Fonterra Shareholders’ Fund Interim Results 2018

Page 1



Reporting Period Six months to 31 January 2018
Previous Reporting Period Six months to 31 January 2017


Amount
(m’s)
Percentage
Change
Revenue from ordinary activities NZ$44 (38)%
Profit (loss) from ordinary activities after tax attributable
to security holder
1

NZ$- -%
Net profit (loss) attributable to security holders NZ$- -%
1
Fonterra Shareholders’ Fund financial statements are prepared in accordance with New Zealand Equivalents to
International Financial Reporting Standards. Revenue from ordinary activities comprises net fair value movements of
Economic Rights of Fonterra Shares, and dividend income.

Interim/Final Dividend
Amount per Security
Imputed Amount
per Security
Interim dividend NZ$0.10 $0.00

Record Date 6 April 2018
Dividend Payment Date 20 April 2018

Comments
On 20 March 2018, the Board of FSF Management
Company Limited declared a distribution of 0.10 cents per
Unit to be paid on 20 April 2018 to Unit holders on the
register at 6 April 2018.

To be followed by the balance of the information required in the report pursuant to Appendix 1 –
Including the Net Tangible Asset amount per security for the current and previous reporting period.

---

2018
INTERIM
REPORT
FONTERRA SHAREHOLDERS’ FUND

FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 2018 1
DEAR INVESTORS
I am pleased to present the Fonterra
Shareholders’ Fund Interim Report for
the six months ending 31 January 2018.
For this six month period Fonterra’s
overall operating result was generally
in line with expectations. The
Ingredients business produced a solid
result with a nine percent increase in
normalised earnings before interest
and tax (“normalised EBIT”) despite
low opening inventories and lower
New Zealand milk collections. The
Consumer and Foodservice business
continued to move more volume to
higher value in a number of markets
and also increased sales prices of
products, but these increases were
not sufficient to offset the impact of
higher dairy commodity input costs,
especially for butter. This resulted in
a 38 per cent decrease in Consumer
and Foodservices’ normalised EBIT. The
overall result was adversely impacted
by the outcome of the Danone
arbitration and also the impairment of
the Beingmate investment. Unit holders
will rightly be disappointed with these
two outcomes. The turnaround of the
Beingmate investment is a key priority
for senior management and the Board
of Fonterra. The Co-operative’s balance
sheet remains strong.
As the return on a unit is driven by the
underlying performance of Fonterra,
I encourage you to read Fonterra’s
2018 Interim Report, available online at
www.fonterra.com/investor to gain a
good understanding of the
Co-operative’s results.
On 20 March 2018, Fonterra declared
an interim dividend of 10 cents per
share. As a result, unit holders will
receive an interim distribution of 10
cents per unit
1
. The record date for the
interim distribution is 6 April 2018 and
the payment date is 20 April 2018.
The Distribution Reinvestment Plan
(DRP) continues to operate at a
discount of 2.5 per cent to the strike
price. Eligible shareholders who would
like to participate for the interim
distribution need to submit a notice of
participation by 6 April 2018.
More details on the DRP can be found in
the offer document, which is available in
hard copy from Computershare or online
at www.investorcentre.com/nz and
https://www.fonterra.com/nz/en/
our-financials/dividends.html
The number of units on issue at
31 January 2018, was 137.4 million,
representing 8.5 per cent of the total
Fonterra Co-operative shares on issue.
Trading in units continues to be strong,
with the FSF ranked second on the
NZX in terms of liquidity. On average,
around 400,000 units were traded on
a daily basis over the past six months².
Analysis of the unit register shows
that New Zealand and Australian unit
holders are the largest group by region,
holding 86 per cent of units on issue³.
I would once again like to thank
you for your continued support of,
and investment in, the Fonterra
Shareholders’ Fund.
JOHN SHEWAN
CHAIRMAN
FSF MANAGEMENT COMPANY LIMITED
(Australian Registered Body Number 160 539 935,
incorporated in New Zealand)
CHAIRMAN’S
REPORT
1 Less any PIE (Portfolio Investment Entity) tax or any other adjustments for tax in relation to that unit.
2 Liquidity has been calculated as median daily value (6 months)/Average Daily New Zealand Free Float Cap (6 months).
3 Merlin Consulting Shareholder Identification Report January 2018

