FY18 Results and Annual Report

The a2 Milk Company Limited


Results for announcement to the market

Reporting period Twelve months to 30 June 2018
Previous reporting
period
Twelve months to 30 June 2017

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 922,677 + 67.9%
Profit (loss) from
ordinary activities after
tax attributable to
security holders
$NZ 195,684 +115.9%
Net profit (loss)
attributable to security
holders
$NZ 195,684 +115.9%

Final dividend Amount per security Imputed amount per
security
The Company does not
propose to pay a
dividend for the year
ended 30 June 2018
Not applicable Not applicable

Record date Not applicable
Dividend payment date Not applicable

Comments: For further information refer to the attached:
Audited Annual Report for the year ended 30 June
2018
Full Year Results Commentary
Full Year Results Presentation



Net Tangible Assets per
security

30 June 2018
73 cents
30 June 2017
31 cents

---

NZX Code: ATM
ASX Code: A2M


22 August 2018
NZX/ASX Market Release

Outstanding financial performance and strong progress on delivery of strategy

Overview for the year ended 30 June 2018 (NZ$)
• Total revenue of $922.7 million – an increase of 68% over the prior corresponding period (pcp)
• EBITDA
1
of $283.0 million – up 101% on pcp
• Net profit after tax of $195.7 million – 116% ahead of the pcp
• Strong cash conversion with operating cash flow of $231.1 million – up 131% on pcp
• EBITDA to sales margin of 31% – up from 26% in the pcp
• Basic earnings per share (EPS) of 27.0 cents – up from 12.7 cents in the pcp
• Infant formula share strengthening to 5.1% in China
2
and 32% in Australia
3

• Substantial physical distribution growth to ~10,000 stores in China and ~6,000 stores in the US
• Enhanced strategic partnerships with Synlait and Fonterra

Summary of financial performance
The Company delivered another very strong financial performance, with substantial improvements in revenue,
earnings and cash generation. Increased investment in brand and market development resulted in rapid growth
of infant formula and the expansion of the liquid milk business in each of the Company’s established markets.
Continued impressive sales growth and trajectory
Sales of a2 Platinum® infant formula again grew substantially in Australia and China, with continued growth in
market share. a2 Platinum® sales revenue was $724.2 million, an increase of 84% on the previous year.
Investment continued in building brand awareness and consumer engagement, expanding distribution in priority
channels and adapting to new regulatory requirements in China.

1
Earnings before interest, tax, depreciation and amortisation (EBITDA) is a non GAAP measure. However, the Company believes that it
assists in providing investors with a comprehensive understanding of the underlying performance of the business. A reconciliation of EBITDA
to net profit after tax is shown at the end of this document
2
Kantar Infant Formula market tracking of Tier 1 and Key A cities for 12 months ending June 2018 by value (Kantar track a substantial
proportion of the total market)
3
Aztec Australian Grocery and Pharmacy Scan value share 12 months ending 30/06/18

2
In Australia, a2 Milk™ branded fresh milk value share grew strongly from 9.3% to 9.8% by year end
4
. The United
States business continued to grow sales velocities in key accounts, alongside a distribution footprint which
increased to 6,000 stores, following expansion into the Northeast and in the natural channel. In the United
Kingdom, improvement in rates of sale and expanding distribution brought gains in revenue.
The Company advanced its growth strategy through multiple initiatives – launching three new products (a2
Platinum® Stage 4 milk powder, a2 Platinum® pregnancy formula and a2 Milk™ powder blended with Mānuka
honey); entering new markets in South East Asia; and establishing a strategic relationship with Fonterra Co-
operative Group Limited and an exclusive distribution agreement with Yuhan Corporation for the South Korea
market.
Margin improvement and investment to deliver growth
Gross margin percentage benefited from the increased proportion of infant formula sales, currency movements
and favourable net selling prices.
Investment in brand building and marketing grew by $31.6 million to $73.6 million, with increases across all
markets. Due to the timing of key marketing programs in China and USA, this investment was more heavily
weighted to the second half.
SG&A spend increased broadly in line with underlying revenue, reflecting a commitment to support continued
growth. Corporate costs rose by $8.3 million, reflecting investment in people and associated costs to support
global growth opportunities.
Strong balance sheet position
The cash position continued to improve along with revenue, earnings and working capital efficiencies. Net
operating cash flow was $231.1 million, compared with $99.9 million in the previous year. Cash on hand at the
end of the year was $340.5 million, compared with $121.0 million for the pcp.
Working capital benefited from improved terms with a number of customers. This was partially offset by a
planned increase in infant formula inventory of $35.7 million as the Company built progressively to more
sustainable levels during the year.
Enhanced strategic supply partnerships
The Company’s supply base was enhanced by the extension of the comprehensive manufacturing and supply
agreement for infant formula with Synlait Milk Limited (Synlait) and the establishment of a new comprehensive
strategic relationship with Fonterra.

Results commentary
Reviewing the results for the 2018 year, the Managing Director and CEO Jayne Hrdlicka said: “FY18 has been a
transformative year. Our brand and unique approach are working across multiple products and markets and we
are seeing real momentum building in China and the US.”
“The Company’s financial results maintained a very strong trajectory, with a revenue increase of 68% and with
operating earnings up by 101%. Significant progress has been achieved in Australia, China and the USA and
important emerging market opportunities are starting to materialise.

4
Aztec Australian Grocery Weighted Scan, 12 months ending 30/06/18 versus pcp

3
“The ongoing momentum reflects the growing strength of our brand proposition, continued execution success in
our end markets and in management of the supply chain.
“The Company has continued to invest in brand building and advertising and in the strength of the organisation,
as we build capability and capacity to deliver on growth against our core opportunities.
“The extended arrangement with Synlait Milk and the new relationships with Fonterra and Yuhan Corporation are
important steps in the development of both our supply chain and our capacity to develop new markets. The
extended relationship with China State Farm is another important relationship, underpinning our platform for
growth in China.”

Strategic progress
With the Australian and China businesses delivering strong earnings, an expanded US distribution footprint and
the growing strength of our brand, the Company continues to be well positioned to execute its strategy for
further growth.
The growth strategy has three priorities:
 Building a branded portfolio of dairy-based nutritional products based on the A1 protein free proposition
 Investing in attractive markets where we believe we can build competitive brand strength
 Deepening our proprietary know-how and A2 protein expertise.

The first signs of competition from a major international company in the A1 protein free category appeared in
March 2018. There has been no apparent impact on our sales momentum as a consequence of this launch. The
Company remains confident that competition will ultimately expand the category over time. The combination of
our strong and contemporary brand, deep know-how and intellectual property, agile and entrepreneurial
approach; and absolute focus as a Company on A1 protein free products, means our business is uniquely
positioned to benefit from category expansion. The Company will actively leverage and defend the integrity of its
market position.
Brand, intellectual property and research & development
The Company has continued its investment in improving brand equity via enhanced marketing campaigns in its
key markets of Australia, China and the US, R&D and further development of intellectual property. The Company’s
investment in marketing and R&D increased by $32.3 million and a further $2.2 million was capitalised for patents
and trade marks.
Increasing investment in trade marks included a rollout of a new unifying brand trade mark that has been applied
across all products and markets. Our brand assets will continue to evolve as the trade mark portfolio broadens
over time.
During FY18 a clincial trial conducted in China involving 600 adults with self reported lactose intolerance found
consumption of milk containing the A2 protein type reduced acute gastorintestinal symptoms. These findings
were consistent with the previous pilot study published in FY16.
A pilot study carried out under the New Zealand Government High Value Nutrition programme is now complete
and being submitted for publication. Furthermore, a clinical study in China amongst pre-school children
examining digestive benefits of A1 protein free milk has been submitted for publication.
The Company continues to support additional science and research & development programmes to enhance its
overall brand proposition.

4
Strategic partnerships
With a view to enhancing our supply chain and broader international market development the Company
announced the formation of a comprehensive strategic relationship with Fonterra. The initial scope of the
relationship incorporates:
 an exclusive nutritional powder agreement under which Fonterra will manufacture A1 protein free
products in Australia for certain priority markets in South East Asia and the Middle East
 an exclusive licence to Fonterra for the production, distribution, sale and marketing of a2 Milk™ branded
liquid milk in New Zealand (commenced from July 2018)
 the opportunity to leverage Fonterra’s sales and distribution capabilities in the priority markets
 joint evaluation of opportunities to sell certain Company branded dairy products, such as butter and
cheese, in Australia, New Zealand and China
 Additional A1 protein free milk pools to be developed by Fonterra and the Company.

a2 Milk™ powder blended with Mānuka honey is packed by Fonterra and is the first product launched with
Fonterra’s assistance following the announcement of our strategic relationship.
Further steps were taken to build on the Company’s global supply strategy with the comprehensive supply
agreement for infant formula with Synlait Milk extended in early July 2018. This provides a two-year extension to
the minimum term, an increase in the volume over which Synlait already had exclusive supply rights, increased
committed production capacity and pricing terms that reflect both companies’ commitment to an ongoing
market-competitive pricing regime.
Consistent with the Company’s desire to deepen relationships with its key partners, the Company announced on
3 August 2018 an additional investment of $162.3 million in Synlait Milk shares, bringing the total shareholding in
Synlait to approximately 17.4%. This investment is intended to provide further stability over Synlait’s capital
position and ownership and reflects the Company’s commitment to supporting key strategic partners. The
Company has no plans to further increase its shareholding in Synlait.
The Company continues to take steps to minimise the risk of product substitution and counterfeit, particularly for
infant formula in China. This includes improved security technology and advances in quality and authenticity
proof points. During the financial year, the Company introduced a unique QR-verification system allowing
verification of the authenticity of our products. The system has now been implemented across the total a2
Platinum® product range. Product quality and security will remain an ongoing area of focus and investment by the
Company.
As recently reported, arrangements with China State Farm, the Company’s exclusive import agent for China label
infant nutrition products into Mainland China, were extended for a further three years, to December 2021.
The Company remains committed to its approach of deploying capital efficiently and strategically to support
mutually beneficial relationships with processing and distribution partners, in line with its multi-site, multi-
product and geographic diversification strategy. As part of this, the Company continues to assess its medium-term
manufacturing strategy for nutritional products, including the possible ownership of blending and canning assets,
potentially in conjunction with its nutritional powder supply partners.
New products and markets
Three new products were launched during the year:
 a2 Platinum® Stage 4 junior milk drink, to support the nutritional needs of children three years and over –
launched in August 2017 in Australia and China. The product has performed above plan

5
 a2 Platinum® Premium pregnancy formula, to support mothers’ nutritional needs pre-pregnancy, during
pregnancy and while breastfeeding – launched in May 2018 in Australia
 Premium a2 Milk™ powder blended with Mānuka honey brings together two naturally beneficial products
to create a great tasting nutritious milk drink that can be enjoyed cold or warm – launched in June 2018 in
Australia, New Zealand and through cross border e-commerce channels in China

Following the year end, a2 Milk™ branded fresh milk was launched in New Zealand under Fonterra’s Anchor™
brand – the first meaningful in-market joint activity between Fonterra and the Company.
The Company increased its resource capability in key innovation, operations and quality roles, which will underpin
future expansion of nutritional products across new and existing regions.
Arrangements were also put in place for four new markets:
 Hong Kong – Launch of a2 Platinum® Stages 1, 2 and 3 in September 2017
 Singapore – a2 Milk™ branded fresh milk was launched in August 2017
 Vietnam – A small test market for a2 Milk™ branded whole milk powder
 South Korea – An exclusive sales and distribution agreement was completed with Yuhan Corporation in
April 2018

The focus on growth initiatives in targeted emerging markets will continue, building on the Company’s
established strategic partnerships.

Regional performance
Australia and New Zealand
The ANZ business continued to grow strongly, with total revenue up 49% on pcp to $656.6 million and EBITDA up
69% on pcp to $262.2 million.
Sales of a2 Platinum® infant formula increased as market share grew from 26% to 32% by value
5
. a2 Platinum®
remains the fastest growing infant formula brand by value in Australia. The Company commenced a transition to
updated packaging, incorporating a new global brand logo, for its a2 Platinum® infant formula in May 2018. This
transition is progressing in line with expectations and is expected to be completed by September 2018.
The flexibility and strength in the Company’s supply chain was evident in its ability to deliver on the continuing
strong growth in demand. The Company also introduced an online platform to improve access to a2 Platinum®
products for Australian parents.
Fresh milk revenue rose by 4% and market share by value increased to 9.8%
6
. a2 Milk™ remains the only milk
brand distributed through all six key grocery retailers in the Australian market.
The milk supply arrangements between the Company, Moxey Farms and Leppington Pastoral Company were
further extended for an additional term of one year through to 30 June 2021.
Sales of a2 Milk™ branded milk powder products were significantly higher than in the previous year. Whole milk
powder and skim milk powder sales growth was complemented by the launch of Premium a2 Milk™ powder with
Mānuka honey and a2 Platinum® Premium pregnancy formula during the year.

