2020 Annual Results announcement

Scales Corporation Limited
Head Office: 52 Cashel Street | Christchurch 8013 | New Zealand
Postal: PO Box 1590 | Christchurch 8140 | New Zealand
Phone: +64 3 379 7720
scalescorporation.co.nz



NZX & Media Release

26 February 2021

SCALES CORPORATION’S SOUND FOUNDATIONS GENERATE STRONG 2020 OPERATING
PERFORMANCE

Highlights – 12 months to 31 December 2020

Diversified agribusiness group Scales Corporation Limited (NZX:SCL) today reported its FY2020 full
year results. Profit for the Year was $26.6 million (FY2019: $121.6 million). Earnings per share for
FY2020 were 15.0 cents per share (FY2019: 84.2 cents per share).

• Group FY2020 financial results:
o Revenue of $470.7 million (FY2019: $484.6 million).
o Reported NPAT of $26.6 million (FY2019: $121.6 million)
1
.
o Underlying
2
EBITDA of $53.9 million (FY2019: $52.7 million).
o Underlying
2
NPAT of $33.8 million (FY2019: $36.4 million).
• Mr Apple own-grown export volumes of 3,915k TCEs
3
, up 2 per cent on 2019 export volumes
and up 3% on forecast.
• Food Ingredients Underlying EBITDA of $23.1 million (FY2019: $13.5 million), an exceptional
performance.

Scales Corporation Chair Tim Goodacre noted: “We are extremely proud of the hard work and unity
displayed by the entire Scales team in a challenging and disruptive year. This unity enabled Scales to
continue trading throughout lockdowns, without New Zealand government wage subsidies, and still
deliver a profit result consistent with our originally provided guidance.”

“The diversified strategy of the Group provided us with a solid base from which to operate. The
divisional mix of our earnings differed compared to prior years, with an exceptional performance
recorded by the Food Ingredients division.”


1
FY2019 results include the gain on sale of Polarcold ($68.9m net of interest) and gain on sale and revaluation gain on the
establishment of Meateor (of $9.8m and $9.8m respectively).
2
Underlying results exclude some New Zealand International Financial Reporting Standards (NZ IFRS) non-cash and other
adjustments. A reconciliation between Net Profit and Underlying Net Profit, EBITDA and Underlying EBITDA is provided in
Appendix 1 of our annual results presentation pack.
3
Tray carton equivalent, a measure of apple and pear weight, defined as 18.6kg packed weight which equates to 18.0kg sale
weight.

2



“Mr Apple benefited from geographical and varietal diversification. Volumes and prices in Asia and
the Middle East were adversely affected by the timing of lockdowns on consumers, but it benefitted
from firm European and UK markets. Food Ingredients produced a stand-out result, benefitting from a
strong growth in global petfood demand together with geographical diversity in its supply network and
sources of proteins.”

Andy Borland, Managing Director of Scales Corporation, commented: “The Board and senior
leadership team are proud of the dedication and courage exhibited by all staff during a demanding
year. We would not have been able to produce our results without a unified effort by all business
divisions.”

“Notwithstanding the challenges thrown at us due to COVID-19, the group continued to advance its
strategic plan and invest in growth opportunities. Mr Apple completed phase 2 of its orchard
redevelopment program, finalised the upgrade of its seasonal worker accommodation and has
recently completed the build of its new purpose-built coolstore at Whakatu. The coolstore was
finished on time and on budget and is expected to provide operational and logistics efficiencies.
Shelby entered into a new toll processing agreement in Dodge City, Kansas, providing us with
additional operational resource in the USA to satisfy demand.”

“We have continued to make progress on our sustainability journey, and are excited to be preparing
our inaugural climate change report for the 2020 annual report.”

“Scales also continues to be in a strong financial position, with net cash at 31 December 2020 of
$97.6 million. This provides us with a solid base from which to invest in future growth opportunities,
both organic and acquisitive.”

During the year Scales declared dividends of 19.0 cents per share
4
. As in previous years, the Board
expects to declare a final dividend in respect of FY2020 in May, with payment in July.

Divisions

Horticulture
Underlying FY2020 EBITDA for the Horticulture division was $31.4 million (FY2019: $39.7 million).

Mr Borland commented “Mr Apple once again delivered record own-grown apple volumes of 3,915k
TCEs, an excellent effort by the orchard team. Disruption to global supply chains and the influence
on consumer behaviour as a result of global COVID-19 lockdowns impacted each market differently.
Whilst Asia and the Middle East were adversely impacted (partially also due to the overlap of
lockdowns and the Chinese New Year sales window), sales to Europe and the UK remained firm. Mr

4
Scales declared a final dividend of 9.5 cents per share for FY2019 on 5 May 2020, which was paid on 10 July 2020 and
declared an interim dividend of 9.5 cents per share for FY2020 on 9 December 2020, which was paid on 15 January 2021.

3



Apple’s diversified sales network enabled it to mitigate these market specific impacts. We also
exhibited growth of our high-value premium varieties, with a 4 per cent increase in these volumes
compared to last year.”

“Phase 2 of our orchard redevelopment programme was completed, with over 140 hectares of
orchard having been redeveloped between 2018 and 2020, predominantly in the high-value, branded,
Dazzle
TM
variety. Plantings adopt new ‘2-dimensional’ techniques enabling efficiencies in pruning,
thinning and picking. We anticipate these orchards will reach commercial scale from 2023 onwards.”

“Mr Apple is focused on opportunities to maintain or improve current margins. The completion of the
new Whakatu coolstore, expected to provide operational and logistics efficiencies, is an example of
this. Acknowledging that the environment for the availability and cost of labour has changed, the
company intends to accelerate further automation initiatives, particularly in post-harvest operations,
during FY2021.”

Food Ingredients
The Food Ingredients division generated Underlying EBITDA of $23.1 million (FY2019: $13.5 million),
an increase of 71 per cent.

Mr Borland said “This was an exceptional performance by Food Ingredients, with it taking a
considerable step towards its long-run EBITDA target of $25 million. The division took advantage of
the growing global petfood market, whilst also benefiting from its geographical and protein
diversification strategies.”

“Volumes of petfood ingredients sold increased by 4 per cent compared to FY2019 and the division
continues to take advantage of market growth through the addition of a new toll processing facility in
the United States. We are excited for the future of this division and continue to actively pursue
organic and external growth opportunities to diversify and expand its geographical reach, product
range and protein offering.”

Logistics
The Logistics division delivered Underlying EBITDA of $3.4 million (FY2019: $3.3 million), an increase
of 4 per cent.

Mr Borland commented “This was a solid performance by the Logistics division, in a year where
activity was impacted by global supply chain disruptions. The division benefitted from a focus on the
agribusiness sector.”

4



Outlook

Mr Goodacre noted: “The start of 2021 has not been without its own challenges. Inclement national
weather events have taken place over the key growing period and global supply chains continue to be
disrupted, with ongoing delays in shipping and increased costs.”

“As a result, the Board has amended Underlying Net Profit guidance for the group to be between
$27.5 million and $33.5 million, implying an Underlying EBITDA range of between $46.5 million and
$53.5 million. This reflects:

• Significantly lower levels of stone fruit exports from the Otago region impacting on Scales
Logistics.
• The Tasman region expecting a significantly lower level of pip fruit exports impacting on third
party export volumes for Mr Apple and Fern Ridge.
• Mr Apple is now expecting that own-grown volumes will be lower than forecast.
• Ongoing delays in shipping resulting in higher port side charges impacting on all Group
business units.”

Mr Goodacre also observed “the 2021 apple harvest has begun with early fruit shipments made to
Asia. Food Ingredients is also expected to continue to take advantage of the growing global petfood
market.”

Contact
Andy Borland, Managing Director, Scales Corporation Limited, Mob: 021 975 999,
email: andy.borland@scalescorporation.co.nz

About Scales Corporation
Scales Corporation is a diversified agribusiness group. It currently comprises three operating
divisions: Horticulture, Food Ingredients and Logistics. The company’s diverse spread of activities
gives Scales broad exposure to New Zealand’s agribusiness sector. Scales Corporation was founded
in 1897 as a shipping business by George Herbert Scales. Find out more at
www.scalescorporation.co.nz.

---

HalfYearResults
For the six months ended 30 June 2020
26 August 2020
Scales Corporation Limited
Growing Your Diversified Agribusiness
Annual Results Presentation
For the Year Ended 31 December 2020
26 February 2021

2
Scales Corporation Limited –2020 Full Year Results
1.Operating Summary
2.Sustainability
3.Financial Overview
4.Divisional Performance
5.Capital Management
6.Governance
7.Trading Outlook
8.Appendices
Agenda

Operating Summary
1

4
Operating Summary
•Scales’ sound foundations generated strong 2020 operating performance:
▪Underlying* EBITDA $53.9mup 2% on 2019 ($52.7m).
▪Underlying* NPAT $33.8m down 7% on 2019 ($36.4m).
▪Statutory Profit for the Year $26.6m(2019: $121.6m**).
•Volumes up but earnings down at Mr Apple:
▪Mr Apple own-grown export volumes of 3,915k TCEs up 2% on 2019 and up 3% on forecast.
▪Horticulture division Underlying EBITDA of $31.4m (2019: $39.7m). Volumes and prices in Asia and Middle East adversely affectedby
lockdowns, whilst European and UK markets were up.
▪Diversity of channels and markets supported earnings resilience.
▪Phase 2 of the orchard redevelopment finished, 36 ha redeveloped during 2020 winter.
•Exceptional performance in Food Ingredients:
▪Underlying EBITDA of $23.1m (2019: $13.5m), increase of 71%.
▪Divisional performance supported by diversification in geographical supply network and sources of protein.
▪Strong growth in petfood demand following increased pet adoption rates during lockdowns.
* Underlying Results exclude some New Zealand International Financial Report Standards (NZ IFRS) non-cash and other adjustments.Management and the Board believe that Underlying Results more
accurately demonstrate the change in operational performance of the Group. Underlying Results are shown before the deductionofshare of NPAT for Non-Controlling Interests (Fern Ridge and Shelby) of
$5.6m (2020) vs $3.6m (2019). A reconciliation of Underlying to Reported Measures is provided in Appendix I.
** 2019 results include thegain on sale of Polarcold ($68.9m net of interest) and gain on sale and revaluation gain on the establishment of Meateor NZ (of$9.8m and $9.8m respectively).
Scales Corporation Limited –2020 Full Year Results

5
By the Numbers
Scales Corporation Limited –2020 Full Year Results
5,739,000
TCEs of apples
exported
1
(2019: 5,953,000)
$97.6m
Net cash
(2019: $104.9 net cash)
35,502
TEU
2
equivalents
managed
(2019: 39,438)
19.0 cents
Dividends declared
per share
115,700MT
Petfood ingredients
sold
4
3,915,000
TCEs of own-grown
apples exported
(increase of 2%)
$470.7m
Revenue
(2019: $484.6m)
15%
ROCE
3
(2019: 16%)
1.Tray carton equivalent, a measure of apple and pear weight, defined as 18.6kg packed weight which equates to 18.0kg sale weight.Includes own grown and external grower volumes including those volumes
exported by Fern Ridge Fresh.
2.TEU is aTwenty-foot Equivalent Unit is a unit of cargo capacity to describe container volumes.
3.Return on Capital Employed, calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as non-current assets plus working capital (excluding cash, overdrafts and borrowings, NZ
IFRS 16 right of use asset and lease liability, dividends declared, derivative assets/liabilities and employee loans).
4.Includes 100% of volumes from MeateorNZ; i.e. total volumes controlled directly and indirectly by the Meateor Group.

6
2020 Achievements
•All business operations continued during lockdowns, including during the critical apple harvest period.
•Safety and wellbeing of staff prioritised at all times.
•All staff paid in full, without use of New Zealand government subsidies.
•Leadership efforts recognised through presentation of INFINZLeadership Award to Andy Borland.
•Continued to pay dividends as scheduled.
•Continued to provide earnings guidance which was ultimately met.
Unity and teamwork allowed Scales to deliver
Scales Corporation Limited –2020 Full Year Results

2
Sustainability

8
Sustainability –Overview and Environment
Overview
•Maintained business operations during lockdowns, including during peak
harvest and production period.
•Partnered with thinkstep-anzto undertake an indepthmateriality assessment:
▪Included a ‘Three Horizons’ workshop to obtain a futurist view of the business.
•Inaugural TCFD
*
Report being prepared for 2020 annual report:
▪Based on the 4 themes contained within the TCFD’srecommended framework.
Environment
•Ongoing projects to reduce energy, fuel and waste to landfill, along with other
footprint-reducing initiatives:
▪2,300mof Extendayreflective groundcover diverted from landfill and recycled.
•Electricity audits conducted in Mr Apple orchards.
•Third annual ToitūEnvirocarecarbonreducecertification undertaken.
•Climate change risks and opportunities identified for Mr Apple.
Looking to the future
Scales Corporation Limited –2020 Full Year Results
* Task Force on Climate-related Financial Disclosures.
TCFDthemes

9
Sustainability –Health & Safety and Other
Health & Safety
•Expansion and development of a number of health & safety
initiatives, including:
▪The company-wide forklift training framework.
▪Guarding and traffic management focus.
▪Critical risk in-depth assessment.
▪Cross-company learning and auditing.
•Decrease in number and severity of incidents.
Other
•Supported both local and overseas communities with apple donations, including Wuhan at the onset of
the pandemic and half a million apples to New Zealand food parcel organisations.
•Realignment of GAP
*
certifications.
•GRASP
**
audit of the Mr Apple external supply chain for worker welfare practices.
•Implementation of updated corporate policies and introduction of a sensitive information policy.
•Pay equality review completed with pleasing results.
Health & safety first
Scales Corporation Limited –2020 Full Year Results
* Good Agricultural Produce.
** GLOBAL GAP Risk Assessment on Social Practice.

3
Financial Overview

11
Group Financial Performance
•Revenue of $470.7m, down 3% on 2019 ($484.6m).
•Underlying EBITDA of $53.9m, up 2% on 2019 ($52.7m).
•Underlying NPAT of $33.8m, down 7% on 2019 ($36.4m), reflecting lower interest income.
Solid result in a disruptive year
Scales Corporation Limited –2020 Full Year Results
Income Statement
Revenue
EBITDA
NPAT
$Millions
2020
2019
% chg.
1
2020
2019
% chg.
1
2020
2019
% chg.
1
Underlying
470.7
484.6
-3%
53.9
52.7
2%
33.8
36.4
-7%
NZ IFRS & other adjustments:
Gain on sale of Polarcold, net of interest
-
-
-
68.9
Fair value gain on recognition of investment in joint venture
-
9.8
-
9.8
Gain on disposal of Meateor New Zealand business
-
9.8
-
9.8
Impairment of non-current assets
2
(4.3)
-
(4.3)
-
NZ IFRS 16 Leases
10.3
9.5
(0.7)
(1.0)
Other NZ IFRS adjustments
(3.1)
(1.9)
(2.1)
(2.3)
Reported
3
470.7
484.6
-3%
56.7
79.9
-29%
26.6
121.6
-78%
Notes:
1. %'s are calculated based on non-rounded figures, figures may not sum due to rounding.
2. Further Fixed Asset (Land & Buildings) positive revaluations offset by declining on-orchard valuations recorded in Reported EBITDA.
3. Earnings are shown before the deduction of share of NPAT for Non-Controlling Interests (Fern Ridge and Shelby) of $5.6m (2020) vs $3.6m (2019).

