Annual Report Published

ANNUAL REPORT 2020ANNUAL REPORT 2020

Synlait’s commitment to elevating
people and planet to the same level
as profit was recognised in June
2020 when it became part of the
B Corp™ community.
B Corp™ is a community of leaders
driving a global movement of people
using business as a force for good.
Certified B Corporations™ consider
the impact of their decisions on
their workers, customers, suppliers,
community, and the environment.
This movement resonates strongly
with Synlait’s purpose of Doing Milk
Differently For A Healthier World.
Learn more about what being a
B Corp™ means for our people,
our community, and our customers
at: synlait.com/bcorp
Did you know
Learn more
REPORT ICONS
Welcome to our Annual Report.
This annual report reviews
Synlait Milk Limited’s (Synlait) and
subsidiaries financial performance
and business achievements for the
year ended 31 July 2020.
It represents our first step towards
adopting Integrated Reporting
methodology. We have been guided
by the principles of Integrated
Reporting to demonstrate to you, our
shareholders, how we create value.
Driven by our purpose of Doing Milk
Differently For A Healthier World
we are making genuine progress
to diversify Synlait and progress
our ambition, which we call: 2 +
Zero. We are well placed to deliver
sustainable growth for you, while
balancing people, planet and profit in
our decisions. We hope you find our
progress encouraging.
We always look for ways to improve
our reporting, please email any
feedback to: investors@synlait.com
An online copy of this report and
our previous annual, interim and
sustainability reports are available
at: synlait.com/investors/
ABOUT THIS
REPORT
For shareholders interested in
Synlait’s environmental and social
impact, a standalone sustainability
report will be released in November.
This report will review Synlait’s
strategy and initiatives to deliver
on our sustainability objectives
and targets.
It is our intention to merge the
sustainability report into the annual
report over time.
SUSTAINABILITY
ANNUAL REPORT 2020

Our differentiated milk supply is what
sets Synlait apart and enables us to
manufacture specialty products with a
higher value. Special milk programmes
require farmers to add value for our
DIFFERENTIATED
MILK SUPPLY
customers behind the farm gate, such
as a1 protein-free, Lead With Pride
TM
or
grass fed milk. We recognise this value
by paying premiums on top of our
base milk price.
Tankers line up to unload at the Synlait Dunsandel
milk reception bay.
PAGE 02 & 03ANNUAL REPORT 2020

Synlait Dunsandel
CONTENTS
About this report 01
Highlights from the year 06
Chair review 08
CEO review 14
Our strategy: Heart. Head. Hands. 18
How we create value 22
Where we operate 24
Where our milk goes 26
What matters to us and why 28
Two decades of progress 30
Our Board 36
Our executive team 38
CFO review 42
First impressions 42
Financial and performance metrics 44
Milk price 45
Review of financial performance 46
Financial contents 57
Financial statements 57
Auditors report 128
Corporate governance 133
Statutory information 153
Directory 170
ANNUAL REPORT 2020PAGE 04 & 05

`
RESULTS AT
A GLANCE
*All comparisons in this document are to the 12 months to 31 July 2019 (FY19) unless stated otherwise 
Synlait remains a solid and highly
profitable business despite
COVID-19.
EBITDA grew strongly
demonstrating the strength of our
infant and lactoferrin businesses.
NPAT reduced reflecting
investments in new facilities and
acquisitions over the past two
years to create new opportunities
for growth.
We continue to balance people
and planet with profit.
ACHIEVEMENTS AT
A GLANCE
27%
REVENUE
$
1.3B
9%
N PAT
$
75.2M
15%
CONSUMER-PACKAGED INFANT

FORMULA SALES
49,180MT
13%
EBITDA
$
171.4M
9%
GROSS PROFIT
$
203.7M
46%
LACTOFERRIN SALES
30MT
CORE INFANT BUSINESS
CONTINUES TO PERFORM 
SYNLAIT POKENO
COMMISSIONED 
NEW MULTINATIONAL CUSTOMER
OPPORTUNITY BEING FINALISED
DAIRYWORKS AND TALBOT
FOREST CHEESE ACQUIRED 
B CORP™ 
CERTIFIED 
MANAGING THROUGH
COVID-19 WELL
ENGAGEMENT AT
RECORD LEVELS 
HIGHLIGHTS FROM THE YEAR
INVESTMENT IN THE
PLANET REMAINS A FOCUS 
MANUFACTURING
EXCELLENCE CONTINUES
PAGE 06 & 07ANNUAL REPORT 2020

In this, our eighth report to
shareholders since we listed the
company in July 2013, I am pleased
to report that our purpose of Doing
Milk Differently For A Healthier
World has proven its resilience and
value when viewed against several
significant challenges.
Sadly, the world is not healthier
since I last wrote to you. We have all
faced extraordinary challenges due
to COVID-19. Synlait’s purpose was
critical to our pandemic response and
I am pleased to report that despite
COVID-19 we made significant
strategic progress and delivered a
strong financial performance in the
year to 31 July 2020.
A strong result in an extraordinary year
Synlait remains solid and profitable
with EBITDA showing our core
business is growing strongly, up 13% to
$171.4 million. This is however behind
the rate originally planned for when we
built our new facilities, with customer
opportunities taking longer than
expected to materialise. NPAT was
$75.2 million, which is consequently
down on the 2019 financial result,
reflecting manufacturing overheads
and financing costs absorbed as we
invest for future growth.
COVID-19: the opportunity and the
challenge for our industry
Synlait is primarily an export-focused
company. For that reason, world
markets are extremely important to
us. Our new reality is that COVID-19
will have a long-term impact on
what was a strongly growing world
economy until the virus emerged.
Our core business is the
manufacturing of essential food
to relatively affluent middle classes
who can afford optimal nutrition.
This is still the case, but when
overlaying a global recession and
people’s ability to afford premium
products, sales of high-value items
will be impacted to some degree.
However, there is no doubt that
high-quality, nutritious, sustainable,
New Zealand-made products will
continue to be in demand.
This situation is not unique to Synlait.
In a world challenged economically
due to COVID-19, relatively expensive
animal and dairy-based proteins will
be tested due to consumers reduced
buying power. We expect plant-based
foods will make headway. We need
to monitor trends and be prepared
and agile to participate in a way that
creates value.
If we look at New Zealand’s export
story, it is a great platform to operate
on – a clean, green image with an
excellent record of food quality and
safety. The strength of the food
and fibre sector, and its importance
to New Zealand’s economy, was
showcased during COVID-19.
Despite recent community outbreaks
our country has remained relatively
COVID-free compared to our global
peers. Hopefully, we can keep adding
CHAIR
REVIEW
this layer of positivity to Synlait’s
brand story.
Our internal response to COVID-19
was admirable. Management and
employees re-organised early to
ensure production would continue
in a safe way. Our manufacturing
teams were extremely resilient during
New Zealand’s COVID-19 lockdown
with increased demand for fresh
milk, cream, cheese and infant
formula due to changing consumer
behaviours and pantry stocking.
We maintained operational and supply
chain continuity while responding
quickly to our customers changing
demand profiles.
This was well supported by our
administration team who worked from
home. Everyone adapted swiftly and
without complaint to working virtually.
A testament to Synlait’s culture,
agility and resilience.
We were therefore well-prepared for
the subsequent community outbreak
and continue to remain prepared
should the virus spread again.
Implementing our strategy
Despite these challenges,
Synlait made considerable gains
by continuing to implement and
execute our strategy throughout
the financial year.
To date, our success has been largely
based on our core infant nutrition
business, which has grown strongly
and is integral to our strategy and
profitability. On the other hand,
the Board and management have
the view that we have become too
reliant on a single product – infant
formula, a single site – Dunsandel,
a single market – China, and a single
customer – The a2 Milk Company.
We achieved geographical site
diversification with the commissioning
of Synlait Pokeno. The next phase
was to diversify our product range.
We needed to attract a customer
who would lead us to new markets
and categories. While China remains
extremely important, we wanted to
diversify in terms of geography as
well as customer-base.
This process is progressing well
and as signaled last month a new,
multinational customer opportunity
is being finalised.
The Supreme Court appeal regarding
Synlait Pokeno was unfortunately
necessary this year. We are still
awaiting a judgment but remain
confident of a favourable outcome.
We are pleased this has not impacted
our ability to attract a new customer.
We consider it unlikely that an
adverse decision at the Supreme
Court or subsequent proceedings
would result in a materially negative
impact on our ability to continue to
operate Synlait Pokeno.
Perhaps the most notable strategic
progress this year was the acquisition
of two existing cheese businesses –
Talbot Forest Cheese and Dairyworks
– as pillars of our Everyday Dairy
strategy. This marked the first time we
have brought existing businesses into
our network. Dairyworks provided
us with instant scale in the cheese
sector, new growth opportunities,
and a diversified earnings base.
We are now closer to Australasian
consumers and own a fully vertically
integrated value chain.
DID YOU KNOW
Dairyworks is a New Zealand leader
in the Everyday Dairy category,
with a growing Australian presence.
It supplies New Zealand consumers
with almost half of its cheese,
a quarter of its butter, as well as milk
powder and ice cream. Learn more
at: dairyworks.co.nz
PAGE 08 & 09ANNUAL REPORT 2020