5
Aztec Australian Grocery and Pharmacy Scan, 12 months ending 30/06/18 versus pcp
6
Aztec Australian Grocery Weighted Scan, 12 months ending 30/06/18

6
The Company continued to invest strongly in its brands, with the highest national advertising spend in the infant
formula and fresh milk categories in the Australian market and strong editorial media coverage. Both
spontaneous and prompted consumer brand awareness grew sharply in both categories and a2 Milk™ was named
the top brand of choice for Australian ‘millennials’
7
.
China and Other Asia
The China and Other Asia business continued to record exceptional growth, with revenue up 163% on pcp to
$233.6 million and EBITDA up 148% on pcp to $81.3 million.
Total market share for a2 Platinum® infant formula in the targeted regions continued to grow rapidly.
Consumption market share by value grew from 2.8% MAT (Moving Annual Total basis) at June 2017 to 5.1% MAT,
as measured by Kantar Worldpanel
8
. Given the nature of panel data the Company believes the MAT measure
provides a more appropriate view of market share trends in China.
Increased marketing and sales investment, including the first television advertising for a2 Platinum® Stage 3 infant
formula and an active social media programme, remained the key drivers of rising brand awareness. Further
impetus was provided by a series of live-streaming events and by publication of the findings from a major clinical
trial conducted in China.
The business has a flexible multi-channel strategy for infant formula in both China label and cross border e-
commerce English label, to best position the brand for growth.
a2 Platinum® again participated successfully in key online sales events. In the major ‘11/11 Singles Day’ event it
was the top-selling infant formula on Kaola.com, second on JD.com and third on T-mall.
In the offline (bricks and mortar) segment, distribution grew to approximately 10,000 Mother & Baby Stores,
compared with approximately 3,800 at June 2017. The stores are supported by an in-store communication
programme providing consumers with product and category advice.
To support the very strong growth of the China business, the team in China continued to grow across each of the
selling, marketing, supply chain and administration functions. Expanding our China team capability will be an
ongoing focus into FY19.
Infant Formula Regulation
Synlait achieved registration of our China label infant formula products (Stages 1, 2 and 3) with the China Food
and Drug Administration (CFDA) in September 2017. Registration was required for the manufacture and import of
such products into China through traditional channels beyond 1 January 2018. The registration process included
formulation R&D and ingredient and finished product assessment. This necessitated packaging changes to comply
with strict labelling and branding requirements.
The newly-registered China label packaging was launched to the market during June 2018 and the transition to
the new pack and China brand is proceeding well.
The Company continues to monitor changes in China’s regulatory regime and will continue to work proactively
with our partners to respond as appropriate.


7
The Urban List, Food & Drink Survey, 1 May 2017 published in June 2017
8
Kantar Infant Formula market tracking of Tier 1 and Key A cities for the 12 months ending 30/06/18 vs the 12 months ending
30/06/17 by value (Kantar track a substantial proportion of the total market)

7
United States
The US business achieved further momentum, with increased brand awareness and sales velocities, along with
continued expansion in its distribution footprint.
Distribution increased to approximately 6,000 stores in California, the Southeast, the Northeast, the Mid-Atlantic
and through natural retail chains, including Sprouts Farmers Market and Whole Foods Market. The expansion into
the Northeast, announced in January 2018, achieved distribution in major retailers in the region.
Sales velocities are increasing across the business in key accounts, with particular strength in the natural channel
and the Northeast.
a2 Milk™ is available in four variants (including chocolate) within the specialty milk segment, the fastest growing
segment of the total milk category.
Marketing investment continued with the Love Milk Again™ advertising campaign, which was broadened on a
national basis to support the expansion into the Northeast. These campaigns augment the ongoing active
editorial media programme and strong digital media and shopper marketing programmes.
The Company retains a positive view of the potential for growth in the US market and the unique advantage of
being the pioneer of the A1 protein free category in this market. With the current opportunity to more quickly
build distribution and brand awareness on a national basis comes the need to increase marketing investment
above previous guidance.
Accordingly, the planned EBITDA investment for FY19 is approximately US$22 million and the Company now
expects to achieve positive monthly EBITDA within three years. This investment is predominantly marketing
expenditure associated with brand building and sales activation but also includes investment in capability in
market.
United Kingdom
Volume sales of a2 Milk™ branded fresh milk increased by more than 50% against the previous year through gains
in distribution and in-store sales velocity. However, the UK continues to be a challenging market to achieve scale.
As in the previous year, results include a contribution from the sale of a2 Platinum® infant formula in the
wholesale market.
The Company will transition between suppliers of its fresh milk product early in FY19. This is not anticipated to
create any disruption to sales or stock availability.

Outlook for FY19
The Company anticipates further growth in revenue particularly in respect of nutritional products in ANZ and
China, and liquid milk in the United States. The focus on growth initiatives in targeted emerging markets and new
product development will continue.
Marketing expenditure as a percentage of sales is expected to be higher than FY18 given continued investment in
the Australian market, re-phasing of 2H18 activities in China, and appropriate investment to support US market
expansion.
Overhead costs are also expected to be higher than FY18, primarily due to increasing headcount for China and the
Corporate office to support continued growth and organisational development.

8
Notwithstanding the higher expenditure as indicated, the Company expects the EBITDA to sales ratio for FY19 to
be broadly consistent with that achieved for FY18.
The Board continues to consider the appropriate use of the Company’s available capital to support further value
creation from the Company’s growth strategy and supply chain development. This includes a review of
opportunities to invest in blending and canning capability where appropriate as part of our longer-term
nutritional products sourcing arrangements.

For further information contact:
The a2 Milk Company Limited
Jayne Hrdlicka
Managing Director and CEO
+61 2 9697 7000



Reconciliation of EBITDA to net profit after tax



Full Year Ended Full Year Ended


30-Jun-18 30-Jun-17 Movement

NZ$ 000's NZ$ 000's %


Segment EBITDA 283,037 141,153 100.5%
Depreciation & amortisation (2,172) (2,689) (19.2%)
EBIT 280,863 138,464 102.8%
Interest income 2,369 887 167.1%
Income tax expense (87,548) (48,705) 79.8%
Net profit after tax 195,684 90,646 115.9%

---

A transformative year
The a2 Milk Company Limited
2018 Annual Report

The a2 Milk Company,
helping people enjoy
a better life.
Contents
FY18 highlights 2
About us 4
Our Chair 15
Our CEO 16
Year in review 18
Social and environmental responsibility 28
Corporate governance 38
Remuneration 58
Financial statements 64
Other information 106
The a2 Milk Company | 1

FY18
highlights
$
923m
Revenue 68%
$
283m
EBITDA 101%
27c
Basic earnings per share 113%
infant nutrition brand in
Australia at 32% share
and 5.1% share in ChinaN o.1
brand for Australian
millennialsN o.1
store distribution
coast to coast in USA6k
of revenue invested in
marketing, R&D and IP
8.5%
unique visitors to
our websites2.5m
value share of Australian
fresh milk across all
key supermarkets
9.8%
store distribution
in China10k
2 | The a2 Milk CompanyThe a2 Milk Company | 3
2018 Annual Report
Introduction

About us
We are passionate about helping
people enjoy a better life by
providing premium branded
dairy-based nutritional products
that only contain the all natural
A2 protein type.
The a2 Milk Company | 5
2018 Annual Report
About us

The A2 protein difference
1
• Conventional cows’ milk contains two
main types of beta casein protein,
A2 protein and A1 protein – our
branded milk is different from
conventional cows’ milk because
it is A1 protein free. It is comparable
to conventional cows’ milk in
other respects
• Our branded milk is naturally occurring
and not a product of genetic
engineering or technological processes
• We work closely with farmers to select
and certify cows that naturally produce
A1 protein free milk. These identified
cows are segregated into their own
herds and milked separately. The milk
from these herds is kept separate and
isolated throughout the supply chain.
Subsequent quality assurance checks
are carried out to ensure the supply
remains A1 protein free
• Many consumers and healthcare
professionals report that certain people
who experience challenges drinking
conventional cows’ milk may
experience benefits when they switch
to our branded milk
• Scientific research has demonstrated
a structural difference between the
A1 and A2 protein types and the way
in which the digestive system breaks
them down
• We continue to support further
research in a number of markets into
understanding the potential benefits
of consuming A1 protein free
dairy-based products
Our purpose
Helping people enjoy
a better life
Our vision
To be the innovative
and smart choice for
dairy nutrition
Our ambition
To be the most admired
and commercially attractive
dairy-based nutritional
company globally
Deepening our proprietary
know-how and A2 protein
expertise
• Integrated intellectual property portfolio
• Leading operational and
compliance capability
• Investing in relevant scientific research
• Differentiated brand development
Investing in attractive
markets
• Asia Pacific focus
(ANZ, China, Other Asia)
• USA
• UK
• New market opportunities
Branded dairy nutritional
product portfolio
• Across a continuum from the purity
of fresh a2 Milk™ to customised
A1 protein free products
• Targeting the whole family from
infants to adults to satisfy their
growing digestive health needs
Our strategic priorities
1 Throughout this document A1 and A2 protein
refers to A1 and A2 beta casein protein type
Originally all
cows produced
milk containing
only A2 protein
Genetic variation has resulted
in mixed herds over time
Typical cow herds
produce conventional
milk containing a mix of
A1 and A2 protein
Our branded milk is sourced
from herds producing milk
containing only the
A2 protein and no A1
6 | The a2 Milk CompanyThe a2 Milk Company | 7
2018 Annual Report
About us

Macro-consumer
trends
Our Company is well positioned
to take advantage of these
significant consumer trends
1. CSIRO, The Future of Food, August 2017
2. Euromonitor International, A Bloated Market: Trends and Developments
in Digestive Remedies, February 2014
3. Euromonitor International, Passport Database, 2018
4. Mintel, A world of opportunities for Australia and New Zealand among
Chinese consumers, March 2017
5. Australian Government Foreign Policy White Paper, 2017
6. Nielsen, Breaking Borders, October 2017
Growing consumer
demand for health
and wellness
products
• “Demand for food that is fresh, tasty and
healthy is now the single biggest consumer
trend in food.” CSIRO
1
• Growing awareness of the link between
food and overall health
• Growing understanding of the benefits
of digestive health
2
• Increased demand for protein
3
• Continued growth in powdered nutrition
product segments
3
Food safety,
naturalness and
provenance
• Growing interest in understanding
country of origin, source of products,
high quality ingredients, and seeking
greater transparency and more traceable
supply chain
• Consumers demanding all-natural
ingredients and products where possible
• Strong quality, safety and trust of products
from Australia and New Zealand
• More than one in three Chinese consumers
buying imported products online have
bought Australian or New Zealand brands
4

Growing middle
class in Asia

• Greater market access and an emerging
middle class with rising consumer wealth
• A billion more Asians will join the middle
class over the next 10 years
5

• By 2030 the region will consume more
than half of the world’s food
5
• 600 million additional people will live
in the region’s cities
5
• Asia stands to deliver nearly two thirds
of global growth to 2030
5

• Shift from a product commodity focus
to a desire for higher quality, value-
added, safe and nutritious foods
• Almost half of Chinese consumers say
they are willing to trade up to purchase
premium products
6

8 | The a2 Milk CompanyThe a2 Milk Company | 9
2018 Annual Report
About us

How we
are unique
As the only company
globally that has
exclusively and
successfully created
an A1 protein free
business, we will
actively leverage
and defend our first
mover advantage
and our unique
business model
A2
protein
Focussed
investment in brand,
IP and growth
Single-minded focus
Capital-smart
approach
Unique, modern
and premium brand
Innovative and
agile approach
Australia and
New Zealand sourcing
for Asia Pacific
10 | The a2 Milk CompanyThe a2 Milk Company | 11
2018 Annual Report
About us

Our markets
China & other Asia
United States & United Kingdom
Segment revenue
Segment revenue
Segment revenue
Australia & New Zealand
$
32.4m

+54%
-$27.6m EBITDA 23.0%
$
233.6m

+16 3%
$81.3m EBITDA 148%
$
656.6m

+49%
$262.2m EBITDA 69%
All figures are in NZ$ (New Zealand dollars)
1 New UK carton in market from September FY19
2 UK export sales only
USUK
AustraliaNew Zealand
2
1
12 | The a2 Milk CompanyThe a2 Milk Company | 13
2018 Annual Report
About us