12
Trends in Group Financial Performance
•Movement in Underlying EBITDA from 2019 onwards reflects changes in Group structure.
•Historic results are unadjusted for businesses that have been sold or acquired.
Scales Corporation Limited –2020 Full Year Results
$67.9m
$62.0m
$67.1m
$52.7m
$53.9m
2016
2017
2018
2019
2020
Underlying EBITDA
$38.6m
$32.7m
$35.8m
$36.4m
$33.8m
2016
2017
2018
2019
2020
Underlying NPAT

13
Divisional Financial Performance Overview
•Horticulture –record export volumes, strong sales into Europe and UK.
•Food Ingredients –strong petfood demand continued into 2H20.
•Logistics –in line with prior periods.
Scales Corporation Limited –2020 Full Year Results
Divisional Performance
% chg.
$Million1H202H2020201H192H1920192020 v 2019
Horticulture32.4(1.0)31.441.3(1.6)39.7-21%
Food Ingredients11.012.123.15.18.413.571%
Logistics3.20.33.43.10.33.34%
Corporate(2.2)(1.9)(4.1)(2.1)(1.7)(3.7)8%
Underlying EBITDA44.49.553.947.35.452.72%
Underlying NPAT29.24.633.830.16.336.4-7%
Notes:
1. Prepared on an Underlying basis. A reconciliation to NZ IFRS is provided in the Appendices.
2. %'s are calculated based on non-rounded figures, figures may not sum due to rounding.
3. NZ IAS 41 Agriculture requires unsold agricultural produce to be measured at fair value less costs to sell meaning the
expected profit on unsold fruit is recognised in the interim result, giving rise to seasonality in profitability as shown above.

14
Trends in Divisional Performance
•The graphs below demonstrate the change in earnings amongst the divisions.
Scales Corporation Limited –2020 Full Year Results
* Previously ‘Storage and Logistics’ up to and including 2018. Shows performance of continuing business only.
$45.3m
$38.9m
$42.6m
$39.7m
$31.4m
2016
2017
2018
2019
2020
Horticulture
Underlying EBITDA
$9.2m
$8.0m
$10.2m
$13.5m
$23.1m
2016
2017
2018
2019
2020
Food Ingredients
Underlying EBITDA
$2.3m
$3.3m
$4.9m
$3.3m
$3.4m
2016
2017
2018
2019
2020
Logistics
*
Underlying EBITDA

15
Balance Sheet
•Changes in assets reflect:
▪Capital expenditure (Mr Apple coolstore, orchard redevelopment
and other projects).
▪Construction of new coolstoreenabled the Group to sell its
Havelock North packhouse (assets held for sale).
▪Revaluation of FX derivatives (in line with NZ IFRS requirements).
Scales Corporation Limited –2020 Full Year Results
Balance Sheet
$Millions20202019
Current Assets (Excluding Cash)
Trade and other receivables19.520.6
Inventories25.826.4
Unharvested agricultural produce24.021.6
Other16.68.2
Assets held for sale2.6 -
88.476.9
Current Liabilities (Excluding Overdraft,
Borrowings and Dividends Declared)
Trade and other payables(25.1)(19.8)
Lease liability(10.1)(9.4)
Other(5.9)(7.2)
(41.1)(36.5)
Net Working Capital47.440.4
Non-Current Assets
Land and buildings at fair value109.296.8
Apple trees at fair value31.033.9
Other property, plant and equipment41.235.0
Investments, intangibles and goodwill68.469.6
Right of use asset77.978.8
Other18.17.1
345.7321.2
Capital Employed393.1361.6
Steady financial position
Note: Figures may not add due to rounding

16
Balance Sheet (continued)
•Net cash as at 31 December 2020 of $97.6m
(2019: $104.9m), comprising:
▪Cash and term deposits of $150.6m(2019: $159.4m).
▪Borrowings of $53.1m(2019: $54.6m).
Scales Corporation Limited –2020 Full Year Results
Ongoing ability to invest in growth opportunities
Balance Sheet (continued)
$Millions
2020
2019
Non-Current or Other Liabilities
Deferred tax liabilities
(25.6)
(19.4)
Lease liability
(70.2)
(70.7)
Other financial liabilities
(3.2)
(4.0)
Dividends declared
(13.4)
(13.3)
(112.3)
(107.4)
Net Cash/(Debt)
Cash less overdraft
46.0
17.4
Term deposits
104.6
142.0
Borrowings
(53.1)
(54.6)
97.6
104.9
Total Equity
378.4
359.0

4
Divisional Performance

18
Horticulture –Financial Performance
•Revenue of $246.0m(2019: $264.8m).
•Underlying EBITDA of $31.4m (2019: $39.7m):
▪Strong sales into Europe and UK.
▪Volumes and prices in Asia and Middle East adversely affected
by timing of lockdowns on consumers.
▪Diversification of markets and varieties proved beneficial.
•Solid volume performance, especially in context:
▪3,915kTCEs, 2% increase on 2019 (3,822kTCEs).
▪Export packout of 76% (2019: 79%).
▪Continuing to premiumise. 57% of all own-grown apples now
‘premium’.
Record export volumes
Scales Corporation Limited –2020 Full Year Results
$Millions
2020
2019
% change
Revenue
246.0
264.8
-7%
Underlying EBITDA
31.4
39.7
-21%
Underlying EBIT
21.9
30.9
-29%
Financial Performance - Horticulture

19
Horticulture –Own-Grown Volumes
•Increase of 4% in premium variety volumes compared to 2019:
▪Similar or increased volumes across most premium varieties.
▪Significant % increases in volumes of new premium varieties (Dazzle
TM
and Posy
TM
).
▪European markets performed well in 2020, Mr Apple’s exposure to a broad range of markets enables it to shift sales to respondto
market factors.
Growth in premium volumes in changing markets
Scales Corporation Limited –2020 Full Year Results
536
741
1,059
1,036
1,454
1,656
1,616
1,901
2,161
2,238
1,465
1,404
1,773
1,716
1,701
1,890
1,929
1,966
1,661
1,678
2,001
2,144
2,833
2,752
3,155
3,546
3,545
3,867
3,822
3,915
2011201220132014201520162017201820192020
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties
214
343
406
457
538
534
119
185
245
245
282
301
253
359
378
401
273
393
585
574
831
866
809
959
1,046
1,049
199
253
536
741
1,059
1,036
1,454
1,656
1,616
1,901
2,161
2,238
2011201220132014201520162017201820192020
Growth in Premium Volumes (TCE 000s)
NZ QueenPink LadyHigh Colour Fuji & Royal GalaOther

20
Horticulture –Pricing & Other KPIs
•Pricing within different geographies affected by:
▪Timing of lockdowns.
▪Impact on logistics and purchasing patterns.
▪Economic effect on consumers
▪Mix of varieties purchased.
•Favourable movements in FX rates, specifically the
NZD:USD.
▪Whilst cover is in place for 2021, recent strength in the NZD
will likely see an adverse shift in FX impacts for 2021.
•Including volumes sold on behalf of other
growers, the Horticulture division sold a total of
5,739k TCEs of apples (2019: 5,953k TCEs):
▪During 2020, some of Fern Ridge’s apple volumes were
replaced by sales of kiwifruit (kiwifruit volumes not reported).
Prices impacted by lockdowns
Scales Corporation Limited –2020 Full Year Results
* External grower volumes comprise external grower volumes handled by Mr Apple (1,216kTCEs) and Fern Ridge Fresh (607kTCEs)
Horticulture KPIs
Apple Prices by Variety (NZD / TCE, FOB)
20202019% change
Premium Varieties36.939.8-7%
Traditional Varieties30.129.33%
Weighted Average all Apples34.035.2-3%
FX Rates (avg. achieved)
20202019% change
NZD:USD0.640.674%
NZD:EUR0.570.570%
NZD:GBP0.510.48-6%
NZD:CAD0.870.870%
Volumes (TCE 000s)
20202019% change
Mr Apple own-grown volumes3,9153,8222%
External grower volumes*1,8242,132-14%
Total volume exported5,7395,953-4%

21
1,901
2,161
2,238
2,170
2,325
2,478
2,639
2,738
1,966
1,661
1,678
1,633
1,609
1,619
1,626
1,631
3,867
3,822
3,915
3,803
3,933
4,097
4,264
4,369
2018201920202021F2022F2023F2024F2025F
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties
Horticulture –Margin Improvement
•The company acknowledges headwinds in margins and is focused on
initiatives to maintain current margins:
▪New Whakatucoolstoreis now operational. Coolstorewas finished on time and on
budget and is expected to provide operational and logistics efficiencies, including the sale
of its Havelock North packhouse to achieve greater centralisation.
▪Increased yields and prices from redeveloped orchards. More than 140 ha of orchard was
planted / redeveloped between 2018 and 2020 predominantly in the high-value, branded,
Dazzle
TM
variety. Plantings adopt new ‘2-dimensional’ techniques enabling efficiencies in
pruning, thinning and picking. Commercial scale from 2023 onwards.
▪The environment for the availability and cost of labour has changed. As a result the
company will accelerate automation initiatives particularly in post-harvest facilities.
Scales expects to commit to automation initiatives through 2021.
Margin improvement is the key focus in the Horticulture division
Scales Corporation Limited –2020 Full Year Results
Inside the new Whakatucoolstore

22
Horticulture –Market Strategies
•Ongoing in-market branding initiatives and marketing activations,
particularly in Asia and Middle East:
▪Asia and Near Markets comprise ~62% of export sales.
▪Retail category management being implemented in Vietnam and Thailand.
▪Additional marketing resource added with the appointment of a senior marketing
manager.
•Continued importance of the China market:
▪China represented approximately 17% of Mr Apple export volumes in 2020, in line
with 2019.
▪Retail trade (e-commerce, supermarket and fruit chain stores) represented over 50%
of all Mr Apple China sales in 2020.
•Innovations in product development and launches:
▪Flagship store on TMALL(Alibaba) to be operational Q22021.
▪TMALLwill market and sell a range of Mr Apple products directly to China consumers.
▪Dazzle
TM
launched in 2020 through high end Chinese retailers such as Hema to have
target promotions in both Vietnam and China in 2021.
Identifying innovative strategies for our key markets
Scales Corporation Limited –2020 Full Year Results
New box design for delivery through TMALL
Dazzle
TM
launch

23
Food Ingredients -Performance
•Significant increases in revenue and profitability reflect
geographical and protein diversification strategies:
▪12% increase in revenue.
▪71% increase in Underlying EBITDA, considerable progress towards the
division’s long-run EBITDA target.
▪4% increase in volumes sold.
•Shelby entered into a new processing / warehouse
agreement with toll processor in Dodge City, Kansas.
•Benefitted from growth in global petfood demand:
▪Attributable in part to increased pet ownership and adoption rates
during COVID-19 pandemic
*
.
▪Consumer demand and trends (e.g. humanisation of pets) for petfood
continuing to drive growth.
•Profruitsales volumes up 6% compared to 2019:
▪High fruit brix and excellent yields.
▪Increased retail demand.
Exceptional performance, taking advantage of growing global petfood demand
Scales Corporation Limited –2020 Full Year Results
* The American Pet Products Association estimated that 11.38 million U.S. households acquired a new pet during the pandemic, COVID-19 Pulse Study, September 2020.
23.0
27.7
29.0
111.0
115.7
2016
2017
2018
2019
2020
Petfood Ingredients Sold (MT 000s)
$Millions
2020
2019
% change
Revenue
173.7
155.1
12%
Underlying EBITDA
23.1
13.5
71%
Underlying EBIT
22.0
12.5
76%
KPIs
2020
2019
% change
Food Ingredients Volume Sold (MT)
115,739
110,970
4%
Juice Concentrate Sold (000 L)
6,544
6,170
6%
Financial Performance - Food Ingredients

24
Food Ingredients –Strategy Update
•The global petfood industry shows no sign of slowing:
▪Market value expected to be US$168.3bby 2029, compared to US$97bin 2019
*
.
▪Market development being shaped by pet ownership and pet humanisation trends.
▪As an example, at least two new petfood plants are planned to be built in USA in 2021.
•The division continues to actively analyse and review both organic and external growth opportunities:
▪Actively investigating the high-growth China market.
▪Actively reviewing opportunities to expand product range, with added-value and functional petfoods.
▪Aiming to be a key provider to a range of international petfood brand owners.
▪Continuing to seek diversification in source and range of proteins.
An attractive industry for investment
Scales Corporation Limited –2020 Full Year Results
* https://www.prnewswire.com/news-releases/global-pet-food-market-to-show-an-impressive-cagr-of-6-from-2019-to-2029-with-valuation-expected-to-reach-us-168-3-bn-finds-tmr-300999294.html
Food Ingredients Structure
Meateor
International
^^
Petfood ingredient supplier,
Australia & other markets
(100%)
Meateor NZ
^
Petfood ingredient processor
and marketer, New Zealand
(50%)
Shelby
^^
Petfood ingredient procurer,
processor and marketer, USA
(60%)
Profruit
^
Juice concentrate processor,
New Zealand
(50%)
Meateor Group
^ Equity accounted. / ^^ Fully consolidated into Scales’ financial results, with non-controlling interests deducted from NPAT.

25
Logistics -Performance
•Solid performance from the Logistics division in a
year where activity was impacted by global supply
chain disruptions:
▪Underlying EBITDA and Underlying EBIT up 4% and 9%
respectively on 2019.
▪Ocean freight managed for the equivalent of 35,502 TEUs
down 10% on 2019 (39,438 TEUs).
▪5,656 tonnes of airfreight organised down 9% on 2019 (6,184
tonnes) due to effects of COVID-19.
•Impact of COVID-19 lessened due to focus on the
agribusiness sector.
Stable returns in a challenging year
Scales Corporation Limited –2020 Full Year Results
$Millions20202019% change
Revenue77.9 87.1 -11%
Underlying EBITDA3.4 3.3 4%
Underlying EBIT3.2 2.9 9%
KPIs
20202019% change
Ocean Freight Volume (TEUs)35,50239,438-10%
Airfreight Volume (tonnes)5,6566,184-9%
Financial Performance - Logistics

5
Capital Management

27
Capital Management
•Return on Capital Employed (ROCE) parameters
determined by business operations:
▪Horticulture partly impacted by a $14mincrease in capital
employed (primarily orchard redevelopment and coolstore
capex).
▪Horticulture ROCElevels expected to increase once
redeveloped orchard reaches maturity (2023 onwards).
▪Group ROCEremains at the long-run target level.
Overall group target maintained, mix differs
Scales Corporation Limited –2020 Full Year Results
Capital Management
Return on Capital Employed
20202019
Horticulture10%17%
Food ingredients29%16%
Logistics89%70%
Group15%16%
Target15%15%

28
Capital Expenditure
•2020 expenditure included:
▪Mr Apple orchard redevelopment ($4.9m) -approximately 36
hectares.
▪Mr Apple Whakatucoolstorebuild ($11.5m) –coolstorecompleted on
time and within budget (an additional spend of $2.5m will be
recognised in 2021).
▪Additional spend on RSEaccommodation ($2.0m).
•Majority of significant orchard redevelopment complete.
•Near term capex focus on automation and efficiencies
for margin improvement.
Continuing to invest in growth initiatives
Scales Corporation Limited –2020 Full Year Results
First truck being unloaded at the Whakatucoolstore
Capital Management
$Millions20202019
Horticulture4.33.1
Food Ingredients0.50.2
Logistics0.10.5
Other0.00.0
4.93.8
Growth Capital Expenditure
$Millions20202019
Horticulture19.511.9
19.511.9
Total Capital Expenditure24.415.7
Operational Capital Expenditure