Finally, Synlait’s strategic decision
to elevate people and planet to the
same level as profit was recognised
by the company becoming a Certified
B Corporation™ (B Corp™) in June.
We joined more than 3,300 B Corp™
businesses across 71 countries
who have undertaken a stringent
assessment process which measures
a business’s ongoing impact on its
workers, community and suppliers,
customers, governance and the
environment.
Refreshing our leadership
In 2019 the Board commissioned
a comprehensive review of its
capability and succession planning.
This highlighted that we have had
relatively few Board changes since
listing, though in the context of Synlait’s
rapid growth, stability of representation
was considered important.
This is about to change with Bill Roest
retiring. Bill joined the Board in 2013 as
a highly qualified former Chief Financial
Officer and professional Director.
He has Chaired the Audit and Risk
Committee since joining Synlait and
has done a superb job overseeing our
capital requirements and bond offers
as well as contributing strongly to the
overall governance of our company.
The Board will nominate Simon
Robertson as its preferred candidate
to replace Bill at our annual meeting
in November. Simon has extensive
executive and governance experience
in finance, strategy, risk, operations,
technology and stakeholder
management. His skills align with
Synlait’s growth priorities and he is
passionate about working in NZX-listed
environments having been the former
Chief Financial Officer of Auckland
International Airport. We hope you
will support us in endorsing Simon’s
Board candidacy.
Under the succession plan, my own
term comes to an end next year, and I
do intend to stand down and make way
for a suitable replacement at that time.
Synlait has continued to develop at a
rapid pace. In his second year as CEO,
Leon Clement, has certainly responded
well to the challenges. The Board is
very pleased with his performance,
strategic development and leadership.
Leon has also done a great job
developing the executive team.
While we said goodbye to our former
CFO, Nigel Greenwood, Leon has
been able to attract and recruit new
talent with Angela Dixon (CFO) and
Mark Toomey (Director, Operations)
joining the team. Angela and Mark
bring experience from their careers
in significant corporates which will
assist Synlait as it enters the next
phase of growth.
It has been a challenging year for
many reasons. I thank my fellow
Directors, our leadership team and
employees for stepping up and
responding so positively.
Where to from here?
The Board’s focus for the next financial
year is to continue growing our core
infant nutrition business while delivering
returns on our investments and
diversification initiatives. Having built a
world class facility in Synlait Pokeno and
seeing a slower growth trajectory than
anticipated, we need to ensure our new
facilities are fully utilised through new-
customer development. We are also
focused on the integration of Dairyworks
and Talbot Forest Cheese and the
commissioning and product verification
of Synlait Dunsandel’s long-life facility.
Synlait has developed a track record
of delivering high returns on capital
by investing in a differentiated value
chain to meet customer needs, and
we are confident that our recent
investments will be no different.
We acknowledge that our share
price has experienced some
pressure as we work to achieve our
growth ambitions. The Board remain
confident that these investments will
drive an improved return for you, our
shareholders, over the long-term.
As an essential industry the impact
of COVID-19 on supply and demand
has not been a severe as on other
sectors and therefore the financial
performance of Synlait was relatively
resilient when viewed against the
backdrop of a global pandemic.
We do have a strong and profitable
business, but we acknowledge there
are market headwinds and unused
capacity that will restrict our short-
term financial performance until
fully utilised.
Outlook
There continues to be significant
global uncertainty regarding COVID-19.
While Synlait has proven its ability to
maintain operational continuity over
recent months, in terms of demand
for the products it manufactures,
it expects:
• Consumer-packaged infant
formula volumes to be similar
DID YOU KNOW
A team of more than 30 Synlait
staff were engaged to complete
the comprehensive B Impact
Assessment. The process took more
than a year and Synlait’s accreditation
will be reviewed every three years.
Synlait will use the assessment as
stimulus to continue to make positive
change within the company.
year-on-year, with lower demand in
the first half of FY21 due to higher
than normal stock levels in the
supply chain. Synlait expects a
return to growth in the second half
of FY21 once stocks have cleared.
• Strong underlying EBITDA
and operating cash flows to
continue, with growth delivered
from a full year of Dairyworks
earnings and the integration of
Talbot Forest Cheese.
• No disruption to manufacturing
or demand for its ingredient and
lactoferrin business.
This guidance is subject to the
unpredictable effects of COVID-19,
with consumer behaviour, channel
dynamics and supply chain
disruptions all subject to change.
This is offset by the carrying costs
of investing in Synlait Pokeno and
Synlait Dunsandel’s Advanced Dairy
Liquid Packaging facility. Earnings
from these investments are expected
to be delivered in FY22 and beyond. 
As previously disclosed, Synlait is in the
process of finalising a long-term supply
agreement with a new, multinational
customer for packaged products which
is expected to have a positive impact
on earnings from FY23.
Against this, we are targeting a
similar, or slight improvement on,
our FY20 NPAT result.
A further update will be provided
at Synlait’s half year result in
March 2021.
Thank you for your ongoing support.

Graeme Milne ONZM
Synlait Chair
PAGE 10 & 11ANNUAL REPORT 2020

Milk reception bay, Synlait Dunsandel
PAGE 12 & 13ANNUAL REPORT 2020

Kia ora Synlait whānau
When I reflect on the last financial
year it is hard not to think about
COVID-19. Organisations can be their
most creative in times of uncertainty,
and when the future is difficult to
predict being adaptable and resilient
is an asset. Our team’s response
to the pandemic was first class, but
COVID-19 also confirmed that our
strategy to create a strong, diverse
company, is more relevant given the
uncertain world ahead.
The financial year to 31 July 2020 saw
us deliver strong growth in our core
business and make genuine progress
to further diversify Synlait.
We are building a sustainable,
diverse and recurring revenue base
that comes from multiple customers,
sites, markets and categories, while
balancing the needs of people,
planet and profit in our decisions.
Strong underlying performance
achieved
It was great to see our strong growth
momentum continue in this current
environment with revenue up 27%
to $1.3 billion. EBITDA rose 13% to
$171.4 million demonstrating our core
business strength, driven by the strong
relationship we have with The a2 Milk
Company, increased sales from a full
year’s production from our expanded
lactoferrin facilities, and our ability to
extract margins from the raw milk we
source. We see opportunities to keep
growing as the focus on operational
efficiency, utilisation and waste
reduction continues.
NPAT fell 9% to $75.2 million
reflecting strategic investments
and acquisitions over the past two
years to achieve our diversification
ambitions. We acknowledge that a
less ambitious strategy may have
resulted in a stronger short-term NPAT
performance, but it would not have
created the growth capacity we now
have or addressed our strategic risks.
Yes, we were disappointed when
downgrading our performance in
February due to changing market
dynamics and demand outlook for
some of our products. This highlighted
our over-reliance on a narrow set of
value drivers that can quickly change,
again reinforcing the importance of our
diversification strategy. Our recovery
in the second half, especially given
COVID-19, gives us confidence in just
how agile and resilient we can be.
There are simply too many stories to
mention, but I am proud of how our
team responded here.
Progressing towards our ambition:
2 + Zero
Our purpose of Doing Milk Differently
for A Healthier World keeps us on
track. Our ambition is a simple formula
for success: 2 + Zero. Our goal is to
achieve $2 billion in revenue.
The + part of our equation talks to
people and planet. Our goal is to
have a net positive impact on our
environment and communities,
CEO
REVIEW
and to create a positive place to
grow with 100% team engagement.
We are balancing people and planet,
with profit, in all decisions.
The Zero focuses on a fundamental
part of our business – keeping our
people safe, our focus on quality,
and reducing all forms of loss. Zero
injuries, Zero defects and Zero losses.
We believe this is possible.
Our progress over the last year
towards 2 + Zero was satisfying.
Revenue is up 27%, staff engagement
is at record levels, we became
a Certified B Corporation™, Total
Recordable Injury Frequency Rate
(TRIFR) is down 38% and our right
first-time performance lifted 34%.
Setting the foundations to diversify
In last year’s annual report, Synlait
was to an extent, one-dimensional.
We had an infant nutrition business
focused predominantly on our
strategic partnership with The a2
Milk Company, and a freshly-inked
fresh milk and cream contract with
Foodstuffs South Island. We were
also reliant on one site, Dunsandel,
predominantly manufacturing infant
formula for China. Twelve months on
we are in better shape.
Customer diversification
We have taken a major step towards
achieving a strong, diverse but
complementary customer portfolio.
In less than two years we have moved
from one key relationship to several,
creating a well-rounded and long-
term customer portfolio,
which includes: The a2 Milk Company,
a fast-growing player in China;
Foodstuffs South Island, a domestic
New Zealand retailer; and the new,
multinational customer opportunity,
that utilises Synlait Pokeno, which we
are working to finalise.
These relationships are supported by
a balanced portfolio of multinational
ingredient and lactoferrin customers,
while the Dairyworks and Talbot
Forest Cheese acquisitions enable us
to connect directly with consumers in
a complementary category that help
us optimise our milk supply.
Market diversification
We are also broadening our markets
effectively. Foodstuffs South Island,
Talbot Forest Cheese and Dairyworks
provided instant market share in
Australia and New Zealand. These
markets are experiencing strong
sector growth as consumers seek
nutritional products that support
better health. Synlait is excited to play
a role in this journey.
China remains our largest export
market. However, there are real,
albeit nuanced, shifts happening in the
regulatory landscape. We are seeing
sentiment shift towards increased
consumer trust in Chinese-made infant
formula and retail channels, which
along with the regulatory landscape,
is accelerating market consolidation.
This represents opportunity and risk for
Synlait, and while we must continuously
adapt, we remain highly committed to
playing an important role in this critical
market with our strategic partner and
shareholder The a2 Milk Company.
We are well positioned to continue
enabling The a2 Milk Company’s
growth aspirations via our
highly integrated infant formula
manufacturing organisation that
meets China’s high standards.
Navigating regulatory environments
is core to our value proposition
and service. The renewal process
required for canned infant formula to
be physically sold in Chinese stores
every five years is well progressed.
New Zealand’s reputation as a trusted
source of safe dairy nutrition has
also been reinforced by our country’s
response to COVID-19.
Site diversification
We removed our single site and milk
pool risk with the commissioning of
Synlait Pokeno, some 1,000 kilometres
from Synlait Dunsandel. This facility
has considerably de-risked Synlait
and provides optimisation benefits
in the way we manufacture. We now
have two infant capable facilities and
a1 protein free milk pools at both
ends of New Zealand. Synlait Pokeno
is a world class facility. Its quality
is evidence of our experience built
through designing, commissioning and
operating these facilities over
the past 10 years.
Category diversification
Our core Infant Nutrition category
remains solid and profitable.
As previously indicated, we are
PAGE 14 & 15ANNUAL REPORT 2020

