOW as an innovator offering fast, local
services without point-to-point prices.
NOW changes
the rules
“ The NOW Same Day
solution really kicked into
gear during COVID-19
level 3 as a valuable
option for customers
who needed to get
perishable and urgent
items across Auckland.”
To achieve our Guaranteed Auckland
Same Day service, we partnered with
CoreLogic, New Zealand’s leading
address verification service provider.
Geo-coding our network is enabling
us to set predetermined pickup times
for deliveries within set Auckland
geographical boundaries, so that
collections can be completed by a
predetermined time.
The NOW Same Day solution really
kicked into gear during COVID-19
level 3. It was a valuable option
for customers who needed to get
perishable and urgent items across
Auckland from suppliers who were
only able to trade online because their
physical stores were shut.
The new NOW website will link
to a Parcel Management Portal
for both senders and receivers,
giving customers at both ends of a
transaction access to key functionality.
The new website will mean customers
have access to a simplified tracking
experience and the option to use
simple tracking IDs. We have every
confidence it will transform our
quoting and sales enquiry process.
More importantly, the new site will
support web integration across
all the Express Package brands at
Freightways; because once it has
been developed, the new technology
will be fully reusable by everyone.
It’s another example of how innovation
hub NOW is leading Freightways’ wider
moves to achieve superior digital
customer experiences.
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Freightways Limited
and its subsidiaries
NOW Couriers

Our Board
Mark Verbiest
Chairman LLB, CF Inst D
Mark Rushworth
BE (Hons), MEM
Kim Ellis
BE (Hons), BCA (Hons)
Andrea Staines OAM
BEcon, MBA (Michigan), AICD Fellow
Malcolm Grimmond joined the Board as a non-executive director in September 2020.
Andrea Staines has announced that she will retire from the Board on 29 October 2020 at the conclusion of the Annual Shareholders Meeting.
Peter Kean
PMD Harvard
Abby Foote
LLB (Hons), BCA, CF Inst D, INFINZ (Cert)
Our leadership team
Mark Troughear
Chief Executive Officer
BMS, Waikato University
Matthew Cocker
Chief Information Officer
PhD, Georgetown University
Steve Wells
General Manager
Express Package Division
Mark Royle
Company Secretary and Chief Financial
Officer to 20 April, 2020
B.BUS (Acc), CA
Neil Wilson
General Manager
Freightways
Stephen Deschamps
Company Secretary and Chief Financial from
20 April, 2020. B Poli Sci, M Fin, (Institut d’Etudes
Politiques, Paris) MBA, Master in Finance
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and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
freightways.co.nzOur Board & leadership team
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
47
freightways.co.nz

Directors’ report
Mark Verbiest LLB, CF Inst D.
Mark was appointed a Director in February 2010 and
Chairman in October 2018. He is a professional director with
a strong working knowledge of technology and technology-
related businesses, as well as having extensive capital
markets experience. A lawyer by training, with widespread
corporate legal experience in private practice, he spent
over seven years on the senior executive team of Telecom
NZ through until mid-2008, where among other things he
had executive accountability for two business units. Mark
is currently Chairman of Meridian Energy Ltd and Willis
Bond Capital Partners Ltd (retiring from that Board on 30
September 2020), a director of ANZ Bank New Zealand
Limited and a member of the Advisory Board of NZ Treasury.
Kim Ellis B.CA, B.ENG
Kim was appointed a Director in August 2009. He spent
28 years in chief executive roles in a number of sectors,
including 13 years as Managing Director of Waste
Management NZ Limited until its sale in 2006 to Transpacific
Industries Pty Limited, and has developed businesses in
both New Zealand and Australia. Kim is now a professional
director working with both private and listed companies.
Kim is currently a director and the Chairman of NZ Social
Infrastructure Fund Limited, Metlifecare Limited and
Green Cross Health Limited. He is also a director of Port
of Tauranga Limited, FSF Management Company Limited
and Ballance Agri-Nutrients Limited and an advisor to
Envirowaste Services Limited.
Abby Foote LLB (Hons), BCA, CF Inst D, INFINZ (cert)
Abby was appointed a Director in June 2018. She is a
professional director with over 12 years’ governance
experience, with qualifications in both law and accounting.
Abby has experience in a range of senior management,
finance and legal roles, with a focus on corporate finance and
commercial transactions. Abby is currently the Chair of Z
Energy Limited and a director of TVNZ and Sanford Limited.
Peter Kean PMD Harvard
Peter was appointed a Director in July 2016. He brings to
Freightways many years of senior executive experience
with the Lion group of companies in both New Zealand and
Australia. Peter’s last executive roles were as Managing
Director of Lion Nathan New Zealand and Managing Director
of Lion Dairy and Drinks, based in Melbourne. Peter retired
from Lion in 2014 and has since developed his career in
governance. Peter is also a director of Sanford Limited and
is involved in a number of private companies both in New
Zealand and in Australia.
Directors
The names of the Directors of the Company in office at the date of this report are:
The Directors of Freightways Limited (Freightways) resolved to submit the following report with respect to the financial position
of the Group as at 30 June 2020 and its financial performance and cash flows for the year ended on that date.
Mark Rushworth BE(Hons), MEM
Mark was appointed a Director in September 2015.
He has extensive experience in the technology sector,
with a decade’s governance experience, predominantly
in the high tech and innovation space. An electrical engineer
by training, with widespread operations and marketing
experience, he spent four years on the senior executive team
of Vodafone NZ, where among other things he had executive
accountability for the fixed-line business and as Director
of Marketing. Mark previously served as chief executive of
Pacific Fibre, ihug and financial services company, Paymark
Limited. Mark is currently Chief Executive Officer of private
equity-owned UP Education and a director of a number of
private companies.
Andrea Staines OAM, BEcon, MBA (Michigan), AICD Fellow
Andrea was appointed a Director in August 2018. Based in
Australia, she has 12 years’ governance experience with an
undergraduate degree in Economics, and an MBA focused on
financial analysis and strategy. Andrea’s executive experience
was mostly in airlines, including American Airlines in
Dallas, and Qantas Group in Sydney. During her last five
years at Qantas, she co-launched international subsidiary,
Australian Airlines (mark II), as Chief Commercial Officer,
becoming CEO soon after launch. Earlier roles at Qantas
included running Global Revenue Management. Andrea has
chaired multiple Board Committees, including Audit & Risk,
Remuneration & Nomination, and temporary Committees
with a business unit or project focus. Andrea is currently a
director of Australian entities SeaLink Travel, UnitingCare,
Acumentis and Australia Post (where she is Deputy Chair).
The Board has determined for the purposes of the NZX
Listing Rules that, as at 30 June 2020, Mark Verbiest, Kim
Ellis, Abby Foote, Peter Kean, Mark Rushworth and Andrea
Staines are independent Directors.
Board skill matrix
Deep Expertise (NED)
Mark
Verbiest
Kim EllisAbby FootePeter Kean
Mark
Rushworth
Andrea
Staines
Governance
NZ Listed Market
Audit and Risk
Business Operations at Scale
International Transport, Logistics,
Sector Aligned Expertise
Marketing/Brand/Sales
IT Platforms and Digital Innovation
Australian Market
Health & Safety
Entrepreneurial
2020
$000
2019
$000
Operating revenue630,940615,692
Operating profit before interest, income tax and amortisation of intangibles88,19799,133
Amortisation of intangibles(3,477)(2,071)
Profit before interest and income tax84,72097,062
Net interest and finance costs
(18,420)(9,566)
Profit before income tax66,30087,496
Income tax(18,925)(24,119)
Profit for the year attributable to the shareholders47,37563,377
Consolidated result for the year
The Board focuses on governance, strategy and the oversight of the performance of the different Freightways businesses and
brands. The six Directors bring both proven experience in governance and a strong background in business to their decision
making. Together, they provide the wide-ranging skills needed to ensure the Board has the expertise to set and approve
strategic direction, make senior management appointments, monitor performance, manage risk and oversee our many
stakeholder relationships. The Board Skill Matrix below sets out the skills of each Director against the range of expertise
Freightways requires to succeed.
Principal activities
The principal activities of the Group during the year ended 30 June 2020 were the operation of express package & business mail services
and information management services.
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and its subsidiaries
Annual Report Financial Year
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Financial Statementsfreightways.co.nz