Governance
6

30
Governance and Management
•Good governance practices maintained during the year:
▪First virtual Annual Shareholders’ Meeting successfully held in over 100 years of trading.
▪Board meetings undertaken via Zoom where necessary.
•Excellent leadership and teamwork from all staff.
▪Exceptional effort from the entire Scales team.
▪Proved ability to quickly adapt to new situation.
▪Staff health & safety prioritised.
•Andy Borland awarded INFINZLeadership Award:
▪For demonstrating sustainable and impactful leadership over a 14 year (and counting)
position.
Governing through a pandemic
Scales Corporation Limited –2020 Full Year Results
Andy Borland with Nick-Scarlett (Caldwell Partners)

Trading Outlook
7

32
2021 Outlook
•As a result of a combination of national weather events over the key growing period and continuing
disruptions in global supply chains (particularly port side delays and costs), Scales has updated its full year
2021 Guidance.
•Directors have amended the full year Guidance range for Group:
▪Underlying Net Profit is now forecast to be between $27.5m to $33.5m.
▪The Guidance range implies an Underlying EBITDA range of between $46.5m and $53.5m.
▪This updates the previous announcement on 9 December 2020.
•The amendment reflects the combined changes in outlook over the last two months:
▪Significantly lower levels of stone fruit exports from the Otago region impacting on Scales Logistics.
▪The Tasman region expecting a significantly lower level of pip fruit exports impacting on third party export volumes for Mr Apple
and Fern Ridge.
▪Mr Apple is now expecting that own-grown volumes will be lower than forecast.
▪Ongoing delays in shipping resulting in higher port side charges impacting on all Group business units.
▪Directors reconfirm all other assumptions previously stated on 9 December 2020.
•Directors note that, having completed a strong operating performance for 2020, it is clear the ripples from
COVID-19 lockdowns are having a greater impact on our results for 2021, some of which are forecast to
improve in the second half of the year.
Group update
Scales Corporation Limited –2020 Full Year Results

33
2021 Outlook (continued)
•The outlook for Horticulture sales activity remains supportive at this time. Key observations include:
▪A lower national crop will lower in-market supply particularly for Europe and UK.
▪Early fruit shipments to Asia have been well received and sales are moving through the usual channels.
▪Mr Apple is expecting lower fruit volumes to be partially offset by higher in-market prices.
▪The 2021 apple crop is looking to be of good fruit-size, brix and colour.
•Directors reconfirm the view that the majority of challenges and additional costs being experienced
domestically in 2021 by the Horticulture division will normalise, as currently experienced by in-market
sales activity and pricing. Management expect margins to return to 2019 levels in the years ahead.
Scales Corporation Limited –2020 Full Year Results
Horticulture division
Mr Apple EBIT Margins* through time
* Historical results have been adjusted to remove hail insurance proceeds in 2015.
0%
5%
10%
15%
20%
25%
2015201620172018201920202021B2022F2023F2024F2025F

8
Appendices

35
Appendix I -Reconciliation of Underlying to
Reported Measures
Scales Corporation Limited –2020 Full Year Results
Reconciliation of Divisional Underlying Profitability to Reported Profitability
GroupHorticultureFood ingredientsLogisticsCorporate and eliminations
2020201920202019202020192020201920202019
EBITDA
Underlying53.952.731.439.723.113.53.43.3(4.1)(3.7)
Fai r val ue gai n on recogni ti on of i nves tment i n joi nt venture - 9.8 - - - 9.8 - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s - 9.8 - - - 9.8 - - - -
Impai rment of non-current as s ets(4.3) - (4.3) - - - - - - -
NZ IFRS 16 Leas es10.39.59.48.60.10.10.80.80.10.1
Equi ty s ettl ed empl oyee benefi ts(0.7)(0.9) - - - - - - (0.7)(0.9)
Meateor NZ Sal e - Worki ng Capi tal Adjus tment(0.5) - - - (0.5) - - - - -
Change i n fai r val ue gai n on appl e i nventory(0.8)(0.3)(0.8)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.6)(0.3)0.1(0.1)(0.8)(0.2) - - - -
Trans acti on cos ts(0.4)(0.4) - 0.0 - - - - (0.4)(0.4)
Share bas ed payments - (0.1) - - - - - - - (0.1)
Reported56.779.935.847.921.932.94.24.1(5.1)(5.0)
EBIT
Underlying43.042.521.930.922.012.53.22.9(4.1)(3.8)
Fai r val ue gai n on recogni ti on of i nves tment i n joi nt venture - 9.8 - - - 9.8 - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s - 9.8 - - - 9.8 - - - -
Impai rment of non-current as s ets(4.3) - (4.3) - - - - - - -
NZ IFRS 16 Leas es2.01.71.81.50.00.00.20.20.00.0
Equi ty s ettl ed empl oyee benefi ts(0.7)(0.9) - - - - - - (0.7)(0.9)
Meateor NZ Sal e - Worki ng Capi tal Adjus tment(0.5) - - - (0.5) - - -
Change i n fai r val ue gai n on appl e i nventory(0.8)(0.3)(0.8)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.6)(0.3)0.1(0.1)(0.8)(0.2) - - - -
Trans acti on cos ts(0.4)(0.4) - 0.0 - - - - (0.4)(0.4)
Share bas ed payments - (0.1) - - - - - - - (0.1)
Reported37.661.818.732.020.831.83.43.1(5.3)(5.2)
NPAT
Underlying33.836.415.422.218.511.22.32.0(2.4)1.0
Gai n on s al e of Pol arcol d - 73.0 - - - - - - - 73.0
Add back i nteres t on s ettl ement of Pol arcol d, net of tax - (4.1) - - - - - - - (4.1)
Fai r val ue gai n on recogni ti on of i nves tment i n joi nt venture - 9.8 - - - 9.8 - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s - 9.8 - - - 9.8 - - - -
Impai rment of non-current as s ets(4.3) - (4.3) - - - - - - -
NZ IFRS 16 Leas es , net of tax(0.7)(1.0)(0.6)(0.9)(0.0)(0.0)(0.1)(0.1)(0.0)(0.0)
Equi ty s ettl ed empl oyee benefi ts(0.7)(0.9) - - - - - - (0.7)(0.9)
Meateor NZ Sal e - Worki ng Capi tal Adjus tment(0.5) - - - (0.5) - - - - -
Change i n fai r val ue gai n on appl e i nventory(0.8)(0.3)(0.8)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.6)(0.3)0.1(0.1)(0.8)(0.2) - - - -
Trans acti on cos ts(0.4)(0.4) - 0.1 - - - - (0.4)(0.4)
Share bas ed payments - (0.1) - - - - - - - (0.1)
Tax effect of other NZ IFRS adjus tments0.9(0.4)1.40.1(0.5)(0.5) - - - 0.0
Reported26.6121.611.221.016.730.12.21.9(3.6)68.6

36
Appendix II -Disclaimer
The information in this presentation has been prepared by Scales Corporation Limited with due care and attention. However, neither Scales Corporation Limited nor any of its
directors, employees, shareholders nor any other person shall have any liability whatsoever to any person for any loss (including, without limitation, arising from any fault or
negligence) arising from this presentation or any information supplied in connection with it.
This presentation supplements our full year results announcement. It should be read subject to and in conjunction with the additional information in that release, and other
material which we have released to the NZX.
This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current
expectations, estimates and assumptions and are subject to a number of risks, uncertainties and assumptions. There is no assurance that results contemplated in any projections
and forward-looking statements in this presentation will be realised. Actual results may differ materially from those projected in this presentation. No person is under any obligation
to update this presentation at any time after its release to you or to provide you with further information about Scales Corporation Limited.
Our results are reported under NZ IFRS. This presentation includes non-GAAP financial measures which are not prepared in accordance with NZ IFRS. The non-GAAP financial
measures used in this presentation include:
•EBITDA. We calculate EBITDA by adding back (or deducting) depreciation, amortisation, finance charges / (revenue), and taxation expense to net earnings / (loss) from
continuing operations.
•EBIT. We calculate EBIT by adding back (or deducting) finance charges / (revenue), and taxation expense to net earnings / (loss)from continuing operations.
•Underlying EBITDA and EBIT are calculated by adding back (or deducting) certain non cash NZ IFRS and other adjustments as detailed in Appendix I.
•Underlying Net Profit is calculated by adding back or (or deducting) the after-tax effect of certain non cash NZ IFRS and other adjustments as detailed in Appendix I.
We believe that these non-GAAP financial measures provide useful information to readers to assist in the understanding of our financial performance, financial position or returns,
but that they should not be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP financial measures may not be
comparable to similarly titled amounts reported by other companies.
Forward-looking statements are subject to any material adverse events, significant one-off expenses or other unforeseeable circumstances.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation
constitutes legal, financial, tax or other advice.
Scales Corporation Limited –2020 Full Year Results

---

Scales Corporation Limited
consolidated financial statements
for the year ended 31 December 2020

Scales Corporation Limited
Contents
Directory3
Consolidated statement of comprehensive income4
Consolidated statement of changes in equity6
Consolidated statement of financial position7
Consolidated statement of cash flows8
Notes to the consolidated financial statements10
Independent auditor's report46
2

Scales Corporation Limited
Directory
Board of DirectorsAuditor
Tim Goodacre (Chair)Deloitte Limited
Andrew Borland (Managing Director)Level 4
Nick Harris151 Cambridge Terrace
Mark HuttonChristchurch 8013
Alan Isaac
Lai Po Sing, TomakinBankers
Nadine TunleyANZ Bank New Zealand Limited
Level 3
Audit and Risk Management CommitteeANZ Centre
Alan Isaac (Chair)267 High Street
Nick HarrisChristchurch 8011
Mark Hutton
Rabobank New Zealand Limited
Nominations and Remuneration CommitteeLevel 23
Mark Hutton (Chair)157 Lambton Quay
Tim GoodacreWellington 6011
Finance and Treasury CommitteeWestpac New Zealand Limited
Mark Hutton (Chair)Level 4
Andrew BorlandThe Terrace
83 Cashel Street
Health & Safety and Sustainability CommitteeChristchurch 8011
Nick Harris (Chair)
Andrew BorlandSolicitors
Nadine TunleyAnthony Harper
Level 9
Registered OfficeAnthony Harper Tower
52 Cashel Street62 Worcester Boulevard
Christchurch 8013Christchurch 8013
New Zealand
Chapman Tripp
Postal Address15 Customs Street West
PO Box 1590Auckland 1010
Christchurch 8140
New ZealandCorporate Advisor
Maher & Associates
Telephone17 Albert Street
+64 3 379 7720Auckland 1010
WebsiteShare Registry
www.scalescorporation.co.nzComputershare Investor Services Limited
Level 2
159 Hurstmere Road
Takapuna
North Shore City
Auckland 0622
3

Scales Corporation Limited
Consolidated statement of comprehensive income for the year ended 31 December 2020
20202019
Note$000's$000's
Continuing operations
RevenueB1470,709484,609
Cost of salesB2(366,800)(383,126)
103,909101,483
Administration and operating expensesB2(44,382)(43,965)
Revaluation of apple trees and buildingsC1(4,311)-
Share of profit of entities accounted for using the equity methodC32,2242,997
Fair value gain on recognition of investment in joint venture-9,782
Gain on disposal of Meateor New Zealand business-9,782
Other incomeB31,645421
Other lossesB3(2,345)(647)
EBITDA56,74079,853
Amortisation(584)(592)
DepreciationC1(10,294)(9,654)
Depreciation of right of use assetG2(8,301)(7,824)
EBIT37,56161,783
Finance revenue2,5842,834
Finance costB4(1,915)(3,549)
Finance cost of lease liabilityG2(2,981)(3,075)
PROFIT BEFORE INCOME TAX EXPENSE FROM CONTINUING OPERATIONS35,24957,993
Income tax expenseB5
(8,668)(9,418)
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS26,58148,575
Profit from discontinued operations (net of tax)-73,002
PROFIT FOR THE YEAR26,581121,577
Profit for the year from continuing operations is attributable to:
Equity holders of the Company21,02545,000
Non-controlling interests5,5563,575
26,58148,575
Profit from discontinued operations is fully attributable to equity holders of the Company.
EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
Basic earnings per share (cents):
Continuing operationsD515.032.1
Discontinued operationsD5-52.1
TotalD515.084.2
Diluted earnings per share (cents):
Continuing operationsD514.932.0
Discontinued operationsD5-51.9
TotalD514.983.9
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
4

Scales Corporation Limited
Consolidated statement of comprehensive income for the year ended 31 December 2020 (continued)
20202019
Note$000's$000's
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Gain on cash flow hedges20,861
6,496
Income tax relating to cash flow hedges(5,841)
(1,819)
Share of other comprehensive income of joint venturesC3708
209
Income tax relating to share of other comprehensive income of joint ventures(198)
(58)
Foreign exchange (loss) gain on translating foreign operations(784)
(125)
14,7464,703
Items that will not be reclassified to profit or loss:
Revaluation of land and buildings9,133
11,117
Income tax relating to buildings(448)
(818)
Revaluation of apple trees(31)
1,431
Income tax relating to apple trees9
(401)
Remeasurement of net defined benefit liability(440)
-
Income tax relating to remeasurement of net defined benefit liability67
-
8,29011,329
OTHER COMPREHENSIVE INCOME FOR THE YEAR23,03616,032
TOTAL COMPREHENSIVE INCOME FOR THE YEAR49,617137,609
Total comprehensive income for the year attributable to:
Equity holders of the Company44,374134,034
Non-controlling interests5,243
3,575
49,617137,609
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
5

Scales Corporation Limited
Consolidated statement of changes in equity for the year ended 31 December 2020
Share
capital
ReservesRetained
earnings
Attributable
to owners
of the
Company
Non-
controlling
interests
Total
Note$000's$000's$000's$000's$000's$000's
Balance at 1 January 2019
94,184 71,999 80,109 246,2923,581
249,873
Profit for the year--118,002118,0023,575121,577
Other comprehensive income for the year-16,032-16,032-16,032
Total comprehensive income for the year-16,032118,002134,0343,575137,609
Reclassification of revaluation reserveD2-(25,912)
25,912-
--
Recognition of share-based paymentsD2-
866
-
866-
866
Shares fully vestedD1, D2
1,089(474)(139)476-
476
DividendsD3
--(26,654)(26,654)(3,167)
(29,821)
Balance at 31 December 201995,27362,511197,230355,0143,989359,003
Profit for the year--21,02521,0255,55626,581
Other comprehensive income for the year-23,349-23,349(313)23,036
Total comprehensive income for the year-23,34921,02544,3745,24349,617
Reclassification of revaluation reserveD2-1,093
(1,093)-
--
Reclassification of pension reserveD2-(341)
341-
--
Recognition of share-based paymentsD2
-698-698-
698
Shares fully vestedD1, D2
1,098(536)(165)397-
397
DividendsD3
--(26,716)(26,716)(4,594)
(31,310)
Balance at 31 December 202096,37186,774190,622373,7674,638378,405
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
6

Scales Corporation Limited
Consolidated statement of financial position as at 31 December 2020
20202019
Note$000's$000's
EQUITY
Share capitalD1
96,37195,273
ReservesD2
86,77462,511
Retained earningsD2
190,622197,230
Equity attributable to Scales Corporation Limited shareholders373,767355,014
Equity attributable to non-controlling interests4,6383,989
TOTAL EQUITY378,405359,003
CURRENT ASSETS
Cash and bank balances
47,41818,632
Term deposits
104,632142,000
Trade and other receivablesE1
19,45220,593
Current tax assets
-164
Other financial assetsE2
12,6884,571
Unharvested agricultural produceC2
24,02221,619
InventoriesC5
25,80526,422
Prepayments
3,8993,482
237,916237,483
Assets held for saleF2
2,550-
TOTAL CURRENT ASSETS240,466237,483
NON-CURRENT ASSETS
Property, plant and equipmentC1
181,311165,741
Investments accounted for using the equity methodC3
26,15424,973
GoodwillC4
41,90543,784
Other financial assetsE218,1437,117
Computer software
354807
Right of use assetG2
77,87778,775
TOTAL NON-CURRENT ASSETS345,744321,197
TOTAL ASSETS586,210558,680
CURRENT LIABILITIES
Bank overdrafts
1,3841,188
Trade and other payablesE3
25,11719,843
Dividend declaredD3
13,35913,328
BorrowingsE4
860-
Current tax liabilities
1,5932,842
Other financial liabilitiesE54,3004,377
Lease liabilityG2
10,0539,427
TOTAL CURRENT LIABILITIES56,66651,005
NON-CURRENT LIABILITIES
BorrowingsE4
52,19954,551
Deferred tax liabilitiesB5
25,59619,442
Defined benefit plan net liability
632-
Other financial liabilitiesE52,5223,966
Lease liabilityG2
70,19070,713
TOTAL NON-CURRENT LIABILITIES151,139148,672
TOTAL LIABILITIES207,805199,677
NET ASSETS378,405359,003
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
7