working to finalise a new multinational
customer opportunity which expands
our category reach.
Our Everyday Dairy strategy made
another step forward in April following
the Dairyworks acquisition. The focus
here is on bringing Talbot Forest
Cheese and Dairyworks together
to create a uniquely integrated
value chain to enhance our market
competitiveness and realise synergies.
This category also includes the fresh
milk and cream line we operate for
Foodstuffs South Island, which we
had our first full financial year of sales
from. The operational performance of
this line is now exceeding expectation
and increased demand during
COVID-19 was met with almost 100%
accuracy. Fresh milk sales rose 2.8%
and cream 20% during COVID-19.
Our Foodservice category is being
established with the focus on
functional UHT whipping creams.
Progress was initially delayed
due to commissioning challenges
on the fresh milk and cream line.
Subsequently, commissioning the
new UHT line has been further
impacted due to COVID-19 as it has
been difficult to get the technical
capabilities required to New Zealand.
With just over 10 years’ experience in
producing powdered products, lessons
are being learnt and our new Director
Operations, Mark Toomey, is using
his beverage sector experience to
drive this project forward. We remain
confident in this opportunity and our
strategy. First sales are expected at the
end of this financial year.
Our strategic concentration risk has
materially reduced over the last year,
while maintaining underlying earnings
growth in our core business. This
approach came with risk as we built
in front of the demand curve and
acquired complementary businesses,
but it is in our DNA to be ambitious
and move at pace. We still have work
to do, but we have achieved our
underlying goal of laying the foundations
to build a more diversified Synlait.
Investment in people and the planet:
growing in a balanced way
We are pursuing shareholder value
creation in a way that enhances the
needs of people and the planet.
We believe that one drives the other,
therefore sustainable thinking is core
to what we do. Our investments,
and the choices we make, will lead
us to being net positive for the planet
and help all to thrive.
Our environmental and social
progress was recognised in June
when we became a B Corp™. We
publicly pledged to use business
as a force for good and intend to
be transparent about our goals and
progress towards them. We are
committed to creating a future of
sustainable farming and integrated
food production. This is our core
value proposition and we believe it
will continue to create value in many
ways for our company.
We have some great plans forming
to reach our off-farm GHG emissions
reduction target of -50% per kilogram
of product by 2028. For example,
we trialled substituting coal for wood
pellets in one of our Dunsandel
boilers, which has the potential to
remove 30% of the coal we burn.
Whakapuāwai, our native tree planting
programme at Synlait Dunsandel,
is progressing. The nursery has been
constructed and 11,000 trees planted.
I am really inspired by our team’s
commitment to this project. We are
truly living Synlait’s purpose here.
Our operational response to
COVID-19 was also an indicator of
our team’s commitment to Synlait and
a driver of engagement. Those who
were needed to run our facilities did
so in the knowledge that they were
safe and contributing to our company
and country’s economy. We were
privileged to be one of the fortunate
few operating as an essential service.
We keep a close watch on
engagement with a quarterly
measurement programme. We use
Gallup’s Australia, New Zealand and
Oceania database as a benchmark
which has seen us move from the
65th to 82nd percentile over the
last year, demonstrating our people
understand Synlait’s purpose and
know how to contribute to it.
High engagement correlates
to health, safety and wellbeing.
In FY18, TRIFR was 18.9
and now it is 8.5. We have work to
do, but progress is encouraging.
The next step is to ensure a
consistent approach at Dairyworks
and Talbot Forest Cheese.
Our focus for the year ahead
Our core business is sound and
producing solid returns on capital.
We are approaching the end of a
substantial investment period into
manufacturing capacity and people.
While this has, for now, had a short-
term impact on our bottom line,
it has set us up to deliver earnings
growth to become a more diversified
company. We have the facilities
and capability to respond to market
opportunities, whether they are
new customers, changing consumer
tastes, or new products.
To ensure we optimise our
performance, we will be focused
on three areas this year.
The first is an intense focus on our
customer relationships. We must
focus on embedding new customer
partnerships and continuing to grow
existing ones.
The second is the need to fully
optimise our assets and create
value. We have invested in strategic
facilities. It is time to make sure these
investments work for us, and you.
We are focused on running our
facilities smarter and more efficiently.
The third is the simplification and
standardisation of our structures and
systems. We will continue to build an
organisation that is future-ready,
and a culture that supports our
purpose and ambition.
This is a year to consolidate, focus,
and set ourselves up for success.
Not all the assumptions we made when
we invested in our facilities have played
out. Our world has changed, and so
must we. We are not going to dwell on
what did not work, we are going to do
what we need to do to keep creating
value for you, our shareholders.
I want to thank those who have been
part of the Synlait story.
Our team delivered a strong result
in exceptional circumstances. I leave
this financial year proud of Synlait,
its people and, and our performance.
Ngā manaakitanga

Leon Clement
Synlait CEO
DID YOU KNOW
Whakapuāwai was launched by Prime
Minister Jacinda Ardern in December
2019. Our staff receive one paid day
per year to plant natives as a way
of supporting commitments to our
farmers and communities to jointly
restore land in Canterbury.
PAGE 16 & 17ANNUAL REPORT 2020

OUR STRATEGY
$2 billion in revenue
Zero injuries
Zero defects
Zero losses
A Healthier
Synlait
Infant Nutrition
Everyday Dairy
Sports Nutrition
Foodservice
Next Big Thing
2
+
ZERO
World Class
Value Chain
Net +ve impact on
planet and communities
+ve place to grow with
100% engagement
Net Positive for
the Planet
DOING MILK
DIFFERENTLY FOR A
HEALTHIER WORLD
DOING MILK DIFFERENTLY
FOR A HEALTHIER WORLD
HEART OUR PURPOSEHEAD OUR AMBITIONHANDS OUR STRATEGY
PAGE 18 & 19ANNUAL REPORT 2020

Blending and canning operator carrying
out quality control at Synlait, Dunsandel
DID YOU KNOW
When running at capacity, our
Dunsandel and Auckland blending
and canning lines tip 6,500 kgs of
dry powdered ingredients, including
essential vitamins and minerals,
per hour into a very large blender
to make infant formula.
ANNUAL REPORT 2020PAGE 20 & 21

WHAT WE DO
HOW WE
CREATE VALUE
WHAT WE HARNESS
Social
Customers, farmer suppliers, regulators,
community
Human
New Zealand and China-based staff
Strengths-based approach to development
Health and safety leadership
Physical
Owned New Zealand-based assets
Integrated manufacturing systems
Financial
NZX/ASX listings
Long-term strategic shareholder base
linked to growth markets
Shareholder capital
Intellectual
Lead with Pride™ programme
Expertise to design, build and operate
world-class facilities
Innovation centre
Natural
Water, energy, land, milk
OUTCOMES
Nutritional, safe products
Health and essential nutrition
Trusted brands, product traceability
Extensive product range
Industry challenger
Recognised for on-farm sustainability
standards: Lead With Pride™
Catalyst for change
Long-term, high-growth partnerships
Market access
Achieved due to regulatory and
quality accreditations
Capability to grow
Talented employees
Innovative and agile culture: Kotahitanga
World-leading engagement results
Safety record improving
Environmental stewardship
On-track to reduce on-farm and off-
farm environmental impacts
Certified B Corp™
Financial capability
Lead With Pride™ incentive payments
Competitive margins
Access to capital for growth
Revenues reinvested
On-farm
Reward New Zealand’s most
innovative farmer suppliers
Source differentiated milk streams
Operations
Operate world-class facilities
Process differentiated milk streams
Implement best practice food safety,
quality and regulatory systems
In-house laboratory
Products
Invest in infant nutrition, ingredients and
everyday dairy
Customers
Develop and manufacture specialised
products for global brands
Sustainability
Set industry-leading targets and roadmaps
DOING MILK DIFFERENTLY FOR A HEALTHIER WORLD
PAGE 22 & 23ANNUAL REPORT 2020

Synlait Dunsandel (838 people)
Our homebase. As well as being our primary manufacturing facility, Synlait
Dunsandel has an administration office and is where Whakapuāwai is based,
our environmental programme which includes an industrial scale nursery.
WHERE WE
OPERATE
We have a history of bringing out
the best in nature and unlocking
its potential through new thinking,
new technologies and new attitudes.
We have grown to operate across eight
DID YOU KNOW
80% of our South Island farmer
suppliers are within a 75 kilometre
radius of Synlait Dunsandel.
FacilityCapacityOutput
Dryer 145,000 MTInfant grade whole milk powder and skim
milk powder
Dryer 245,000 MTInfant formula base powder, Infant grade
whole milk powder and skim milk powder
Dryer 345,000 MTInfant formula base powder, Infant grade
whole milk powder and skim milk powder
SMD1,800 MTSpecialty milk powders
AMF25,000 MTAMF liquid milk products
Advanced Dairy Liquid
Packaging Facility
110MLMilk, cream and long life products
Lactoferrin 117 MTLactoferrin
Lactoferrin 217 MTLactoferrin
Wetmix Kitchen 140,000 MTInfant formula base powder
Wetmix Kitchen 245,000 MTInfant formula base powder
Blending and Canning40,000 MTInfant formula
locations in New Zealand and China.
Our state-of-the-art assets are run by
an engaged and highly capable team,
backed by some of the best of New
Zealand’s farmer suppliers.
Synlait Pokeno (110 people)
Our newest infant-capable site in the North Island.
FacilityOutput
Secondary cheese
processing
Cheese, butter, yogurt, milk powder
and ice cream
FacilityCapacityOutput
Primary cheese
manufacture
12,000 MTCheese
Synlait Palmerston North (17 people)
Our research and development centre based at Massey University.
Talbot Forest Cheese (76 people)
Our first cheese acquisition, based in Temuka, two hours south
of Christchurch.
Synlait Christchurch
Our satellite office for administration staff.
Dairyworks (229 people)
Our newest member of the Synlait family based in
Christchurch.
Synlait Auckland (97 people)
Our second blending and canning facility.
Synlait China (6 people)
Our teams in Shanghai and Beijing are focused on regulatory affairs,
business development and sales.
FacilityCapacityOutput
Blending and Canning40,000 MTInfant formula
FacilityCapacityOutput
Dryer45,000 MTInfant formula base powder, Infant grade
whole milk powder and skim milk powder
Wetmix Kitchen45,000 MTInfant formula base powder, Infant grade
whole milk powder and skim milk powder
80% of our North Island farmer
suppliers are within a 130 kilometre
radius of Synlait Pokeno.
PAGE 24 & 25ANNUAL REPORT 2020

South Africa
WHERE OUR
MILK GOES
Our differentiated milk supply is what
sets Synlait apart. It enables us to
manufacture a range of nutritional
milk products that provide genuine
benefits for human health and
wellbeing for our global customers.
New Zealand’s unique environment is
reflective of the quality of the milk we
produce, and our milk finds its way all
over the world.
Denmark
Trinidad and Tobago
Algeria
Dominica
Nigeria
Peru
Ghana
Jamaica
Jordan
Egypt
Chile
Netherlands
Guyana
DISTRIBUTION BY
PRODUCT
KEY: DISTRIBUTION
BY COUNTRY
Synlait manufactured
Dairyworks manufactured
Fiji
New Zealand
Philippines
Papua New Guinea
Australia
Vietnam
South Korea
Samoa
United Arab Emirates
Tahiti
Qatar
Rarotonga
Saudi Arabia
Tonga
Madagascar
New Caledonia
Japan
Wallis and Futuna
Oman
Hong Kong
Taiwan
China
BangladeshPakistanKuwait
Sri Lanka
Singapore
Malaysia
Thailand
Indonesia
DID YOU KNOW
Commercial product, including
instant whole milk powder, skim milk
powder, infant formula base powder
and cream, has been manufactured
at Synlait Pokeno since September
2019. The first shipment of whole
milk powder was dispatched in
December 2019 to Vietnam.
Countries
exported to
Synlait
Anhydrous milk fat21
Butter milk powder3
Consumer packaged infant formula3
Infant formula base powder3
Lactoferrin4
Skim milk powder17
Whole milk powder23
Dairyworks
Cheese20
Flavoured butter1
Ice cream18
Salted and unsalted butter18
Whole milk powder16
PAGE 26 & 27
ANNUAL REPORT 2020

To improve as an organisation we
need to identify, understand and
closely manage our performance on
the topics that are most material to
us and our stakeholders.
This year we performed a desktop
materiality assessment, reviewing
reports from suppliers, customers,
investors and other external
stakeholders to assess relevant
issues that can affect value.
The outcomes of the materiality
assessment inform our decision
making on where we aim to make an
impact and feed into our corporate
reporting framework.
The materiality assessment focuses
on those topics that are most relevant
or impactful for the company and its
stakeholders, covering economic,
social, and environmental topics.
Working from a long list of
topics, a shortlist was created for
further discussion with internal
stakeholders to assess their views
on Synlait’s impact and to find out
which subjects are important for
our stakeholders.
The topics with the highest priority
for stakeholders and the biggest
estimated impact on our business
or on society appear in this matrix.
All topics shown in the top right
corner of the chart are considered
material and high priority. Our goal
is to refine this materiality analysis
and matrix by interviewing external
stakeholders over the coming years.
MATERIAL
TOPICS
Food safety
Animal welfare
Water quality
Climate change
Safety and wellbeing
of employees
Land degradation
Customer diversity
Market access / geopolitical
unrest
Plant-based foods / innovation
Product provenance
and traceability
Plastic packaging, waste,
reuse and recycling
Social responsibility
Nutrition
Recessionary conditions /
Net debt risk and return
on investment
Cyber security
Organisational capability
and culture
1
2
3
4
6
9
10
11
12
5
8
13
15
14
16
7
WHAT MATTERS MOST
TO OUR STAKEHOLDERS
AND TO OUR BUSINESS
MATERIALITY
MATRIX
1
2
3
4
6
9
10
11
12
5
8
13
15
14
16
7
Influence on stakeholder decisions
Significance of Synlait’s impact
LEARN MORE
More information on our risk
management framework can be
found in the Corporate Governance
section of this report on page 133.
PAGE 28 & 29ANNUAL REPORT 2020

