Scales : 2017 Annual Meeting Notice

24 May 2017

Notice of Annual Meeting of Shareholders

Dear Shareholder

We invite you to join us for the Annual Meeting of the Shareholders of Scales Corporation Limited ("Scales"), to be held at:

Where: The Waimakariri Room, Novotel Christchurch Cathedral Square, 52 Cathedral Square, Christchurch

When: Wednesday 14 June 2017 at 4.30pm

After the business has concluded you are welcome to join members of the Board and Management for light refreshments.

Please bring the enclosed voting form and attendance slip to the meeting to assist with your registration.

If you cannot attend, I encourage you to complete and lodge the proxy form in accordance with the instructions on the back so that it reaches Computershare by 4.30pm (New Zealand time) on Monday 12 June 2017.

Items of Business:

1. Chairman's address

2. Managing Director's address

3. Ordinary resolutions

4. General business

   Resolutions:

   To consider, and if thought fit, to pass the following ordinary resolutions:

5. That the Board is authorised to fix the auditor's remuneration for the coming year.

6. Having retired by rotation (as determined by lot), that Nick Harris be re-elected as a Director.

7. Having been appointed during the year by the Board and holding office only until the Annual Meeting, that Weiyong Wang be elected as a Director.

8. That the maximum total pool of Directors' remuneration payable by Scales to Directors (in their capacity as Directors) be increased by $60,000 per annum, from $440,000 per annum to $500,000 per annum.

9. Further information relating to these resolutions is set out in the Explanatory Notes accompanying this Notice of Meeting. Please read and consider the resolutions together with the notes.

   By order of the Board.

   Jon Mayson Chairman 24 May 2017

   Explanatory Notes

   These notes form part of the Notice of Annual Meeting

   Ordinary Resolution 1: Appointment and remuneration of auditor

   Section 207T of the Companies Act 1993 provides that a company's auditor is automatically re-appointed unless there is a resolution or other reason for the auditor not to be re-appointed. The Company wishes Deloitte to continue as the Company's auditor, and Deloitte has indicated its willingness to do so.

   Section 207S of the Companies Act 1993 provides that the fees and expenses of the auditor are to be fixed in such a manner as the Company determines at the Annual Meeting. The Board proposes that, consistent with past practice, the auditor's fees be fixed by the Directors. The Board unanimously recommends that shareholders vote in favour of Resolution 1.

   Ordinary Resolution 2: Re-election of Director

   The NZX Main Board Listing Rules require that at least one third of the Directors or, if their number is not a multiple of three, then the number nearest to one third, shall retire from office at the Annual Meeting each year, but shall be eligible for re-election at that meeting. The Directors to retire are those who have been longest in office since their last election, with the exception of Andy Borland as an Executive Director nominated by the Board (pursuant to clause 27.1(c) of the Constitution).

   Two Directors are required to retire at this meeting. Jon Mayson is the longest in office and wishes to retire at the conclusion of the Annual Meeting. Accordingly Jon does not offer himself for re-election. Nick Harris and Tim Goodacre are the Directors who have next been longest in office and it has been decided by lot that Nick Harris will retire at the Annual Meeting. Nick, being eligible, offers himself for re-election and the Board unanimously supports the re-election of Nick.

   Nick Harris

   Non-Executive Director Independent

   Term of Office: Appointed Director on 18 June 2014, re-appointed Director on 8 June 2015

   Board Committees: Audit & Risk Management Committee, Health & Safety Sub-Committee

   Prior to joining Scales' Board Nick was a Director of Scales' Storage & Logistics and Food Ingredients divisional companies. Nick was previously the Managing Director, and was one of the founding shareholders, of Hellers Limited.

   Ordinary Resolution 3: Election of Director appointed since the last Annual Meeting

   Pursuant to clause 26.2 of the Constitution, Directors who have been appointed by the Board may hold office only until the next Annual Meeting, and be then eligible for election.

   Weiyong Wang was appointed during the year by the Board and offers himself for election. The Board unanimously supports the election of Weiyong Wang.

   Weiyong Wang

   Non-Executive Director

   Term of Office: Appointed Director on 23 June 2016

   Weiyong Wang is CEO, and a Director of China Resources Ng Fung Limited and its holding company, China Resources Enterprise, Limited and is based in Hong Kong. He also has extensive experience in strategic planning and corporate management.

   China Resources Ng Fung is a leading importer of food products into China which provides significant local market knowledge of growth opportunities into Asian markets.

   Ordinary Resolution 4: Increase in the Fee Pool of Directors' Fees

   This resolution seeks shareholder approval to increase the maximum aggregate amount of remuneration ("fee pool") that may be paid each year to the Directors of Scales for their services as Directors by $60,000 per annum, from $440,000 per annum to $500,000 per annum, taken together. Shareholder approval is required under NZX Listing Rule 3.5.1.

   The existing fee pool of $440,000 was approved at the previous Annual Meeting on 8 June 2016. Actual Board fees paid during the 2016 financial year were $434,179, including fees paid to Weiyong Wang which are not included in the fee pool calculation unless and until his appointment is approved at this Annual Meeting.

   Director remuneration is reviewed annually and effective from January 1stof each financial year. As a result of the combined effect of a general 7.5% increase in fees from 1 January 2017 and the introduction of fees for two newly constituted Board sub-committees, the Board considers that an increase in the fee pool is now appropriate to provide scope for future review. Future reviews will also cover the expanded scope of Board committees.

   The fee pool is to be divided amongst the Directors at the discretion of the Board. The current annual Directors' fees, set on 1 January 2017 are as follows:

   • Chairman $118,250 (including Committee responsibilities)

   • Non-executive Directors $63,560

   • Chairman of the Audit Committee $17,330

   • Chairman of the Nominations Committee $11,560

   • Chairman of Sub-Committees $2,890

   • Committee members $5,780

   Scales will disregard any votes on Ordinary Resolution 4 by:

10. Any Director of Scales;

11. Any Associated Person of any Director of Scales.

Except where any such vote is cast by the Director or one of their associates as proxy for a person who is entitled to vote and the Director or that associate votes in accordance with express instructions to vote for or against a particular resolution on the proxy form.