Emerging beta casein
science, IP development
and licensing model
approach
Global branded
dairy nutrition
leaders making
a difference to
people’s lives
through further
market expansion,
innovation and
smart partnerships
IP Creators
Establishing broader
leadership
Revenue
NZ$
FY07
$7. 6 m
FY18
$923m
‘00-
‘07
‘18
Shift from dairy
focus to broader
nutritional product
portfolio with the
emergence of
significant infant
formula business
and broader global
market footprint
Multi-product
geographic diversity
FY17
$550m
‘12-
‘17
Shift from licensing
to branded
operating business
model with regional
business structure
and Australia focus
Branded domestic
fresh milk focus
FY12
$62.5m
‘07-
‘12
Our Chair
Dear Shareholder,
I am delighted
to present to you
another year
of outstanding
achievement by your
Company, in what
was undoubtedly a
transformative period.
In delivering its FY18 result, the Company
has achieved compound annual growth
across a three-year period of 81% in
revenue and 349% in EBITDA – an
impressive result that reflects the strength
of our brand, a highly focussed and
disciplined growth strategy, and the
talent and commitment of our people.
The Company’s strong financial
performance has enabled us to progress
our objective of building a global dairy
nutrition company, centred on a unique
and compelling brand proposition. We
intend to continue strengthening our
position as the pioneers and leaders of
the A1 protein free category.
Not only are we larger and more financially
robust, we are now also in a significantly
enhanced strategic position. I would like
to highlight three transformative changes
to your Company:
• We have proved that our proposition
has real international potential across
multiple geographies and products. We
are building a genuine international
brand and its growing strength is
impressive.
• Physical distribution has reached scale
in both China and the US, supporting
the planned increased investment in
brand building in these critical markets.
• The depth of our partnership model
has been underscored with the
combination of our enhanced
agreement with and shareholding in
Synlait, the announcement of our
multi-faceted agreement with Fonterra
and, importantly, the renewal of
our import services agreement with
China State Farm.
These three dynamics not only create a
stronger base for our business but, also
more and bigger opportunities for growth
in the future which will sustain and
deliver the Company’s long-term
strategic objectives.
The year also marks the retirement of
Geoffrey Babidge as Managing Director
and CEO. Geoff presided over the
Company’s achievement of another stellar
financial result for the year ended 30 June
2018. Geoff’s leadership was a critical part
of the Company’s success over his 11-year
association with the business. Geoff is
extremely proud of the culture he leaves
behind – entrepreneurial, highly
commercial, prepared to think outside the
square, consumer focussed, and driven by
a strong set of values. It is a strong legacy
and one that positions the Company well
for the future.
I wish to acknowledge his contribution
and thank him on behalf of all
shareholders for his leadership, vision
and commitment.
I also wish to welcome Geoff’s successor,
Jayne Hrdlicka, who is now fully
established in her role. Jayne is an
outstanding senior executive with
strengths highly relevant to this dynamic
and transformative period for the
Company. These include her extensive
experience in strategy formulation and
execution, consumer-centricity and
innovation and, importantly, an
understanding of operating in a disruptive
environment. Jayne is no stranger to high
growth businesses. She has hit the ground
running and is well positioned to continue
the momentum of our business into
fiscal 2019.
The Company’s robust financial position
and unique proposition mean it is well
placed for continued growth. The Board
is acutely aware of its responsibility as
stewards of the Company’s capital and
continues to consider its appropriate use,
including a review of opportunities to
invest in blending and canning capability
as part of our longer-term planning.
Our Year in Review provides a
comprehensive overview of the
operational and financial performance
for the year. A further update on our
performance will be provided at the
Annual Meeting, in November 2018.
On behalf of the Board, I would like to
thank our management and staff across
all regions for their continued hard work
and dedication to the Company during
the year and the outstanding results they
have achieved.
David Hearn
Chair
21 August 2018
The a2 Milk Company | 15
2018 Annual Report
About us
14 | The a2 Milk Company

Our CEO
From our early days in scientific discovery
to the commitment of all employees today,
there is a real pioneering ethos at the heart
of the Company, genuinely looking to make
the world a better place by making people
feel better. A spirit of integrity is part of the
Company’s history and guides the decisions
we make today.
The foundations are strong. From the
scientific underpinnings of our Company,
the sophistication of our trade
relationships, our market driven approach
in China and the commercial strength of
the business – we are in good shape and
getting stronger every day.
The potential is significant.
The a2 Milk Company team has achieved
a lot in recent years. This success is a
culmination of strong early foundations
in science and IP, exceptional business
development in Australia, and the growing
strength of The a2 Milk Company™
branded products in China. The potential
to continue to build on the momentum is
significant. Both China and the US are big
consumer markets where the underlying
focus on health and wellness and the
increasing consciousness about food
security and provenance play to our hand.
No doubt we have a lot of hard work
ahead, but the Company and our people
are very capable of continuing to remain
agile, react quickly and punch above
our weight.
The fit is excellent. I have spent my
career working with consumer driven
businesses, helping them define and
deliver on their potential. Having worked
across most industries and companies
at every conceivable age, stage and
circumstance, I am comfortable picking up
leadership of The a2 Milk Company at this
moment in time. We are a high growth,
high potential, fundamentally
entrepreneurial Company that needs to
reinforce our foundations as we maintain
the drive for continued growth. The team
and I are off to a good start in doing
exactly that.
I look forward to sharing more with you as
I get my feet more firmly planted. We have
only begun to scratch the surface of our
potential as a Company and as a team.
Thank you for your ongoing support of
the Company, I look forward to meeting
many of you in the coming months.
Warm regards,
Jayne
It is an honour to be
The a2 Milk Company CEO.
While I have only recently become your
CEO, I feel very privileged to have had
several months before officially starting to
get my head around the business and
prepare for all that is ahead. To help you
get to know me I thought I would share
with you a bit about myself and my early
observations of the business.
Like many of you, I have a family that
significantly influences who I am. We
have been an ‘a2 Milk™ only’ household
for years. We became passionate about
the brand because we felt that a2 Milk™
was healthier and higher quality and
therefore better milk for our kids. I am
proud to now have the opportunity to
help the company continue to deliver on
its significant potential.
As I have learned more about our
Company, its people and the opportunities
ahead, I am reminded of the reasons
I chose to join the Company.
This is a company built on great values.
From our early days in scientific discovery
to the commitment of all employees today,
there is a real pioneering ethos at the heart
of the Company, genuinely looking to make
the world a better place by making people
feel better. A spirit of integrity is part of the
Company’s history and guides the decisions
we make today.
16 | The a2 Milk CompanyThe a2 Milk Company | 17
2018 Annual Report
About us

Year in review
2018 Annual Report
Year in review
The a2 Milk Company | 19

Outstanding financial
performance and
strong progress on
delivery of strategy
FY18 has been a transformative year for the Company.
The a2 Milk Company™ brand and our approach is working
across multiple products in multiple markets. We continued
to learn how to communicate our brand proposition effectively
and increased our investment to apply it to new regions and
product innovation. Our scale in market in both China and the US
is now substantial and creating real momentum of its own. We
have also significantly strengthened our strategic partnerships
with an enhanced supply agreement with Synlait, and a new
comprehensive partnership with Fonterra, which is expected to
support further access to new markets and product capabilities.
Basic earnings per share (EPS) of
27.0 cents
up from 12.7 cents on pcp
Operating cash flow of
$231.1m
up 131% on pcp
Net profit after tax of
$195.7m
up 116% on pcp
Total revenue of
$922.7m
an increase of 68% over the
prior corresponding period (pcp)
EBITDA
*
of
$283.0m
up 101% on pcp
EBITDA to sales margin of
30.7%
up from 25.7% on pcp
Substantial distribution
growth with circa
16,000
stores across China and USA
8.5%
of revenue invested in
marketing, IP and R&D
5 .1%
**

share of infant nutrition in
China and 32% in Australia
Summary of financial
performance
The Company delivered another very
strong financial performance, with
substantial improvements in revenue,
earnings and cash generation.
Increased investment in brand and
market development resulted in rapid
growth of infant formula and the
expansion of the liquid milk business
in each of the Company’s
established markets.
Continued impressive sales
growth and trajectory
Sales of a2 Platinum
®
infant formula again
grew substantially in Australia and China,
with continued growth in market share.
a2 Platinum
®
sales revenue was
$724.2 million, an increase of 84% on
the previous year. Investment continued in
building brand awareness and consumer
engagement, expanding distribution in
priority channels and adapting to new
regulatory requirements in China.
In Australia, a2 Milk™ branded fresh milk
value share grew strongly from 9.3% to
9.8% by year end
1
. The United States
business continued to grow sales velocities
in key accounts, alongside a distribution
footprint which increased to 6,000 stores,
following expansion into the Northeast
and in the natural channel. In the United
Kingdom, improvement in rates of sale
and expanding distribution brought gains
in revenue.
1 Aztec Australian Grocery Weighted Scan,
12 months ending 30/06/18 versus pcp
The Company advanced its growth
strategy through multiple initiatives –
launching three new products
(a2 Platinum
®
Stage 4 milk powder,
a2 Platinum
®
pregnancy formula and
a2 Milk™ powder blended with Mānuka
honey); entering new markets in South
East Asia; and establishing a strategic
relationship with Fonterra Co-operative
Group Limited and an exclusive
distribution agreement with Yuhan
Corporation for the South Korea market.
Margin improvement and
investment to deliver growth
Gross margin percentage benefited from
the increased proportion of infant formula
sales, currency movements and favourable
net selling prices.
Investment in brand building and
marketing grew by $31.6 million to
$73.6 million, with increases across all
markets. Due to the timing of key
marketing programs in China and USA,
this investment was more heavily weighted
to the second half.
SG&A spend increased broadly in line
with underlying revenue, reflecting a
commitment to support continued
growth. Corporate costs rose by
$8.3 million, reflecting investment in
people and associated costs to support
global growth opportunities.
Strong balance sheet position
The cash position continued to improve
along with revenue, earnings and working
capital efficiencies. Net operating cash
flow was $231.1 million, compared with
$99.9 million in the previous year. Cash
on hand at the end of the year was
$340.5 million, compared with
$121.0 million for the pcp.
Working capital benefited from improved
terms with a number of customers. This
was partially offset by a planned increase
in infant formula inventory of $35.7 million
as the Company built progressively to
more sustainable levels during the year.
Enhanced strategic supply
partnerships
The Company’s supply base was enhanced
by the extension of the comprehensive
manufacturing and supply agreement for
infant formula with Synlait Milk Limited
(Synlait) and the establishment of a new
comprehensive strategic relationship
with Fonterra.
* Earnings before interest, tax, depreciation and amortisation (EBITDA) is a non GAAP measure. However, the Company believes that it assists in providing investors
with a comprehensive understanding of the underlying performance of the business. A reconciliation of EBITDA to net profit after tax is shown on page 115.
** Kantar Infant Formula market tracking of Tier 1 and Key A cities for 12 months ending 30/06/18 by value (Kantar track a substantial proportion of the total market)
20 | The a2 Milk CompanyThe a2 Milk Company | 21
2018 Annual Report
Year in review