--
2 FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 2018
MANAGER’S STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
STATEMENT OF COMPREHENSIVE INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS . . . . .3
STATEMENT OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
CASH FLOW STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . .5
NOTES TO THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
FSF Management Company Limited
(the Manager) is pleased to present
to the unit holders the interim
financial statements for the Fonterra
Shareholders’ Fund (the Fund) for the
six months ended 31 January 2018.
The Manager is responsible for
presenting interim financial statements
for the six months which fairly present
the financial position of the Fund and
its financial performance and cash
flows for that period.
The Manager considers the
interim financial statements of the
Fund have been prepared using
accounting policies which have been
consistently applied and supported
by reasonable judgements and
estimates, and that all relevant
financial reporting and accounting
standards have been followed.
The Manager believes that proper
accounting records have been kept
which enable, with reasonable
accuracy, the determination of the
financial position of the Fund and
facilitate compliance of the interim
financial statements with the NZX
Listing Rules and the Fonterra
Shareholders’ Fund Trust Deed.
The Manager considers that it has
taken adequate steps to safeguard the
assets of the Fund, and to prevent and
detect fraud and other irregularities.
The Manager approves and authorises
for issue the interim financial
statements for the six months ended
31 January 2018 presented on pages 3 to 7.
For and on behalf of the Board of the Manager:

JOHN SHEWAN PIP DUNPHY
CHAIRMAN DIRECTOR
FSF MANAGEMENT COMPANY LIMITED FSF MANAGEMENT COMPANY LIMITED
20 MARCH 2018 20 MARCH 2018
INTERIM FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
MANAGER’S
STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2018

FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 2018 3

STATEMENT OF
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Net fair value gain on revaluation of Economic Rights of Fonterra shares185942
Dividend income261237
Investment income447179
Net change in fair value of liability to unit holders(18)(59)(42)
Distributions to unit holders(26)(12)(37)
Finance cost(44)(71)(79)
Profit before tax–––
Tax expense–––
Profit for the year–––
There are no items of other comprehensive income.
STATEMENT OF CHANGES IN NET ASSETS
ATTRIBUTABLE TO UNIT HOLDERS
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS
$ MILLION
Net assets attributable to unit holders at 1 August 2017763
Movements:
Revaluation of liability to unit holders18
Issue of units122
Redemption of units(51)
Net assets attributable to unit holders at 31 January 2018 (unaudited)852
Net assets attributable to unit holders at 1 August 2016637
Movements:
Revaluation of liability to unit holders59
Issue of units132
Redemption of units(64)
Net assets attributable to unit holders at 31 January 2017 (unaudited)764
Net assets attributable to unit holders at 1 August 2016637
Movements:
Revaluation of liability to unit holders42
Issue of units179
Redemption of units(95)
Net assets attributable to unit holders at 31 July 2017 (audited)763
The accompanying notes form part of these interim financial statements.

4 FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 201 8
STATEMENT OF
FINANCIAL POSITION
AS AT 31 JANUARY 2018
$ MILLION
NOTES
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Assets
Economic Rights of Fonterra shares2852764763
Total assets852764763
Total liabilities (excluding net assets attributable to unit holders)–––
Net assets attributable to unit holders – liability3852764763
CASH FLOW
STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
CASH FLOW STATEMENT
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Cash flows from operating activities
Cash was provided from:
–Sale of Economic Rights of Fonterra shares516495
–Dividend received (net of dividends reinvested)201030
Cash was applied to:
–Purchase of Economic Rights of Fonterra shares(116)(130)(172)
Net cash flows from operating activities(45)(56)(47)
Cash flows from financing activities
Cash was provided from:
–Proceeds from issue of units116130172
Cash was applied to:
–Outflows on redemption of units(51)(64)(95)
–Distributions paid to unit holders (net of dividends reinvested)(20)(10)(30)
Net cash flows from financing activities455647
Net (decrease)/increase in cash and cash equivalents–––
Cash and cash equivalents at the beginning of the year–––
Cash and cash equivalents at the end of the year–––
The accompanying notes form part of these interim financial statements.

FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 2018 5
STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
A) GENERAL INFORMATION
The Fonterra Shareholders’ Fund (FSF or the
Fund) is a New Zealand managed investment
scheme established to be the ‘Authorised
Fund’ under Fonterra’s Trading Among
Farmers scheme. It is registered under the
Financial Markets Conduct Act 2013 and
its governing document is the Fonterra
Shareholders’ Fund Trust Deed (the Trust
Deed) dated 23 October 2012 (as amended)
and has a life of 80 years. Under the Trust
Deed, the Fund may invest only in authorised
investments, which are Economic Rights of
Fonterra shares (Economic Rights), and issue
units to investors. It may not invest directly in
Fonterra shares (shares).
The Fund is listed on the NZX Main Board
operated by NZX Limited and as an exempt
foreign entity on the Australian Securities
Exchange operated by ASX Limited. The
Manager is an FMC reporting entity under the
Financial Markets Conduct Act 2013.
These interim financial statements were
authorised for issue by the Manager on
20 March 2018.
Fonterra interim financial statements
Investors are encouraged to read the interim
financial statements of Fonterra Co-operative
Group Limited (Fonterra), together with the
interim financial statements of the Fund,
given that the performance of the Fund is
driven by the performance of Fonterra. The
Fonterra interim financial statements can be
found at www.fonterra.com in the ‘Investors/
Financial Results’ section.
Activities
The principal activity of the Fund is to acquire
Economic Rights and issue units to investors.
It allows investors in the Fund an opportunity
to earn returns based on the financial
performance of Fonterra.
B) BASIS OF PREPARATION
These interim financial statements have been
prepared in accordance with International
Accounting Standard 34: Interim Financial
Reporting and New Zealand Equivalent
to International Accounting Standard 34:
Interim Financial Reporting. They have also
been prepared in accordance with Generally
Accepted Accounting Practice (GAAP)
applicable to for-profit entities. These
interim financial statements are as at and
for the six months ended 31 January 2018,
and are unaudited.
These interim financial statements are
presented in New Zealand dollars ($), which
is the Fund’s functional and presentation
currency, and rounded to the nearest million,
except where otherwise stated.
The same accounting policies are followed
in these interim financial statements as were
applied in the financial statements for the
year ended 31 July 2017.