Directors’ report
Group
Fees (per annum)
PositionNote
2020
$
2019
$
Board of DirectorsChair(1)165,000160,000
Member - NZ93,00085,000
Member - NZ93,00085,000
Member - AU(2)98,90093,400
Audit & Risk CommitteeChair(1)104,000100,000
People & Remuneration CommitteeChair(1)100,00092,500
Committee work pool (if required)42,14547,000
Total annual fee pool limit(3)696,045662,900
Notes:
(1) Inclusive of Board member fee
(2) Based on A$93,000 (2019: A$85,000)
(3) Approved by shareholders at Annual Shareholders Meeting in October
Approved remuneration of directors (effective 1 November)
Directors holding office during the year were:
Parent:
Mark Verbiest (Chairman)
Kim Ellis
Abby Foote
Peter Kean
Mark Rushworth
Andrea Staines
Subsidiaries:
Mark Troughear (all Freightways subsidiaries)
Mark Royle (all Freightways subsidiaries)
Stephan Deschamps (Parcelair Limited only since 25 May 2020)
Colin Neal (Big Chill Distribution Limited only)
Mark Shapland (Big Chill Distribution Limited only)
Mark Royle handed the CFO role over to Stephan Deschamps, effective 20 April 2020, but remained a Director of all Freightways
Limited subsidiaries until 30 June 2020.
Remuneration received by directors
2020
$
2019
$
Directors of Freightways (Parent company)
Mark Verbiest155,083140,000
Kim Ellis92,50092,500
Abby Foote97,46795,139
Peter Kean85,68385,000
Mark Rushworth85,68385,000
Sue Sheldon (resigned 25 October 2018)-50,753
Andrea Staines90,56877,735
Total non-executive Directors606,984626,127
Directors of Group subsidiaries only
Mark Troughear - Freightways Chief Executive Officer (CEO)843,483872,912
Mark Royle - Freightways Chief Financial Officer (CFO)*550,673582,585
Colin Neal**--
Mark Shapland**--
Total Directors of Group subsidiaries1,394,1561,455,497
Total Group2,001,1402,081,624
* Mark Royle handed the CFO role over to Stephan Deschamps, effective 20 April 2020, but remained a Director of all
Freightways Limited subsidiaries until 30 June 2020.
** Non-executive Director of Big Chill Distribution Limited only
Directors’ report
The remuneration of the CEO and CFO includes the incentive payments made during the year ended 30 June 2020 in respect
of the two previous six-month performance periods (1 January to 30 June 2019 and 1 July to 31 December 2019). No amount
is included above in respect of incentive payments for the period 1 January to 30 June 2020, as these were paid in August
2020. Remuneration of the CEO and CFO comprises a fixed remuneration package representing 70% and 78% of their total
remuneration, respectively, and an ‘at risk’ portion representing 30% and 22%, respectively, payable on achievement of short-
term financial objectives. They also participate in the Freightways Senior Executive Performance Share Plans described in Note
25 of the Financial Statements by way of an annual allocation of performance share rights (PSRs) equivalent to 32% and 25%,
respectively of their fixed remuneration, but otherwise on the same terms and conditions as other Freightways executives.
The PSRs have a 3-year vesting period and are subject to the achievement of financial hurdles, as described in Note 25. The
Company’s Remuneration Policy can be found at:
https://www.freightways.co.nz/about/corporate-governance/.
Remuneration of other officers
Fixed remuneration of other officers, not being directors, representing a range from 76% to 78% of their total remuneration, is
benchmarked to market and consists of base salary and matched Kiwisaver contributions up to a maximum of 3%. The officers
participate in an at-risk short-term incentive (STI) scheme, representing a range from 22% to 24% of their total remuneration,
that reflects the achievement of predetermined company profit levels and individual performance objectives aligned to business
strategy and goals. The officers also participate in the Freightways Senior Executive Performance Share Plan (the ‘Plan’) described
in Note 25 of the Financial Statements by way of an annual allocation of PSRs. The PSRs have a 3-year vesting period and are subject
to the achievement of financial hurdles, as described in Note 25. Both the STI scheme and Senior Executive Performance Share Plan
are variable, performance-based incentives and are only awarded if specific financial and non-financial performance hurdles are met,
and at the discretion of the Board. The Company’s Remuneration Policy can be found at:
https://www.freightways.co.nz/about/corporate-governance/.
5051
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