TWO DECADES
OF PROGRESS
THE SYNLAIT STORY 2000 - 2020
2000200520072008
201120122013
The Synlait dream beginsSynlait is formed The Synlait Dunsandel dream beginsFirst milk processed at
Synlait Dunsandel
2009
2010
Supply agreement signed with the
A2 Corporation Limited
A big year for SynlaitFirst milk processed in Synlait
Dunsandel’s infant formula facility
Development continues at
Synlait Dunsandel
Bright Dairy joins the Synlait family
2014
New facilities come on-line
Dairy farmers and entrepreneurs Ben
Dingle, Juliet Maclean and Dr John
Penno purchased Robindale Dairy Farm
in Canterbury.
Synlait Milk launched. The name Synlait
was derived from the words ‘synergy’ and
‘lait’ (French for milk).
Synlait Milk entered an agreement to
deliver all milk collected to Westland Milk
Products during construction of Dryer 1.
In June Synlait Dunsandel received its
first milk from third-party farmer suppliers.
Dryer 1 was commissioned in August
and the Anhydrous Milk Fat facility was
commissioned in September.
The special milks spray dryer was
commissioned in August.
On 15 September the first milk was
processed in Synlait Dunsandel’s infant
formula facility.
Dryer 2 is commissioned. Synlait Milk
has the capability to manufacture infant
formula and nutritional products to unique
customer specifications.
Bright Dairy invested capital in Synlait
Milk and became a 51% shareholder in
November.
Synlait Dunsandel commenced
construction of Dryer 2, a sophisticated
purpose-built infant formula facility.
In March, an agreement was signed with
A2 Corporation Limited (later known as
The a2 Milk Company™ Limited) for Synlait
Milk to process and supply The a2 Milk
Company™ Limited’s a2 Platinum®
infant formula.
In April, Synlait Milk launched its
internationally accredited ISO/IEC 17065
dairy farm assurance programme, Lead
With Pride™, which recognises and
financially rewards farmer suppliers who
achieve dairy farming best practice.
On 23 July Synlait Milk Limited listed
on NZX, New Zealand’s Exchange.
At Synlait Dunsandel, the Lactoferrin
extraction and purification facility was
commissioned in April and the blending
and consumer packing facility in July.
Also, in July, Dry Store 3 was completed.
PAGE 30 & 31
ANNUAL REPORT 2020

2015201620172018
Synlait Dunsandel upgrades continueCapital raising and ASX listingFocused on growthCelebrating 10 years of operations ...
20192020
Synlait continues to grow and grow ...Twenty years on and the focus on
growth continues
South Island Limited
former Managing Director stepped
down from the role of CEO, and Leon
Clement was appointed.
Synlait announced bold 10-year
sustainability targets in September and
launched a new corporate brand identity
and purpose ‘Doing Milk Differently For
A Healthier World’ in November.
Construction of the Advanced Dairy
Liquid Packaging Facility commenced
at Synlait Dunsandel.
In February, Synlait announced the
conditional purchase of 28 hectares
of land in Pokeno, North Waikato to
establish its second nutritional power
manufacturing site.
This was followed by the official opening
of the Synlait Research and Development
Centre in Palmerston North, a partnership
with Massey University and Food HQ,
in March.
In August, Dr John Penno, founder and
Synlait Auckland, a blending and
consumer packaging facility, was
commissioned in November. This was
formerly the site of The New Zealand
Dairy Company Limited, which Synlait
Milk purchased in May that year.
The Wetmix kitchen at Synlait Dunsandel
was officially opened in December,
doubling Synlait’s infant formula
powder capacity.
In October, Synlait Milk completed a
$98 million capital raise.
Synlait Milk Limited listed on the
Australian Securities Exchange (ASX)
on 25 November.
Dryer 3, an infant formula grade spray
dryer, was commissioned in September
at Synlait Dunsandel.
to Synlait Dunsandel. The land will enable
Synlait Milk to pursue several strategic
supply chain and sustainability initiatives
that support Synlait Dunsandel’s long-term
operation and expansion.
Synlait Milk became the owner of
Dairyworks Limited in April.
Synlait Milk became a Certified B
Corporation™ in June.
Synlait Milk acquired farmland adjacent
New Zealand’s first large-scale electrode
boiler was commissioned at Synlait
Dunsandel in March. This was a significant
social and environmental performance
milestone for Synlait Milk.
Synlait Milk commenced supply of fresh
liquid milk and cream to Foodstuffs
South Island in April from its newly
commissioned Advanced Liquid Dairy
Packaging Facility at Synlait Dunsandel.
The acquisition of selected assets of Talbot
Forest Cheese was completed in August.
This acquisition supported Synlait Milk’s
broader growth and diversification strategy.
Synlait Milk announced in September that
revenue exceeded $1 billion for the first
time in the company’s history.
Synlait Pokeno processed its first milk
in September.
Lactoferrin facility expansion at Synlait
Dunsandel commissioned in October,
doubling the manufacturing capacity.
Whakapuāwai programme and electrode
boiler officially opened by the Prime
Minister at Synlait Dunsandel in December.
Synlait Milk listed $180 million
subordinated bonds on NZX’s Debt
Market in December.
PAGE 32 & 33ANNUAL REPORT 2020

Dry Store 4 will provide an
additional 30,000 square metres of
warehousing at Synlait Dunsandel.
It will streamline logistics activities
and bring offsite South Island storage
back to Dunsandel, supporting
growth and generating supply chain
efficiencies. It enables greater control
DRY STORE 4
over our inventories, value add
services, improves our sustainability
footprint, and improves lead times
for our customers. New technology
and infrastructure improvements will
enhance the health and safety of our
people too. It will be completed in
November 2020.
Dry Store 4 during construction shortly after the
roof was completed in August 2020
PAGE 34 & 35ANNUAL REPORT 2020

OUR BOARD
LEARN MORE
The Board’s full profiles are available
on our website: synlait.com/people
Other information about Board
composition and performance
is disclosed in the corporate
Graeme Milne ONZM (Chair)
Sam Knowles
Min BenQikai Lu
Bill Roest
Sihang Yang
Dr John Penno
Hon. Ruth Richardson
The pink health and safety pathway at
Synlait Dunsandel
governance section on page
133. Information on Directors
remuneration, participation in
Synlait securities, and other interests
are disclosed in the statutory
information section on page 153.
ANNUAL REPORT 2020PAGE 36 & 37

Milk reception bay, Synlait Dunsandel
OUR EXECUTIVE TEAM
LEARN MORE
The Executive Team’s full profiles
are available on our website:
synlait.com/people
Leon Clement
Chief Executive Officer
Chris France
Director, Strategy and Business
Transformation
Mark Toomey
Director, Operations
Deborah Marris
Director, Legal, Risk and Governance
Martijn Jager
Director, Sales and Business
Development
Angela Dixon
Chief Financial Officer
Boyd Williams
Director, People, Culture
and Performance
Hamish Reid
Director, Sustainability and Brand
Dr Suzan Horst
Director, Quality, Regulatory and
Laboratory Services
PAGE 38 & 39ANNUAL REPORT 2020

“During New Zealand’s COVID-19
Alert Level 4 lockdown we saw a
significant increase in consumer
demand for fresh milk and cream
across the South Island. The Synlait
team pulled out all stops to deliver on
our unscheduled requirements –
this is a testament to the solid
relationship we have developed.”
Phil Lemon, GM Merchandise,
Foodstuffs South Island
FOODSTUFFS
SOUTH ISLAND
A Synlait Dunsandel warehouse operator loads an order
of fresh milk and cream from the coolstore for delivery to
Foodstuffs South Island stores
PAGE 40 & 41ANNUAL REPORT 2020

Angela Dixon joined Synlait as
Chief Financial Officer in June
2020. She has more than 20
years’ experience in the financial,
professional services and
insurance sectors in New Zealand
and the United Kingdom, holding
senior roles with Public Trust,
IAG, Auckland International
Airport, Telewest Communications,
Royal Sun Alliance and PwC.
FIRST IMPRESSIONS
FROM OUR NEW CFO
I am a recent recruit to Synlait’s
Executive Leadership Team and
this, my first report to you, our
shareholders, provides a unique
opportunity to introduce myself
and share some first impressions
of our business.
Although I come from a background
in corporate finance and insurance,
I know the dairy industry well. I grew
up on a dairy farm in the Waikato,
gaining a first-hand appreciation of
how our industry worked, including
watching the creation of Fonterra Co-
operative Group unfold over the years
as a result of many mergers around us.
Our farm was not far from the
Tatua Co-operative Dairy Company
catchment, and we were very aware
of the successes of Tatua as it was
evidence of the virtues of being small
and competitive. Because of this, I was
attracted to the proposition of Synlait
as a challenger who is showing the
industry how to do milk differently.
I was also attracted to Synlait’s
sustainability story. Coming from an
extended family of dairy farmers, we
were encouraged to respect and care
for the land. My family believed in being
sustainable, competitive and nimble.
These values were instilled in me. I am
a passionate and proud New Zealander
who wants to contribute to a more
sustainable world. Synlait is a change-
maker influencing the food and fibre
industry for the better. I am excited to
be part of this journey.
Getting fit and ready for the next
phase of growth
Through the recruitment process I
discovered Synlait had grown to be
larger than meets the eye. This is
when I realised my skill set would
benefit Synlait. I have spent my
career working for large corporate
organisations and have experience
working through complexity to
find simplicity.
Synlait has had a successful run up
the curve, but we are no longer a
start-up. We are a significantly sized
company by New Zealand standards,
operating across multiple sites and
countries. We must navigate how we
will continue to grow with a maturing
company mindset, without losing
the entrepreneurial spirit we were
founded on.
I do not have manufacturing
experience, but I know that every
dollar is hard won in a mature market.
You must watch costs and margins
closely. I also bring experience in
diversifying businesses. When you
buy another company, you need to
realise value and deliver the results
quickly. Synlait is experiencing this
with Dairyworks. We will integrate it
strategically, while showing you the
value we are creating by owning it.
We are taking Synlait to the world
Synlait’s brand and reputation have
enabled it to attract intelligent people.
I am impressed by the culture.
Our team is full of fresh and optimistic
people who care about being part of
this organisation and see the growth
possibilities. We are attracting global
talent because of this.
Synlait has done the hard yards.
It has built first-class facilities. It has
world-class expertise in manufacturing
and exporting. It is partnered with
successful brands and provided quality
products repeatedly. Now, we need to
pivot to partner with more customers.
There are natural constraints right now
due to COVID-19, and our current and
potential customers are being rightly
cautious. But the pandemic will not
destroy the value already invested into
Synlait. We have the building-blocks in
place – the facilities, the expertise, the
partnerships and market intelligence.
The future for Synlait is about how
we accelerate and fully utilise those
building-blocks to keep growing.
Thank you for making me feel
welcome. I look forward to continuing
to hear your perspectives on Synlait as
I build my knowledge of our company
and industry.
Angela Dixon
Chief Financial Officer
CFO
REVIEW
PAGE 42 & 43ANNUAL REPORT 2020