C) OPERATING SEGMENTS
The Fund’s investments only include
Economic Rights assets and the Fund’s
performance is evaluated on an overall basis.
Therefore the Fund is a single-segment entity.
All of the Fund’s income is from investments
in the Economic Rights.
The internal reporting provided to the Board
of the Manager, which is the Fund’s chief
operating decision maker, for the Fund’s assets,
liabilities and performance is prepared on a
consistent basis with the measurement and
recognition principles of NZ IFRS. The Board
of the Manager reviews the Fund’s internal
reporting in order to assess the performance
and position of the Fund.

6 FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 201 8
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JANUARY 2018
1 FAIR VALUE MEASUREMENT
The Fund measures fair values for recognition of both Economic Rights assets and unit holder liabilities.
The Fund uses the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
–Level 1: Quoted price (unadjusted) in an active market for an identical instrument.
–Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes
instruments valued using: quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques for which all significant inputs are directly or indirectly observable from market data.
–Level 3: Valuation techniques using significant unobservable inputs. The Fund has no Level 3 instruments.
The Fund’s liability to unit holders is a Level 1 instrument as the unit price is quoted on the NZX Main Board, which is considered to be an active
market. The Manager considers market prices to be the most representative measure of fair value as they are used by market participants as
a practical expedient for fair value measurement. The market will be monitored on an on-going basis to confirm that it remains active for the
purposes of establishing fair value.
Economic Rights are Level 2 instruments as Economic Rights are not listed and there is no active market for Economic Rights assets. Economic
Rights are valued using the quoted price of units (which are considered to be a materially comparable instrument) in the Fund listed on the
NZX Main Board. The on-going validity of assumptions relating to the comparability between a unit and an Economic Right is regularly reviewed.
There have been no transfers between the categories in the fair value hierarchy during any of the periods presented.
2 ECONOMIC RIGHTS OF FONTERRA SHARES
The Economic Rights are held on trust for the Fund by the Custodian under the Fonterra Economic Rights Trust.
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Value of Economic Rights ($ million)852764763
Number of Economic Rights137,366,342123,422,471126,047,304
The Economic Rights are measured at fair value, calculated as the number of Economic Rights held multiplied by the established fair value for each
Economic Right.
$ MILLION
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Opening value of Economic Rights 763637637
Movements:
Purchase of Economic Rights¹122132179
Sale of Economic Rights(51)(64)(95)
Revaluation of Economic Rights185942
Closing value of Economic Rights852764763
1 Purchase of Economic Rights includes $5.6 million for Economic Rights acquired in conjunction with Fonterra’s Dividend Reinvestment Plan (31 January 2017: $2.4 million;
31 July 2017: $6.7 million).

FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 2018 7
3 LIABILITY TO UNIT HOLDERS
31 JAN 2018
UNAUDITED
31 JAN 2017
UNAUDITED
31 JUL 2017
AUDITED
Value of unit holder liability ($ million)¹852764763
Opening number of units on issue²126,047,304111,991,937111,991,937
Number of units issued³19,503,56122,222,59729,932,644
Number of units redeemed(8,184,523)(10,792,063)(15,877,277)
Closing number of units on issue137,366,342123,422,471126,047,304
1 The liability to unit holders is measured at fair value, calculated as the number of units on issue multiplied by the unit market price of $6.20 (31 January 2017: $6.19; 31 July 2017: $6.05).
2 Included in the total number of units is one Fonterra unit which was issued at launch.
3 Included in the number of units issued are 934,040 units with a total value of $5.6 million that were issued under the Distribution Reinvestment Plan (31 January 2017: 419,397 units
with a total value of $2.4 million; 31 July 2017: 1,148,243 units with a total value of $6.7 million).
4 NET TANGIBLE ASSETS PER SECURITY
As at 31 January 2018, the net tangible assets per unit on issue was $6.20 (31 January 2017: $6.19; 31 July 2017: $6.05).
5 COMMITMENTS AND CONTINGENT LIABILITIES
The Fund has no material commitments or contingent liabilities as at 31 January 2018 (31 January 2017: nil; 31 July 2017: nil).
6 SUBSEQUENT EVENTS
Declaration of interim distribution
On 20 March 2018, the Board of Directors of Fonterra declared an interim dividend of 10 cents per share. Following Fonterra’s dividend declaration,
the Board of the Manager declared an interim distribution of 10 cents per unit. This distribution will be paid on 20 April 2018 to the unit holders on
the register at 6 April 2018.
The Manager has a Distribution Reinvestment Plan, where eligible unit holders can choose to reinvest all or part of their future distribution in
additional units. The Distribution Reinvestment Plan will apply to this distribution. Participation in the Distribution Reinvestment Plan requires
unit holders to submit an election notice for participation by 6 April 2018. Full details of the Distribution Reinvestment Plan are available in the
‘Investors/Dividends’ section of Fonterra’s website.
Changes in unit price
Units are traded on the NZX and ASX and accordingly the unit price changes regularly, including during the period between balance date and the
date these interim financial statements were authorised for issue. Changes in the market price of the units result in a corresponding change in the
value of the Economic Rights asset held by the Fund. Daily unit prices are available on the NZX website.

8 FONTERRA SHAREHOLDERS’ FUND INTERIM REPORT 201 8
REGISTERED OFFICE OF THE MANAGER
OF THE FUND – NEW ZEALAND
109 Fanshawe Street
Auckland Central
Auckland 1010
Telephone: +64 9 374 9000
REGISTERED OFFICE OF THE MANAGER
OF THE FUND – AUSTRALIA
C/o Fonterra Australia Pty Limited
327 Ferntree Gully Road
Mount Waverley, Melbourne
Victoria 3149
Telephone: +61 3 8541 1588
DIRECTORS OF THE MANAGER OF THE FUND
Philippa Jane Dunphy
Kimmitt Rowland Ellis
Nicola Mary Shadbolt
John Bruce Shewan
Scott Andrew St John
COMPANY SECRETARY
Andrew Cordner
SUPERVISOR
The New Zealand Guardian Trust Company Limited
Level 14, 191 Queen Street
Auckland Central
Auckland 1010
New Zealand
AUDITORS OF THE FUND AND THE MANAGER
OF THE FUND
PricewaterhouseCoopers
Level 22, PwC Tower
188 Quay Street
Auckland 1010
New Zealand
LEGAL ADVISERS TO THE MANAGER
Chapman Tripp
Level 35, ANZ Centre
23 Albert Street
Auckland 1010
New Zealand
SHARE REGISTRAR – NEW ZEALAND
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
Private Bag 92119
Auckland 1142
Telephone: +64 9 488 8700
SHARE REGISTRAR – AUSTRALIA
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford, VIC 3067
GPO Box 3329
Melbourne, VIC 3001
Telephone: 1800 501 366 (within Australia)
Telephone: +61 3 9415 4083 (outside Australia)
DIRECTORY

THIS DOCUMENT IS PRINTED ON AN
ENVIRONMENTALLY RESPONSIBLE PAPER
PRODUCED USING ELEMENTAL CHLORINE FREE
(ECF) FSC
®
CERTIFIED MIXED-SOURCE PULP,
SOURCED FROM WELL-MANAGED AND LEGALLY
HARVESTED FORESTS, AND MANUFACTURED
UNDER THE STRICT ISO14001 ENVIRONMENTAL
MANAGEMENT SYSTEM.

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
x
whether:
Interim
x
YearSpecialDRP Applies
x
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Non-resident Inv (see note)
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
6 April, 201820 April, 2018
N/AN/A
See note aboveNil
NZD
Approximately $14 million
Date Payable
$Nil (see note above)Nil
$0.10nil
NOTE: FSF is a Foreign Investment Variable Rate PIE. The whole distribution is excluded income for NZ
resident investors. PIE tax (for resident investors) or NRWT (for non-residents) may be deducted at the rate
appropriate for the investor
nil$0.10
N/AN/A
In dollars and cents
Distribution pursuant to Clause 15.1(a) of the
Fonterra Shareholders' Fund Unit Trust Deed and
paid through Computershare
N/AN/A
Enter N/A if not applicable
Resident Inv (see note)
N/A
Units (FSF)
(09) 374 9000(09) 374 90012003
NZFSFE0001S5
2018
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Fonterra Shareholders' Fund (NS)
Andrew CordnerDirectors' resolution