Group
20202019
$100,000 – $109,9994445
$110,000 – $119,9995346
$120,000 – $129,9993129
$130,000 – $139,9992429
$140,000 – $149,9991710
$150,000 – $159,9991018
$160,000 – $169,9991313
$170,000 – $179,9991310
$180,000 – $189,999912
$190,000 – $199,99967
$200,000 – $209,999126
$210,000 – $219,99924
$220,000 – $229,99964
$230,000 – $239,99948
$240,000 – $249,99932
$250,000 – $259,99942
$260,000 – $269,99923
$270,000 – $279,99911
$280,000 – $289,999-1
$290,000 – $299,99911
$300,000 – $309,99942
$310,000 – $319,999-1
$320,000 – $329,99912
$330,000 – $339,9991-
$340,000 – $349,999-1
$350,000 – $359,9991-
$370,000 – $379,99913
$420,000 – $429,9992-
$440,000 – $449,999-1
$450,000 – $459,999-1
$550,000 – $559,9991-
Directors’ report
Remuneration of employees
The number of employees, not being directors of Group subsidiaries, within the Group receiving annual remuneration and benefits
above $100,000 are as indicated in the following table:
Directors’ report
Fully-paid ordinary shares
BeneficiallyNon-beneficially
Director
Mark Verbiest10,000-
Kim Ellis-50,000
Abby Foote-14,363
Peter Kean51,500-
Mark Rushworth-18,000
Andrea Staines--
Entries in the register of directors’ interests
The Register of Directors’ Interests records that the following directors of Freightways Limited have an equity interest in the Company.
Freightways Limited shares
At balance date Directors of Freightways Limited held the following number of equity securities in the Company:
5253
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

Directors’ report
Number$000
NoteAcquired
(Disposed)
Cost
(Sale)
Colin Neal
Ordinary shares in Big Chill Distribution Limited held as trustee of the Colin
Neal Family Trust sold to Freightways Express Limited on 1 April 2020(ii)(95,000)See note
Mark Shapland
Beneficial ownership of ordinary shares in Big Chill Distribution Limited
sold to Freightways Express Limited on 1 April 2020(ii)(1,900)See note
Ordinary shares in Big Chill Distribution Limited held as trustee of the
Shapland Family Trust sold to Freightways Express Limited on 1 April 2020(ii)(93,100)See note
Notes:
(ii) On 1 April 2020, Freightways Express Limited acquired all 198,000 ordinary shares in Big Chill Distribution Limited
from the various shareholders in that company under a sale and purchase agreement dated 30 October 2019, for an
aggregate consideration of $114,553,000 plus a deferred amount based on performance of Big Chill Distribution Limited.
In respect of the initial amount of $114,553,000, 2,793,296 ordinary shares in Freightways Limited were issued to Colin
Ashley Neal and Burley Attwood Trustees (No. 11) Limited and 2,793,296 ordinary shares in Freightways Limited were
issued to Mark Shapland and YRW Trustees 2011 Limited, in each case at an issue price of $5.37 per share for an aggregate
consideration of $29,999,999. The aggregate balance of $84,553,000 was paid to the vendors in cash.
The following table shows transactions recorded in respect of securities acquired or disposed of by Directors of Big Chill
Distribution Limited during the year ended 30 June 2020:
Directors’ and officers’ liability insurance
Deeds of indemnity have been granted by the Company in favour of the Directors of the Company and its subsidiaries, to the fullest
extent permitted by the Companies Act 1993. In accordance with the deeds of indemnity, the Company has insured all its Directors and
the Directors of its subsidiaries against liabilities to other parties (except the Company or a related party of the Company) that may
arise from their positions as Directors. Freightways’ liability insurance also covers Officers of the Group. The insurance does not cover
liabilities arising from criminal actions.
For and on behalf of the Board this 24th day of August 2020.
Mark Verbiest
Chairman
Abigail Foote
Director and Chair of the Audit & Risk Committee
Financial
statements
Contents
56 Independent auditor’s report
62 Income statement
63 Statement of comprehensive income
64 Statement of changes in equity
65 Balance sheet
66 Statement of cash flows
67 Notes to the financial statements
118 Shareholder information
120 Corporate governance statement
Number$000
NoteAcquired
(Disposed)
Cost
(Sale)
Mark Rushworth
Non-beneficial ownership in ordinary shares acquired on 6 March 202010,00075
Abby Foote
Non-beneficial ownership in ordinary shares acquired on 1 April 2020(i)3632
Notes:
(i) Allocation of ordinary fully-paid shares under the Freightways Dividend Reinvestment Plan.
The following table shows transactions recorded in respect of securities acquired or disposed of by Directors of Freightways
Limited during the year ended 30 June 2020:
55
freightways.co.nz
54
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statements