FINANCIAL AND PERFORMANCE METRICSMILK PRICE
2016/172017/182018/192019/20
kgMS collected 63,249,602 63,616,077 63,438,694 76,550,913
Average fat %4.904.864.914.90
Average protein %3.923.893.923.98
Average lactose %5.064.994.994.99
Volume of components collected (kg)
Fat 35,123,275 35,289,377 35,270,506 42,252,084
Protein 28,126,327 28,327,076 28,168,188 34,298,829
Lactose 36,292,742 36,221,310 35,894,766 42,977,611
Component value
1
Fat $4.70$6.97$7.36$8.44
Protein$6.56$4.63$4.18$4.20
Lactose$1.87$2.03$1.53$1.67
Component value ratio
Fat 1111
Protein1.3970.6640.5670.497
Lactose0.3980.2910.2080.198
Total $ paid per component
Fat $164,998,609$245,903,402$259,645,339$356,688,641
Protein$184,528,391$131,063,290$117,657,713$143,911,349
Lactose$67,823,876$73,377,129$54,987,988$71,818,527
Volume charge($27,732,308)($27,289,173)($26,283,402)($32,746,784)
Average base milk price
2
$6.16$6.65$6.40$7.05
Total incentive payment$8,908,367$8,127,045$11,530,895$19,249,791
Average incentive payment per kgMS
3
$0.14$0.13$0.18$0.25
Total average Synlait payment per kgMS
4
$6.30$6.78$6.58$7.30
Key financial metrics
1
Currency as stated (in millions)FY2016FY2017FY2018FY2019FY2020
Income statement
Revenue 546.9 759.0 879.0 1,024.3 1,302.0
Gross profit 102.1 112.1 166.5 186.3 203.7
EBITDA
2
83.7 88.8 138.6 152.1 171.4
EBIT
2
62.9 67.6 113.1 124.5 123.3
NPAT 35.7 39.5 74.6 82.2 75.2
Revenue (USD per MT)
3
3,316 3,659 4,815 4,602 5,181
Gross profit per MT (NZD)
3
877 792 1,294 1,268 1,359
EBIT per MT sold (NZD)
3
540 478 879 855 858
Net cash from / (used in) operating activities 104.4 115.2 98.4 136.7 105.5
Balance sheet
Net operating assets
4
455.2 423.5 493.3 633.9 1,043.3
Return on net operating assets16.2%15.4%24.7%22.1%14.7%
Net return on capital employed (pre-tax)14.5%14.8%22.7%18.3%12.6%
Debt / debt + equity (excl derivatives)48.7%18.7%20.9%39.2%47.1%
Net debt / EBITDA
6
2.5 0.9 0.8 2.2 3.1
Earnings per share 23.50 22.82 41.60 45.89 41.95
Average FX conversion rate (NZD:USD) 0.7058 0.6814 0.7047 0.6792 0.6651
Base milk price 3.91 6.16 6.65 6.40 7.05
Total milk price (kgMS)
5
4.02 6.30 6.78 6.58 7.30
Key operational metrics
Sales (MT)
Powders and cream 100,393 122,606 93,042 106,802 101,222
Consumer packaged Infant Formula 15,999 18,776 35,580 42,907 49,180
Lactoferrin 10 11 16 21 30
Total sales (MT)
3
116,402 141,393 128,637 149,730 150,432
Production (net production)
Powders and cream 104,703 115,991 102,833 103,131 107,098
Consumer packaged Infant Formula 16,043 19,403 36,651 43,168 50,918
Lactoferrin 8 12 12 23 29
Total production (MT)
3
120,754 135,407 139,496 146,322 158,045
Milk purchases ('000 kg MS)
Milk purchased from contracted supply 54,125 63,255 63,639 64,189 76,875
Milk purchased from other suppliers 3,573 1,700 (2,853) 1,877 (6,079)
Total milk purchases ('000 kg MS) 57,698 64,954 60,785 66,066 70,796
This table shows how Synlait take the milk supplied by our contracted farmer suppliers, value the milk components,
and make a pay-out via the average base milk price.
The 2019/20 milk price had not been fully paid out at the time the annual report was released. Figures represent what
has been paid and is accrued to be paid.
It also highlights the incentive payments made to our farmer suppliers in addition to the average base milk price.
This information represents payments made in the milk season which runs 1 June to 31 May as opposed to Synlait’s financial year.
For the recently completed 2019/2020 milk season we paid out an average base milk price of $7.05 with an average
additional incentive payment of $0.25 per kgMS.
1
Rounded to two decimal places
2
Amount paid for components + volume charge / kgMS collected = base milk price
3
Includes incentives and winter incentive payments
4
Base milk price + average incentive payment
1
The group uses several non-GAAP measures when discussing financial performance. Management believes these measures provide
useful insight on the performance of the business, to analyse trends and to assist stakeholders in making informed decisions.
2
EBIT is calculated by excluding financing costs and income tax, with EBITDA also excluding depreciation & amortisation accordingly.
A reconciliation of EBIT and EBITDA is provided in the CFO Review on page 49.
3
Synlait Milk Limited only and fresh milk is excluded in FY20 and FY19 (part year in FY19)
4
Net operating assets includes current assets, PPE and intangible assets. It excludes capital work in progress, derivatives, goodwill,
trade payables and tax liabilities.
5
Total milk price for Synlait Milk suppliers on standard milk supply contract, includes value and seasonal premiums. This is a milk
season reflective payment that runs 1 June to 31 May.
6
Net debt calculation excludes lease liabilities, for banking covenant purposes lease liabilities are included.

PAGE 44 & 45
ANNUAL REPORT 2020

REVIEW OF FINANCIAL PERFORMANCE
The Group has continued to execute on its strategy of growing both our Nutritional (infant and lactoferrin) and Everyday
Dairy businesses which is reflected through revenues exceeding $1 billion for the second time in FY20 with revenues
of $1,302.0 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 13% to $171.4 million
demonstrating the strength of our infant and lactoferrin businesses. Reported after tax earnings were a profit of $75.2
million, a 9% decrease reflecting investments in new facilities and acquisitions over the past two years to achieve
growth ambitions as well as increased overhead expenditure in areas of the business that support future growth
opportunities aligned to our strategy.
Average reference commodity prices increased steadily in the first half of the 2019/20 milk season until February.
Reference commodity prices fell steadily from February through May as global uncertainty driven by COVID-19 impacted
commodities. The average reference basket price in the 2019/20 season increased to $3,128, a 4% increase vs the
2018/19 season. This increase, as well as a lower FX rate, are the key contributors to the $0.65 increase in the average
base milk price paid to our suppliers in 2019/20, which moved from $6.40 to $7.05 per kgMS.
Gross profit performance
Sales
Our total gross profit per MT of $1,359 is 7% higher than last year’s $1,268 per MT. A direct result of the favourable sales
product mix in FY20. Continued investment in people to support key growth projects, higher Lead With Pride™ supplier
engagement costs, and the full impact of depreciation from the completion of the investment program in prior years
tempering the upside. Over time, as we grow into our capacity, we will see a positive incremental impact on gross profit
and increased ROCE with fixed costs per MT at its highest immediately after the completion of a new facility.
Consumer packaged gross profit improved $24 per MT, generated from higher utilisation of our consumer packaging
facilities in Dunsandel and Auckland.
Lactoferrin margin per MT has materially increased over FY19 due to a favourable market pricing environment.
Lactoferrin production volume also increased following the facility upgrades which were completed in November 2019
(up 26%), and overall contributed $28 million of gross profit in FY20 (FY19: $13 million).
Everyday Dairy
The Everyday Dairy category represents the acquisition of Talbot Forest Cheese and Dairyworks, along with the
Advanced Dairy Liquid Packaging Facility at Dunsandel. Gross Profit from this area is net $0.4 million, a result reflecting
some initial commissioning challenges in the Advanced Dairy Liquid Packaging Facility at Dunsandel and low fixed
overhead recoveries as we move from commissioning phase to a focus on increasing utilisation. Dairyworks and Talbot
Forest Cheese are tracking to expectations generating Gross Profit of $2.6 million combined in FY20. In FY21 we will
focus on integrating Dairyworks and Talbot Forest Cheese and leverage synergies with the core Synlait business.
We received 76.8 million kilograms of milk solids (kgMS) from our contracted suppliers, 12.4 million kgMS more than FY19
to support the Pokeno facility. We also sold (net) 6.0 million kgMS over the season of which 1.4 million kgMS was cream
sold from the Pokeno facility, resulting in an overall 7% or 4.4 million kgMS increase in milk processed in FY20. Again, this
was enabled by the investments and implementation of the IWS programme as mentioned above – the IWS programme
increased facility production capacities validating the investment management has made into this programme.
Sales (metric tonnes)FY20FY19Growth %
Ingredients101,222106,802(5)%
Consumer packaged powders49,18042,90715%
Lactoferrin302146%
Total150,432149,7300.5%
OVERVIEW
FINANCIAL PERFORMANCE
Sales
Revenue in FY20 at $1,302.0 million is $277.7 million or 27% higher than FY19 ($1,024.3 million), with total sales volume
of 150,432 MT (excluding Everyday Dairy, which is discussed in a separate section below) in line with FY19 but product
mix significantly moving from commodities to higher value canned infant formula.
This revenue growth was driven by a 15% increase in high value canned infant formula sales, and a 46% increase in
lactoferrin sales volumes. The uplift in higher value product sales was enabled by the investments made in prior years
as well as from manufacturing efficiencies which have delivered through our Integrated Work Systems (IWS) programme.
PAGE 46 & 47ANNUAL REPORT 2020