Strategic progress
With the Australian and China
businesses delivering strong earnings,
an expanded US distribution footprint
and the growing strength of our
brand, the Company continues to be
well positioned to execute its strategy
for further growth.
The growth strategy has three priorities:
• Building a branded portfolio of
dairy-based nutritional products based
on the A1 protein free proposition
• Investing in attractive markets where
we believe we can build competitive
brand strength
• Deepening our proprietary know-how
and A2 protein expertise
The first signs of competition from a
major international company in the A1
protein free category appeared in March
2018. There has been no apparent impact
on our sales momentum as a consequence
of this launch. The Company remains
confident that competition will ultimately
expand the category over time. The
combination of our strong and
contemporary brand, deep know-how
and intellectual property, agile and
entrepreneurial approach; and absolute
focus as a Company on A1 protein free
products, means our business is uniquely
positioned to benefit from category
expansion. The Company will actively
leverage and defend the integrity of its
market position.
Brand, intellectual property and
research & development
The Company has continued its investment
in improving brand equity via enhanced
marketing campaigns in its key markets of
Australia, China and the US, R&D and
further development of intellectual
property. The Company’s investment in
marketing and R&D increased by
$32.3 million and a further $2.2 million
was capitalised for patents and
trade marks.
Increasing investment in trade marks
included a rollout of a new unifying brand
trade mark that has been applied across all
products and markets. Our brand assets
will continue to evolve as the trade mark
portfolio broadens over time.
During FY18 a clinical trial conducted in
China involving 600 adults with self
reported lactose intolerance found
consumption of milk containing the
A2 protein reduced acute gastrointestinal
symptoms. The study was consistent with
a previous pilot study published in 2016.
A pilot study carried out under the New
Zealand Government High Value Nutrition
programme is now complete and being
submitted for publication. Further, a
clinical study in China amongst pre-school
children examining digestive benefits of
A1 protein free milk has been completed
and submitted for publication.
The Company continues to support
additional science and research &
development programmes to enhance
its overall brand proposition.
Strategic partnerships
With a view to enhancing our supply chain
and broader international market
development the Company announced the
formation of a comprehensive strategic
relationship with Fonterra. The initial scope
of the relationship incorporates:
• an exclusive nutritional powder
agreement under which Fonterra will
manufacture A1 protein free products
in Australia for certain priority markets
in South East Asia and the Middle East
• an exclusive licence to Fonterra for the
production, distribution, sale and
marketing of a2 Milk™ branded liquid
milk in New Zealand (commenced from
July 2018)
• the opportunity to leverage Fonterra’s
sales and distribution capabilities in the
priority markets
• joint evaluation of opportunities to sell
certain Company branded dairy
products, such as butter and cheese,
in Australia, New Zealand and China
• Additional A1 protein free milk pools
to be developed by Fonterra and
the Company.
a2 Milk™ powder blended with Mānuka
honey is packed by Fonterra and is the
first product launched with Fonterra’s
assistance following the announcement
of our strategic relationship.
Further steps were taken to build on the
Company’s global supply strategy with the
comprehensive supply agreement for
infant formula with Synlait Milk extended
in early July 2018. This provides a two-year
extension to the minimum term, an
increase in the volume over which Synlait
already had exclusive supply rights,
increased committed production capacity
and pricing terms that reflect both
companies’ commitment to an ongoing
market-competitive pricing regime.
Consistent with the Company’s desire to
deepen relationships with its key partners,
the Company announced on 3 August
2018 an additional investment of
$162.3 million in Synlait Milk shares,
bringing the total shareholding in Synlait
to approximately 17.4%. This investment
is intended to provide further stability over
Synlait’s capital position and ownership
and reflects the Company’s commitment
to supporting key strategic partners. The
Company has no plans to further increase
its shareholding in Synlait.
The Company continues to take steps to
minimise the risk of product substitution
and counterfeit, particularly for infant
formula in China. This includes improved
security technology and advances in
quality and authenticity proof points.
During the financial year, the Company
introduced a unique QR-verification
system allowing verification of the
authenticity of our products. The system
has now been implemented across the
total a2 Platinum
®
product range. Product
quality and security will remain an ongoing
area of focus and investment by
the Company.
As recently reported, arrangements with
China State Farm, the Company’s exclusive
import agent for China label infant
nutrition products into Mainland China,
were extended for a further three years,
to December 2021.
The Company remains committed to its
approach of deploying capital efficiently
and strategically to support mutually
beneficial relationships with processing
and distribution partners, in line with its
multi-site, multi-product and geographic
diversification strategy. As part of this, the
Company continues to assess its medium-
term manufacturing strategy for nutritional
products, including the possible ownership
of blending and canning assets, potentially
in conjunction with its nutritional powder
supply partners.
New products and markets
Three new products were launched during
the year:
• a2 Platinum
®
Stage 4 junior milk drink,
to support the nutritional needs of
children three years and over –
launched in August 2017 in Australia
and China. The product has performed
above plan
• a2 Platinum
®
Premium pregnancy
formula, to support mothers’
nutritional needs pre-pregnancy, during
pregnancy and while breastfeeding –
launched in May 2018 in Australia
• Premium a2 Milk™ powder blended
with Mānuka honey brings together
two naturally beneficial products to
create a great tasting nutritious milk
drink that can be enjoyed cold or warm
– launched in June 2018 in Australia,
New Zealand and through cross border
e-commerce channels in China
Following the year end, a2 Milk™ branded
fresh milk was launched in New Zealand
under Fonterra’s Anchor™ brand – the
first meaningful in-market joint activity
between Fonterra and the Company.
The Company increased its resource
capability in key innovation, operations
and quality roles, which will underpin
future expansion of nutritional products
across new and existing regions.
Arrangements were also put in place for
four new markets:
• Hong Kong – Launch of a2 Platinum
®

Stages 1, 2 and 3 in September 2017
• Singapore – a2 Milk™ branded
fresh milk was launched in August 2017
• Vietnam – A small test market for
a2 Milk™ branded whole milk powder
• South Korea – An exclusive sales and
distribution agreement was completed
with Yuhan Corporation in April 2018
The focus on growth initiatives in targeted
emerging markets will continue, building
on the Company’s established strategic
partnerships.
A clinical trial in China
involving 600 adults
with self-reported
lactose intolerance
found consumption of
milk containing only the
A2 protein reduced acute
gastrointestinal symptoms
22 | The a2 Milk CompanyThe a2 Milk Company | 23
2018 Annual Report
Year in review

Regional performance
Australia and New Zealand
The ANZ business continued to grow
strongly, with total revenue up 49%
on pcp to $656.6 million and EBITDA
up 69% on pcp to $262.2 million.
Sales of a2 Platinum
®
infant formula
increased as market share grew from 26%
to 32% by value
2
. a2 Platinum
®
remains the
fastest growing infant formula brand by
value in Australia. The Company
commenced a transition to updated
packaging, incorporating a new global brand
logo, for its a2 Platinum
®
infant formula in
May 2018. This transition is progressing in
line with expectations and is expected to be
completed by September 2018.
The flexibility and strength in the
Company’s supply chain was evident in its
ability to deliver on the continuing strong
growth in demand. The Company also
introduced an online platform to improve
access to a2 Platinum
®
products for
Australian parents.
Fresh milk revenue rose by 4% and market
share by value increased to 9.8%
3
.
a2 Milk™ remains the only milk brand
distributed through all six key grocery
retailers in the Australian market.
The milk supply arrangements between
the Company, Moxey Farms and
Leppington Pastoral Company were further
extended for an additional term of one year
through to 30 June 2021.
Sales of a2 Milk™ branded milk powder
products were significantly higher than in
the previous year. Whole milk powder and
skim milk powder sales growth was
complemented by the launch of Premium
a2 Milk™ powder with Mānuka honey and
a2 Platinum
®
Premium pregnancy formula
during the year.
2 Aztec Australian Grocery and Pharmacy Scan
12 months ending 30/06/18 versus pcp
3 Aztec Australian Grocery Weighted Scan,
12 months ending 30/06/18
The Company continued to invest strongly
in its brands, with the highest national
advertising spend in the infant formula
and fresh milk categories in the Australian
market and strong editorial media
coverage. Both spontaneous and
prompted consumer brand awareness
grew sharply in both categories and
a2 Milk™ was named the top brand of
choice for Australian ‘millennials’
4
.
China and Other Asia
The China and Other Asia business
continued to record exceptional
growth, with revenue up 163% on
pcp to $233.6 million and EBITDA up
148% on pcp to $81.3 million.
Total market share for a2 Platinum
®
infant
formula in the targeted regions continued
to grow rapidly. Consumption market
share by value grew from 2.8% MAT
(Moving Annual Total basis) at June 2017
to 5.1% MAT, as measured by Kantar
Worldpanel
5
. Given the nature of panel
data the Company believes the MAT
measure provides a more appropriate view
of market share trends in China.
Increased marketing and sales investment,
including the first television advertising for
a2 Platinum
®
Stage 3 infant formula and
an active social media programme,
remained the key drivers of rising brand
awareness. Further impetus was provided
by a series of live-streaming events and by
publication of the findings from a major
clinical trial conducted in China.
The business has a flexible multi-channel
strategy for infant formula in both China
label and cross border e-commerce English
label, to best position the brand
for growth.
4 The Urban List, Food & Drink Survey, 1 May 2017
published in June 2017
5 Kantar Infant Formula market tracking of Tier 1
and Key A cities for 12 months ending 30/06/18
vs 12 months ending 30/06/17 by value (Kantar
track a substantial proportion of the total market)
a2 Platinum
®
again participated
successfully in key online sales events. In
the major ‘11/11 Singles Day’ event it was
the top-selling infant formula on
Kaola.com, second on JD.com and third
on T-mall.
In the offline (bricks and mortar) segment,
distribution grew to approximately 10,000
Mother & Baby Stores, compared with
approximately 3,800 at June 2017. The
stores are supported by an in-store
communication programme providing
consumers with product and
category advice.
To support the very strong growth of the
China business, the team in China
continued to grow across each of the
selling, marketing, supply chain and
administration functions. Expanding our
China team capability will be an ongoing
focus into FY19.
Infant Formula Regulation
Synlait achieved registration of our China
label infant formula products (Stages 1, 2
and 3) with the China Food and Drug
Administration (CFDA) in September 2017.
Registration was required for the
manufacture and import of such products
into China through traditional channels
beyond 1 January 2018. The registration
process included formulation R&D and
ingredient and finished product
assessment. This necessitated packaging
changes to comply with strict labelling and
branding requirements.
The newly-registered China label
packaging was launched to the market
during June 2018 and the transition to
the new pack and China brand is
proceeding well.
The Company continues to monitor
changes in China’s regulatory regime and
will continue to work proactively with our
partners to respond as appropriate.
United States
The US business achieved further
momentum, with increased brand
awareness and sales velocities,
along with continued expansion
in its distribution footprint.
Distribution increased to approximately
6,000 stores in California, the Southeast,
the Northeast, the Mid-Atlantic and
through natural retail chains, including
Sprouts Farmers Market and Whole Foods
Market. The expansion into the Northeast,
announced in January 2018, achieved
distribution in major retailers in the region.
Sales velocities are increasing across the
business in key accounts, with particular
strength in the natural channel and the
Northeast.
a2 Milk™ is available in four variants
(including chocolate) within the specialty
milk segment, the fastest growing
segment of the total milk category.
Marketing investment continued with the
Love Milk Again™ advertising campaign,
which was broadened on a national basis
to support the expansion into the
Northeast. These campaigns augment the
ongoing active editorial media programme
and strong digital media and shopper
marketing programmes.
The Company retains a positive view of
the potential for growth in the US market
and the unique advantage of being the
pioneer of the A1 protein free category in
this market. With the current opportunity
to more quickly build distribution and
brand awareness on a national basis
comes the need to increase marketing
investment above previous guidance.
Accordingly, the planned EBITDA
investment for FY19 is approximately
US$22 million and the Company now
expects to achieve positive monthly
EBITDA within three years. This investment
is predominantly marketing expenditure
associated with brand building and sales
activation but also includes investment in
capability in market.
United Kingdom
Volume sales of a2 Milk™ branded
fresh milk increased by more than
50% against the previous year
through gains in distribution and
in-store sales velocity.
However, the UK continues to be a
challenging market to achieve scale.
As in the previous year, results include a
contribution from the sale of a2 Platinum
®

infant formula in the wholesale market.
The Company will transition between
suppliers of its fresh milk product early in
FY19. This is not anticipated to create any
disruption to sales or stock availability.
24 | The a2 Milk CompanyThe a2 Milk Company | 25
2018 Annual Report
Year in review

Outlook for FY19
The Company anticipates further growth in
revenue particularly in respect of nutritional
products in ANZ and China, and liquid milk
in the United States. The focus on growth
initiatives in targeted emerging markets and
new product development will continue.
Marketing expenditure as a percentage of sales is
expected to be higher than FY18 given continued
investment in the Australian market, re-phasing of
2H18 activities in China, and appropriate investment
to support US market expansion.
Overhead costs are also expected to be higher than
FY18, primarily due to increasing headcount for
China and the Corporate office to support continued
growth and organisational development.
Notwithstanding the higher expenditure as indicated,
the Company expects the EBITDA to sales ratio for
FY19 to be broadly consistent with that achieved
for FY18.
The Board continues to consider the appropriate use
of the Company’s available capital to support further
value creation for the Company’s growth strategy
and supply chain development. This includes a review
of opportunities to invest in blending and canning
capability where appropriate as part of our longer-
term nutritional products sourcing arrangements.
26 | The a2 Milk CompanyThe a2 Milk Company | 27
2018 Annual Report
Year in review

Social and
environmental
responsibility
The a2 Milk Company | 29
2018 Annual Report
Social and environmental responsibility

A2
protein
Capital-smart
approach
Single-minded
focus
Focussed
investment in brand,
IP and growth
Unique, modern
and premium
brand
Innovative and
agile approach
Australia and
New Zealand sourcing
for Asia Pacific
At The a2 Milk Company we believe we
have a responsibility to do business in a way
that best represents the interests of all our
stakeholders and to protect the
environment and the communities in which
we operate. This is consistent with who we
are as an organisation, part of what has
made us so successful thus far and
underscores the integrity and value of our
brand. As a young company we are putting
more structure around what we do.
Several core themes run at the heart
of both our success and our ongoing
investment in social responsibility –
product quality and safety; ethical
and responsible supply chain and farm
management; responsible
communications; strategic partnerships;
and people and capability.
We are confident that a holistic business
strategy, taking into account commercial,
environmental, technological, regulatory
and social factors, plays an important
part in underpinning long-term,
sustainable business value. This is a
crucial factor in how we run our business
and engage with our key partners and
we will increasingly be more overt and
public in our approach.
Product quality
and food safety
With a broad consumer base and
a large proportion of our products
consumed by infants, young
children and pregnant women, our
commitment to safety and quality
of the highest standard is at the
heart of who we are as a company.
We take great care in leveraging our
significant proprietary know-how
and quality processes to deliver
A1 protein free products that are
of the highest quality and are safe
and compliant with market regulations
and requirements.
This commitment is supported by:
• A comprehensive and unique focus
on A1/A2 beta casein segregation
and testing from farm to finished
product
• A priority focus on food safety and
quality management programmes
audited by accredited third party
verification agencies for both
proprietary and third party
manufacturing sites
• Long-term partnerships with high
quality third-party manufacturers
who share our focus and ambition
on social responsibility
• Relevant industry certifications:
ISO 9001 (infant nutrition), SQF
1