Independent auditor’s report
To the shareholders of Freightways Limited
PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz

Independent auditor’s report
To the shareholders of Freightways Limited
We have audited the financial statements which comprise:
●the balance sheet as at 30 June 2020;
●the income statement for the year then ended;
●the statement of comprehensive income for the year then ended;
●the statement of changes in equity for the year then ended;
●the statement of cash flows for the year then ended; and
●the notes to the financial statements, which include a summary of significant accounting
policies.
Our opinion
In our opinion, the accompanying financial statements of Freightways Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of
the Group as at 30 June 2020, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the 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 International
Code of Ethics for Assurance Practitioners (including International Independence Standard) (New
Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards) issues by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of agreed upon procedures over the poll
for the shareholder resolutions at the Annual General Meeting and Executives’ remuneration
benchmarking. The provision of these other services has not impaired our independence as auditor of
the Group.
Independent auditor’s report
To the shareholders of Freightways Limited
PwC
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment assessment of goodwill and
indefinite lived brands, including the impact
of COVID-19
The Group has goodwill of $301.3 million and
brands of $118.3 million as disclosed in Note
17. The Group is required to perform an
annual impairment assessment of both
goodwill and brands, which are accounted for
as indefinite life intangible assets.
This is an area of focus for our audit due to the
value of these assets on the balance sheet and
the inherent judgement in assessing these
assets for impairment.
Management prepared an impairment
assessment for the Group based on the latest
forecasts for each Cash Generating Unit (CGU)
which included considerations relating to the
impact of COVID-19. The recoverable amount
of each CGU has been determined based on
the greater of its value-in-use and its fair value
less costs of disposal.
The key assumptions used by management in
the impairment assessment are included in
Note 17 of the financial statements.
As detailed in Note 17, as a result of the
impairment assessments the Directors have
recognised a total impairment expense of $5.2
million in goodwill and $1.6 million in brands.
Our audit procedures included aspects of the following
depending on the level of headroom and sensitivity to
impairment of each CGU:
●Considered the appropriate determination of each CGU
●Obtained an understanding of the current and forecast
outlook for the business, including consideration of, and
adjustments made for, the potential impact of COVID-19
and management’s basis for determining the key
assumptions in preparing the forecast cash flows
●In conjunction with our auditor’s valuation expert,
assessed the appropriateness of key assumptions by
performing the following:
−assessed the reliability of management’s
budgeting process by understanding the
differences between the historical and
budgeted performance in previous years;
−benchmarked key assumptions, to historic
performance and market data where relevant
and available.
●Tested the mathematical accuracy of the models
●Considered whether disclosures, including the
completeness of key assumptions and the impact of
reasonably possible changes in key assumptions that
may result in a CGUs carrying amount exceeding its
recoverable amount, are appropriate.
5657
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

PwC
Key audit matter How our audit addressed the key audit matter
Accounting for Big Chill Distribution
acquisition
The Group acquired Big Chill Distribution on
the 1 April 2020 as disclosed in Note 33. We
consider this acquisition to be a key audit
matter due to the significance of the
acquisition to the Group and the significance
of the judgements involved.
Management applied judgement in
determining the fair value of the future earn-
out payment which makes up $27.2 million of
the total purchase consideration.
Management has also applied significant
judgement in completing a provisional
assessment of the fair value of the assets and
liabilities acquired, including recognising the
following separately identifiable intangible
assets:
●Brand of $5.5 million
●Non-compete agreement with the
founders/directors of $1.9 million
●Customer relationships of $40.9 million.
We audited the accounting treatment of the acquisition by:
●Reviewing the Sale and Purchase Agreement to
understand the key terms and conditions
●Testing the value assigned to the Freightways shares
that were issued as part of the total consideration by
comparing it to the market value of Freightways shares
at the transaction date
●Gaining an understanding of the valuation approach
and methodology undertaken by management to
identify separately identifiable intangible assets and
value the assets and liabilities acquired
●Considering whether identification and recognition of
intangible assets was consistent with the requirements
of the accounting standards
●Engaging our auditor’s valuation expert to:
a)evaluate management’s assumptions regarding
the calculation of the deferred payment
b)assess the valuation approach and methodology
undertaken by management in relation to the
brand, customer relationships, non-compete
agreement and the calculation of the deferred
payment
c)evaluate management’s assumptions regarding
the valuation of the brand, customer relationships
and non-compete agreement.
●Considering whether the relevant disclosures were
appropriately made.
Independent auditor’s report
To the shareholders of Freightways Limited
PwC
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement.
Overall Group materiality: $4.15 million, which represents an average of
approximately 5% of profit before tax over the past three years.
We chose an average of profit before tax over the last three years as the
benchmark because, in our view, profit before tax is the benchmark
against which the performance of the Group is most commonly measured
by users and is a generally accepted benchmark. We chose to use an
average of the last three years because of lower sales in the second half of
the year ended 30 June 2020 related to the COVID-19 pandemic and the
impact of this on the Group’s results.
As indicated above, we have determined that there are two key audit
matters:
●Impairment assessment of goodwill and brands, including the impact
of COVID-19
●Accounting for Big Chill Distribution acquisition
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industries in which the Group operates.
We conducted full scope audit work at four divisions which make up 68% of external revenue and 86%
of profit before tax in New Zealand and Australia. The remaining divisions in the Group were not
considered individually significant and depending on our risk assessment were subject to other audit
procedures such as analytical review, enquiry, testing key balances or reconciliations.
Independent auditor’s report
To the shareholders of Freightways Limited
5859
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