Milk price
Raw milk remains Synlait’s most significant component of our cost of goods sold. Our final average base milk price
for the 2019/20 season is $7.05 per kgMS, compared to our 2018/19 average base milk price of $6.40 per kgMS. In
addition, we paid out $0.25 per kgMS in incentive and premium payments through a2, Lead With Pride
TM
, Grassfed and
winter milk payments, increasing the average total milk payment to $7.30 per kgMS compared with $6.58 per kgMS in
2018/19. Premiums and incentive payments are higher in 2019/20 predominantly through an increase in our winter milk
payments. This resulted in our contracted suppliers receiving a total of $19.3 million in additional value-added
premiums in the 2019/20 season, compared to $11.5 million in 2018/19.
Overhead expenditure
Overhead expenses for FY20 at $80.9 million were up $18.7 million from $62.1 million in FY19. Notable increases
in these overhead costs include overhead expenditure from acquired subsidiaries ($4.6 million), depreciation
($4.0 million), employee costs ($4.4 million) and multi-site distribution ($1.4 million).
As previously signalled, increases in overhead expenditure reflect continued investment to help run the new facilities
that we are bringing on-line and enter new categories.
The impact of COVID-19 on expenditure is not evident in the year-on-year comparison. However, there was a reduction
in training, entertainment, travel and consulting costs totalling $2.5 million across the business. This is partially offset by
higher cleaning costs of $0.3 million and additional warehouse space costs of $0.2 million to mitigate against the risk of
export channels slowing down.
The $12.0 million increase in net financing costs is due to an increase in interest-bearing debt as a result of continued
capital expenditure and lower capitalised interest.
Gross interest on term debt increased by $5.8 million to $15.2 million in FY20 with higher average interest-bearing debt
year-on-year as a result of the acquisition of subsidiaries and continued capital expenditure across both years, with
lower interest rates providing some offset. Capitalised interest decreased by $5.4m to $2.1m in FY20 with Synlait Pokeno
commissioned in early FY20 and the Advanced Dairy Liquid Packaging Facility at Dunsandel commissioned in FY19.
Net financing costs
Net financing costs at $21.4 million increased 127% over FY19’s $9.4 million.
$ millionFY20FY19
Profit before tax$101.9$115.1
Add back: net finance cost$21.4$9.4
EBIT$123.3$124.5
Add back: depreciation and amortisation$48.1$27.6
EBITDA$171.4$152.1
FY20FY19Va r.
Gross term debt interest(15.2)(9.4)(5.8)
Less capitalised interest2.17.5(5.4)
Net term funding interest(13.1)(1.9)(11.2)
Working capital funding interest(6.2)(6.9)0.7
Interest received0.11.2(1.1)
Loss on derecognition of financial assets(1.7)(1.8)0.1
Net short-term funding interest(7.8)(7.5)(0.3)
Interest on lease liabilities (0.5)0.0(0.5)
Net finance costs(21.4)(9.4)(12.0)
Powders and CreamConsumer Packaged
Infant Formula
LactoferrinTotal Powders
FY20
Sales Volume (MT)101,22249,18030150,432
Gross Profit ($M)134.440.528.4203.3
Gross Profit / MT1,327824943,0741,359
FY19
Sales Volume (MT)106,80242,90721149,730
Gross Profit ($M)142.234.313.3189.8
Gross Profit / MT1,331800646,0991,268
% Change
Sales Volume (MT)(5%)15%46%0%
Gross Profit ($M)(6%)18%113%7%
Gross Profit / MT0%3%46%7%
1
Gross profit per MT includes both external sales volumes and internal transfers of bulk infant formula to blending and consumer packaging.
Gross profit by category
1
EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA), at $171.4 million, grew strongly demonstrating the
strength of our infant nutritional and lactoferrin businesses. The 13% increase on the FY19 result of $152.1 million was
driven by increased sales volumes and a favourable product mix.
PAGE 48 & 49ANNUAL REPORT 2020

Raw materials increased to $71.3 million (FY19: $40.1 million). Tonnage of raw materials increased to 13,614 (FY19: 11,307
MT). Higher raw materials balances reflect the acquisition of subsidiaries inventories, which, due to the nature of their
operations, are weighted towards holding higher volumes of raw material to enable cheese aging. Work in progress in
FY20 of $11.6m (FY19: nil) predominantly relates to bulk cheese manufactured at Talbot Forest Cheese that is awaiting
further manufacturing.
Finished goods inventory has increased to $186.5 million (FY19: $124.7 million). Tonnage of finished goods has
increased to 32,109 MT (FY19: 23,318 MT). The increase relates to a larger holding of our core infant nutritional products
and finished goods inventory held by Dairyworks and Talbot Forest Cheese.
Inventories were reviewed for impairment, resulting in a stock impairment provision totalling $2.0 million relating to
finished goods ($1.8 million) and raw materials ($0.2 million) (FY19: $0.3 million all relating to finished goods). This
increase primarily relates to production in late May which did not pass our stringent quality standards. Impaired finished
goods were written down to net realisable value.
In addition, we have an onerous contracts provision of $0.3 million (FY19: $0.5 million); the reduction from prior year is
due to product mix and a declining cost to manufacture.
Property, plant and equipment
Property, plant and equipment at $965.1 million, increased $119.9 million from FY19 at $845.2 million. The year-on-year
increase is a consequence of total capital expenditure of $129.4 million, acquisitions through business combinations of
$34.3 million, less depreciation of $40.0 million, impairment of $3.2 million, and net disposals of $0.6 million. The capital
expenditure of $129.4 million primarily relates to our growth initiative projects with $93.9 million of total spend in FY20.
FINANCIAL POSITION
Overview
In FY20 the Group continued to invest for the future, completing the construction of assets and acquisition of
businesses to allow us to successfully implement our strategy.
Our reported net profit after tax of $75.2 million, plus the movement in reserves, has increased total equity to $606.5
million at 31 July 2020 from $492.4 million.
Trade and other receivables
At $63.1 million, Group trade and other receivables have increased by $1.2 million on FY19 ($61.9 million). Synlait’s
trade and other receivables have decreased significantly year on year to $36.1m (FY19: $61.9m) driven by an increased
balance of receivables assigned as at 31 July 2020 (FY20: $131.3, FY19: $109.0). The differential is the trade and other
receivables of the subsidiaries acquired during FY20 (Dairyworks and Talbot Forest Cheese).
FY20FY19
$ millionMT$ millionMT
Synlait Milk Limited216.140,787*164.834,625*
Dairyworks Limited40.14,889*--
Synlait Foods (Talbot Forest) Limited13.21,766--
Working capital funding interest has decreased by $0.7 million due to lower interest rates, partly offset by higher
working capital requirements in FY20 than in FY19. Those working capital requirements being Synlait’s continued
growth; inventory build of infant nutritional products to ensure customer demand is able to be met, to protect against
COVID-19 supply chain disruption, and to ensure optimal utilisation of our plant through peak milk collection; together
with the additional working capital requirements of Dairyworks and Talbot Forest Cheese, which were acquired in FY20.
Loss on derecognition of financial assets is the financing cost associated with our receivables financing programme. It
has decreased slightly with lower interest rates offset by increased utilisation of these facilities.
Further, the Group adopted NZ IFRS 16 effective from 1 August 2019, resulting in $0.5m interest on lease liabilities for
FY20 (FY19: nil).
Foreign Exchange
The management of foreign exchange exposure is one of the key risks of the business with many product sales being
to overseas markets creating a primarily United States Dollar (USD) exposure risk. Our foreign exchange policy seeks to
achieve the lowest annual average New Zealand Dollar (NZD)/USD exchange rate for the year. In FY20 we achieved a
net annual average NZD/USD exchange rate of 0.6651 (FY19: 0.6792).
Earnings per share and return on capital employed
Our reported basic and diluted earnings per share (EPS) for FY20 was 41.95 cents and 41.85 cents respectively, against
45.89 cents and 45.77 cents in FY19. The dilutive shares are basic EPS adjusted for contingently issuable shares in
accordance with the Employee Share Scheme. The Group also generated a pre-tax return on average capital employed
of 12.6% in FY20 compared with 18.3% in FY19.
Inventories
Our inventory holdings increased to $269.4 million (FY19: $164.8 million). $53.3 million of this increase relates to the
inventory holdings of subsidiaries acquired during the year. The balance of the increase at Synlait is largely due to
increased holdings of canned and bulk infant nutritional products to ensure customer demand is able to be met, to
protect against potential Covid-19 supply chain disruption (increased safety stock), and to ensure optimal utilisation of
our plant through peak milk collection in FY21.
* inventory not measured in metric tonnes is excluded as not material to our volumes.
PAGE 50 & 51
ANNUAL REPORT 2020

In February 2020, we commissioned our new North Island nutritional spray drier and related assets located in Pokeno.
The construction of the nutritional spray dryer was budgeted to cost $258.3 million (excluding the cost of the land). Total
spend on the project in FY20 was $64.1 million (FY19: $181.1 million, FY18: $12.7 million) for total spend to date of $257.9
million (excluding land).
During FY20 we also commissioned the capacity upgrade of our milk separation plant. Total spend in FY20 was $7.4
million (FY19: $6.5m) for total project spend of $13.9 million. In the year we also ramped up construction of our new
dry storage facility. Total spend on the project in FY20 was $18.7 million (FY19: $0.9 million, FY18: $0.2 million) for total
spend to date of $19.8 million.
Operational capital expenditure increased to $35.5 million from $18.5 million in FY19. The increase in expenditure
was attributable to the upgrades at Talbot Forest Cheese ($4.7 million) and Dairyworks ($1.9 million), acquisition of
replacement lactoferrin resin ($3.6 million), the fitout of the Christchurch office and upgrades to Dunsandel office
building ($3.2 million), the upgrade of the Wetmix kitchen ($1.2 million), and Blended Steam Supply project ($1.2 million).
The higher level of operational capital expenditure reflects the significant growth of the Group and its asset base over
FY19 and FY20.
Acquisitions of Talbot Forest Cheese and Dairyworks
On 1 August 2019 the Group completed the purchase of Talbot Forest Cheese when Synlait Foods (Talbot Forest)
Limited formally acquired Talbot Forest Cheese’s Temuka assets and operations. Total consideration paid was $38.3
million. Brands of $1.7 million were acquired and $16.1 million of goodwill arose on acquisition.
On 1 April 2020 the Group completed the acquisition of 100% of the shares of Dairyworks for a purchase price of $112
million on a debt-free basis with the equity price being locked in with an effective date of 30 September 2019. After
effective date adjustments for debt, working capital, and leakage – consideration of $63.6m was transferred to the
vendors on 1 April 2020. Brands of $15.8 million were acquired and $43.4 million of goodwill arose on acquisition.
Trade and other payables
Trade and other payables at $238.8 million is up $22.8 million on last year’s balance of $216.0 million. This variance is
due to the trade and other payables balances of Dairyworks and Talbot Forest Cheese at 31 July 2020.
Cash spent on investing activities of $225.0 million (FY19: $337.4 million) during the financial period, offset by cash
from operating activities of $105.5 million (FY19: $136.6 million), resulted in a free cash outflow of $119.5 million from
operating and investing activities. This together with cash outflows from interest and financing fees paid of $26.4 million
(FY19: $18.1 million), repayment of lease liabilities $4.2m, and Dairyworks loans and borrowings of $43.2 acquired on
acquisition account for the movement in net debt*. Operating cash flows are discussed further below.
With Net Debt* of $527.0 million, our gearing (Net Debt* / Net Debt* + Equity) is 46.5% (FY19: 40.4%) and our leverage
(Net Debt* / EBITDA) is 3.08x (FY19: 2.19x).
$ millionFY20FY19
Current debt$102.8$99.6
Term debt (carry amount)$426.8$249.5
Transaction costs $3.2$0.5
Cash on hand($5.9)($16.0)
Total Net Debt (excluding lease liabilities) $527.0$333.6
Contingent liability
The Group has included a contingent liability note in the annual financial statements relating to the Pokeno land
covenant issue. There are a range of possible outcomes in this dispute meaning the Group is not able to reliably
estimate a potential liability, if any. For further information please refer to the Contingent Liability note in the financial
statements, page 125.
Total net debt
Total net debt (excluding lease liabilities) at year end, including both current and term debt facilities less cash on hand,
was $527.0 million, an increase of $193.4 million over the FY19 balance of $333.6 million.
* Net debt excluding lease liabilities
PAGE 52 & 53
ANNUAL REPORT 2020

