Scales : 2017 Annual Shareholders Meeting Addresses

Annual Shareholders' Meeting

14 June 2017

SCALES CORPORATION -2017 ANNUAL SHAREHOLDERS'MEETING

The attached presentation will be given at Scales Corporation Limited's Annual Shareholders' Meeting starting at 4.30pm today in the The Waimakariri Room, Novotel Christchurch Cathedral Square, 52 Cathedral Square, Christchurch.

1. 2017 Scales Corporation Limited Annual Shareholders' Meeting - Chair and Managing Director's Address

2. 2017 Scales Corporation Limited Annual Shareholders' Meeting - Presentation

ENDS

Contacts

Andy Borland, Managing Director, Scales Corporation Limited, Mob: [phone], email: [e-mail]

About Scales Corporation

Scales Corporation is a diversified agribusiness group. It currently comprises three operating divisions: Horticulture, Storage & Logistics and Food Ingredients. 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. Today it employs over 600 staff New Zealand wide. Find out more at www.scalescorporation.co.nz.

Annual Shareholders' Meeting

14 June 2017

Address by the Chair: Jon Mayson [SLIDE 3: AGENDA]

My name is Jon Mayson. I'm Chairman of Scales and it's my pleasure to welcome you all to this, the one hundred & fifth annual meeting of the company, the third annual meeting since Scales became a publicly listed company in July 2014 and the first as a member of the S&P NZX50 Index.

Some housekeeping matters before we start. Firstly, I would like to remind you, as a matter of courtesy, to turn your mobile phones to silent. If there is an emergency and we need to leave the venue please do so through the marked exits. Hotel staff will be available to help us. The assembly point is kerbside of the pedestrian crossing out the front of the main entrance.

I am pleased to confirm that we have a quorum and therefore declare the 2017 Annual Shareholders' Meeting of Scales Corporation Limited open.

The items of business for this meeting and the resolutions to be considered by shareholders are contained in the Notice of Meeting which was sent to shareholders on 19 May.

The order of proceedings today is that I will briefly comment on the highlights of the last 12 months followed by an address by Andy Borland, our CEO and Managing Director. We will then attend to the resolutions. While voting is taking place there will be an opportunity for you to ask questions. We will conclude with an opportunity for you to raise any matters of a general nature.

In terms of the formal business, we will cover each resolution in turn and invite questions specific to those items. It will then be time to vote on the resolutions. I will outline the process for the discussion and voting on the resolutions at that point in the agenda.

At the close of the meeting we hope you will join us for refreshments. I would like to introduce my fellow Directors - they are:

• Andy Borland, Managing Director;

• Tim Goodacre, an independent director;

• Nick Harris, also an independent director;

• Mark Hutton, Chair of Scales' Nominations and Remuneration Committee and also an independent director;

• Alan Isaac, Chair of Scales' Audit and Risk Management Committee and also an independent director; and

• Weiyong Wang, Director.

I would also like to note that members of Scales' management and staff are in attendance as well as our external auditors, Deloitte, and our lawyers, Anthony Harper and Chapman Tripp.

[SLIDE 4: CHAIRMAN'S REVIEW]

Last year was a landmark year for Scales with a number of highlights.

I would like to begin by acknowledging and welcoming Mr Weiyong Wang, CEO of China Resources Ng Fung, as a Director of Scales.

China Resources Ng Fung became a significant minority shareholder in the company in March last year, and Mr Wang became a director in June. Both China Resources Ng Fung and Mr Wang bring a wealth of experience across a broad range of industries, as well as strong networks and connections to mainland China. We are delighted to have Mr Wang as part of the Board.

During 2016, Scales produced another record financial result. This result was made possible by the tireless effort of the entire team and I would like to take this opportunity to acknowledge the contribution from all Scales team members in helping to deliver this outcome.

We have made a number of developments to progress the strategies within each division, including increasing our shareholding in Fern Ridge Fresh and the acquisition of Longview. We are delighted to welcome the management and staff of Longview to the Scales family.

We were included in the S&P NZX50 index. This was a significant milestone for Scales, ranking us alongside the largest, eligible stocks on the NZX Main Board.