PwC
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the financial statements does not
cover the other information included in the annual report and we do not and will not express any form
of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard, except that not all other
information was available to us at the date of our signing.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the 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 financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible 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 financial statements
Our objectives are to obtain reasonable assurance about whether the 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 (NZ) and ISAs 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 financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Independent auditor’s report
To the shareholders of Freightways Limited
PwC
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which 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 and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.

The engagement partner on the audit resulting in this independent auditor’s report is Leopino (Leo)
Foliaki.
For and on behalf of:
Chartered Accountants
24 August 2020
Auckland
Independent auditor’s report
To the shareholders of Freightways Limited
6061
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

Group
Note
2020
$000
2019
$000
Operating revenue3 & 4630,940615,692
Other income7-1,252
Transport and logistics expenses(253,443)(241,907)
Employee benefits expenses(168,017)(174,537)
Occupancy expenses
(5,143)(28,912)
General and administration expenses(59,668)(58,119)
Other expenses7-(1,252)
Non-recurring items5 & 7(9,598)2,354
Operating profit before interest, income tax, depreciation
and software amortisation and amortisation of intangibles135,071114,571
Depreciation and software amortisation5(46,874)(15,438)
Operating profit before interest, income tax and amortisation
of intangibles88,19799,133
Amortisation of intangibles5(3,477)(2,071)
Profit before interest and income tax84,72097,062
Net interest and finance costs5(18,420)(9,566)
Profit before income tax66,30087,496
Income tax:
Tax applicable to profit before income tax(20,355)(24,119)
Tax benefits a result of tax law change1,430-
Total income tax6(18,925)(24,119)
Profit for the year 47,37563,377
Profit for the year is attributable to:
Owners of the parent47,33263,367
Non-controlling interests4310
47,37563,377
Earnings per share28
Basic earnings per share (cents)30.040.8
Diluted earnings per share (cents)29.940.7
NB: All revenue and earnings are from continuing operations.
The above Income Statement should be read in conjunction with the accompanying notes.
Income statement
For the year ended 30 June 2020
Group
Note
2020
$000
2019
$000
Profit for the year (NPAT)47,37563,377
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations241,475(2,210)
Cash flow hedges taken directly to equity, net of tax241,826328
Total other comprehensive income after income tax3,301(1,882)
Total comprehensive income for the year 50,67661,495
Total comprehensive income for the year is attributable to:
Owners of the parent50,63361,485
Non-controlling interests4310
50,67661,495
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
The Board of Directors of Freightways Limited authorised these financial statements for issue on the date below.
For and on behalf of the Board this 24th day of August 2020.
Mark Verbiest
Chairman
Abigail Foote
Director
Statement of comprehensive income
For the year ended 30 June 2020
6263
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

GroupContributed
equity

$000
Retained
earnings

$000
Cash flow
hedge
reserve
$000
Foreign
currency
translation
reserve

$000
Non-
controlling
interests


$000
Total
equity

$000
Balance at 1 July 2019125,260140,861(4,229)(3,669)-258,223
Profit for the year-63,367--1063,377
Exchange differences
on translation of foreign
operations---(2,210)-(2,210)
Cash flow hedges taken
directly to equity, net of tax--328--328
Total Comprehensive
Income-63,367328(2,210)1061,495
Dividend payments-(47,002)---(47,002)
Acquisition of non-
controlling interests----114114
Shares issued1,180----1,180
Balance at 30 June 2019126,440157,226(3,901)(5,879)124274,010
Impact of adoption of
NZ IFRS 16 (Note 2)-(14,409)-(231)-(14,640)
Restated Balance at
1 July 2019126,440142,817(3,901)(6,110)124259,370
Profit for the year-47,332--4347,375
Exchange differences on
translation of foreign
operations---1,475-1,475
Cash flow hedges taken
directly to equity, net of tax--1,826--1,826
Total Comprehensive
Income-47,3321,8261,4754350,676
Dividend payments-(47,403)--(53)(47,456)
Shares issued54,190----54,190
Balance at 30 June 2020180,630142,746(2,075)(4,635)114316,780
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Statement of changes in equity
For the year ended 30 June 2020
Group
Note2020
$000
2019
$000
Current assets
Cash and cash equivalents10
16,686
15,986
Trade and other receivables11
100,381
87,805
Income tax receivable
384
-
Inventories12
6,019
5,009
Total current assets
123,470
108,800
Non-current assets
Trade receivables and other non-current assets11
7,348
3,984
Property, plant and equipment15
134,649
106,710
Right-of-use assets16
278,142
-
Intangible assets17
498,966
365,152
Investment in associates34
7,842
-
Total non-current assets
926,947
475,846
Total assets
1,050,417
584,646
Current liabilities
Trade and other payables19
87,65668,967
Borrowings (secured)23
5,210-
Lease liabilities16
30,641
127
Income tax payable
18,824
6,429
Provisions21
1,225
860
Derivative financial instruments13
750
880
Contract liability22
15,142
15,664
Total current liabilities
159,448
92,927
Non-current liabilities
Trade and other payables19
27,3863,137
Borrowings (secured)23
216,484167,394
Deferred tax liability18
41,425
37,762
Provisions21
6,331
4,750
Lease liabilities16
280,431
129
Derivative financial instruments13
2,132
4,537
Total non-current liabilities
574,189
217,709
Total liabilities
733,637
310,636
Net assets
316,780
274,010
Equity
Contributed equity
180,630126,440
Retained earnings
142,746157,226
Cash flow hedge reserve13
(2,075)
(3,901)
Foreign currency translation reserve
(4,635)
(5,879)
24
316,666
273,886
Non-controlling interests
114
124
Total equity
316,780
274,010
The above Balance Sheet should be read in conjunction with the accompanying notes.
Balance sheet
As at 30 June 2020
6465
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