Scales Corporation Limited
Consolidated statement of cash flows for the year ended 31 December 2020
20202019
Note$000's$000's
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers469,559511,371
Dividends received1,5091,517
Interest received4,042791
475,110513,679
Cash was disbursed to:
Payments to suppliers and employees(407,074)(442,424)
Interest paid(4,896)(6,624)
Income tax paid(9,916)(8,532)
(421,886)(457,580)
NET CASH PROVIDED BY OPERATING ACTIVITIES53,22456,099
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from maturing term deposits37,368-
Advances repaid382722
Proceeds from sale of storage businesses-148,882
Proceeds from sale of Meateor New Zealand businessC3-15,000
Sale of property, plant and equipment and computer software29857
38,048164,661
Cash was applied to:
Purchase of property, plant and equipment(24,237)(16,313)
Purchase of computer software(131)(495)
Purchase of financial instruments-(497)
Investment in term deposits-(142,000)
(24,368)(159,305)
NET CASH PROVIDED BY INVESTING ACTIVITIES13,6805,356
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Proceeds from seasonal and other facility borrowingsE43,95579,000
3,95579,000
Cash was applied to:
Dividends paid(26,685)(26,625)
Dividends paid to non-controlling interests(4,594)(3,167)
Repayments of lease liabilities(7,300)(6,459)
Repayments of seasonal facility borrowingsE4(3,000)(81,000)
Repayments of term facility borrowingsE4-(10,000)
Repayments of related party borrowings-(1,329)
(41,579)(128,580)
NET CASH USED IN FINANCING ACTIVITIES(37,624)(49,580)
NET INCREASE IN NET CASH29,28011,875
Net foreign exchange difference(690)(201)
Cash and cash equivalents at the beginning of the year17,4445,770
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR46,03417,444
Represented by:
Cash and bank balances
47,418
18,632
Bank overdrafts
(1,384)
(1,188)
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR46,03417,444
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
8

Scales Corporation Limited
Consolidated statement of cash flows for the year ended 31 December 2020 (continued)
20202019
Note$000's$000's
NET CASH GENERATED BY OPERATING ACTIVITIES
Reconciliation of profit for the year to net cash generated by operating activities:
Profit for the year26,581121,577
Non-cash items:
Depreciation (including on right-of-use asset)18,59517,478
Revaluation of apple trees and buildings4,311-
Amortisation584592
Share of equity accounted results(2,224)(2,997)
Hedging instruments(205)639
Loss (gain) on disposal of property, plant and equipment62(57)
Share-based payments6981,000
Change in gross liability on put options647273
Deferred tax(203)941
Gain on disposal of storage businesses-(68,131)
Gain on disposal of Meateor New Zealand businessC3-(9,782)
Fair value gain on recognition of investment in joint ventureC3-(9,782)
Items classified as investing and financing activities:
Dividends received from equity accounted entities1,5001,500
Changes in net assets and liabilities:
Trade and other receivables764(579)
Unharvested agricultural produce(2,403)(1,072)
Inventories283,540
Prepayments(426)(975)
Trade and other payables5,960(235)
Current tax assets and liabilities(1,045)2,169
NET CASH PROVIDED BY OPERATING ACTIVITIES53,22456,099
Statement of cash flows
For the purpose of the statement of cash flows, cash and cash equivalents include cash and bank balances and
bank overdrafts.
The following terms are used in the statement of cash flows:
Operating activitiesare the principal revenue producing activities of the Group and other activities that are not
investing or financing activities.
Investing activitiesare the acquisition and disposal of long-term assets and other investments not included in cash
equivalents.
Financing activitiesare activities that result in changes in the size and composition of the contributed equity and
borrowings of the Group.
The notes to the financial statements on pages 10 to 45 form part of and should be read in conjunction with this statement.
For and on behalf of the Board of Directors who authorised the issue of the financial statements on 25 February 2021.
Tim Goodacre, ChairAndy Borland, Managing Director
9

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
ABOUT THIS REPORT
IN THIS SECTION
The notes to the financial statements include information which is considered relevant and material to assist the
reader in understanding the financial performance and financial position of the Scales Corporation Limited Group
("Scales" or the "Group"). Information is considered relevant and material if:
• the amount is significant because of its size and nature;
• it is important for understanding the results of Scales;
• it helps to explain changes in Scales’ business; or
• it relates to an aspect of Scales’ operations that is important to future performance.
Scales Corporation Limited (the "Company") is a for-profit entity domiciled and registered under the Companies
Act 1993 in New Zealand. It is an FMC reporting entity for the purposes of the Financial Markets Conduct Act
2013. The Group consists of Scales Corporation Limited, its subsidiaries and joint ventures. The principal activities
of the Group are to grow apples, provide logistics services, export products, manufacture and trade food ingredients,
provide insurance services to companies within the Group and operate processing facilities.
The financial statements have been prepared:
• in accordance with Generally Accepted Accounting Practice (GAAP), International Financial Reporting Standards
(IFRS), the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable
financial reporting standards, as appropriate for a Tier 1 for-profit entity;
• in accordance with the requirements of the Financial Markets Conduct Act 2013;
• in accordance with accounting policies that are consistent with those applied in the previous year;
• on the basis of historical cost, except for certain assets and financial instruments that are measured at fair
values; and
• in New Zealand dollars with all values rounded to the nearest thousand dollars.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or liability, the Group takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree
to which the inputs to the fair value measurements are observable. The levels are described as:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices within Level 1, that are observable for the asset or liability,
either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
Key judgements and estimates
In the process of applying the Group’s accounting policies and the application of financial reporting standards,
Scales has made a number of judgements and estimates. The estimates and underlying assumptions are based on
historical experience and various other factors that are considered to be appropriate under the circumstances.
Actual results may differ from these estimates.
10

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
ABOUT THIS REPORT (CONTINUED)
Key judgements and estimates (continued)
Judgements and estimates which are considered material to understanding the performance of Scales are
explained in the following notes:
• Apple trees in note C1;
• Unharvested agricultural produce in note C2.
• Assessment of Group invesment in Meateor Pet Foods Limited Partnership for impairment in note C3.
Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and its subsidiaries (being
entities controlled by Scales Corporation Limited), and the equity accounted result, assets and liabilities of the
joint ventures.
The financial statements of members of the Group, are prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the Group financial statements, all material intra-group transactions, balances, income, expenses and
cash flows have been eliminated. Subsidiaries are consolidated from the date on which control is obtained to the
date on which control is lost.
Other accounting policies
Other accounting policies that are relevant to an understanding of the financial statements are provided
throughout the notes to the financial statements.
Adoption of new and revised standards and interpretations; standards and Interpretations issued but not yet effective
All mandatory amendments and interpretations have been adopted in the current year. None had a material impact
on these financial statements.
The Group has reviewed all Standards, Interpretations and Amendments to existing Standards in issue not yet
effective and does not expect these to have a material effect on the financial statements of the Group.
11

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
A. SEGMENT INFORMATION
IN THIS SECTION
This section explains the financial performance of the operating segments of Scales, providing additional
information about individual segments, including:
• total segment revenue and revenue from external customers;
• segment profit before income tax; and
• total segment assets and liabilities.
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker, being the Managing Director. The Managing Director monitors the operating
performance of each segment for the purpose of making decisions on resource allocation and strategic direction.
Inter-segment pricing is determined on an arm’s length basis. Segment results include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis.
No single external customer’s revenue accounts for 10% or more of the Group’s revenue.
The Group comprises the following operating segments:
Food Ingredients: processing and marketing of food ingredients such as pet food ingredients and juice
concentrate. Meateor Foods Limited, Meateor Foods Australia Pty Limited, Meateor Group Limited, Meateor US LLC,
Shelby JV LLC Group (Shelby Cold Storage LLC, Shelby Exports Inc, Shelby Foods LLC, Shelby JV LLC, Shelby Properties LLC,
Shelby Trucking LLC), Meateor GP Limited, Meateor Pet Foods Limited Partnership and Profruit (2006) Limited.
Horticulture: orchards, fruit packing and marketing. Mr Apple New Zealand Limited, New Zealand Apple Limited,
Fern Ridge Produce Limited and Longview Group Holdings Limited.
Logistics: logistics services. Scales Logistics Limited and Scales Logistics Australia Pty Ltd.
Other: Scales Corporation Limited, Geo. H. Scales Limited, Scales Employees Limited, Scales Holdings Limited
and Selacs Insurance Limited.
Horticulture
Food
IngredientsLogisticsOtherEliminationsTotal
$000's$000's$000's$000's$000's$000's
2020
Total segment revenue245,984173,69477,9173,784(30,670)470,709
Inter-segment revenue--(28,082)(2,588)30,670-
Revenue from external customers245,984173,69449,8351,196-470,709
Loss on sale of non-current assets46-(108)--(62)
Share of profit of entities accounted for-2,224---2,224
using the equity method
Revaluation of apple trees and buildings(4,311)----(4,311)
EBITDA35,78121,8724,215(5,128)-56,740
Amortisation expense(475)-(43)(66)-(584)
Depreciation expense(9,049)(1,045)(187)(13)-(10,294)
Depreciation of right of use asset(7,586)(63)(594)(58)-(8,301)
Finance revenue11-2,582-2,584
Finance costs(36)(32)(28)(1,819)-(1,915)
Finance cost of lease liability(2,660)(18)(289)(14)-(2,981)
Segment profit (loss) before income tax15,97620,7153,074(4,516)-35,249
12

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
SEGMENT REPORTING (CONTINUED)
Horticulture
Food
IngredientsLogisticsOtherEliminationsTotal
$000's$000's$000's$000's$000's$000's
Segment assets329,055103,79317,867135,495-586,210
Segment liabilities122,83819,08211,87054,015-207,805
Segment carrying value of investment-26,154---26,154
accounted for using the equity method
Segment acquisition of property, plant and23,800471926-24,369
equipment and computer software
2019 (continuing operations)
Total segment revenue264,782155,07787,0763,461(25,787)484,609
Inter-segment revenue--(22,948)(2,839)25,787-
Revenue from external customers264,782155,07764,128622-484,609
Gain on sale of non-current assets45--1-46
Share of profit of entity accounted for-2,997---2,997
using the equity method
EBITDA47,90932,9214,058(5,035)-79,853
Amortisation expense(486)(1)(36)(69)-(592)
Depreciation expense(8,296)(1,016)(328)(14)-(9,654)
Depreciation of right of use asset(7,122)(62)(583)(57)-(7,824)
Finance revenue191032,802-2,834
Finance costs(16)(23)(33)(3,477)-(3,549)
Finance cost of lease liability(2,739)(20)(301)(15)-(3,075)
Segment profit (loss) before income tax29,26931,8092,780(5,865)-57,993
Segment assets293,249101,09118,619145,721-558,680
Segment liabilities112,42611,11012,26963,872-199,677
Segment carrying value of investment-24,973---24,973
accounted for using the equity method
Segment acquisition of property, plant and15,00219147010-15,673
equipment and computer software
Non-current assets other than financial instruments by geographical location
New ZealandAustraliaUSATotal
20202019202020192020201920202019
$000's$000's$000's$000's$000's$000's$000's$000's
Property, plant and equipment177,517161,10240493,7544,590181,311165,741
Investments accounted for26,15424,973----26,15424,973
using the equity method
Goodwill16,18816,188--25,71727,59641,90543,784
Computer software354807----354807
Right of use asset77,29478,08019221539148077,87778,775
13

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B. FINANCIAL PERFORMANCE
IN THIS SECTION
This section explains the financial performance of Scales, providing additional information about individual items
in the statement of comprehensive income, including:
• accounting policies, judgements and estimates that are relevant for understanding items recognised in the
statement of comprehensive income; and
• analysis of Scales’ performance for the year by reference to key areas including revenue, expenses and taxation.
B1. REVENUE
20202019
$000's$000's
By nature:
Revenue from the sale of goods
402,194 390,855
Revenue from the rendering of services
64,357 90,280
Fees and commission
5989
Net foreign exchange loss
(730)(127)
Rental revenue
4,8293,512
470,709 484,609
By market:
New Zealand
81,549 107,465
Asia
128,582 153,301
Europe
75,041 64,621
North America
184,894 154,994
Other
6434,228
470,709 484,609
By segment and type:
Horticulture - sale of agricultural produce229,033237,584
Horticulture - agricultural produce related services12,13323,695
Horticulture - other4,8183,503
Food ingredients - sale of pet food ingredients171,144152,963
Food ingredients - other2,5502,114
Logistics services49,83564,128
Other1,196622
470,709 484,609
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts
collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service
to a customer.
14

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B1. REVENUE (CONTINUED)
Sale of agricultural produce
The Group sells apples to more than 160 customers in 40 countries. Sales-related quality claim provisions are
recorded in accordance with NZ IAS 37Provisions, Contingent Liabilities and Contingent Assets. Revenue is
recognised when control of the goods has transferred, being when the goods have been shipped to the customer
("outright sales") or when the goods have been sold by the customer ("consignment sales"). In addition, the apple
season finishes before the end of the calendar year, with performance obligations under both sales types satisfied
for all sales made during that season.
Outright sales
Following shipment, revenue is recognised when the customer obtains control as it has full discretion over the
manner of distribution and price to sell the goods, has the primary responsibility when onselling the goods and
bears the risks of loss in relation to the goods. A receivable is recognised by the Group when it loses control,
which is when the goods are delivered on the ship at the port of shipment as this represents the point in time at
which the right to consideration becomes unconditional, as only the passage of time is required before the
payment is due. Terms of payment are up to 45 days on arrival.
Consignment sales
Revenue is recognised by the Group when it loses control, which is when the goods are confirmed to be on-sold
to the ultimate customer as this represents the point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before the payment is due. Terms of payment are
immediate upon on-sale.
Sale of petfood ingredients
The Group sells petfood ingredients to a number of international and domestic customers. Revenue is recognised
when control of the goods has transferred, being when the goods have been delivered to the customer ("delivered
to destination sales") or when shipped to the customer ("outright sales"). Terms of payments are up to 120 days.
Delivered to destination sales
Following delivery, revenue is recognised when the customer obtains control as it has full discretion over the
manner of distribution and price to sell the goods, has the primary responsibility when onselling the goods and
bears the risks of loss in relation to the goods. A receivable is recognised by the Group when it loses control, which is
when the goods are delivered to the destination named by the customer as this represents the point in time at
which the right to consideration becomes unconditional, as only the passage of time is required before the
payment is due.
Outright sales
Same as above under "Sale of agricultural produce - outright sales".
Agricultural produce related services
The Group provides a number of agricultural produce related services to external apple growers, including
packaging, cartage, export documentation and export services. Each of those services is considered to be a distinct
service as it is both regularly supplied by the Group to customers on a stand-alone basis and is available for
customers from other providers in the market.
A receivable is recognised by the Group when the service performance has been completed, and the performance
obligation is satisfied as this represents the point in time at which the right to consideration becomes unconditional,
as only the passage of time is required before the payment is due. Terms of payment are up to 45 days.
Logistics services
The Group provides marine and air logistics services to domestic customers. Revenue is recognised by the Group
at a point in time, which is when the shipment is organised and the goods are on the ship or the aeroplane. The
performance obligation is satisfied at the point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before the payment is due. Terms of payments are up to 60 days.
15