We take best-practice corporate governance very seriously at Scales Corporation and this year was no exception:

• We participated in the Institute of Director's Future Director programme, welcoming Liz Muller as an attendee at Scales' Board meetings for 12 months. Liz will be replaced by Jennifer Martin, an Investment Banking Director at Deutsche Craigs, who will join us for the next 12 months.

• We under took a Sustainability Materiality Review and produced our inaugural Sustainability Report within our Annual Report.

• We expanded our Corporate Governance reporting within our Annual Report; and

• We are continually evaluating the performance of the Board including identification of skill gaps. Where skill gaps are identified, we will consider these when making future Director appointments.

I would now like to touch on the subject of Scales' share ownership.

A New Zealand company whose overseas ownership equals 25.0% or more, is considered an 'overseas person' under the Overseas Investment Act. As such, that entity is required to apply for consent for certain sensitive land purchases or the entry into or extension of leases for sensitive land, as well as investments in significant business assets (with a value of more than NZ$100m). As you will be aware, obtaining Overseas Investment Office consent can be a drawn out process that may, at the time, have a financial and operational impact on the business.

The overseas person whose acquisition of Scales shares causes Scales' overseas ownership to equal 25.0% or more will be required to obtain Overseas Investment Office consent for this investment. Although the responsibility falls on the overseas person acquiring shares in Scales to determine the overall level of overseas ownership and whether consent is required for their investment in Scales, a number of these institutional and retail shareholders do not undertake this process. In addition, the monitoring of shareholding is complex and on-going changes in shareholdings and shareholders is frequent.

Therefore, to assist shareholders to meet their legal obligations the Board intends to provide the market with regular updates of the estimated level of foreign ownership of Scales' shares.

To be clear we do not intend to introduce restrictions on share transfers, we welcome all shareholders, but wish to avoid a shareholder unintentionally tipping Scales into overseas person status and triggering a requirement to seek Overseas Investment Office approval to own Scales shares.

Additional initiatives the board will implement are:

• adopting a selective approach to placing new shares, such as in consideration for bolt-on acquisitions; and

• lobbying the appropriate authorities to introduce new and or practical guidelines for shareholders and listed companies. As such, Scales remains a vocal supporter of the issuer community's call for reform, including by introducing measures similar to those used by Australia's Foreign Investment Review Board, which only counts disclosed relevant interests towards a listed company's overseas ownership levels (i.e. in New Zealand, substantial product holders with a relevant interest in more than 5% of the Company's shares).

  The Board welcomes any further feedback from shareholders on this matter.

  And, finally, I would like to acknowledge the commitment of the team to delivering on excellent shareholder communication. As a Board we are focused on providing comprehensive, transparent, and timely communications to our shareholders.

  I'll now invite Andy Borland to address you. At the conclusion of Andy's presentation we will move to the formal business of the meeting. While voting is taking place you will have an opportunity to ask questions. We please ask that if you have a question you save it for this time.

  Address by the Managing Director: Andy Borland [SLIDE 5: MANAGING DIRECTOR'S REVIEW]

  Thank you Jon, and good afternoon ladies & gentlemen. In this section of today's presentation, I will be covering:

• Key highlights from our 2016 year.

• Insight into the people of Scales and various Group initiatives.

• An update on our strategy.

• An update on year to date trading.

• And concluding by examining investor returns.

[SLIDE 6: JON MAYSON - RETIREMENT]

But first, I'd like to talk about Jon Mayson. As announced at our Annual Shareholders' Meeting last year, Jon is retiring from the Scales Board at the end of this meeting. Jon has had a long association with the Group, commencing as a Director of Polarcold (and thus the Storage & Logistics division) in February 2012 and becoming a Director of Scales Corporation in June of that year and Chairman in July. Jon is the 8thChairman of Scales.

Jon's leadership has been a great asset to the Group, providing his expertise and experience in a number of areas. He has overseen the Group in its most transformative years including its growth in Underlying EBITDA from $27.4m in 2012 to $67.9m last year, the IPO of the Group in 2014 and entering the S&P NZX50 in September 2016.