Funding facilities and covenants
At reporting date, the Group had in place four syndicated bank facilities with ANZ and BNZ:
1. Working Capital Facility – reviewed annually in September with a year-end facility limit of NZD $320.0 million.
This is a dual currency (NZD & USD) facility.
2. Revolving Credit Facility A – maturing 1 August 2021 with a fixed facility limit of $150 million.
3. Revolving Credit Facility B – maturing 1 August 2023 with a fixed facility limit of $50 million.
4. Revolving Credit Facility C – maturing 1 August 2023 with a fixed facility limit of $50 million.
In addition to banking facilities, the company has on issue a $180.0m unsecured, subordinated, fixed rate bond maturing
17 December 2024.
Subsequent to reporting date, we have entered into an additional Revolving Credit Facility of $100m commencing 1
October 2020, stepping down to $70m on 1 January 2021 and maturing 1 May 2021. We have also reduced the working
capital facility of $320m down to $250m and extended the revolving credit facility A to mature on 1 October 2021.
We have five bank covenants in place within our syndicated bank facility agreement. These are:
1. Interest cover ratio - EBITDA to interest expense of no less than 3.00x based on full year forecast result
(FY20: 8.01x).
2. Minimum shareholders’ funds – must exceed $295.5 million (FY20: $469.9 million).
3. Working capital ratio – must exceed 1.50x (FY20: 3.40x).
4. Leverage ratio – no more than 4.0x (FY20: 3.19x).
5. Senior leverage ratio - no more than 3.0x (FY20: 2.14x).
The company was compliant with our bank covenants at all times during the financial period.
Note that the covenants are calculated in accordance with our banking facilities agreement and include adjusting items
that are not presented in the financial statements.
Angela Dixon
Chief Financial Officer
Derivatives
As at 31 July 2020 we held USD$525.5 million (net) in foreign exchange contracts as detailed in note 15 of the annual
financial statements. These have been placed across a 24-month future period, in accordance with our Treasury Policy.
Given the recent appreciation in the NZD/USD exchange rate, we have mark to market unrealised gains associated with
these contracts at year-end of $17.5 million after tax, a movement of $38.5 after tax year-on-year. As our foreign exchange
contracts fully hedge against future USD receipts and payments, this unrealised gain is recognised in other reserves in
equity rather than through the income statement. The impact of these foreign exchange contracts will play out in the
periods in which they mature, and they will form part of our annual average NZD/USD exchange rate in those periods.
We also have in place a nominal balance of $57.3 million of interest rate swap agreements at year-end (FY19: $79.5
million) at various weighted average interest rates, generating an unrealised mark to market loss of $4.9 million after
tax, a movement of $0.2m after tax year-on-year, with swap agreements unwinding partly offset by lower interest rates.
We continue to use dairy commodity derivatives to support the management of the risk of movement in dairy
commodity prices. Dairy commodity derivatives with a nominal balance of NZD $12.0 million were in place at year end
(FY19: NZD $5.3 million).
Year-on-year there was a $38.8 million movement in the cash flow hedge reserve from ($26.1) million in FY19 to
$12.6 million in FY20. The cash flow hedge reserve relates to derivatives and the year-on-year movement is primarily
explained by the movement in fair value of foreign exchange contacts as detailed above.
Operating cash flows
Operating cash flows at $105.5 million are down $30.9 million on FY19 ($136.6 million). The primary reason for this
decrease was due to an unfavourable movement in working capital year-on-year with an increase in infant formula
product on hand and additional working capital requirements of Dairyworks and Talbot Forest Cheese.
PAGE 54 & 55ANNUAL REPORT 2020

Synlait Pokeno, Waikato
Director’s responsibility statement 58
Financial statements 58
Income statement 59
Statement of comprehensive income 60
Statement of changes in equity 61
Statement of financial position 62
Statement of cash flows 63
Notes to the financial statements 64
Performance 68
01 Revenue recognition and segment information 69
02 Expenses 71
03 Reconciliation of profit after income tax to net cash inflow from
operating activities 72
Working Capital 73
04 Trade and other receivables 74
05 Inventories 78
06 Trade and other payables 79
Long Term Assets 80
07 Property, plant and equipment 81
08 Intangible assets 84
09 Leases 88
Debt and Equity 90
10 Finance income and expenses 91
11 Loans and borrowings 92
12 Share capital 94
13 Share based payments 95
14 Reserves and retained earnings 97
Financial Risk Management 98
15 Financial risk management 99
16 Financial instruments 106
Other 111
17 Income tax 112
18 Business combinations 116
19 Other investments 120
20 Related party transactions 122
21 Contingencies 125
22 Commitments 126
23 Events occurring after the reporting period 127
24 Other accounting policies 127
Auditors report 128
FINANCIAL
CONTENTS
FINANCIAL STATEMENTS
PAGE 56 & 57ANNUAL REPORT 2020

The Directors are pleased to present the financial statements for Synlait Milk Limited and its subsidiaries, Synlait Milk Finance
Limited, The New Zealand Dairy Company Limited, Eighty Nine Richard Pearse Drive Limited, Synlait Business Consulting
(Shanghai) Limited, Synlait Foods (Talbot Forest) Limited, Dairyworks Limited and Dairyworks (Australia) Pty Limited (together
“the Group”) as set out on pages 57 to 127 for the year ended 31 July 2020.
The Directors are responsible for ensuring that the financial statements present fairly the financial position of the Group
as at 31 July 2020 and the financial performance and cash flows for the year ended on that date.
The Directors consider that the financial statements of the Group have been prepared using appropriate accounting policies,
consistently applied and supported by reasonable judgements and estimates and that all relevant financial reporting and
accounting standards have been followed.
The Directors believe that proper accounting records have been kept which enable, with reasonable accuracy, the
determination of the financial position of the Group and facilitate compliance of the financial statements with the
Financial Markets Conduct Act 2013.
For and on behalf of the Board.
Graeme Milne
Chair
25 September 2020
Willem Jan (Bill) Roest
Independent Director
25 September 2020
DIRECTORS’ RESPONSIBILITY STATEMENT
20202019
Notes$’000$’000
Revenue11,302,0251,024,305
Cost of sales2(1,098,292)(837,976)
Gross profit203,733186,329
Other income1404898
Share of profit/(loss) from associates1933(580)
Sales and distribution expenses2(32,318)(26,836)
Administrative and operating expenses2(48,561)(35,303)
Earnings before net finance costs and income tax123,291124,508
Finance expenses10(19,777)(8,819)
Finance income101341,232
Loss on derecognition of financial assets10,4(1,747)(1,842)
Net finance costs10(21,390)(9,429)
Profit before income tax101,901115,079
Income tax expense17(26,693)(32,840)
Net profit after tax for the period75,20882,239
Earnings per share
Basic earnings per share (cents)1241.9545.89
Diluted earnings per share (cents)1241.8545.77
INCOME STATEMENT
For the year ended 31 July 2020
ANNUAL REPORT 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.
PAGE 58 & 59

20202019
Notes$’000$’000
Profit for the period75,20882,239
Items that may be reclassified subsequently to profit and loss
Effective portion of changes in fair value of cash flow hedges1553,882(21,323)
Exchange differences on translation of foreign operations(12)-
Income tax on other comprehensive income17(15,087)5,971
Total items that may be reclassified subsequently to profit and loss38,783(15,352)
Other comprehensive income for the year, net of tax38,783(15,352)
Total comprehensive income for the year113,99166,887
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2020
Share
Capital
Employee
Benefits
Reserve
Cash Flow
Hedge
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Total
Equity
GroupNotes$’000$’000$’000$’000$’000$’000
Equity as at 1 August 2018268,074930(10,796)-166,536424,744
Profit or loss for the year----82,23982,239
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges--(21,410)--(21,410)
Movement in time value hedge reserve--87--87
Income tax on other comprehensive income--5,971--5,971
Total other comprehensive income--(15,352)--(15,352)
Employee benefits reserve13,14,17-728---728
Total contributions by and distributions to owners-728---728
Equity as at 31 July 2019268,0741,658(26,148)-248,775492,359
Profit or loss for the year----75,20875,208
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges--53,882--53,882
Exchange differences on translation of foreign operations---(12)-(12)
Income tax on other comprehensive income--(15,087)--(15,087)
Total other comprehensive income--38,795(12)-38,783
Employee benefits reserve13,14,17470(336)---134
Total contributions by and distributions to owners470(336) - --134
Equity as at 31 July 2020268,5441,32212,647 (12)323,983606,484
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2020
PAGE 60 & 61ANNUAL REPORT 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.The accompanying notes form part of and are to be read in conjunction with these financial statements.

STATEMENT OF FINANCIAL POSITION
As at 31 July 2020
STATEMENT OF CASH FLOWS
For the year ended 31 July 2020
20202019
Notes$’000$’000
(restated)
ASSETS
Current assets
Cash and cash equivalents5,88716,007
Trade and other receivables463,05761,933
Intangible assets84,2303,686
Goods and services tax refundable6,3983,689
Income accruals and prepayments12,4049,554
Inventories5269,384164,849
Derivative financial instruments15,1622,5302,358
Other current assets2,50020,500
Total current assets386,390282,576
Non-current assets
Property, plant and equipment7965,104845,202
Intangible assets842,50316,428
Goodwill8,1865,5456,026
Other investments19143110
Derivative financial instruments15,1614,08445
Right-of-use assets918,497-
Total non-current assets1,105,876867,811
Total assets1,492,2661,150,387
LIABILITIES
Current liabilities
Loans and borrowings11102,83799,626
Trade and other payables6238,770216,020
Current tax liabilities24,56129,220
Derivative financial instruments15,1614,14827,960
Lease liabilities94,422-
Total current liabilities384,738372,826
Non-current liabilities
Loans and borrowings11426,754249,482
Deferred tax liabilities1754,64725,034
Derivative financial instruments15,164,80510,686
Lease liabilities914,838-
Total non-current liabilities501,044285,202
Total liabilities885,782658,028
Equity
Share capital12268,544268,074
Reserves1413,957(24,490)
Retained earnings14323,983248,775
Total equity attributable to equity holders of the Group606,484492,359
Total liabilities and equity1,492,2661,150,387
20202019
Notes$’000$’000
Cash flows from operating activities
Cash receipts from customers1,316,0761,025,168
Cash paid for milk purchased(545,792)(461,369)
Cash paid to other creditors and employees(635,402)(403,420)
Net movement in goods and services tax(2,709)2,846
Income tax payments(26,633)(26,670)
Net cash inflow from operating activities3105,540136,555
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired18(72,927)(18,000)
Interest received1341,232
Purchase of property, plant and equipment(139,212)(309,314)
Proceeds from sale of property, plant and equipment242(147)
Purchase of intangible assets(13,262)(11,127)
Net cash outflow from investing activities(225,025)(337,356)
Cash flows from financing activities
Proceeds from the issuance of subordinated bonds11180,000-
Transaction costs paid on issue of subordinated bonds(3,370)-
(Repayment)/drawdown of borrowings18(43,224)152,300
Net movement in working capital facility3,21150,305
Interest paid(23,048)(18,069)
Repayment of lease liabilities(4,185)-
Net cash inflow from financing activities109,384184,536
Net decrease in cash and cash equivalents(10,101)(16,265)
Cash and cash equivalents at the beginning of the financial year16,00732,129
Effects of exchange rate changes on cash and cash equivalents(19)143
Cash and cash equivalents at end of year5,88716,007
PAGE 62 & 63
ANNUAL REPORT 2020
The accompanying notes form part of and are to be read in conjunction with these financial statements.The accompanying notes form part of and are to be read in conjunction with these financial statements.
Comparative numbers for goodwill and deferred tax have been restated due to a prior period error. Refer to Note 18 for further detail.