(certification of Company’s Sydney
processing facility)
• Ongoing monitoring and
compliance with relevant regulatory
requirements in the markets in
which we operate
• Investment in people and training to
ensure capability to meet product
quality & food safety standards
Additionally, we continue
to enhance efforts to ensure
consumers are purchasing
True a2™ products:
We aim to progressively
build our approach to
social responsibility in
keeping with our unique
model – and we can and
will do more.
Rigorous internal testing
regimes and quality
compliance programmes
Significant and ongoing
investment in brand and other
consumer communication
QR code based tracking system
printed on all infant and pregnancy
nutritional products
Independent product verification
by food traceability experts
Oritain to ensure in-market
product authenticity
1 Safe Quality Food Programme (Global
Food Safety Initiative)
A2
protein
30 | The a2 Milk CompanyThe a2 Milk Company | 31
2018 Annual Report
Social and environmental responsibility

While the Company does not own
or operate any farming assets, where
possible we work closely with our
farmers, supporting them with the
economic, environmental and social
aspects of farming.
Recognising the importance of waste
minimisation, we have established
comprehensive recycling and waste
management procedures at our milk
processing facility in Australia.
Animal, farmer and
environmental welfare
Our A1 protein free milk is sourced
from diversified milk pools across New
Zealand, Australia, the USA and UK.
The following principles guide our milk
sourcing strategy:
• Proximity to processing facilities:
The majority of our milk is sourced
from farms in close proximity to our
processing facilities, allowing us
to deliver fresher product with a
reduced footprint
• Land management and
sustainability: Our farmers work
through a number of platforms
to protect and sustain the land for
future farming. In Australia, for
example, we have commenced a
programme to assist our farmers’
efforts. During FY18 we began
contributing to Landcare Australia
funding grants for projects that will
help them enhance the
sustainability of their operations.
Landcare is the largest
environmental management
movement in Australia, supporting
community owned and driven
initiatives that promote sustainable
approaches to land management.
The funding will help those farmers
undertake projects focussed on
a variety of initiatives, such as
increased use of solar power,
implementation of technology
to reduce energy consumption,
revegetation to reduce soil erosion
and improve water quality, and
recycling of waste water
Ethical and
responsible
supply chain and
milk sourcing
We work in partnership with our
farmers to collectively do the right
thing by the environment and
their animals.
• Animal management: We are
committed to providing optimal
living standards for animals involved
in and impacted by a2 Milk™
supply, underpinned by a respect for
animal welfare, and a belief in the
positive impact that animal welfare
standards can have on milk
production and milk quality. Our
Animal Welfare programme, already
implemented in Australia and the
United States, is endorsed and
validated by Validus, a third party
animal welfare specialist, and
safeguards the Five Freedoms
2
for
animal welfare adopted by the
World Organisation for
Animal Health
• Quality control practices:
Our partners exhibit the same core
beliefs as The a2 Milk Company
and are the custodians of its A1
protein free point of difference,
striving for industry best practice
and continuously improving and
challenging the status quo. Each
partner has in place processes to
ensure they meet our milk quality
specifications
• Paying a premium: The Company
pays a premium price to its farmers
for A1 protein free milk over the
market price for raw milk in the
markets in which we operate
3
. This
premium rewards farmers for the
additional efforts undertaken to
supply milk The a2 Milk Company
way, and makes the ethical
production of our A1 protein free
milk an attractive economic
proposition for our farmers
Gray family farm,
New South Wales,
Australia
2 The Five Freedoms outline five aspects
of animal welfare under human control
and have been adopted by the World
Organisation for Animal Health
3 Does not include milk sourced by
licensees
A2
protein
32 | The a2 Milk Company
2018 Annual Report
Social and environmental responsibility
The a2 Milk Company | 33

Responsible
consumer
marketing and
healthcare
education
The Company supports
breastfeeding as the primary
form of infant nutrition. We have
developed a premium high
quality range of infant nutrition
products to provide parents an
alternative when breastfeeding
is not an option. In line with
market regulations and the
World Health Organisation’s
International Code of Marketing
and Breast Milk Substitutes
(WHO Code
3
), we refrain from
promoting any products
targeting 0-12 months of age
across all our markets.
We also support the important
nutritional needs of women
during their pregnancy and
whilst breastfeeding by
providing a2 Milk™ fresh milk
and milk powders and more
recently a2 Platinum
®
pregnancy
and breastfeeding formula.
Marketing of Infant Formulas
(MAIF Agreement)
We are a signatory to the Marketing
in Australia of Infant Formula:
Manufacturer and Importers
Agreement (MAIF agreement). It gives
effect in Australia to the principles of
the WHO Code. The MAIF agreement
seeks to contribute to the provision of
safe and adequate nutrition for infants
by protecting and promoting the
benefits of breastfeeding, whilst
ensuring the appropriate marketing
and distribution of breast milk
substitutes such as infant formula.
Sustainable
Partnerships
We work in close partnership
with all key suppliers to
ensure we share the same
quality, environmental and
community values.
Working with strategic partners
throughout our supply chain is a core part
of our business model. We are working to
ensure our partners all feel like they are
part of The a2 Milk Company family. Both
Synlait and Fonterra are great examples of
this and with each we are on a journey
working to do more together in delivering
for our key stakeholders in a socially
responsible way.
Fonterra Co-operative Group
Limited
During the year, we announced the
formation of a comprehensive strategic
relationship with Fonterra, which includes
the manufacture and supply of nutritional
products, a licensing agreement for
a2 Milk™ branded fresh milk in New
Zealand, the development of
A1 protein free milk pools in New Zealand
and Australia, and a number of other
product and market opportunities.
Fonterra believes that ‘strong healthy
local environments and communities are
the foundation for sustainable, profitable
dairy farming’
4
. In its 2017 Sustainability
Report, Fonterra has committed to
medium-term targets and long-term
contributions aligned to the United
Nations Sustainable Development Goals.
This report is aligned to the Global
Reporting Initiative (GRI) Standards – an
internationally recognised framework for
sustainability reporting.
Access Fonterra’s 2017 Sustainability
Report: https://www.fonterra.com/
sustainabilityreport
Infant Nutrition Council
The Company is a member of the
Australia and New Zealand Infant
Nutrition Council, which represents the
major manufacturers and marketers of
infant formula in Australia and
New Zealand as well as local companies
producing product for export.
The Council seeks to improve infant
nutrition by supporting public health
goals for the protection and promotion
of breastfeeding and good nutrition for
infants. All members abide by a Code of
Conduct including the MAIF Agreement
and The Infant Nutrition Council Code
of Marketing of Infant Formula in
New Zealand (INC Code of Practice).
Healthcare professional
education
We provide health care professionals
with materials and tailored programmes
across all our key markets to enhance
their knowledge and understanding of
the differences in A1 and A2 beta casein
science and overall health and
nutrition education.
Synlait Milk Limited
As the Company’s infant and pregnancy
nutrition manufacturer for the New
Zealand, Australian and Chinese markets,
and with approximately 70 contracted
farms, Synlait supports a significant
proportion of the Company’s operations.
Synlait’s business model supports
the achievement of economic,
environmental and social outcomes.
It has committed to reducing its
environmental impact significantly over
the next 10 years by targeting key areas of
its value chain. Commitments include:
• Targeted reductions in greenhouse gas
emissions, and water consumption on
and off farm, as well as reduced
nitrogen loss on farms, by 2028
• Boosting support for Synlait’s best
practice dairy farming programme,
Lead With Pride™, via increased
premium payments for participating
farms; and
• Becoming a certified B Corporation and
adopting several of the United Nation’s
Sustainable Development Goals
• Never building another coal boiler and
addressing existing coal infrastructure
over time as well as commissioning
Australasia’s first large-scale electrode
boiler in early 2019
Access Synlait’s sustainability
commitments: www.synlait.com
3 World Health Organization (1981)
International Code of Marketing
of Breast-milk Substitutes, Geneva
(WHO Code)
4 Fonterra Sustainability Report 2017, Page
1 (https://view.publitas.com/fonterra/
sustainability-report-2017/page/2-3)
A2
protein
A2
protein
34 | The a2 Milk CompanyThe a2 Milk Company | 35
2018 Annual Report
Social and environmental responsibility

Age group
Heritage
Length
of service
Role
Gender
D
i
r
e
c
t
o
r
s

&

s
e
n
i
o
r

m
a
n
a
g
e
m
e
n
t
:


6
%
O
p
e
r
a
t
i
o
n
s
:


1
6
%
H
e
a
l
t
h

c
a
r
e
,

q
u
a
l
i
t
y

&

r
e
g
u
l
a
t
o
r
y
:


1
6
%
M
a
r
k
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t
i
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g
,

i
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n
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a
t
i
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n

&

e
m
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g

m
a
r
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t
s
:


1
7
%
S
a
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s
:


2
8
%
F
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,

l
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a
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d

a
d
m
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:


1
7
%
M
a
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e
:

4
5
%
F
e
m
a
l
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:

5
5
%
O
v
e
r

5
0
:

2
1
%
3
0
-
5
0
:

6
9
%
U
n
d
e
r

3
0
:

1
0
%
5
+

Y
e
a
r
s
:

1
9
%
2
-
5

Y
e
a
r
s
:

3
5
%
0
-
2

y
e
a
r
s
:

4
6
%
A
s
i
a
n
:

4
6
%
E
u
r
o
p
e
a
n
:

1
5
%
A
f
r
i
c
a
n

&

M
i
d
d
l
e

E
a
s
t
e
r
n
:

2
%
A
m
e
r
i
c
a
s
:

1
3
%
A
u
s
t
r
a
l
a
s
i
a
n
:

2
4
%
8/10
of executive team
have been in place
for over 4 years
25
%
of employees
have joined in the
past 12 months
1 in 2
new roles added in past year
focussed on operations & quality,
innovation and emerging markets
>40
%
of workforce are from
Asian background
55
%
of workforce
are women
Our people:
composition
and diversity
Creating a diverse, skilled and
innovative workplace
It is no coincidence that underpinning the
Company’s financial results is an extremely
vibrant, agile, skilled and engaged workforce. Our
team is diverse across gender, culture, knowledge
and experience, reflecting the markets in which
we operate. The Company’s workforce is
continuing to evolve and we are increasing our
capability and diversity along the way.
The Company believes diversity of thought is a
big part of our history and we will work to ensure
that we never lose sight of the importance of
challenging convention.
Diversity
The Company’s business policies, practices and
behaviours promote diversity and equal
opportunity and create an environment where
individual differences are valued and all employees
have the opportunity to realise their potential and
contribute to the Company’s success.
The Company has adopted a Diversity Policy,
which is available on the Company’s website at
www.thea2milkcompany.com/about-us/
corporate-governance.
The policy requires the Board to establish
measurable objectives to assist the Company
in achieving diversity, and provides for delegation
to the Nomination Committee to review the
Company’s progress in meeting these objectives.
Board and executive leadership team’s
responsibility
Our Company’s leadership is responsible for
designing and overseeing the implementation
of our Diversity Policy. The leadership of the
Company is responsible for promoting diversity
within the Company’s culture and monitoring
the effectiveness of our diversity policy.
Our people
Setting objectives:
The Company’s leadership objective is to continue
to broaden the diversity of the Board and senior
executive team.
The leadership is presently focussed on implementing the
following steps to increase the breadth of diversity across
the business:
• actively seeking a diverse and gender balanced
candidate pool for all Board and executive placements
• implementing sound recruitment and development
practices to minimise unconscious bias; and
• with an objective of a minimum of 40% women and
40% men holding roles in all leadership levels, including
directors, senior executives and managers, by 2023.
The Company’s leadership will continue to evaluate
the effectiveness and appropriateness of its actions
in achieving its aim of further developing a talented
workforce with diverse backgrounds, qualifications,
experience and perspectives.
As at 30 June 2018
FemaleFemale
(%)
MaleMale
(%)
Directors
1
117583
Senior Executives
2
110990
Managers1849 1951
Staff79624838
Total99558145
As at 30 June 2017
FemaleFemale
(%)
MaleMale
(%)
Directors
1
117583
Senior Executives
2
110990
Managers1550 1550
Staff68634037
Total85556945
1 Includes executive directors: David Hearn (Chair) and
Geoffrey Babidge (then CEO) and excludes Jayne Hrdlicka
(current CEO) as she commenced her role in July 2018
2 Senior Executives are defined as the CEO and those directly reporting
to the CEO
* All these figures include permanent full-time, permanent part-time
and fixed term employees, but exclude independent contractors.
36 | The a2 Milk CompanyThe a2 Milk Company | 37
2018 Annual Report
Social and environmental responsibility

Corporate
governance
Contents
Our directors 40
Our executive leadership team 42
Corporate governance statement 43
Our Board 45
Risk management 54
Remuneration 58
The a2 Milk Company | 39
2018 Annual Report
Corporate governance