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B2. COST OF SALES, ADMINISTRATION AND OPERATING EXPENSES
20202019
$000's$000's
Auditor's remuneration:
Deloitte Limited (New Zealand):
Audit of the financial statements:
Audit of the annual financial statements
175168
Review of interim financial statements
4845
Other assurance services:
Audit of solvency certificate for Selacs Insurance Limited
66
Sheehan & Company CPA, PC (United States):
Group reporting audit
9269
Review of subsidiary financial statements
3130
Bad debts incurred (recovered)
251(168)
Change in fair value adjustment to unharvested agricultural produce
802332
Change in inventories
2523,540
Direct expenses
58,852 65,987
Directors' fees
596555
Donations
4513
Electricity
2,7782,774
Employee benefits expense:
Post employment benefits - defined contribution plans
1,2541,401
Post employment benefits - defined benefit plans
508409
Salaries, wages and related benefits
79,809 73,754
Other employee benefits
698743
Grower payments
49,017 62,376
Insurance
3,6093,589
Management fees
4897
Materials and consumables
112,758 102,877
Ocean and air freight
72,056 81,154
Operating lease expenses
2,9602,089
Packaging
19,225 18,940
Provision for write-down of inventories
3771,168
Repairs and maintenance
4,9355,143
411,182 427,091
Disclosed as:
Cost of sales366,800383,126
Administration and operating expenses44,38243,965
411,182 427,091
Employee benefits
An accrual is made for benefits due to employees in respect of wages and salaries, annual leave and long service
leave when it is probable that settlement will be required and they are capable of being measured reliably.
Accruals are measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Contributions to defined contribution plans are recognised as an expense when employees have rendered service
entitling them to the contributions.
The costs relating to shares issued in accordance with the Senior Executive Share Scheme are explained in note D2.
16

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B3. OTHER INCOME AND LOSSES
20202019
$000's$000's
Dividends
91
(Loss) gain on disposal of property, plant and equipment
(62)46
Reinsurance income (Note G4)
1,636374
Insurance claims expense paid (Note G4)
(1,636)(374)
Remeasurement of gross liability to non-controlling interest
(647)(273)
(700)(226)
Disclosed as:
Other income1,645421
Other losses(2,345)(647)
(700)(226)
B4. FINANCE COST
Interest on loans
1,8673,298
Other interest
12123
Bank facility fees
36128
1,9153,549
Finance costs consist of interest and other costs incurred in connection with the borrowing of funds. Interest
expense is accrued on a time basis using the effective interest method.
B5. TAXATION
Income tax recognised in profit or loss
Income tax expense comprises:
Current tax expense from continuing operations
8,8278,795
Current tax expense from discontinued operations
-2,483
Total current tax expense
8,827 11,278
Adjustments recognised in the current year in relation to the current tax of prior years
-(74)
Deferred tax expense relating to the origination and reversal of temporary differences
(159)438
8,668 11,642
Total income tax expense recognised in profit or loss from continuing operations8,6689,418
Total income tax expense recognised in profit or loss from discontinued operations
-
2,224
Total income tax expense recognised in profit or loss
8,668 11,642
The prima facie income tax expense on pre-tax accounting profit reconciles to the income tax expense in the
financial statements as follows:
Profit from continuing operations35,24957,993
Profit from discontinued operations-75,226
Total profit before tax35,249133,219
Income tax expense calculated at applicable corporate tax rates9,59037,128
Non-assessable income(1,698)(26,278)
Non-deductible expenses472688
Under (over) provision of income tax in previous year - current tax-(73)
Under provision of income tax in previous year - deferred tax304177
8,668 11,642
17

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B5. TAXATION (CONTINUED)
The tax rates used in the above reconciliation are the corporate tax rate of 28% payable by New Zealand companies
under New Zealand tax law, 30% payable by Australian companies under Australian tax law and 25.5% payable by
US entities under US tax law (being federal tax 21% and weighted average state tax 4.5%).
Opening
balance
Charged to
profit or
loss
Charged to
other
comprehen-
sive income
Closing
Balance
$000's$000's$000's$000's
Deferred tax liability
Taxable and deductible temporary differences
arise from the following:
31 December 2020
Deferred tax liabilities (assets):
Trade and other receivables(23)(141)-(164)
Unharvested agricultural produce6,048671-6,719
Property, plant and equipment and computer software12,820(745)43912,514
Trade and other payables(703)(45)-(748)
Lease liability and right-of-use asset (NZ IFRS 16)(381)(295)-(676)
Other financial assets and liabilities, joint ventures and pension plan1,6812985,9727,951
Net deferred tax liability19,442(257)6,41125,596
31 December 2019
Deferred tax liabilities (assets):
Trade and other receivables(140)117-(23)
Unharvested agricultural produce5,558490-6,048
Property, plant and equipment and computer software10,8337681,21912,820
Trade and other payables(467)(236)-(703)
Lease liability and right-of-use asset (NZ IFRS 16)-(381)-(381)
Other financial assets and liabilities(196)-1,8771,681
Net deferred tax liability15,5887583,09619,442
Current tax is the taxation expected to be paid to taxation authorities in respect of the current year. Deferred taxation
is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the Financial Statements. Current and deferred tax is calculated on the basis of the laws enacted or
substantively enacted at balance date.
Income tax
Current and deferred tax are recognised in profit or loss, except when the tax relates to items charged or credited
to other comprehensive income, in which case the tax is also recognised in other comprehensive income.
18

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
B6. FOREIGN CURRENCY TRANSACTIONS
In preparing the financial statements of the individual entities, the transactions in currencies other than New
Zealand dollars are recorded at the rates of exchange prevailing at the dates of the transaction. At the end of each
reporting period financial assets and liabilities denominated in foreign currencies are retranslated into New
Zealand dollars at the rates prevailing at the end of the reporting period.
Exchange differences from these transactions are recognised in profit or loss in the period in which they arise.
Income and expenses for each subsidiary whose functional currency is not New Zealand dollars are translated at
exchange rates that approximate the rates at the actual dates of the transactions. Assets and liabilities of each
subsidiary are translated at exchange rates at balance date.
All resulting exchange differences are recognised in the foreign exchange translation reserve, which is a separate
component of equity.
The effective portion of exchange differences on foreign currency borrowings designated as hedges of net
investments in foreign operations is also recognised in the foreign exchange translation reserve.
19

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C. KEY ASSETS
IN THIS SECTION
This section shows the key assets Scales uses to generate operating revenues. There is information about:
• property, plant and equipment;
• unharvested agricultural produce;
• investments accounted for using the equity method;
• goodwill; and
• inventories.
C1. PROPERTY, PLANT AND EQUIPMENT
Land and
buildings at
fair value
Apple trees
at fair value
Plant and
equipment
at cost
Office
equipment
and motor
vehicles at
cost
Capital work
in progress
at costTotal
$000's$000's$000's$000's$000's$000's
Gross carrying amount
Balance at 1 January 2019
86,669 31,600 67,686 11,9642,014
199,933
Additions
963,6565,0111,1325,506
15,401
Disposals
--(11,532)(994)-
(12,526)
Revaluation
10,020 (1,342)---
8,678
Effect of foreign currency translation
(6)-(13)-(7)
(26)
Balance at 31 December 201996,77933,91461,15212,1027,513211,460
Additions
6,7121,9703,7711,569 10,215
24,237
Reclassified as held for sale
(3,148)----
(3,148)
Disposals
--(671)(660)-
(1,331)
Revaluation
7,693 (3,080)---
4,613
Effect of foreign currency translation
(137)-(270)(2)10
(399)
Balance at 31 December 2020107,89932,80463,98213,00917,738235,432
Accumulated depreciation, and impairment
Balance at 1 January 2019
--40,4478,900
-49,347
Depreciation expense
1,0972,7734,5731,211
-9,654
Disposals
--(8,477)(918)
-(9,395)
Revaluation
(1,097)(2,773)--
-(3,870)
Effect of foreign currency translation
--(17)-
-(17)
Balance at 31 December 2019--36,5269,193-45,719
Depreciation expense
1,4403,0494,5851,220
-10,294
Reclassified as held for sale
(598)---
-(598)
Disposals
--(347)(626)
-(973)
Revaluation
(1,440)(3,049)--
-(4,489)
Impairment on revaluation
2,4711,840--
-4,311
Effect of foreign currency translation
--(143)-
-(143)
Balance at 31 December 20201,8731,84040,6219,787-54,121
Net book value
As at 31 December 201996,77933,91424,6262,9097,513165,741
As at 31 December 2020106,02630,96423,3613,22217,738181,311
20

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C1. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Accounting policy
Land, buildings and apple trees are included in the statement of financial position at their fair value at the date of
revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Valuations are performed with sufficient regularity such that the carrying amounts do not differ materially from
those that would be determined using fair values at the end of the reporting period.
Any valuation increase arising on the revaluation of such land, buildings and apple trees is recognised in other
comprehensive income and accumulated as a separate component of equity in the revaluation reserve, except to
the extent that it reverses a valuation decrease for the same asset previously recognised in profit or loss, in which
case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in
carrying amount arising on the revaluation of such land, buildings and apple trees is charged to profit or loss to
the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of
that asset.
Depreciation on revalued buildings and apple trees is charged to profit or loss. On the subsequent sale or
retirement of revalued property or apple trees, the attributable revaluation surplus remaining in the revaluation
reserve is transferred directly to retained earnings. No transfer is made from the revaluation reserve to retained
earnings except when an asset is derecognised.
Office equipment, motor vehicles, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the
item.
Depreciation is provided on property, plant and equipment, including buildings and apple trees but excluding land
and capital work in progress. Depreciation is charged so as to write off the cost or valuation of assets, other than
land and capital work in progress, over their estimated useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes
in estimate accounted for on a prospective basis. The following estimated useful lives are used in the calculation of
depreciation:
Apple trees30 years
Buildings10 to 50 years
Office Equipment and Motor Vehicles2 to 20 years
Plant and Equipment2 to 25 years
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the sale proceeds and the carrying amount of the asset and is recognised in profit or
loss.
Land and buildings carried at fair value
Land and buildings shown at valuation were valued at fair value as at 31 December 2020 by independent registered
valuers Added Valuation Limited and Logan Stone Limited. The valuations were arrived at by reference to market
evidence of transaction prices for similar properties.
21

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C1. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and buildings carried at fair value (continued)
The fair value of land and buildings is calculated on the basis of market value. Market value is determined by applying
income capitalisation and comparative sales calculations which are benchmarked against depreciated replacement
cost calculations. The valuations include adjustments to observable data for similar properties to take into
account property-specific attributes.
The significant unobservable inputs, based on regional averages, for the land and buildings (mainly coolstores and
packhouses) are potential market comparative rentals $5 - $283 per square metre (2019: $5 - $155) and the capitalisation
rates of 7.6% - 11% (2019: 8.5% - 12%).
The higher the rental rates the higher the fair value. The higher the capitalisation rates the lower the fair value.
Significant changes in either of these inputs would result in significant changes to the fair value measurement.
Orchard land is valued within the range of $28,300 to $135,000 per hectare (2019: $28,300 to $123,000).
The Group’s land and buildings are classified as Level 3 in the fair value hierarchy.
The carrying amount of land and buildings had it been recognised under the cost model is $50,794,000
(31 December 2019: $48,077,405).
Apple trees carried at fair value
The Group’s apple orchards, being the apple trees other than the existing crop on the trees, were valued at fair value by
Boyd Gross B.Agr (Rural Val), Dip Bus Std, FNZIV, FPINZ of Logan Stone Limited as at 31 December 2020.
The market valuations completed by Boyd Gross were based on a discounted cash flows (DCF) analysis of forecast
income streams and costs. They were benchmarked against a comparison of sales of other orchards adjusted to reflect
the location, plantings, age and varieties of trees and productive capabilities of the orchards. The fair value of
orchard land and buildings are deducted from the overall orchard valuation to give rise to the apple trees valuation.
The significant unobservable inputs, based on district averages, for the apple trees are:
20202019
Production levels (gross tray carton equivalent (tce)) per hectare2,277 - 7,1053,495 - 6,021
Orchard gate returns per tce$24.75 - $37.62$25.00 - $38.00
Orchard costs per tce$12.95 to $41.83$15.31 - $28.34
Discount rate14.84% - 17.84%15.58% - 19.40%
The higher the production levels and orchard gate return the higher the fair value. The higher the orchard costs
and discount rate the lower the fair value. Significant changes in any of these inputs would result in significant
changes to the fair value measurement. The Group’s apple trees are classified as level 3 in the fair value hierarchy.
The carrying amount of apple trees had it been recognised under the cost model is $16,673,000
(31 December 2019: $19,591,963).
22

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C1. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The apple trees, on owned and leased orchards, have the following planting profile:
Total hectares planted
20202019
Premium varieties:
NZ Queen
210210
Pink Lady
121123
Red sports (Fuji and Royal Gala)
265259
Other premium
169151
Traditional varieties:
Braeburn
101110
Royal Gala
177176
Other traditional
158153
1,2011,182
Risk management strategy:
The Group is exposed to financial risks arising from changes in climatic conditions, market prices and the value of
the New Zealand dollar. The Group mitigates these risks by installing hail and frost protection on orchards which
have shown to be more susceptible to these risks, obtaining hail insurance cover, utilising foreign currency
derivative instruments and building close working relationships with key customers.
C2. UNHARVESTED AGRICULTURAL PRODUCE
20202019
$000's$000's
Balance at beginning of the year
21,619 20,547
Decrease due to harvest
(21,619)(20,547)
Development expenditure
24,460 21,254
Fair value adjustment
(438)365
Balance at end of the year
24,022 21,619
The assessment of the value of unharvested agricultural produce was undertaken by management, using a
discounted cash flow model, and is calculated as the fair value less estimated harvest and post-harvest costs of
the unharvested crop on the trees at the reporting date. The risk adjusting discount rate represents an allowance
for adverse events that may affect crop, harvest and/or market conditions. This calculation is also benchmarked
against orchard costs incurred during the current growing cycle.
The Group’s unharvested agricultural produce is classified as Level 3 in the fair value hierarchy.
The significant unobservable inputs included in the model are the:
20202019
Production levels (tonnes per hectare per annum)37 - 15963 - 108
Orchard gate returns per tce$22 to $48$23 to $43
Risk adjusting discount rates43% to 61%53% to 71%
The higher the yield per hectare and the higher the orchard gate returns per tce, the higher the fair value. The
higher the risk adjusting discount rate, the lower the fair value.
23