Group
Note
2020
$000
Inflows
(Outflows)
2019
$000
Inflows
(Outflows)
Cash flows from operating activities
Receipts from customers634,749609,744
Payments to suppliers and employees(474,653)(501,203)
Cash generated from operations160,096108,541
Interest received48137
Interest and other costs of finance paid(19,380)(9,379)
Income taxes paid(13,599)(23,292)
Net cash inflows from operating activities26127,16576,007
Cash flows from investing activities
Payments for property, plant and equipment(18,318)(16,844)
Payments for software (5,313)(6,429)
Proceeds from disposal of property, plant and equipment8492,450
Payments for businesses acquired (net of cash acquired) 33(94,973)(11,111)
Payments for investment in associates(7,468)-
Receipts from joint venture1,2022,478
Cash flows from other investing activities(226)(470)
Net cash outflows from investing activities(124,247)(29,926)
Cash flows from financing activities
Dividends paid(47,456)(47,002)
Increase in bank borrowings45,8029,512
Proceeds from issue of ordinary shares24,126748
Principal elements of lease payments
(2019 – Principal elements of finance lease payments)
(24,954)(91)
Net cash outflows from financing activities(2,482)(36,833)
Net increase in cash and cash equivalents4369,248
Cash and cash equivalents at beginning of year15,9867,410
Exchange rate adjustments 264(672)
Cash and cash equivalents at end of year1016,68615,986
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Statement of cash flows
For the year ended 30 June 2020
Note 1. Summary of significant accounting policies
(a) Reporting entity and statutory base
Freightways Limited is a company registered under the
Companies Act 1993 and is an FMC reporting entity under Part
7 of the Financial Markets Conduct Act 2013. The financial
statements of the Group have been prepared in accordance with
the requirements of Part 7 of the Financial Markets Conduct
Act 2013 and the NZX Main Board Listing Rules. In accordance
with the Financial Markets Conduct Act 2013, group financial
statements are prepared and presented for Freightways Limited
and its subsidiaries. Accordingly, separate financial statements
for Freightways Limited are not required to be prepared and
presented.
The financial statements are stated in New Zealand dollars
rounded to the nearest thousand, unless otherwise indicated.
Basis of preparation
The financial statements of the Group have been prepared in
accordance with Generally Accepted Accounting Practice in
New Zealand (NZ GAAP).
The Group is a for-profit entity for the purposes of complying
with NZ GAAP. The financial statements comply with New
Zealand equivalents to International Financial Reporting Stan-
dards (NZ IFRS), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply
NZ IFRS. The financial statements also comply with Interna-
tional Financial Reporting Standards (IFRS).
The financial statements have been prepared on a historical
cost basis, except for derivative financial instruments and
acquisition earn-out payables, which have been measured at
fair value.
Critical accounting estimates and judgments
The preparation of financial statements in conformity with NZ
IFRS requires the use of certain critical accounting estimates,
where necessary, and may require management to exercise
judgment in the process of applying the Group’s accounting
policies. There are no judgments made that are considered to
have a significant risk of causing a material adjustment to the
carrying value of assets or liabilities. Specific areas of critical
accounting estimates and assumptions used are as follows:
(i) Carrying value of indefinite life intangible assets
Impairment reviews are performed by management,
annually or where there is an indicator of impairment,
to assess the carrying value of indefinite life intangible
assets, including goodwill and brand names. The
recoverable amounts of cash-generating units have
been determined based on the greater of value-in-use
and fair value less cost of disposal calculations. These
calculations require the use of estimates. Refer to Note 17.
(ii) Accounting for contract liability
A contract liability is recorded in the balance sheet
reflecting the future service obligation for courier and
postal products that have been sold in advance of their
use. The balance is supported by reference to historical
customer prepaid product usage patterns. Accordingly,
the balance is sensitive to movements in the future level
of customer purchases and use of prepaid products, which
involves estimates. Management regularly reviews the
historical usage patterns to ensure an adequate contract
liability is recognised.
(iii) Fair value of derivatives
The fair value of financial instruments that are not traded
in an active market is determined by using valuation
techniques. The Group uses its judgment to select a variety of
valuation methods and makes assumptions that are mainly
based on market conditions existing at the end of each
reporting period.
(iv) Customer relationships
The estimation of the useful lives of customer
relationships has been based on historical experience.
The useful lives are reviewed at least once per year
and adjustments to useful lives are made when
considered necessary.
(v) Acquisition earn-out amounts payable
The valuation of the Group’s acquisition earn-out amounts
payable is based on the post-acquisition performance of
the acquired businesses. These fair value measurements
require, among other things, significant estimation of
post-acquisition performance of the acquired business and
judgment on time value of money. Acquisition earn-out
amounts payable shall be remeasured at their fair value
resulting from events or factors that emerge after the
acquisition date, with any resulting gain or loss recognised
in the income statement. Judgment is applied to determine
key assumptions (such as growth in sales and margins)
adopted in the estimate of post-acquisition performance of
the acquired business. Judgment is also applied to determine
the appropriate discount rate applied to calculate the present
value of the amount payable. Changes to key assumptions
may impact the future payable amount. Refer to Note 33.
(vi) Purchase price allocation for acquisitions
During the year, the Group acquired 100% of the shares in
Big Chill Distribution Limited, along with a number of small
information management businesses (refer Note 33). All
identifiable assets and liabilities including intangible assets
have been measured at fair value at acquisition date. In
deriving a fair value for identifiable intangibles, the Group has
used a variety of valuations methods and key assumptions to
reflect what a typical market participant would apply if they
were to buy or sell each asset on an individual basis.
Notes to the financial statements
For the year ended 30 June 2020
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