Our directors
Warwick Every-Burns
Independent, non-executive
Director
Advanced Management
Program (Harvard)
Director since August 2016
Warwick has been a director of
the Company since 23 August
2016. He is also Chair of the
Remuneration Committee and
a member of the Audit and Risk
Management Committee.
Warwick has been a career
Consumer Packaged Goods
(CPG) executive of global scale.
His executive roles have
included a successful career
with The Clorox Company of
the USA as Senior Vice
President, International, based
in the USA and prior to that as
VP Asia Pacific. His earlier roles
included Managing Director of
NationalPak Limited (the Glad
Products Company ultimately
acquired by Clorox) and a long
career with Unilever PLC where
he was based in Australia. More
recently Warwick has been a
Non-Executive Director of one
of the leading international
wine companies, the ASX listed
Treasury Wine Estates.
Warwick brings a combination
of international CPG Executive
and non-executive director
experience in markets of
particular relevance to the
Company in China, North
America and Europe. His strong
skills and interest in business
development in new and
emerging markets, brand
management and human
resource management are of
significant value to the
Company.
Warwick resides in Australia.
Jesse Wu
Independent, non-executive
Director
Master of Business
Administration (Duke)
Director since May 2017
Jesse has been a director of the
Company since 16 May 2017.
He is also a member of the
Audit and Risk Management
Committee and the
Remuneration Committee.
Jesse began his career with
Procter & Gamble and
PepsiCo, before joining
Johnson & Johnson’s consumer
business. He was appointed
International Vice President,
Asia/Pacific in 2003 and
Company Group Chair, Global
Markets in 2008. Prior to his
last executive position, he was
Worldwide Chair of the
Johnson & Johnson Consumer
Group (which had annual
revenues of US$14bn).
Jesse serves on the Board of
Visitors at Duke University’s
Fuqua School of Business.
He is a two-time recipient of
the Magnolia Award from
the Shanghai Municipal
Government, given in
recognition of his contributions
to Shanghai’s economic
development. In addition, Jesse
serves on the board of Aptar
Group Inc, a leader in global
dispensing systems.
Over his career Jesse has
managed significant scale and
complexity in the areas of
manufacturing, distribution,
sales and marketing, in both
developed and emerging
markets.
Jesse resides in China.
Geoffrey Babidge
Former Managing Director &
Chief Executive Officer (CEO)
Bachelor of Economics
Director from July 2010 to
July 2018
Geoffrey has been a Director
of the Company since 22 July
2010. He retired as Managing
Director and CEO effective
from 16 July 2018.
Geoffrey has over 30 years
senior management
experience working in the
Australian FMCG industry.
Prior to his appointment as
CEO of the company in 2010,
Geoffrey held senior executive
roles with a number of
companies in Australia
including Freedom Foods
Group Limited, Bunge
Defiance and National Foods.
Prior to these roles he was
a practising chartered
accountant and partner at
Price Waterhouse.
Geoffrey resides in Australia.
Peter Hinton
Independent, non-executive
Director
Bachelor of Commerce;
Bachelor of Laws (Hons);
Master of Laws (Harvard)
Director since February 2016
Peter has been a director
of the Company since
16 February 2016. He is also
Chair of the Nomination
Committee and a member of
the Remuneration Committee.
Peter was a partner at law firm
Simpson Grierson in New
Zealand until December 2016
and is a highly regarded
commercial lawyer, investor
and businessman with
substantial experience in
New Zealand and international
markets.
Peter provided legal advice to
the Company over many years
and this background together
with his very strong
commercial skills is highly
relevant and complementary
to the make-up of the Board.
This is particularly so given the
increasing complexity of the
business and the breadth of
activities in international
markets.
Peter resides in New Zealand.
Jayne Hrdlicka
Managing Director & Chief Executive
Officer (CEO)
Bachelor of Arts (Hons) Economics
and Mathematics; Master of
Business Administration (Dartmouth)
Director since July 2018
Jayne commenced as Managing
Director and CEO of the Company
on 16 July 2018.
Jayne is a senior executive with
extensive experience in strategy
formulation and execution, insight
into customer-centricity and
innovation and, importantly, an
understanding of operating in a
disruptive environment.
Prior to joining the Company, Jayne
was most recently employed for five
years in the role of CEO of the Jetstar
Group, a wholly owned subsidiary of
Qantas Limited, having previously led
the business transformation of Qantas
Airlines from 2010 to 2012. Jayne also
served as a Non-Executive Director of
Woolworths Limited from 2010 to
2016. In her earlier career, Jayne was
a partner at Bain & Company, where
she was focussed on consumer
orientated businesses. Jayne is also
the current non-executive President
of Tennis Australia.
Jayne resides in Australia.
David Hearn
Chair & Executive Director
Master of Arts
Director since February 2014
David has been a director of the
Company since 5 February 2014, and
Chair since 30 March 2015. He is also
a member of the Nomination
Committee.
David has experience and skills in
executive management, sales and
marketing and strategy development
in Fast Moving Consumer Goods
(FMCG) in international markets.
He has held senior executive roles
including Chief Executive Officer or
Managing Director roles for FMCG
companies including Goodman Fielder
Limited, UB Snack Foods Europe/Asia,
Del Monte UK and Smith’s Crisps and
for the marketing services group,
Cordiant Communications Group.
In addition to his Company
directorship, David is also a director
of Lovat Partners Limited, Robin
Partington & Partners Limited and
Committed Capital Limited.
David resides in the United Kingdom.
Julia Hoare
Deputy Chair &
Independent, non-executive Director
Bachelor of Commerce, FCA,
Chartered Member of the Institute
of Directors (New Zealand)
Director since November 2013
Julia has been a director of the
Company since 19 November 2013,
and Deputy Chair since 30 March
2015. She is also Chair of the Audit
and Risk Management Committee
and a member of the Nomination
Committee.
Prior to joining the Board, Julia had
extensive chartered accounting
experience in Australia, the UK and
New Zealand and was a partner with
PwC New Zealand for 20 years. She is
also a member of the New Zealand
External Reporting Advisory Panel
(XRAP), a body designed to support
the standard setting process of the
New Zealand External Reporting
Board (XRB), and the New Zealand
Institute of Directors National Council.
In addition to her Company
directorship, Julia is Deputy Chair of
Watercare Services Limited, and a
director of New Zealand Post Limited,
Port of Tauranga Limited, AWF
Madison Group Limited and Auckland
International Airport Limited.
Julia resides in New Zealand.
40 | The a2 Milk CompanyThe a2 Milk Company | 41
2018 Annual Report
Corporate governance

Jayne Hrdlicka
Bachelor of Arts (Hons) Economics and
Mathematics; Master of Business
Administration (Dartmouth)
Managing Director & Chief Executive
Officer (CEO)
Peter Nathan
Bachelor of Business (Marketing)
Chief Executive, Asia Pacific
Blake Waltrip
BA Economics, Master of Business
Administration (UCLA)
Chief Executive, USA
Michael Bracka
Bachelor of Arts (Psychology)
Head of Business Development –
Emerging Markets
Simon Hennessy
Bachelor of Science (Chemistry),
Graduate Diploma, Corporate Finance
General Manager, International
Development
Craig Louttit
Bachelor of Commerce, CA
Chief Financial Officer
Susan Massasso
Bachelor of Commerce
(Accounting/Marketing)
Chief Marketing Officer
Shareef Khan
Post Graduate Certificate in
Management, Bachelor of Science,
Certified Supply Chain Professional
(APICS)
Chief Operating Officer
Jaron McVicar
Bachelor of Laws
General Counsel & Company Secretary
Detailed profiles for the executive
leadership team are available on
the Company’s website at
www.thea2milkcompany.com/about-us/
corporate-governance.
Our executive
leadership team
*
Corporate governance
statement
We are committed to
maintaining the
highest standards of
corporate governance.
Our corporate governance framework has
been established to ensure that directors,
officers and employees fulfil their
functions responsibly whilst protecting
and enhancing the interests of
shareholders.
Our corporate governance framework has
been developed with regard to:
• the NZX Corporate Governance Code;
and
• the ASX Corporate Governance
Council’s Corporate Governance
Principles and Recommendations
(3rd Edition) (ASX Principles).
For the financial year ended 30 June 2018
our corporate governance framework
complied with the recommendations in
the NZX Corporate Governance Code and
the ASX Principles, except where
noted below.
ASX principles
ASX recommendation 2.5 states that
the chair of the Board should be an
independent director and, in particular,
should not be the same person as
the CEO.
The roles of Chair and Chief Executive
Officer are not exercised by the same
individual. During the financial year, the
role of Chief Executive Officer was held by
the Managing Director, Geoffrey Babidge.
However, the Board does not consider the
Company’s Chair, David Hearn, to be an
independent director in this financial year
for the purposes of the ASX Principles.
This is because the CEO had the capacity
to call on David from time to time to
support Europe and the UK in a limited
executive role.
David brings to the Board invaluable
perspective on the development of
consumer products markets globally.
The Board is confident that he exercises
an independent view and judgement in
his role as Chair and that the CEO has full
executive control and accountability in
the organisation.
The Board considers there to be an
appropriate level of independent view and
judgment exercised by directors, including
by Julia Hoare as Deputy Chair, who is the
lead non-executive director.
The Board is responsible
for guiding the Company’s
strategic direction,
monitoring risk, and
overseeing the activities
of management
This Corporate Governance statement
sets out our commitment to best practice
corporate governance in compliance with
the ASX Principles and the NZX Corporate
Governance Code.
The Corporate Governance statement
is current as at 30 June 2018 (except
where otherwise specified) and has
been approved by the Board.
* As at date of this report
42 | The a2 Milk CompanyThe a2 Milk Company | 43
2018 Annual Report
Corporate governance

Our Board
Role of Board and delegation
of authority
The Board is responsible for the overall
governance and operations of the
Company, guiding the Company’s strategic
direction, monitoring risk, and overseeing
the activities of management. All issues of
substance affecting the Company are
considered by the Board, with advice from
external advisers as required.
The role and responsibilities of the Board
are set out in the Board Charter, available
on the Company’s website at
www.thea2milkcompany.com/about-us/
corporate-governance.
The Board delegates certain functions to
its three Committees (Audit and Risk
Management Committee, Remuneration
Committee, and Nomination Committee).
The role of each of these Committees is
outlined in the Board Committees
section, below.
Board procedures ensure that all directors
have the information needed to contribute
to informed discussion on all agenda items
and effectively carry out their duties.
Senior managers make direct
presentations to the Board on a regular
basis to give the directors broader contact
with the leadership team.
Role of Chair
The Chair’s role is set out in the Board
Charter and includes leading and
managing the Board so that it operates
effectively, and facilitating interaction
between the Board and the
Chief Executive Officer.
Role of Chief Executive
Officer
To enable the effective day-to-day
management and leadership of the
Company, the Board delegates the
management responsibilities of the
Company to the Chief Executive Officer.
The Chief Executive Officer in turn
sub-delegates parts of that authority to
senior executives in the leadership team
to enable effective and timely decision
making. The Board meets regularly with
management to provide strategic
guidance for the Company and effective
oversight of management.
Role of Company Secretary
The Company Secretary is accountable
directly to the Board, through the Chair,
on all matters to do with the proper
functioning of the Board. Each director
can communicate directly with the
Company Secretary and vice versa. The
role of the Company Secretary is outlined
in the Board Charter.
Board size, skills and structure
During the reporting period, the Board
comprised six directors (four independent
non-executive directors and two executive
directors). The Company’s constitution
provides for a minimum of four directors
and a maximum of eight, of which at least
two must be New Zealand residents to
comply with the NZX Listing Rules.
We are
committed to
maintaining the
highest standards
of corporate
governance
44 | The a2 Milk CompanyThe a2 Milk Company | 45
2018 Annual Report
Corporate governance