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Details of each of the Group’s material joint ventures at the end of the reporting period are as follows:
Joint venturesPrincipal activityCountry of
Holding
Balance date
incorporation
20202019
Profruit (2006) LimitedTrading companyNew Zealand50%50% 31 December
Meateor Pet Foods Limited Partnership Trading companyNew Zealand50%50% 31 December
Summarised financial information in respect of the Group’s joint ventures is set out below. The aggregate summarised
financial information below represents amounts in joint ventures financial statements prepared in accordance
with NZ IFRS Standards.
20202019
$000's$000's
Current assets
35,738 31,110
Non-current assets
36,430 30,218
Current liabilities
(13,616)(8,233)
Non-current liabilities
(6,245)(3,149)
Net assets
52,307 49,946
Group's share in the net assets of equity accounted entities (50%)
26,154 24,973
Carrying amount of investment in equity accounted entities
26,154 24,973
The above amounts of assets and liabilities include the following:
Cash and cash equivalents
1,6272,243
Current financial liabilities (excluding trade and other payables and provisions)
(2,441)(1,340)
Non-current financial liabilities (excluding trade and other payables and provisions)
(2,790)(3,114)
Revenue
61,541 54,892
Profit for the year after tax
4,4465,994
Other comprehensive income attributable to the owners of the company
1,416418
Total comprehensive income
5,8626,412
The above profit for the year includes the following:
Depreciation and amortisation
1,576817
Interest expense
295325
Income tax expense
1,5591,542
Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint
venture recognised in the consolidated financial statements:
Share of profit before taxation
3,0033,768
Share of income tax
(780)(771)
Share of other comprehensive income (net of tax)
708209
Share of net profit for the year and total comprehensive income2,9313,206
Carrying value at beginning of the year
24,9735,213
Interest retained (foregone) in Meateor Pet Foods Limited Partnership
(250)18,054
Dividend paid by Profruit (2006) Limited
(1,500)(1,500)
Investment in equity accounted entities26,15424,973
24

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
The Group share of the guarantee of the Profruit (2006) Limited bank loan facilities is $1,096,301 (2019: $2,052,808).
In 2019, the Company announced an agreement to enter into a pet food Joint Venture (JV) with Alliance
Group Limited (Alliance). Under the terms of the JV, Alliance paid $15 million to acquire a 50% interest in
Meateor Food Limited’s (a wholly owned subsidiary of the Group) New Zealand business and operations.
Accordingly, Meateor Pet Foods Limited Partnership (the "LP") was incorporated on 13 March 2019. The general
partner of the LP is Meateor GP Limited (incorporated in 2019), which is owned 50/50 by the Group and Alliance.
The LP acquired Meateor Foods Limited's New Zealand business and operations for $30 million. The Group and
Alliance each contributed $15 million in exchange for a 50% limited partnership interest. $15 million capital
contribution from the Group was set off against $30 million receivable from the LP.
A total $19.6 million gain was recognised which included $9.8m gain on sale of Meator New Zealand business to
the LP and $9.8m gain on fair value measurement of the interest in the LP.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in a joint venture is initially
recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the joint venture. Dividends or
distributions received from a joint venture reduce the carrying amount of the investment in that joint venture in
the Group financial statements. When the Group’s share of losses of a joint venture exceeds the Group’s interest
in that joint venture, the Group discontinues recognising its share of further losses. Additional losses are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee
becomes a joint venture until the date it ceases to be a joint venture. On acquisition of the investment in a joint
venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as goodwill, which is included within the carrying value of the
investment. The requirements of NZ IAS 36Impairment of Assetsare applied to determine whether it is
necessary to recognise any impairment loss.
Due to the recent performance of the LP being below expectations, the directors have assessed the investment in
the LP for impairment. The LP is governed by a separate board made up of representatives from the Group and
Alliance Group Limited. The LP Board has reviewed the performance of the business and adopted a budget and cash
flow forecast, which was used to assess impairment.
The directors of the Group have assessed the LP Board's approved forecast for 2021 and 2022, and growth
assumptions for the following years, including the terminal growth rate, when considering the carrying value of the
investment in the LP. The LP Board's forecast for 2021 and 2022 included a number of plans and assumptions
designed to restore and grow profitability to expected levels. The directors consider such assumptions to be
reasonable in the circumstances.
25

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C3. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
The directors determined the recoverable amount of the investment in the LP based on the value in use of the business
which uses future cash flows covering a 5 year period based on the LP Board approved forecast.
The directors concluded that there is no impairment of the investment in the LP as the recoverable amount exceeded the
carrying value of the investment in the LP.
$000's
Recoverable amount of Group's investment in the LP
20,790
Carrying value
19,956
Headroom
834
Key assumptions:
Pre-tax discount rate12.55%
Sales and cost of sales growth rate in years 1-54.50%
Overhead cost growth rate in years 1-51.50%
Terminal growth rate beyond year 51.90%
The pre-tax discount rate was determined based on the weighted average cost of capital which utilises past
experience and external sources.
The sensitivity of the recoverable amount of the Group's investment in the LP to the reasonably possible changes
is set out below:
$000's$000's
+0.5%-0.5%
Pre-tax discount rate(997)1,095
Sales and cost of sales growth rate in years 1-51,136(1,113)
Overhead cost growth rate in years 1-5(143)141
Terminal growth rate499(456)
+10%-10%
Forecast earnings2,541(2,541)
Changes in each key assumptions that would result in the recoverable amount equalling the carrying amount, assuming
all other inputs remain unchanged, are set out below:
Pre-tax discount rateIncrease by 0.4%
Sales and cost of sales growth rate in years 1-5Reduction by 0.4%
Overhead cost growth rate in years 1-5Increase by 2.9%
Terminal growth rateReduction by 1.0%
Forecast earningsReduction by 2.9%
26

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C4. GOODWILL
20202019
$000's$000's
Gross carrying amount
Balance at beginning of the year43,78443,875
Effect of foreign currency exchange differences(1,879)(91)
Balance at end of the year
41,905 43,784
Goodwill arising on the acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any. Goodwill is tested for impairment annually, or more
frequently if there are indications that goodwill might be impaired. For the purpose of impairment testing,
goodwill has been allocated to the cash-generating units ("CGUs") listed below which represent the lowest level at
which the Directors monitor goodwill.
20202019
$000's$000's
Logistics1,9551,955
Mr Apple14,23314,233
Shelby25,71727,596
41,905 43,784
As at 31 December 2020, the Directors have determined, based on discounted cash flow and value in use
calculations, that there is no impairment of goodwill associated with any of the above CGUs.
The discounted cash flow and value in use calculation uses future cash flows covering a five year period based on
a Board approved budget. The model was based on the following key assumptions:
20202019
Pre-tax discount rates10-13%12-13%
Annual growth rates2%2-3%
The Directors consider that any reasonably possible changes in the key assumptions would not cause the carrying
amount of any of the cash-generating units to exceed their recoverable amount.
C5. INVENTORIES
20202019
$000's$000's
Finished goods
20,871 21,583
Other
4,9344,839
25,805 26,422
Inventories are stated at the lower of cost and net realisable value. Cost means the actual cost of the inventory
and in determining cost the first in first out basis of stock movement is followed, with due allowance having been
made for obsolescence. Net realisable value represents the estimated selling price for inventories less all
estimated costs of completion and costs necessary to make the sale.
27

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
C6. IMPAIRMENT OF ASSETS
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is
less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset
in the unit. Any impairment loss for goodwill is recognised directly in profit or loss and is not reversed in
subsequent periods.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease.
28

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
D. CAPITAL FUNDING
IN THIS SECTION
This section explains how Scales manages its capital structure and how dividends are returned to shareholders.
In this section there is information about:
• equity;
• dividends paid; and
• earnings per share.
Capital management
The Group’s capital includes share capital, reserves and retained earnings. The Group’s policy is to maintain a
strong capital base so as to maintain investor, creditor and customer confidence and to sustain the future
development of the business. The impact of the level of capital on shareholders’ return is also recognised and the
Group recognises the need to maintain a balance between the higher returns that might be possible with greater
gearing and the advantages and security afforded by a sound capital position.
D1. SHARE CAPITAL
Issued and paid up capital consists of 142,090,521 fully paid ordinary shares (2019: 141,579,238) less treasury stock of
1,580,229 shares (2019: 1,383,659 shares) (refer to note D2). All shares rank equally in all respects.
Shares issued or purchased on market under the Senior Executive Share Scheme ("Share Scheme") (note D2) are
treated as treasury stock until vesting to the employee.
Number of shares
Fully paid ordinary shares:
20202019
Opening balance141,579,238141,103,597
Share Scheme - shares issued511,283475,641
Closing balance142,090,521141,579,238
Treasury stock:
Opening balance1,383,6591,195,664
Share Scheme - shares issued511,283475,641
Share Scheme - shares fully vested(314,713)(287,646)
Closing balance1,580,2291,383,659
The available subscribed capital of $46,072,206 (2019: $42,808,000) represents the amount of the shareholders’ equity
that is available to be returned to shareholders on a tax-free basis.
In accordance with the Companies Act 1993 the Company does not have a limited amount of authorised capital
and issued shares do not have a par value.
20202019
Movement in share capital related to share-based payments:$000's$000's
Cash-settled share based payment scheme vested-134
Equity-settled employee benefit share scheme vested
Interest-free loan became full recourse397342
Accumulated share option value reclassified from reserve into share capital536474
Accumulated dividends reclassified from retained earnings into share capital165139
1,0981,089
29

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
D2. RESERVES
Revaluation
Cash flow
hedge
Share of
joint
ventures
Equity-
settled
employee
benefits
Foreign
exchange
translation
Revaluation
related to
discontinued
operations
Pension plan
reserve
Total
reserves
$000's$000's$000's$000's$000's$000's$000's$000's
Balance at 1 January 2019
44,540250-1,2484925,912-
71,999
Other comprehensive income (loss)11,3294,677151-(125)-
-
16,032
Transfer to retained earnings
-----(25,912)-
(25,912)
Recognition of share-based payments
---866---
866
Shares fully vested
---(474)---
(474)
Balance at 31 December 201955,8694,9271511,640(76)--62,511
Other comprehensive income (loss)8,66315,020510-(784)-
(60)
23,349
Transfer from retained earnings
1,093-----(341)
752
Recognition of share-based payments
---698-
-
-
698
Shares fully vested
---(536)-
-
-
(536)
Balance at 31 December 202065,62519,9476611,802(860)-(401)86,774
Revaluation reserve
The revaluation reserve arises on the revaluation of land, buildings and apple trees, net of the related deferred tax.
Cash flow hedge reserve
The cash flow hedge reserve represents the unrealised gains and losses on interest rate and foreign currency
contracts taken out to manage the Group interest rate and foreign currency risks, net of the related deferred tax.
Equity-settled employee benefits reserve
The Senior Executive Share Scheme involves the Company making available interest-free loans to selected senior
executives to acquire shares in the Company. The senior executives will not gain any benefit with respect to the
shares purchased under the Scheme unless they remain in employment with the Group for a period of three years
from the date of acquisition of those shares.
The shares are held by a custodian during the restrictive period and are then transferred to the senior executive.
All net dividends or distributions received in respect of the shares must be applied to repayment of the
interest-free loan.
Grant dateVesting dateExercise price, $
Number of shares
Opening
balanceGrantedForfeited
Vested and
exercised
Closing
balance
5 May 2017 - FY16A5 May 20201.70278,879--(278,879)-
5 May 2017 - FY16B5 May 20202.4535,834--(35,834)-
20 April 2018 - FY17A20 April 20211.70309,698---309,698
20 April 2018 - FY17B 20 April 20212.5136,007---36,007
20 April 2018 - FY17C20 April 20213.6240,577---40,577
28 June 2018 - FY17R28 June 20214.13207,023---207,023
30 April 2019 - FY1830 April 20222.71261,356---261,356
28 June 2019 - FY18R28 June 20224.06214,285---214,285
30 April 2020 - FY1930 April 20233.20-301,657--301,657
28 June 2020 - FY19R28 June 20234.19-209,626--209,626
Total1,383,659 511,283-(314,713) 1,580,229
30

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
D2. RESERVES (CONTINUED)
The weighted average share price for shares that vested on 5 May 2020 was $4.80.
The shares issued vest over three years. The estimated value of the share options is determined using the
Black-Scholes pricing calculator and is amortised over the restrictive period. This cost is expensed with the
corresponding credit included in the equity-settled employee benefits reserve. Expected share price volatility was
based on historical volatility of the Company's ordinary shares.
20202019
FY19FY19RFY18FY18R
The inputs into the "option pricing calculator" are:
Issue date share price, $4.904.965.004.75
Expected share price volatility, %21212220
Option life, years3333
Risk-free interest rate, %0.510.141.471.13
Exercise price, $3.204.192.714.06
Fair value, at the grant date, $1.831.122.431.10
Foreign exchange translation reserve
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as
part of the net investment, are accounted for in two ways. Gains or losses relating to the effective portion of the
hedge are recognised in other comprehensive income. Any gains or losses relating to the ineffective portion of the
hedge are recognised in profit or loss.
Gains or losses arising on translation of foreign subsidiaries results (Note B6) are also recognised in this reserve.
Retained earnings
Retained earnings represents the profits retained in the business.
D3. DIVIDENDS
20202019
$000's$000's
Final dividend paid - 9.50 (2019: 9.50) cents per share13,35713,326
Interim dividend declared - 9.50 (2019: 9.50) cents per share13,35913,328
26,71626,654
All above dividends were fully imputed.
The 2020 interim dividend was declared on 9 December 2020 and paid on 15 January 2021.
D4. IMPUTATION CREDIT ACCOUNT
20202019
$000's$000's
Balance at end of the year20,77323,194
The imputation credit account balance represents the net amount available at the reporting date that can be
attached to future dividends declared.
The Scales Corporation Limited consolidated tax group for income tax includes Scales Corporation Limited and all
New Zealand registered subsidiary companies other than Scales Employees Limited.
31

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
D5. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the company by the
weighted average number of ordinary shares on issue during the year, excluding shares held as treasury stock.
Diluted earnings per share assumes conversion of all dilutive potential ordinary shares in determining the
denominator.
20202019
Profit attributable to equity holders of the Company ($000's):
From continuing operations21,02545,000
From discontinued operations-73,002
Total21,025118,002
Weighted average number of shares:
Ordinary shares140,402,514 140,108,891
Effect of dilutive ordinary shares (non-vested Senior Executive Share Scheme)467,735481,924
Weighted average number of Ordinary Shares for diluted earnings per share140,870,249 140,590,815
Earnings per share (cents):
Basic - continuing15.032.1
Basic - discontinued-52.1
Basic - total15.084.2
Diluted - continuing14.932.0
Diluted - discontinued-51.9
Diluted - total14.983.9
32

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E. FINANCIAL ASSETS AND LIABILITIES
IN THIS SECTION
This section explains the financial assets and liabilities of Scales, the related risks and how Scales manages these
risks. In this section of the notes there is information on:
• the accounting policies, judgements and estimates relating to financial assets and liabilities; and
• the financial instruments used to manage risk.
ACCOUNTING POLICIES
Financial assets
Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or
loss’ (FVTPL) and ‘measured at amortised cost’.
The classification depends on the business model for managing the financial asset and the cash flow
characteristics of the financial asset and is determined at the time of initial recognition or when a change in the
business model occurs.
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss if they are not measured at cost or
amortised cost. Gains and losses on a financial asset designated in this category and not part of a hedging
relationship are recognised in profit or loss.
Financial assets measured at amortised cost
The Group’s financial assets held in order to collect contractual cash flows that are solely payments of principal
and interest on the principal outstanding are measured at amortised cost. Cash and cash equivalents, trade
receivables and employee loans are classified in this category.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses ("ECL") on investments in debt instruments that
are measured at amortised cost, trade and other receivables. The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The Group always recognises lifetime ECL for trade receivables. The expected credit losses on these financial assets
is estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors
that are specific to the debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in
credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an
amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected
life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to
result from default events on a financial instrument that are possible within 12 months after the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that
are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at the original effective interest rate.
33