(b) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities that are controlled either directly
by the Company or where the substance of the relationship
between the Company and the entity indicates the Company
controls it. The results of businesses acquired or disposed
of during the year are included in the income statement
from the date of acquisition or up to the date of disposal.
The financial statements include the Company and its
subsidiaries accounted for using the acquisition method.
The cost of an acquisition is measured as the fair value of
the assets acquired, equity instruments issued and liabilities
incurred or assumed at the date of acquisition. Costs directly
attributable to the acquisition are expensed to the income
statement. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination
are measured initially at their fair values at acquisition
date. The Group recognises any non-controlling interest
in an acquired entity on an acquisition-by-acquisition
basis either at fair value or as the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable
assets. The excess of the consideration transferred over the
fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill.
All material transactions between subsidiaries or
between the Company and subsidiaries are eliminated
on consolidation. Accounting policies of subsidiaries are
consistent with those adopted by the Group.
Any contingent consideration to be transferred by the
Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability
are recognised in accordance with NZ IFRS 9 in the income
statement. Contingent consideration that is classified as
equity is not remeasured, and its subsequent settlement
is accounted for within equity.
(ii) Joint arrangements and joint ventures
The Group applies NZ IFRS 11 to all joint arrangements.
Under NZ IFRS 11 investments in joint arrangements are
classified as either joint operations or joint ventures depending
on the contractual rights and obligations of each investor.
The Group has assessed the nature of its joint arrangements
and determined them to be joint ventures. Joint ventures are
accounted for using the equity method.
Under the equity method of accounting, interests in joint
ventures are initially recognised at cost and adjusted thereafter
to recognise the Group’s share of the post-acquisition profits
or losses and movements in other comprehensive income.
When the Group’s share of losses in a joint venture equals
or exceeds its interests in the joint venture (which includes
any long-term interests that, in substance, form part of the
Group’s net investment in the joint venture), the Group does
not recognise further losses, unless it has incurred obligations
or made payments on behalf of the joint venture.
Unrealised gains on transactions between the Group and
its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies
of joint ventures are changed where necessary to ensure
consistency with the policies adopted by the Group.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each entity
in the Group are measured using the currency that best
reflects the primary economic environment in which the
entity operates (the “functional currency”). The financial
statements are presented in New Zealand Dollars, which
is the Company’s functional currency and the Group’s
presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into the
functional currency using the foreign exchange rate ruling
at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except
when deferred in equity as qualifying cash flow hedges.
(iii) Foreign operations
The results and balance sheets of foreign operations (none
of which has the currency of a hyperinflationary economy)
that have a functional currency different from the
presentation currency are translated into the presentation
currency as follows:
- assets and liabilities for the balance sheet presented are
translated at the closing rate at the date of the balance
sheet;
- income and expenses for the income statement are
translated at average exchange rates (unless this is not
a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates
of the transactions); and
- all resulting exchange differences are recognised as
a separate component of equity.
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at
the closing rate.
Notes to the financial statements
For the year ended 30 June 2020
(d) Impairment of non-financial assets
In respect of this policy, assets that have an indefinite life
are not subject to amortisation and are tested annually
for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of
an asset’s fair value, less costs of disposal, and value-in-use.
For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash-generating units).
(e) Financial assets
(i) Classification
The Group classifies its financial assets in the following
measurement categories:
- those to be measured subsequently at fair value either
through other comprehensive income or through the
income statement; and
- those to be measured at amortised cost.
The classification depends on the Group’s business model for
managing the financial assets and the contractual terms of
the cash flows. For assets measured at fair value, gains and
losses will either be recorded in the income statement or other
comprehensive income.
(ii) Recognition and derecognition
Regular purchases and sales of financial assets are recognised
on the trade date, i.e. the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised
when the rights to receive cash flows from the investments have
expired or the Group has transferred substantially all the risks
and rewards of ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value
through the income statement, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through the income
statement are expensed in the income statement.
(f) Fair value estimation
The fair value of financial assets and financial liabilities is
estimated for recognition and measurement or for disclosure
purposes. The fair value of financial instruments that are
not traded in an active market (for example, over the counter
derivatives) are determined using accepted treasury valuation
techniques, such as estimated discounted cash flows, by
an external treasury management system provider. The
carrying value of trade receivables (less provision for doubtful
receivables) and payables approximate their fair values.
(g) Goods and services tax (GST)
The income statement and statement of cash flows have been
prepared so that all components are stated exclusive of GST.
All items in the balance sheet are stated net of GST, with the
exception of trade receivables and payables, which include GST
invoiced.
(h) Changes in accounting policies
The Group adopted NZ IFRS 16 Leases for which application
became mandatory for the Group for the financial year
beginning 1 July 2019. The impact of adopting NZ IFRS 16 is
detailed in Note 2.
Except for the adoption of NZ IFRS 16 Leases, the accounting
policies and methods of computation are consistent with those
used in the year ended 30 June 2019.
Amendments to NZ IFRS 3: Business Combinations, mandatory
from 1 July 2020, further clarify the definition of a business,
with the objective of assisting entities to determine whether a
transaction should be accounted for as a business combination
or as an asset acquisition (refer Note 36 for further
details). Other than this, there are no other new standards,
amendments or interpretations that are not yet effective that
would be expected to have a material impact on the Group.
Notes to the financial statements
For the year ended 30 June 2020
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Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz

Notes to the financial statements
For the year ended 30 June 2020
Note 2. Adoption of NZ IFRS 16 leases
The Group adopted NZ IFRS 16 Leases, effective from 1 July 2019. This standard replaces the guidance in NZ IAS 17. Under NZ
IAS 17, a lessee was required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance
sheet). NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments and a ‘right-of-use’ (ROU)
asset for virtually all lease contracts.
From the effective date of adoption, the income statement is impacted by the removal of operating lease expenses, the recognition
of an interest expense applicable to the future lease payment obligations and the recognition of a depreciation expense in respect
of the ROU asset.
This standard has changed the accounting for the Group’s operating leases. As at the effective date, the Group had non-cancellable
operating lease commitments of $127 million. Upon adoption, NZ IFRS 16 had a material impact on a number of elements of, and
disclosures within, the Group’s balance sheet, income statement and statement of cash flows. The Group’s actual overall cash flows
are unaffected by the adoption of this standard.
In calculating the financial impact, management was required to make various key judgments, including:
- the incremental borrowing rate (IBR) used to discount the ROU assets and the future lease payment obligations (lease liabilities);
- lease terms, including any rights of renewal expected to be exercised; and
- foreign exchange conversion rates.
In applying NZ IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
- applying a single discount rate to a portfolio of leases with reasonably similar characteristics;
- accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term leases;
- excluding initial direct costs for the measurement of the ROU asset at the date of initial application; and
- using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
When adopting the standard, management applied IBR’s of between 2.45% to 4.23%, with a weighted average rate of 3.61%, to
discount the ROU assets and the future lease payment obligations, depending on the nature of the relevant leases. Some of the
factors taken into consideration when calculating the IBR for each asset category included observable market rates, economic
conditions and lease tenure.
The new standard allowed a choice of transition methods. Management determined that the most appropriate approach for
the Group to use was the modified retrospective transition method. Under this transition method, the Group was allowed to
retrospectively value the ROU asset on a lease by lease basis without having to restate comparatives and to recognise the cumulative
effect of initially applying the standard as an adjustment to retained earnings. Alternatively, the ROU asset on a lease by lease basis
could have been measured at an amount equal to the value of the lease liability. In arriving at the below financial impact of adopting
the new standard, the latter approach was applied to value the ROU asset for the majority, by number, of the Group’s operating
leases, but with 20 high-value property operating leases (representing approximately 80% of the lease liability to be recognised)
being retrospectively valued.
Management’s process identified that the financial impact on the balance sheet as at 1 July 2019 was as follows:
- recognition of ROU assets of $200 million;
- recognition of lease liabilities of $223 million;
- a decrease in trade and other payables of $2 million;
- recognition of a deferred tax asset of $6 million; and
- a decrease in opening retained earnings of $15 million.
The financial impact on the income statement for the year ended 30 June 2020 was a reduction in net profit after tax of $2.5 million.
This was made up of the following changes:
- a $33.7 million decrease in operating lease rental expenses (removed);
- a $28.4 million increase in depreciation (relating to ROU assets);
- an $8.8 million increase in interest expense (relating to lease liabilities); and
- a $1 million decrease in tax expense.
Notes to the financial statements
For the year ended 30 June 2020
A summary of the financial impact on the income statement for the year ended 30 June 2020 is:
Before NZ
IFRS 16
$000
IFRS 16
Adjustment
$000
After NZ
IFRS 16
$000
Operating profit before interest, income tax, depreciation
and software amortisation and amortisation of intangibles101,36633,705135,071
Depreciation and software amortisation(18,465)(28,409)(46,874)
Operating profit before interest, income tax and amortisation
of intangibles82,9015,29688,197
Amortisation of intangibles(3,477)-(3,477)
Profit before interest and income tax79,4245,29684,720
Net interest and finance costs(9,668)(8,752)(18,420)
Profit before income tax69,756(3,456)66,300
Income tax(19,920)995(18,925)
Profit for the year attributable to the shareholders49,836(2,461)47,375
Prior to the adoption of NZ IFRS 16, operating lease payments were included in payments to suppliers within operating
activities in the statement of cash flows. Following the adoption of NZ IFRS 16, the interest component is allocated to
operating cash flows and the repayment of the principal elements of leases is classified within financing activities.
Note 3. Segment reporting
A segment is a component of the Group that can be distinguished from other components of the Group by the products or
services it sells, the primary market it operates in and the risks and returns applicable to it. Operating segments are reported
upon in a manner consistent with the internal reporting used by the Chief Executive Officer, as the chief operating decision
maker, and the Board for allocating resources, assessing performance and strategic decision making.
The Group is organised into the following reportable operating segments:
Express package & business mail
Comprises network (hub & spoke) courier, refrigerated transport, point-to-point courier and postal services.
Information management
Comprises secure paper-based and electronic business information management services.
Corporate and other
Comprises corporate, financing and property management services.
The Group has no individual customer that represents more than 4% of external sales revenue.
7071
Freightways Limited
and its subsidiaries
Annual Report Financial Year
ended 30 June 2020
Financial Statementsfreightways.co.nz