Skills and experience
Board
representation
(out of 6
directors)
Executive leadership – experience as a senior executive in one or
more substantial commercial businesses
100% (6)
Non-executive board membership – experience as a non-
executive director of a number of listed or other widely held
companies
50% (3)
Consumer products and nutritional industries – experience as a
senior executive in, or as a professional advisor to, consumer
products or nutritional industry businesses
67% (4)
E-commerce – experience as a senior executive in, or as a
professional advisor to, businesses engaged in e-commerce activities
83% (5)
Food safety – technical or managerial experience relating to food,
food product development and development and/or implementation
and management of safe practices for the sourcing, production,
transport and distribution of perishable foods
33% (2)
International markets – experience as a senior executive in, or as a
professional advisor to, businesses that operate outside Australia and
New Zealand, particularly those international markets in which the
Company operates, and an understanding of how to succeed in
different cultural, regulatory and business environments
100% (6)
Accounting, legal, taxation and finance – experience in financial
accounting, legal, taxation, external and/or internal audit and reporting
33% (2)
Risk management – experience in identifying and mitigating risk
100% (6)
Remuneration – experience in developing and/or implementing
executive remuneration programmes, including incentive-based
remuneration
83% (5)
In addition to the matters noted above, when reviewing potential board candidates, the
Nomination Committee considers other matters including the degree of independence,
a candidate’s contribution to diversity, and their ability to devote sufficient time to
the directorship.
The Nomination Committee has considered and is satisfied that the current composition
of the Board reflects an appropriate range of skills, diversity of backgrounds and
experience for the Company to effectively discharge its responsibilities, but continues
to review and consider Board composition.
Our Board
Director independence
The Board Charter provides that the Board
will, where practicable, comprise a
majority of independent directors.
Director independence is initially assessed
upon each director’s appointment and
reviewed each year, or as required when a
new personal interest or conflict of interest
is disclosed. For this purpose, each director
is required to bring an independent view
and judgement to the Board and to
declare all actual or potential conflicts of
interest on an ongoing basis.
Any issue concerning a director’s ability to
properly act as a director must be
discussed at a Board meeting as soon as
practicable, and a director may not
participate in discussions or resolutions
pertaining to any matter in which the
director has a material personal interest.
In determining the independence of its
directors, the Board considers guidance
for independence, set out in the ASX
Principles, the NZX Listing Rules and the
NZX Corporate Governance Code. Based
on those rules and recommendations, a
director is considered to be independent
by the Board if he or she is a non-
executive director and free of any interest,
position, association or relationship that
might influence, or be reasonably
perceived to influence, in a material
respect, his or her capacity to bring an
independent judgement to bear on issues
before the Board and to act in the best
interests of the Company and security
holders generally.
Based on these measures, the Board
considers that the non-executive
directors: Julia Hoare; Peter Hinton;
Warwick Every-Burns; and Jesse Wu are
independent directors.
Peter Hinton was previously a partner at
Simpson Grierson, a New Zealand law firm
which provides legal services to the
Company. From 1 January 2017, on
retirement as a partner of the firm, he was
appointed as Special Counsel to the firm,
and ceased to be involved in any legal
advice provided by Simpson Grierson to
the Company. The Board considers him to
be independent and is satisfied that Peter’s
continuing role with Simpson Grierson
does not interfere with his independence.
The Board considers that, by virtue of their
executive roles in the Company, David
Hearn and Jayne Hrdlicka are not
independent directors. Similarly, prior to
his retirement on 16 July 2018, former
CEO Geoffrey Babidge was not an
independent director.
.
Board committees
The Board has three standing committees
(the Committees) to facilitate and assist
the Board in fulfilling its responsibilities.
Other committees may be established
from time to time with specific
responsibilities as delegated by the Board.
The composition of the Committees as at,
and throughout the financial year ended
30 June 2018, was as follows:
MembersIndependent
Non-
Executive
Audit and Risk Management
Committee
Julia Hoare
(Chair)
üü
Warwick
Every-Burns
üü
Jesse Wu
üü
Nomination Committee
Peter Hinton
(Chair)
üü
Julia Hoare
üü
David Hearn
ûû
Remuneration Committee
Warwick
Every-Burns
(Chair)
üü
Peter Hinton
üü
Jesse Wu
üü
The Board has developed a board skills matrix which sets out the diversity of skills and
experience that it has. The matrix, set out in its collective form reflecting current Board
composition, is as follows:
The Committees are governed by Charters,
which detail their specific functions and
responsibilities. The Charter for each
Committee is reviewed by the Board
annually. Copies of the Committee
Charters are available on the Company’s
website at www.thea2milkcompany.com/
about-us/corporate-governance.
The Committees make recommendations
to the Board. They have no decision-
making power except where expressly
authorised by the Board. The relevant
qualifications and experience of individual
Committee members are set out in the
‘Our directors’ section.
The Board Charter provides for the Board
to review and evaluate the performance
objectives, responsibilities, and processes
and procedures of each Committee on an
annual basis in accordance with such
performance measures as may be adopted
from time to time. The Charter of each
Committee also requires the Committee
to review and assess its performance,
objectives, responsibilities, and processes
and procedures each year to ensure that
they are not unduly complex, are designed
to assist the Board in effectively fulfilling
its role and are delivering to a high
standard.
100
%
of our directors have
executive experience with
businesses that operate
outside Australia and
New Zealand
46 | The a2 Milk CompanyThe a2 Milk Company | 47
2018 Annual Report
Corporate governance

Attendance at Board and Committee meetings
Director attendance at Board and Committee meetings during the year ended
30 June 2018 is set out below.
Meetings of the
Board
Audit and Risk
Management
Committee
Remuneration
Committee
Nomination
Committee
HeldAttendedHeldAttendedHeldAttendedHeldAttended
David Hearn
(Chair)
1312––––11
Julia Hoare
(Deputy
Chair)
131344––11
Geoffrey
Babidge
1
(MD & CEO)
1313––––––
Peter Hinton1311––4411
Warwick
Every-Burns
13134444––
Jesse Wu13114444––
Our Board
1 Retired as MD & CEO on 16 July 2018
Held: meetings held during the period for which the person was a director or Committee
member.
Audit and Risk Management
Committee
The Audit and Risk Management
Committee’s responsibilities are set out in
its Charter, including to:
• ensure the Company meets its financial
reporting requirements, including the
release of yearly and half-yearly
financial statements;
• review the scope and outcome of the
external audit;
• review the effectiveness of the
Company’s internal controls regarding
all matters affecting the Company’s
financial performance and financial
reporting, including information
technology security and control;
• advise the Board on accounting
policies, practices and disclosures;
• review, with management, the
adequacy of the Company’s systems for
identifying, managing, and monitoring
the Company’s key risks in accordance
with the Company’s Risk Management
Policy;
• keep the Board informed of all
significant business risks; and
• review any incident which indicates
a breakdown in the Company’s risk
management framework.
The Chief Executive Officer and the Chief
Financial Officer may attend meetings at
the invitation of the Committee; and the
external auditors may attend by invitation
of the Chair of the Committee. The
Committee meets a minimum of four
times each year.
The Audit and Risk Management
Committee regularly reports to the Board
about the Committee's activities, issues
and related recommendations.
Remuneration Committee
The Remuneration Committee meets as
required to advise the Board on the
matters outlined in its Charter,
including to:
• review the remuneration of the Chief
Executive Officer and other senior
executives as the Board may determine;
and
• make recommendations to the Board
in relation to the remuneration of the
non-executive directors.
Remuneration packages are reviewed
annually. Independent external surveys are
used as a basis for establishing competitive
packages. A member of the Committee
must not be present for discussions at a
Committee meeting on, or vote on a
matter regarding, his or her remuneration.
Management may attend meetings only at
the invitation of the Committee.
Following each meeting, the Chair of the
Remuneration Committee provides a
report to the Board. The Chair is also
required to provide an annual report
summarising the Remuneration
Committee's activities during the year and
any related significant results and findings.
The Company's remuneration policies for
directors and senior executives and
managers are set out in the Remuneration
section, below.
Nomination Committee
The Nomination Committee meets as
required to advise the Board on the
matters outlined in its Charter, including
the recommendation of new
appointments to the Board.
Every new director appointment that is
approved by the Nomination Committee is
considered and decided by the Board as a
whole, considering the range of skills and
experience (including matters such as
independence and diversity) that a
potential new director may offer the Board
and the ability to fully commit the time
needed to be effective as a director of the
Company.
Following each Committee meeting,
the Chair of the Nomination Committee
provides a report to the Board. The Chair
is also required to provide an annual
report summarising the Nomination
Committee's activities during the year and
any related significant results and findings.
Nominations, appointments
and ongoing education
The Company's process for selection,
appointment, and re-appointment of
directors is detailed in the Nomination
Committee Charter.
The objectives of the Nomination
Committee include to:
• assist the Board in planning the Board's
composition and that of the
Committees;
• advise and assist the Chair and the
Board (as applicable) to review the
performance of the Board, the
Committees, the Chair and individual
directors;
• evaluate the competencies required
of prospective directors, identify those
prospective directors and establish their
degree of independence; and
• develop succession plans for the Board.
The Nomination Committee recommends
to the Board suitable candidates for
appointment as directors. The Committee
considers, among other things, the
candidate’s:
• experience as a director;
• skills, expertise and competencies; and
the extent to which those skills
complement the skills of existing
directors;
• contribution to diversity of Board
membership;
• degree of independence; and
• ability to devote sufficient time to the
directorship.
The Audit and Risk
Management Committee
regularly reports to the Board
about the Committee’s
activities, issues and related
recommendations
48 | The a2 Milk CompanyThe a2 Milk Company | 49
2018 Annual Report
Corporate governance

Our Board
The Company undertakes appropriate
checks before the Board appoints a
director, or recommends a new candidate
to shareholders for election as a director.
Such checks have been undertaken in
relation to all current Board members, and
will be undertaken prior to appointment
or election of any new Board
recommended director.
The Company provides sufficient
information to shareholders about
candidates standing for election for the
first time and directors seeking re-election
at a general meeting to enable them to
make an informed decision on whether or
not to elect or re-elect the person,
including their relevant qualifications and
experience and the skills they bring to the
Board, details of any other material
directorships or positions currently held by
the person, the term of office already
served by the director (if applicable), the
Board’s view on whether the person is or
will be considered to be independent, and
a statement by the Board in respect of
whether it supports the election or
re-election of the person.
On joining the Board, each director
receives a formal letter of appointment
outlining his or her duties and obligations,
and participates in an induction program,
which provides such information and
advice as may be considered necessary
or desirable relating to his or her
appointment to the Board.
To ensure ongoing education, directors are
regularly informed of developments that
affect the Company's industry and
business environment, as well as company
and legal issues. Directors receive
comprehensive Board papers and briefing
information before Board meetings and
have unrestricted access to management
and any additional information they
consider necessary to perform their roles
as directors effectively. Directors are also
encouraged to undertake appropriate
training to remain current on how best to
perform their duties as directors.
A director may obtain independent
professional advice relating to the affairs
of the Company or his/her responsibilities
as a director or Committee member.
Where the director has the approval of the
Board Chair to obtain independent
professional advice, the Company will
meet the reasonable costs of such advice.
Performance review of the
Board, Board committees and
individual directors
The Board recognises that the
performance of the Board and its
Committees is pivotal to the Company's
success and to the protection of the
interests of shareholders. The Board
regularly reviews and evaluates the
performance objectives, responsibilities,
and processes and procedures of the
Board and each Committee.
Internal financial control
The Board, advised by the Audit and Risk
Management Committee, is responsible
for the Company’s overall system of
internal financial control.
The Chief Financial Officer is responsible to
the Chief Executive Officer for ensuring
that all operations within the Company
comply with the Board approved financial
control policies.
Under its Charter, the Audit and Risk
Management Committee is responsible for
regularly reporting to the Board, including
the results of the Committee's review of
the Company's risk management and
internal control systems. The Board is also
required, under the Risk Management
Policy, to undertake an annual review of
the effectiveness of the Company's risk
management and internal control system.
External auditor
The Board has established a framework
for the relationship between the
Company and the external auditor,
which ensures that:
• recommendations made by the external
auditor and other independent advisers
are critically evaluated and, where
appropriate, applied;
• the ability of the external auditors to
carry out their statutory audit is in no
way impaired;
• consideration is given to what, if any,
services other than their statutory audit
role may be provided by the auditors;
• any other services provided by the
auditors, other than their statutory
audit role, are approved and monitored;
and
• the Company has defined policies and
procedures in place as appropriate
internal controls to manage risk
effectively.
The external auditor is invited to attend
the annual meeting of the Company to
answer questions from shareholders in
relation to the audit.
Internal audit function
Deloitte Touche Tohmatsu (“Deloitte”)
act as the Company’s internal auditors,
reporting to the Audit and Risk
Management Committee. The internal
audit program is focussed on evaluating
the effectiveness of risk management,
control and governance processes.
CEO and CFO annual
declaration
In line with ASX Principle 4.2, the Audit
and Risk Management Committee and the
Board receive an annual declaration from
the Chief Executive Officer and Chief
Financial Officer in relation to the
Company’s financial statements, that in
their opinion:
• the Company’s financial records have
been properly maintained;
• the Company’s financial statements
and accompanying notes comply with
generally accepted accounting practice
in New Zealand and International
Financial Reporting Standards; and
• the Company’s financial statements
and accompanying notes give a true
and fair view of the financial position
and performance of the Group.
This declaration is provided with an
assurance that the opinion has been
formed on the basis of a sound system of
risk management and internal control, and
that the system is operating effectively
with regard to the identification of
material financial reporting risk.
Corporate governance policies
The Company has adopted the following
policies, each of which has been prepared
having regard to the ASX Principles and
the NZX Corporate Governance Code and
which are available on the Company’s
website at www.thea2milkcompany.com/
about-us/corporate-governance.
The Board regularly reviews the
performance and effectiveness of the
Company's corporate governance policies
and procedures and, if appropriate,
amends those policies and procedures or
adopts new policies or procedures, to
uphold the integrity of the Company’s
corporate governance framework.
Code of ethics
The Company expects its directors, officers
and employees to conduct themselves in
accordance with the highest ethical
standards of corporate and individual
behaviour. The Company’s Code of Ethics
is designed to set out the practices which
are necessary to maintain confidence in
the Company's integrity. Directors, officers
and employees are required to comply
with both the spirit and letter of all laws
which apply to the Company and the
principles of the code.
The Company requires all directors,
officers and employees who become
aware of an actual or suspected violation
of the code to report to a nominated
reporting person. This process allows for
confidential reporting of any potential
violation without disadvantage to
the employee.
Group-wide ethics training sessions for all
staff took place during the year.
The performance of the
Board and its Committees
is pivotal to the
Company’s success and
to the protection of the
interests of shareholders
50 | The a2 Milk CompanyThe a2 Milk Company | 51
2018 Annual Report
Corporate governance