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E. FINANCIAL ASSETS AND LIABILITIES (CONTINUED)
Financial liabilities measured at amortised cost
The Group’s financial liabilities include trade and other payables and borrowings. These financial liabilities are
initially recognised at fair value plus any directly attributable costs. Subsequent to initial recognition, they are
measured at amortised cost using the effective interest method.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value with reference to observable market data at the end of each reporting
period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated as
an effective hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship. The Group designates certain derivatives as cash flow hedges. A derivative is
presented as a non-current asset or a non-current liability where the cash flow will occur after 12 months and it is
not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or
current liabilities.
Hedge accounting
At the inception of a hedge relationship, the Group documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether
the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in cash flows
of the hedged item, attributable to the hedged risk.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognised in other comprehensive income and accumulated as a separate component of equity in the hedging
reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is
included in ‘other income’ or ‘other losses’.
Amounts recognised in the hedging reserve are reclassified from equity to profit or loss in the periods when the
hedged item is recognised in profit or loss, in the same line as the recognised hedged item. Hedge accounting is
discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold,
terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in the
hedging reserve at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss
that was deferred in the hedging reserve is recognised immediately in profit or loss.
Hedges of net investments in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss
on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive
income and accumulated under the heading of foreign exchange translation reserve. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss. Gains and losses on the hedging instrument
relating to the effective portion of the hedge accumulated in the foreign exchange translation reserve are
reclassified to profit or loss on the disposal of the foreign operation.
34

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E1. TRADE AND OTHER RECEIVABLES
20202019
$000's$000's
Trade receivables
14,151 13,400
Interest receivable
5852,043
Other receivables
1,0911,504
Owing by entity accounted for using the equity method
15797
Goods and services tax
3,4683,549
19,45220,593
Credit risk management
The Group activities expose it to credit risk which refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Financial instruments which potentially subject the
Group to credit risk principally consist of cash and cash equivalents, trade and other receivables and advances.
The Group performs credit evaluations on trade customers, obtains trade credit insurance as appropriate but
generally does not require collateral. The Group continuously monitors the credit quality of its major receivables
and does not anticipate non-performance of those customers. Cash and cash equivalents are placed with high
credit quality financial institutions.
There is a significant concentration of credit risk with 5 customers who represent 38.07% (2019: 5 customers
who represent 45.47%) of trade and other receivables.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum
exposure to credit risk.
Included in trade receivables are debtors which are past due at balance date, as payment was not received within
1 month, and for which provision for expected credit losses was not material as there has not been a significant
change in credit quality and the amounts are still considered recoverable. No collateral is held over these balances
although trade credit insurance cover is obtained in respect of some specific receivables. Interest is not charged on
overdue debtors. The ageing of these past due trade receivables is:
1 month2,3162,086
2 months616979
More than 2 months2,1691,827
5,1014,892
E2. OTHER FINANCIAL ASSETS
Current:
At fair value:
Foreign currency derivative instruments
12,6884,571
12,6884,571
Non-current:
At fair value:
Foreign currency derivative instruments
17,5726,593
Shares in unlisted companies
184221
At amortised cost:
Employee loans
387303
18,1437,117
35

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E3. TRADE AND OTHER PAYABLES
20202019
$000's$000's
Trade payables13,70711,628
Accruals6,4944,433
Employee entitlements4,9163,782
25,11719,843
E4. BORROWINGS
Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition,
borrowings are measured at amortised cost with any difference between the initial recognised amount and the
redemption value being recognised in profit or loss over the period of the borrowing using the effective interest
method. The fair value of current and non-current borrowings is approximately equal to their carrying amount.
The Group signed Multi-Option Facility Agreements with Coöperatieve Rabobank U.A., New Zealand Branch
("Rabobank") and Westpac New Zealand Limited ("Westpac") in 2013. The total facility is $22,000,000
(2019: $22,000,000). At 31 December 2020 the undrawn amount under these facilities was $2,000,000
(2019: $2,000,000). In addition, a $1,000,000 ANZ overdraft facility is available to Group (2019: $1,000,000).
This facility was undrawn as at both 31 December 2020 and 31 December 2019.
In 2018, the Group obtained an additional USD 11,635,000 term loan from Rabobank and USD 11,635,000 from
Westpac. These facilities were utilised to finance the acquisition of Shelby JV LLC Group. The USD denominated
loans are designated as a hedge of net investment in foreign operations.
The floating interest rate is 1.25% to 2.44% (2019: 2.03% to 3.06%) and the term borrowing facility expiry date is
1 July 2022. Seasonal facility presented as current borrowings is due for repayment within one year. The bank
facilities are secured by a first ranking security interest granted by each of the Charging Group Companies*
over all its present and after-acquired property (including proceeds) and a first ranking security interest
over any of the Charging Group Companies present and future assets and undertakings which are not personal
property. The bank facilities are also secured by first and exclusive registered mortgages over property comprising
coolstores, orchards and industrial and commercial property owned by members of the Charging Group.
The Multi-Option Facility Agreements with the Group’s banks include the requirement that at all times the
Tangible Net Worth of the Group, being Tangible Assets less Total Liabilities (excluding deferred tax liabilities), be
not less than $100,000,000. The Group has complied with this requirement since the facility was established. The
Group policies in respect of capital management and allocation are reviewed regularly by the Board of Directors.
There have been no material changes to the Group’s management of capital during the year.
*Charging Group Companies as at 31 December 2020 are Scales Corporation Limited, Scales Holdings Limited,
Mr Apple New Zealand Limited, New Zealand Apple Limited, Geo.H.Scales Limited, Meateor Foods Limited, Scales
Logistics Limited and Meateor Group Limited.
Seasonal facility
Other current
borrowings
Term borrowings
202020192020201920202019
$000's$000's$000's$000's$000's$000's
Seasonal (current) and term (non-current) borrowings:
Opening balance-2,000--54,55164,664
Drawdowns3,00079,000955---
Repayments(3,000)(81,000)---(10,000)
Effect of foreign currency translation--(95)-(2,352)(113)
--860-52,19954,551
36

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E5. OTHER FINANCIAL LIABILITIES
20202019
$000's$000's
Current financial liabilities at fair value:
Foreign currency derivative instruments
35785
Interest rate swap contracts and forward rate agreements
618537
Put option
3,6473,055
4,3004,377
Non-current financial liabilities at fair value:
Foreign currency derivative instruments
3661,459
Interest rate swap contracts and forward rate agreements
554762
Put option
1,6021,745
2,5223,966
In 2016 the Group increased its shareholding in Fern Ridge Produce Limited ("Fern Ridge") to 75%. As
part of the transaction, 2.12% of the shares were then sold to an employee of Fern Ridge, and Scales entered into
agreements with the remaining shareholders of Fern Ridge whereby those shareholders have an option to put
their shares to Scales at a value based on a multiple of Fern Ridge profits, but with a minimum value equivalent
to that paid to the selling shareholders.
In 2018 the Group acquired 60% of Shelby JV LLC and its subsidiaries Shelby Foods LLC, Shelby
Exports Inc, Shelby Cold Storage LLC, Shelby Trucking LLC and Shelby Properties LLC (collectively, "Shelby Group").
As part of the transaction, the Company entered into an agreement with the vendor whereby the vendor has an
option to put a further 5% of total units in Shelby Group to Scales at a value based on a multiple of Shelby Group
EBITDA. The obligation to acquire the ownership interest under the put option is included in other financial liabilities.
E6. INTEREST RATE RISK
Interest rate risk management
The Group is exposed to interest rate risk as it borrows funds at floating interest rates. Management monitors the
level of interest rates on an ongoing basis and may use interest rate swaps and forward rate agreements to
manage interest rate risk.
Interest rate swap contracts and forward rate agreements
Under interest rate swap contracts and forward rate agreements, the Group agrees to exchange the difference
between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts,
some of which can commence in future reporting years, enable the Group to mitigate the risk of changing interest
rates on the cash flow exposures on the issued floating rate debt. The fair value of these contracts at the reporting
date is determined by discounting the future cash flows using the forward interest rate curves at reporting date
and the credit risk inherent in the contracts. The average contracted fixed interest rate is based on the notional
principal amount at balance date.
37

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E6. INTEREST RATE RISK (CONTINUED)
The Group’s interest rate swap contracts and forward rate agreements are classified as Level 2 in the fair value
hierarchy.
Details of interest rate swap contracts and forward rate agreements for the Group are:
Fixed Interest Rate
Notional principal
amountFair value
202020192020201920202019
%%$000's$000's$000's$000's
Maturity Date
Interest rate swap contracts:
Within 1 year4.62-10,000-(323)-
2-5 years3.253.9310,00020,000(849)(1,299)
After 5 years------
20,00020,000(1,172)(1,299)
These interest rate swap contracts and forward rate agreements, exchanging floating rate interest amounts for
fixed rate interest amounts, are designated as cash flow hedges in order to reduce the Group’s cash flow exposure
resulting from floating interest rates on borrowings. The interest rate swap and forward rate agreement
payments, and the interest payments on the loans occur simultaneously, and the amount deferred in equity is
recognised in profit or loss over the period that the floating rate interest payments on debt impact profit or loss.
As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the
Group performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate
swap contracts and the value of the corresponding hedged items will systematically change in opposite directions
in response to movements in the underlying interest rates. The main source of hedge ineffectiveness in these
hedge relationships (which is not material) is the effect of the counterparty and the Group's own credit risk on
the fair value of the interest rate swap contract, which is not reflected in the fair value of the hedged item
attributable to the change in interest rates. No other sources of ineffectiveness emerged from these hedging
relationships.
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives
and non-derivative instruments at the reporting date. For floating rate liabilities, the analysis is prepared
assuming the amount of liability outstanding at reporting date was outstanding for the whole year. A 1%
increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management’s assessment of the reasonably possible change in interest rates. Impact on net profit
after tax assumes that none of floating interest rate borrowings were hedged.
20202019
+1%-1%+1%-1%
$000's$000's$000's$000's
Impact on net profit after tax192(192)(187)187
Impact on cash flow hedge reserve net of tax238(247)371(389)
38

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E7. FOREIGN CURRENCY RISK
Foreign currency risk management
Foreign currency risk is the risk that the value of the Group’s assets and liabilities or revenues and expenses will
fluctuate due to changes in foreign exchange rates. The Group is exposed to currency risk as a result of normal
trading transactions denominated in foreign currencies. The currencies in which the Group primarily trades are the
Australian dollar, Euro, Canadian dollar, Great Britain pound and United States dollar, with the largest exposure
being to the United States dollar.
Currency risk is managed by the natural hedge of foreign currency receivables and payables and the use of foreign
currency derivative financial instruments. The fair value of foreign currency derivative financial instruments at the
reporting date is determined on a discounted cash flow basis whereby future cash flows are estimated based on
forward exchange rates and contract forward rates, discounted at a rate that reflects the credit risk of various
counterparties.
The Group’s forward foreign exchange contracts and foreign exchange options are classified as Level 2 in the fair
value hierarchy.
Details of foreign currency instruments at balance date for the Group are:
20202019
Contract
ValueFair Value
Contract
ValueFair Value
$000's$000's$000's$000's
Sale commitments forward foreign exchange contracts217,51214,979210,5875,224
Sale commitments foreign exchange options106,64014,88090,4103,696
These foreign currency instruments are designated as cash flow hedges in order to reduce the Group’s cash flow
exposure resulting from movements in foreign currency exchange rates on anticipated future transactions. It is
anticipated that the sales will take place during the 2021 to 2025 financial years at which stage the amount
deferred in equity will be released into profit or loss.
For hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life
and underlying) of the foreign exchange forward contracts and their corresponding hedged items are the same,
the Group performs a qualitative assessment of effectiveness and it is expected that the value of the forward
contracts and the value of the corresponding hedged items will systematically change in opposite directions in
response to movements in the underlying exchange rates. The Group uses the hypothetical derivative method
for the hedge effectiveness assessment and measurement of hedge ineffectiveness. As for the hedge of the net
investment in Meateor US LLC sub-group, the Group assesses effectiveness by comparing the nominal amount
of the net assets designated in the hedge relationship with the nominal amount of the hedging instrument.
This is a simplified approach because the currency of the exposure and hedging instruments perfectly match
and the Group excludes from the designation the foreign currency basis spread.
The following table demonstrates the sensitivity to a reasonably possible change of 5% in the value of New
Zealand dollar against other foreign currencies, with all other variables held constant. The impact on the Group’s
profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Group’s
equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges.
20202019
+5%-5%+5%-5%
$000's$000's$000's$000's
Impact on net profit after tax(273)302(214)194
Impact on cash flow hedge reserve net of tax(11,694)10,811(10,861)10,309
39

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
E8. CATEGORIES OF FINANCIAL INSTRUMENTS
20202019
$000's$000's
Financial assets:
Amortised cost63,78935,979
Derivative instruments in designated hedge accounting relationships30,26011,164
Fair value through profit or loss184221
94,23347,364
Financial liabilities:
Amortised cost92,91988,910
Derivative instruments in designated hedge accounting relationships1,5733,543
Fair value through profit or loss5,2494,800
99,74197,253
The carrying amount of financial instruments at amortised cost approximates their fair value.
E9. MATURITY PROFILE OF FINANCIAL LIABILITIES
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the Group can be required to pay. The table includes both interest and principal cash flows.
Within 3
months
4 months
to 1 year1-5 yearsTotal
$000's$000's$000's$000's
2020
Trade and other payables25,117--25,117
Dividend declared13,359--13,359
Put options3,647-1,6025,249
Borrowings20863052,61653,454
Interest rate swaps and forward rate agreements1964376141,247
42,5271,06754,83298,426
2019
Trade and other payables19,843--19,843
Dividend declared13,328--13,328
Put options3,055-1,7454,800
Borrowings4101,23055,36657,006
Interest rate swaps and forward rate agreements1985951,2442,037
36,8341,82558,35597,014
40

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
F. GROUP STRUCTURE
IN THIS SECTION
This section provides information to help readers understand the Scales Group structure and how it affects the
financial position and performance of the Group. In this section there is information about subsidiaries.
F1. SUBSIDIARY COMPANIES
Subsidiary companies:Principal activityCountry of
Holding
Balance date
incorporation
20202019
Fern Ridge Produce LimitedTrading companyNew Zealand72.88%72.88% 31 December
Geo. H. Scales LimitedNon trading companyNew Zealand100%100% 31 December
Longview Group Holdings LimitedNon trading companyNew Zealand100%100% 31 December
Meateor Foods Australia Pty LimitedTrading companyAustralia100%100% 31 December
Meateor Foods LimitedTrading companyNew Zealand100%100% 31 December
Meateor Group LimitedHolding companyNew Zealand100%100% 31 December
Meateor US LLCHolding companyUnited States100%100% 31 December
Mr Apple New Zealand LimitedTrading companyNew Zealand100%100% 31 December
New Zealand Apple LimitedTrading companyNew Zealand100%100% 31 December
Scales Employees LimitedCustodial companyNew Zealand100%100% 31 December
Scales Holdings LimitedHolding companyNew Zealand100%100% 31 December
Scales Logistics LimitedFreight consolidatorNew Zealand100%100% 31 December
Scales Logistics Australia Pty LtdFreight consolidatorAustralia100%100% 31 December
Selacs Insurance LimitedInsurance companyNew Zealand100%100% 31 December
Shelby Cold Storage, LLCColdstore operatorUnited States60%60% 31 December
Shelby Exports, IncNon trading companyUnited States60%60% 31 December
Shelby Foods, LLCTrading companyUnited States60%60% 31 December
Shelby JV LLCHolding companyUnited States60%60% 31 December
Shelby Properties LLCNon trading companyUnited States60%60% 31 December
Shelby Trucking LLCTrading companyUnited States60%60% 31 December
Subsidiary companies are controlled by the Company. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the
company loses control of the subsidiary.
F2. ASSETS HELD FOR SALE
As at 31 December 2020, Mr Apple New Zealand Limited's Havelock North packhouse assets were classified as held
for sale. An unconditional agreement has been reached for the sale of the assets which is due to settle after balance
date. The packhouse assets are included in the Horticulture segment.
41

