TABLE OF CONTENTS Business ..............................................................................................................................................................................................6 HKScan in brief..............................................................................................................................................................................6 Market areas............................................................................................................................................................................8 Operating environment ...................................................................................................................................................... 10 Graphs................................................................................................................................................................................... 14 CEO's review .............................................................................................................................................................................. 18 Strategy....................................................................................................................................................................................... 21 Corporate responsibility .............................................................................................................................................................. 24 Value chain ................................................................................................................................................................................. 24 Corporate responsibility at HKScan ........................................................................................................................................ 25 Economic responsibility...................................................................................................................................................... 27 Social responsibility............................................................................................................................................................. 30 Responsible products ................................................................................................................................................... 31 Employee wellbeing ..................................................................................................................................................... 34 Responsible sourcing.................................................................................................................................................... 40 Animal health and welfare.................................................................................................................................................. 43 Environment ......................................................................................................................................................................... 46 Energy efficiency............................................................................................................................................................ 47 Greenhouse gas emissions .......................................................................................................................................... 49 Water use and wastewater ........................................................................................................................................... 53 Material efficiency.......................................................................................................................................................... 56 Environmental work at farms ....................................................................................................................................... 61 Goals and improvements ................................................................................................................................................... 63 Stakeholders............................................................................................................................................................................... 66 Financials ......................................................................................................................................................................................... 72 Report of the Board of Directors.............................................................................................................................................. 72 Five years in figures............................................................................................................................................................. 85 Calculation of financial indicators...................................................................................................................................... 87 Financial statements.................................................................................................................................................................. 89 This page is generated from HKScan's online annual report 2016. Please visit annualreport2016.hkscan.com for the full report. 2 Consolidated income statement for 1 January–31 December ...................................................................................... 89 Consolidated statement of comprehensive income 1 January–31 December ........................................................... 91 Consolidated balance sheet at 31 December ................................................................................................................. 92 Consolidated cash flow statement .................................................................................................................................... 94 Statement of changes in consolidated equity ................................................................................................................. 96 Notes to the financial statements ...................................................................................................................................... 97 Notes to the income statement ................................................................................................................................. 112 1. Business segments............................................................................................................................................ 112 2. Other operating income................................................................................................................................... 115 3. Materials and services....................................................................................................................................... 115 4. Employee benefit expenses............................................................................................................................. 116 5. Depreciation and impairment ......................................................................................................................... 120 6. Other operating expenses ............................................................................................................................... 121 7. Financial income and expenses ...................................................................................................................... 122 8. Income taxes...................................................................................................................................................... 123 9. Earnings per share ............................................................................................................................................ 124 Notes to the balance sheet ........................................................................................................................................ 126 10. Items affecting comparability ........................................................................................................................ 126 11. Intangible assets.............................................................................................................................................. 126 12. Goodwill........................................................................................................................................................... 127 13. Tangible assets ................................................................................................................................................ 129 14. Business combinations................................................................................................................................... 131 15. Shares in associates ........................................................................................................................................ 133 16. Financial assets and liabilities........................................................................................................................ 134 17. Deferred tax assets and liabilities ................................................................................................................. 136 18. Inventories ......................................................................................................................................................