The Company expects
its directors, officers and
employees to conduct
themselves in accordance
with the highest ethical
standards of corporate
and individual behaviour
Continuous disclosure policy
The Company prides itself on its
continuous disclosure practices and has
adopted a set of procedures and
guidelines to ensure that it complies with
its disclosure obligations in accordance
with all applicable legal and regulatory
requirements, including the NZX Listing
Rules and the ASX Listing Rules. Subject to
recognised exceptions, this ensures the
timely disclosure to the ASX and the NZX
of any information concerning the
Company which is not generally available
and which a reasonable person would
expect to have a material effect on the
price or value of the Company’s securities.
Shareholder communication
policy
The Company has adopted a Shareholder
Communications Policy which outlines the
Company’s approach and commitment to
effective communication with
shareholders. The Company uses
numerous modes of communication,
including electronic communication,
to ensure that its communications with
shareholders are timely, clear and
accessible. The Company provides
investors with comprehensive and timely
access to information about itself and its
governance on its website at www.
thea2milkcompany.com. The website
includes copies of past annual reports,
results announcements, other NZX and
ASX announcements, media releases and
general Company information.
Shareholders are invited to attend the
Company’s annual meeting, either in
person or by representative. The Board
regards the annual meeting as an excellent
forum in which to discuss issues relevant
to the Company and accordingly
encourages full participation by
shareholders. Shareholders have an
opportunity to submit questions to the
Board and to the Company’s external
auditor. Shareholders may also attend and
participate at the meeting virtually via an
online platform provided by the
Company’s share registrar.
Diversity policy
The Company’s diversity policy is discussed
on page 36 of this Annual Report.
Securities trading policy
The Company’s Securities Trading Policy
applies to directors, employees and
contractors wishing to participate as
shareholders in the Company.
Under New Zealand and Australian
legislation, the insider trading laws operate
to prohibit people in possession of non–
public price sensitive information from
dealing in securities or passing on that
information to other people who may deal
in securities. The Company’s policy is
designed to protect directors, employees
and their associates, as well as the
Company’s shareholders against acts of
insider trading that, either willingly or
unknowingly, would disadvantage holders
of the Company’s securities.
The policy employs the use of blackout
periods to restrict directors, officers, senior
executives, and their associates, together
with other persons identified by the
Company from time to time, from trading
during times where sensitive, non-public
information may be held. In addition,
those persons must notify the Company
in advance of any proposed dealing in the
Company’s securities.
Under the terms of the policy, directors,
officers, senior executives and their
associates are prohibited from entering
into hedging transactions which operate
to limit the economic risk of their securities
in the Company (including under any
equity-based remuneration scheme) and
must notify the Company before engaging
in any margin or securities lending
arrangements or granting a security
interest or other encumbrance over
Company securities.
Indemnities and insurance
The Company has provided Deeds of
Indemnity to all directors for potential
liabilities and costs they may incur for acts
or omissions in their capacity as directors
of the Company and its subsidiaries.
Directors’ and officers’ liability insurance is
in place for directors and officers acting on
behalf of the Company.
Protocols in the event of a
takeover offer
The Board has established protocols that
set out the procedures to be followed in
the event of a takeover offer to assist
directors and management with the
response to unexpected takeover activity,
including governance, conflict and
communications protocols for
takeover response.
The a2 Milk Company | 53
2018 Annual Report
Corporate governance
52 | The a2 Milk Company
2018 Annual Report
Corporate governance

The Company
recognises that risk
management is an
inherent part of
actively growing and
developing the
business.
Effective risk management anticipates risk,
develops strategies to manage risk and
enables the Company to capitalise on
opportunities that bring value to
shareholders. The Company’s risk
management program comprises a series
of processes, structures and guidelines
which assist the Company to identify,
assess, monitor and manage its business
risk, including any material changes to its
risk profile.
The Company’s Risk Management Policy
outlines the program implemented by the
Company to ensure appropriate risk
management within its systems and
culture. A copy of the Risk Management
Policy is available on the Company’s
website at www.thea2milkcompany.com/
about-us/corporate-governance
Risk management
Risk governance
The Company has clearly defined the
responsibility and authority of the Board to
oversee the risk management programme,
while conferring responsibility and
authority on the Audit and Risk
Management Committee to develop and
maintain the risk management programme
considering the day-to-day needs of
the Company.
The Audit and Risk Management
Committee is responsible for reviewing
whether the Group has any material
exposure to economic, environmental and
social sustainability risks, and if so, to
develop strategies to manage such risks,
and present such strategies to the Board.
The Group Risk Register is an important
tool used by the Audit & Risk
Management Committee that helps the
business identify, evaluate and
communicate material risk exposures. The
Board is of the view that the Company has
appropriate strategies in place to manage
material exposure to economic,
environmental or social sustainability risks.
Risk management
The Company considers ongoing risk
management to be a core component of
the executive leadership team’s
management of the Company. The
Company’s ability to identify and address
risk is central to achieving its corporate
objectives. The Company’s risk
management approach is supported by:
• a robust risk governance framework
overseen by the Board and supported
by the Audit & Risk Management
Committee
• a strong and experienced management
team with relevant expertise in local
markets
• clearly articulated levels of authority
and approval processes
• established risk identification tools
including the Group Risk Register
• adequate external insurance cover in
place, appropriate to the Company’s size
and risk profile
• an internal audit function providing
supplementary review of the internal
control framework
Under its Charter, the Audit and Risk
Management Committee is responsible for
providing assessments to the Board of the
adequacy, effectiveness and efficiency of
the Company’s risk management and
internal control process. The Board must
also annually, under the Risk Management
Policy, review the effectiveness of the
Company’s risk management and internal
control system. A review of the Company’s
risk management framework has been
conducted in the reporting period by the
Audit and Risk Management Committee.
No significant changes to the framework or
policy were identified.
Regular communication between
management and the Board supplements
the Company’s quality system, complaint
handling processes, employee policies and
standard operating procedures which are all
designed to address various forms of risks.
Effective risk management
anticipates risk, develops
strategies to manage risk and
enables the Company to
capitalise on opportunities that
bring value to shareholders
Key risks & mitigations
The Company has identified the following
key risks having the potential to impact on
the Company’s ability to achieve its future
objectives. The Company has included in
the table examples of mitigations in place
to assist in managing these various risks.
RisksMitigation
Product
quality
The Company’s products may become
contaminated, tampered with,
adulterated or otherwise unsafe or unfit
for sale or consumption. This could
result in injury or harm to consumers,
regulatory penalties, termination of
distribution agreements, liability
associated with adverse health effects
on consumers, product recall and
disposal costs, loss of stock, delay in
supply and overall damage to the
Company’s brand and reputation
• Food safety & quality management systems and
programmes, internally and with suppliers to
the Company
• Partnering with high quality third-party manufacturers
with a proven record for product safety and quality
• Comprehensive testing of the integrity of protein content
and product quality prior to the release of every batch of
finished product (positive release protocol)
• Testing of distributed products in selected markets
• Employment of product innovation and technology
improving product security
• Product recall and crisis management systems and
processes with supplier integration
• Consumer support systems
Supply
chain
The Company’s ability to maintain
supply to its customers, and maintain its
position in existing markets or enter
new markets may be impacted if:
• The operations of one or more
suppliers change in a material and
adverse way
• One or more suppliers reduce their
support for the Company
• Focus on developing strong, long-term commercial
relationships with multiple supply chain partners
• Due diligence on supply chain partners before entering
commercial agreements
• Long-term partnership with dairy nutritionals
manufacturer, Synlait Milk Limited, governed by a formal
manufacturing agreement, and complemented by the
Company’s equity interest in Synlait Milk
• Establishment of strategic relationship with Fonterra
Co-operative Group Limited, providing multi-site and
geographic diversification for the Company’s growing
nutritionals business
• Contracts provide access to milk pools that exceed the
Company’s current usage requirements
• Multiple milk processors contracted in Australia and USA,
mitigating reliance on single processor in these regions
54 | The a2 Milk CompanyThe a2 Milk Company | 55
2018 Annual Report
Corporate governance

Risk management
Health and safety
We are committed to the health, safety and wellbeing of our people. This commitment starts at the top of our Company. Our directors
visit the Company’s sites to gain a first-hand understanding of the systems in place. The Company’s health and safety report is reviewed
at each Board meeting. We have a focus on reporting not only injuries but also safety observations, which are an important part of an
improving health and safety management system. During the year, there were no medical treatment injuries or lost time injuries.
RisksMitigation
Regulations
Government actions which influence or
restrict international trade in products
including tariffs, quotas, price controls,
taxes and non-tariff barriers such as
product registrations, competition and
consumer laws. Failure to comply with
regulatory requirements may result in
legal action, financial penalties, trade
embargoes or loss of market access
• Close ongoing monitoring by the Company and third
party experts to ensure compliance with regulatory
requirements in all markets in which it operates
• Continuing to build a multi-product, multi-channel route
to market strategy for the sale of infant formula into
China
• Close partnership with Company’s infant formula
manufacturer, Synlait Milk, which has received both
CNCA
1
and CFDA
2
registrations for the importation of the
Company’s infant formula into China
1 CNCA registration is a market access requirement for facilities producing
food for import into China. Synlait Milk has achieved this registration
for its manufacturing facility in Dunsandel, New Zealand.
2 All manufacturers of infant formula are required to register brands and
recipes with the China Food and Drug Administration (CFDA) in order
to import products into China, through traditional import channels,
from 1 January 2018. Synlait Milk achieved this registration for the
Company’s China label infant formula in September 2017.
Intellectual
property
• Expiry or cancellation of some of the
Company’s intellectual property (IP)
rights, which may limit the
Company’s ability to claim and
enforce such IP
• Infringement of the Company’s IP
rights resulting from third-party
conduct or claim against such IP,
which may lead to protracted
litigation, and/or negative publicity
for the Company
• Continued investment by the Company in developing and
further broadening its trademark and patent portfolio
including building exclusivity in trademarks in existing and
future markets and expansion of the Company’s suite of
patent families
• Significant and ongoing investment in brand building
activities globally
• Documenting and embedding proprietary know-how
across quality systems and processes
• Monitoring of third party applications and activity
• Monitoring misuse of the Company’s IP and taking
necessary action to protect it
Agricultural
practices
• Environmental concerns linked with
the Company’s supply of dairy-based
products, including in relation to
agricultural practice (including water
access and usage) and animal welfare
• In turn, the impact of such concerns
could negatively affect the
Company’s brand reputation, result
in greater regulation, consent or
licensing requirements or restrictions
on the Company’s operations
• Sourcing of milk from diversified milk pools across and
within New Zealand, Australia, USA and UK
• The majority of our milk is sourced from farms in close
proximity to our processing facilities, reducing the need
to transport milk over long distances from other areas
• Independently audited Animal Welfare Program in the US
and Australia, contributing positively to animal living
standards, milk production and milk quality
• Building long-term supply arrangements with partners
promoting positive environmental and social sustainability
activities and initiatives
RisksMitigation
Key
personnel
• Loss of key management personnel,
which could have a material effect
on the Group’s operating and
financial performance
• Effective employee retention strategy combining both
short and long-term financial incentives with career
development opportunities to motivate and engage key
personnel
• Increasing the depth and capability of the senior
management pool to support future growth
• Succession planning to ensure continuity of knowledge,
skills and experience
Workplace
health &
safety
• Actual or potential harm to all
workers and other persons at the
workplace
• Non-compliance with applicable laws
and regulations which could result in
actual or potential harm to all
workers and other persons at the
workplace (as well as potential
financial penalties, drop in staff
morale and productivity, increased
insurance costs and damage to the
Company’s reputation, including as
an employer)
• Framework in place to assist the Board and senior
management with the identification, control, reporting,
investigation and monitoring of health and safety risks
to the Group
• Use of qualified external consultants to ensure
compliance with relevant laws in each jurisdiction and
to identify improvement opportunities
• Board prioritisation of health and safety performance,
facilitated through monthly formal review and Board
updates, to ensure a strong focus on health and safety
in the workplace is maintained
• Health and safety training and supervision for employees
IT cyber
security
Inadequate IT security leading to a
compromise of the Company’s IT system
and potential data theft, data loss or
corruption. Such a compromise could
result in economic or reputational loss
to the Company.
• Restricted and segregated access to sensitive Company
and stakeholder data
• Implementation of regional specific cyber security audits
• Cyber security insurance
56 | The a2 Milk CompanyThe a2 Milk Company | 57
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Corporate governance