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
G. OTHER
IN THIS SECTION
This section includes the remaining information relating to Scales’ financial statements which is required to
comply with NZ IFRS.
G1. CAPITAL COMMITMENTS
20202019
$000's$000's
Commitments entered into in respect of apple trees purchases as at balance date2891,192
G2. LEASES
The Group as a lessee
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognised a
right-of-use asset and a corresponding liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of twelve months or less) and leases of low value
assets. For these leases, the Group applies the practical expedient and recognises the lease payments as an
operating expense on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the lease assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the Group uses its incremental borrowing rate (IBR).
Lease payments included in the measurement of the lease liability comprise:
- fixed lease payments (including in-substance fixed payments), less any lease incentives;
- variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
- the amount expected to be payable by the lessee under residual value guarantees;
- the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
- payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
- the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case
the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
- the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease
payments using the initial discount rate.
- a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
42

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
G2. LEASES (CONTINUED)
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement date and any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on
which it is located or restore the underlying asset to the condition required by the terms and conditions of the
lease, a provision is recognised and measured under NZ IAS 37Provisions, Contingent Liabilities and Contingent Assets.
Right-of-use assets are depreciated over the shorter period of either the lease term or the useful life of the
underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects
that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful
life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies NZ IAS 36Impairment of Assetsto determine whether a right-of-use asset is impaired and
accounts for any identified impairment loss under this standard.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and
the right-of-use asset. The related payments are recognised as an expense in the period in which the event or
condition that triggers those payments occurs and are included in the line "Administration and operating expenses"
in the statement of comprehensive income.
As a practical expedient, NZ IFRS 16 permits a lessee not to separate non-lease components, and instead account for
any lease and associated non-lease components as a single arrangement.
Right-of-use assets
Land and
buildings
Plant and
equipment
Office
equipment
motor and
vehiclesTotal
$000's$000's$000's$000's
Carrying Amount
Balance at 1 January 201977,6512945,02582,970
Additions2,4401361,0533,629
Depreciation expense(6,013)(216)(1,595)(7,824)
Balance at 31 December 201974,0782144,48378,775
Additions4,831-2,5727,403
Depreciation expense(6,082)(185)(2,034)(8,301)
Balance at 31 December 202072,827295,02177,877
43

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
G2. LEASES (CONTINUED)
20202019
$000's$000's
Amounts recognised in profit and loss
Depreciation expense on right-of-use assets8,3017,824
Interest expense on lease liabilities2,9813,075
Expense relating to short-term leases and low-value assets2,9602,089
Lease liabilities
Current10,0539,427
Non-current70,19070,713
Maturity analysis (undiscounted cash flows)
Year 110,0539,427
Year 29,0038,850
Year 38,0898,098
Year 47,5357,330
Year 57,1466,779
Onwards61,98365,077
103,809105,561
Cash outflows for leases
Interest on lease liabilities2,9813,075
Repayments of lease liabilities7,3006,459
Short-term leases and low-value asset leases2,9602,089
13,24111,623
G3. RELATED PARTY DISCLOSURES
Transactions with related parties
Certain Directors or senior management have relevant interests in companies with which Scales has transactions
in the normal course of business. A number of Scales directors are also non-executive directors of other
companies. Any transactions undertaken with these entities have been entered in the ordinary course of business.
Key management personnel remuneration
The compensation of the directors and executives, being the key management personnel
of the Group, is as follows:
Short-term employee benefits2,7842,956
Share-based payments367218
Post-employment benefits95104
3,2463,278
During 2020, 1,062,451 (2019: 740,968) shares were issued to key management personnel in accordance with the
Senior Executive Share Scheme described in note D2.
Transactions with equity accounted entities
Revenue from sale of goods1,1891,409
Revenue from services3,9102,564
Dividends received1,5001,500
Trade receivables at balance date257182
44

Scales Corporation Limited
Notes to the financial statements for the year ended 31 December 2020
G4. CONTINGENT LIABILITY
In December 2018 an insurance claim was notified to Selacs Insurance Limited, a wholly owned subsidiary of
Scales Holdings Limited, which in turn is a wholly owned subsidiary of Scales Corporation Limited.
The claim arises in consequence of the collapse of the roof of a leased coldstore located in Hastings, Hawke's Bay.
The event is under investigation by specialists and a claim has not yet been accepted.
The risk is fully reinsured, and in the event the claim is accepted and becomes payable, there will be no impact on
net income or net assets of the Group.
No claim expense, reinsurance revenue, claim payable and reinsurance receivable have been recorded in the
financial statements, except ex-gratia payments from reinsurers to the insured party recorded as claim expense
and reinsurance revenue (as disclosed in Note B3).
G5. EVENTS OCCURRING AFTER BALANCE DATE
There were no events occurring subsequent to balance date which require adjustment to or disclosure in the
financial statements.
G6. COVID-19
On 24 March 2020, the New Zealand Government announced a number of Orders under the Health Act 1956 and
the Epidemic Preparedness Act 2006 to restrict certain activities for the purposes of preventing the outbreak and
spread of COVID-19. The Group's business units were classified as "essential services" and complied with the
respective health requirements within each jurisdiction they operated in.
As at the date of authorisation of these financial statements, the Group was operating in Alert Level 1 in New Zealand
with strict border restrictions remaining in place and contact tracing encouraged. The Group operations outside of
New Zealand continue to be further impacted by the COVID-19 pandemic.
(a) Uncertainties, estimates and judgements
The economic and public health conditions globally have impacted these trading results, and the current uncertainties are
expected to impact the trading results in the future.
The risks impacted by the uncertainty arising from COVID-19 include credit risk and market risks which impact the
Group's assessment of expected credit losses, carrying value of inventories and the recoverability of non-current
assets and goodwill.
The Directors have assessed the impact of COVID-19 on these judgements and estimates and concluded that no significant
changes to the carrying values of assets or liabilities are currently necessary.
(b) Government grants
Government support was received in New Zealand and Australia by Group subsidiaries. While the criteria were met for
receiving this support, the Group opted to refund these amounts to the respective government agencies.
Similar support was received in the United States of America by way of government loans. These loans may be forgiven if
the eligibility criteria are met. The loan balances are carried as a liability until the criteria are met.
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions
attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic
basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to
compensate.
45

46

Independent Auditor’s Report
To the Shareholders of Scales Corporation Limited
Opinion We have audited the consolidated financial statements of Scales Corporation Limited and its subsidiaries (the
‘Group’), which comprise the consolidated statement of financial position as at 31 December 2020, and the
consolidated statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 4 to 45, present fairly, in all
material respects, the consolidated financial position of the Group as at 31 December 2020, and its
consolidated financial performance and cash flows for the year then ended in accordance with New Zealand
Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and International Financial Reporting
Standards (‘IFRS’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and International
Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Company in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand)
issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards), and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
Other than in our capacity as auditor and the provision of other assurance services, we have no relationship
with or interests in the Company or any of its subsidiaries. These services have not impaired our
independence as auditor of the Company and Group.
Audit materiality


We consider materiality primarily in terms of the magnitude of misstatement in the financial statements of
the Group that in our judgement would make it probable that the economic decisions of a reasonably
knowledgeable person would be changed or influenced (the ‘quantitative’ materiality). In addition, we also
assess whether other matters that come to our attention during the audit would in our judgement change or
influence the decisions of such a person (the ‘qualitative’ materiality). We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $1.9 million.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

47

Key audit matter How our audit addressed the key audit matter
Valuation of Unharvested Agricultural Produce
Unharvested agricultural produce growing on bearer plants (e.g. fruit), is
measured at fair value less costs to sell in accordance with NZ IAS 41
Agriculture.
The Group’s unharvested agricultural produce was valued at $24.02 million
at balance date as described in note C2. A revaluation loss of $0.4 million is
recorded in profit or loss.
Fair value less cost to sell is calculated by the Group using a discounted
cash flow model. The model includes significant unobservable inputs and
assumptions including, for each variety, the forecast production per
hectare per annum by weight, sales prices, and risk-adjusting discount
rates, as well as costs to harvest and sell.
The risk-adjusting discount rates take into account the risk of unknown
adverse events that may affect crop, harvest and/or market conditions.
The valuation of unharvested agricultural produce is considered to be a key
audit matter due to the level of judgement required to determine the fair
value less costs to sell.
Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the internal valuation
model.
Our procedures included, amongst others:
• Holding discussions with management and considering market
information to identify factors, including environmental or
market risks, that would impact the current crop valuation,
including consideration of the impact of COVID-19.
• Assessing and challenging the reasonabless of changes to risk-
adjusting discount rates;
• Engaging a Deloitte valuation specialist to consider whether
the valuation method applied was appropriate and whether
the risk-adjusting discount rates were reasonable based on
market information and risks relating to the unharvested
agricultural produce.
• Challenging the reasonableness of the key assumptions by
comparing the forecast production, prices, and costs to
harvest and sell for the current growing season to the
approved budgets for each orchard.
• Assessing the historical accuracy of the Group’s budget
forecasts by comparing to the actual results.
• Checking the mechanical accuracy of the discounted cash flow
model.
Valuation of Apple Trees
As disclosed in note C1 the Group has apple trees valued at $31 million. A
revaluation decrease of $1.8 million and $31,000 were recognised in profit
and loss and other comprehensive income, respectively.
The Group has a policy of recording apple trees at fair value with valuations
performed with sufficient regularity that the carrying amount at the end of
a reporting period does not differ materially from their fair value.
The fair value of the Apple trees are determined by an independent
registered valuer on the basis of a discounted cash flow analysis of forecast
income streams and costs from each orchard less the fair value of orchard
land and buildings. The model uses a number of significant unobservable
inputs, in particular: production levels per hectare, orchard gate returns
(market prices), orchard costs, and discount rates.
Valuation of apple trees is considered to be a key audit matter due to the
significance of the assets to the Group’s consolidated statement of financial
position, and the level of judgement involved in valuing the apple trees.

Our procedures focused on the appropriateness of the valuation
methodology and the key assumptions applied in the model.
Our procedures included, amongst others:
• Evaluating the Group’s processes in respect of the independent
valuation of the apple trees including its review of the valuation
methodology and determination of the key valuation
assumptions.
• Engaging a Deloitte valuation specialist to consider whether the
valuation methods applied were reasonable.
• Assessing the competence, objectivity and integrity of the
Group’s independent registered valuer. This included assessing
the valuer’s professional qualifications, experience and
independence. It also included meeting with the valuer to
understand the valuation process adopted and to identify and
challenge the critical judgement areas in the valuation. We
specifically discussed the impact of COVID-19 with the valuer.
• Assessing the valuation methodology for consistency with the
the most recent valuation (“2019 valuation”) and determining
whether any changes to the methodology were appropriate.
• Challenging the reasonableness of the key assumptions by
comparing them to the 2019 valuation, the Group’s internal data
and current market evidence. We focused on the assumptions
relating to production levels per hectare, orchard gate returns
(market prices), orchard costs, and discount rates, including
consideration of the impact of COVID-19.
o We tested estimated production levels per hectare by
comparing orchard hectares in production with the
2019 valuation. We compared the production levels
per hectare to external production data as well as
internal production data for the previous season.
o We tested the orchard gate returns by comparing
these to actual sales returns received during the
previous year.
o We challenged orchard costs by comparing orchard
costs to the 2019 valuation and available market
data.
o We challenged the discount rates by comparing them
with 2019 valuation discount rates and considering
the risks associated with the orchards.
• Checking the mechanical accuracy of the discounted cash flow
models on a sample basis.

48

Key audit matter How our audit addressed the key audit matter
Impairment Assessment of the investment in Meateor Petfoods
Limited Partnership (“LP”)
As disclosed in note C3 the Group holds a 50% investment in Meateor
Petfoods Limited Partnerhip, a joint venture. The entity is an equity
accounted investment with a carrying value of $20 million at 31 December
2020.
Due to the recent performance of the LP being below expectations, the
Group has assessed the investment in the LP for impairment. A discounted
cash flow methodology was used to determine the recoverable amount of
the investment in the LP at 31 December 2020. Within the net assets of the
LP is goodwill which must be tested for impairment annually.
The key assumptions applied in the model are:
• forecast earnings;
• pre-tax discount rates;
• Sales and cost of sales growth rate;
• Overhead cost growth rate; and
• terminal growth rate.
The Group has concluded that there is no impairment of the investment in
the LP as the recoverable amount exceeded the carrying value of the LP,
however, the Group determined that there are reasonably possible
changes in key assumptions that could result in impairment as disclosed in
C3.
We have included the impairment assessment of the Group’s investment in
Meateor Petfoods Limited Partnership as a key audit matter due to the
significance of the balance to the financial statements and the level of
judgement applied by the Group in determining the key assumptions used
to determine the recoverable amount, including the sensitivities of these
assumptions.
We considered whether the Group’s methodology for assessing impairment
is compliant with NZ IAS 36 Impairment of Assets. We focused on testing
and challenging the suitability of the model and reasonableness of the
assumptions used by the Group in conducting their impairment reviews.
Our procedures included:
• Agreeing a sample of future cash flows to Board approved
forecasts; and
• Challenging the reliability of the Group’s growth rates by
comparing the forecasts underlying the growth rates to historical
forecasts and actual results of the underlying businesses (where
applicable) and to external sector forecast data. This also
included consideration of the impact of COVID-19 on both
forecast revenue and profitability of the LP.
We used our internal valuation specialists to assist with evaluating the
models and challenging the Group’s key assumptions. The procedures of
the specialist included:
• Evaluating the appropriateness of the valuation methodology;
• Testing the mathematical integrity of the model;
• Evaluating the Group’s determination of the pre-tax discount
rates used in the model through consideration of the relevant
risk factors for the LP, the cost of capital for the LP, and market
data on comparable businesses; and
• Comparing the terminal growth rates to market data for the
industry sectors.
We evaluated the sensitivity analysis performed by management to
consider the extent to which a change in one or more of the key
assumptions could give rise to impairment in the investment in the LP.

Other information

The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the consolidated
financial statements and the audit report. The Annual Report is expected to be made available to us
after the date of this auditor's report.

Our opinion on the consolidated financial statements does not cover the other information and we
will not express any form of assurance conclusion thereon.

Our responsibility is to read the other information identified above when it becomes available and
consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.

When we read the other information in the Annual Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and consider
further appropriate actions.
Directors’ responsibilities for the
consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control
as the directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the
Group for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.

49

Auditor’s responsibilities for the
audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs and ISAs (NZ) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use

This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so
that we might state to the Company’s shareholders those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company’s shareholders as a body, for our audit work,
for this report, or for the opinions we have formed.




Paul Bryden, Partner
for Deloitte Limited
Christchurch, New Zealand
25 February 2021

---

Results announcement




Results for announcement to the market
Name of issuer Scales Corporation Limited
Reporting Period 12 months to 31 December 2020
Previous Reporting Period 12 months to 31 December 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$470,709 -3%
Total Revenue $470,709 -8%
Net profit/(loss) from
continuing operations
$21,025 -53%
Total net profit/(loss) $21,025 -82%
Interim/Final Dividend
Amount per Quoted Equity
Security
N/A
Imputed amount per Quoted
Equity Security
N/A
Record Date N/A
Dividend Payment Date N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.33 $2.19
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the attached reports for commentary and audited
consolidated financial statements.
Authority for this announcement
Name of person

authorised
to make this announcement
Steve Kennelly
Contact person for this
announcement
Steve Kennelly
Contact phone number +64 3 3712263
Contact email address steve.kennelly@scalescorporation.co.nz
Date of release through MAP

26/02/2021

Audited financial statements accompany this announcement.