The consolidated financial statements (“financial statements”) presented are those of the Group, including Synlait Milk
Limited and its subsidiaries Synlait Milk Finance Limited, The New Zealand Dairy Company Limited, Eighty Nine Richard
Pearse Drive Limited, Synlait Business Consulting (Shanghai) Limited, Synlait Foods (Talbot Forest) Limited, Dairyworks
Limited and Dairyworks (Australia) Pty Limited.
Synlait Milk Limited is primarily involved in the manufacture and sale of dairy products.
The parent company, Synlait Milk Limited, is a profit oriented entity, domiciled in New Zealand, registered under the
Companies Act 1993 and listed on the New Zealand Stock Exchange and the Australian Securities Exchange. Synlait
Milk Limited is a FMC reporting entity under the Financial Market Conducts Act 2013 and its financial statements comply
with that Act.
REPORTING ENTITY
The financial statements of the Group have been prepared in accordance with Generally Accepted Accounting
Practice. They comply with New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’) and
other applicable Financial Reporting Standards, as applicable for profit oriented entities. The consolidated financial
statements also comply with International Financial Reporting Standards (‘IFRS’).
Certain comparative figures have been reclassified during the year for consistency with the current year presentation.
These classifications had no effect on the reported results of operations.
The financial statements were authorised for issue by the directors on 25 September 2020.
Basis of measurement
These financial statements have been prepared on the historical cost basis except for certain items as identified in
specific accounting policies.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The financial statements are presented in New
Zealand Dollars ($), which is the Company’s functional currency and are rounded to the nearest thousand ($000).
Transactions and balances
Transactions in foreign currencies are translated to the functional currency at the exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the functional currency at the exchange rate at that date.
BASIS OF PREPARATION
In March 2020, the World Health Organisation declared the outbreak of COVID-19 as a pandemic. The Group’s operations
were deemed an essential service and therefore continued throughout the various New Zealand Government COVID-19
alert levels. The Group’s primary focus in responding to the pandemic has been to protect the safety of its staff and to
implement appropriate controls around its production facilities. Access restrictions were put in place at all facilities,
including staff working from home where possible, additional cleaning and security provisions were also put in place on site
and other social distancing measures were adopted.
The COVID-19 pandemic has resulted in an increase in uncertainty in both global and local markets. Management assessed
the impact of COVID-19 on all aspects of the balance sheet, in particular the carrying value of receivables and inventory,
impairment of assets such as goodwill, and any impact from currency volatility during this period on the Group’s portfolio of
derivatives. Management has determined that there has been a modest impact on the balance sheet and the performance of
the Group in FY20.
The Group has continued to assess the impact of any changes to New Zealand Government COVID-19 alert levels which
have occurred subsequent to balance date and up to the date of the approval of the financial statements. The Group
has considered the impact of these changes and they are not expected to have a material impact on either the Group’s
operations or its financial statements.
COVID-19
The Group’s financial statements consolidate the financial statements of Synlait Milk Limited and its subsidiaries, accounted
for using the acquisition method, and the results of its associates, accounted for using the equity method. Intercompany
transactions and balances between group companies are eliminated upon consolidation.
BASIS OF CONSOLIDATION
Use of accounting estimates and judgements
The preparation of these financial statements in conformity with NZ IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates and assumptions.
Estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
Key sources of estimation uncertainty and key judgements relate to derecognition of financial assets, the assessment of
impairment of inventory and property plant and equipment, and the identification and valuation of goodwill and any other
indefinite life intangible assets. The individual notes in the financial statements provide additional information.
NOTES TO THE FINANCIAL STATEMENTS
PAGE 64 & 65ANNUAL REPORT 2020

SIGNIFICANT ACCOUNTING POLICIES
Standards, amendments and interpretations to existing standards that are not yet effective
There are no standards that are not yet effective and expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
Changes in accounting policies
During the period the Group adopted the following new standards;
NZ IFRS 16 ‘Leases’ (effective 1 August 2019)
Effective 1 August 2019, the Group has adopted NZ IFRS 16, which supersedes NZ IAS 17 Leases (NZ IAS 17) and related
interpretations. Under NZ IAS 17, leases were previously classified as either operating or financing for lessees based on
an assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the
underlying asset to the Group. As the Group’s leases were previously classified as operating, straight-line operating lease
expense was recognised over the lease term in the comparative period.
NZ IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees, with a right-of-use asset (“ROU
asset”) representing the Group’s right to use the underlying asset, and a lease obligation representing its obligation to make
lease payments. Amortisation expense for ROU assets and interest expense for lease obligations replaces the straight-line
operating lease expense recognised under NZ IAS 17.
The Group has applied NZ IFRS 16 using the modified retrospective approach, under which the initial ROU asset is
measured at an amount equal to the lease liability resulting in no impact to retained earnings at 1 August 2019. Short-term
and low-value recognition exemptions were applied, as well as practical expedients allowing for the use of hindsight to
assess the lease term for contracts with extension options and the exclusion of leases with a term of less than one year
remaining at the transition date. The Group also utilised the practical expedient which allowed for all existing contracts which
were previously identified as leases to be treated as leases under NZ IFRS 16. NZ IFRS 16 was not applied to contracts which
were not previously treated as leases under NZ IAS 17 as at transition date.
The impact of transition is outlined under Note 9, with changes in accounting policies outlined below:
Lease definition
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,
a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
An identified asset may be implicitly or explicitly specified in a contract, but must be physically distinct, and must not have
the ability for substitution by a lessor. The Company has the right to control an identified asset if it obtains substantially all
of its economic benefits and either pre-determines, or directs how and for what purpose the asset is used.
Measurement of right-of-use assets and lease obligations
On initial application, the Group elected to record ROU assets equal to the corresponding present value of the
remaining lease liability. Subsequent additions were measured at the initial amount of the lease obligation adjusted for
any lease payments made at, or before, the commencement date, plus any initial direct costs incurred, less any lease
incentives received.
The ROU asset is subsequently depreciated on a straight-line basis over the shorter of the term of the lease, or the
useful life of the asset determined on the same basis as the Group’s property, plant and equipment. The ROU asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease obligation.
The lease obligation is initially measured at the present value of lease payments remaining at the lease commencement
date, discounted using the Group’s incremental borrowing rate. Lease payments included in the measurement of the
lease obligation, when applicable, may comprise fixed payments, variable payments that depend on an index or rate,
amounts expected to be payable under a residual value guarantee and the exercise price under a purchase, extension or
termination option that the Group is reasonably certain to exercise.
The lease obligation is subsequently measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes
its assessment of whether it will exercise a purchase, extension or termination option. When the lease obligation is
remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset.
Recognition exemptions
The Group has elected not to recognise ROU assets and lease obligations for short-term leases that have a lease
term of twelve months or less or for leases of low-value assets. Payments associated with these leases are recognised
as an operating expense on a straight-line basis over the lease term within costs and expenses in the consolidated
Income Statement. The Group has also elected to apply a single discount rate to portfolios of leases with reasonably
similar characteristics.
Accounting policies, accounting estimates and judgements that summarise the measurement basis used and are
relevant to the understanding of the financial statements are provided throughout the accompanying notes and are
designated by a shaded area.
The accounting policies adopted have been applied consistently throughout the periods presented in these financial
statements, except for the change in accounting policy relating to the adoption of NZ IFRS 16.
PAGE 66 & 67ANNUAL REPORT 2020

This section covers the Group’s financial performance and includes the
following notes:
01 Revenue recognition and segment information 69
02 Expenses 71
03 Reconciliation of profit after income tax to net cash inflow
from operating activities 72
PERFORMANCE01. REVENUE RECOGNITION AND SEGMENT INFORMATION
Sales of goods
The Group manufactures and sells a range of milk powder, milk powder related products, liquid milk, cheese and
butter to customers. Revenue from contracts with customers is recognised when the control of the goods has been
transferred to customers, being at the point when the goods are delivered. Delivery of goods is completed (i.e. the
performance obligation is fulfilled) when the goods have been delivered pursuant to the terms of the specific contract
agreed with the customer and the risks associated with ownership have been transferred to the customer.
Revenue is measured according to the contracted price agreed with customers, which represents fair value of
the consideration received or receivable, net of returns, discounts and allowances. Revenue is only recognised
to the extent that it is highly probable that a significant reversal will not occur. The payment terms vary
depending on the individual contracts. No deemed financing components are present as there are no
significant timing differences between the payment terms and revenue recognition.
Description of segments
The Group operates in one industry, being the manufacture and sale of milk powder, milk powder related
products, liquid milk, cheese and butter. The Board makes resource allocation decisions based on expected cash
flows and results of the Group’s operations as a whole and the Group therefore has one segment.
20202019
$’000$’000
Dairy products1,302,0251,024,305
Other sundry income404898
Total income1,302,4291,025,203
PAGE 68 & 69
ANNUAL REPORT 2020

As a result of the recent acquisitions of both Synlait Foods (Talbot Forest) Limited and Dairyworks Limited, Management
is currently reviewing the way in which it internally reports on the business activities of the Group and this may result in
changes to how activities are reported to the Chief Operating Decision Maker in the future. Any changes made may
have a corresponding impact on segment results reported in the financial statements.
Revenues of approximately 64% (2019: 66%) are derived from the top three external customers. The proportion of sales
revenue by geographical area is summarised below:
20202019
China*5%8%
Rest of Asia19%24%
Middle East and Africa8%7%
New Zealand43%34%
Australia22%24%
Rest of World3%3%
Total100%100%
02. EXPENSES
20202019
$’000$’000
The following items of expenditure are included in cost of sales
Depreciation and amortisation38,85124,289
Employee benefit expense78,74848,711
KiwiSaver contributions1,6561,166
Export freight11,1049,524
Rent and storage2,471874
Increase/(decrease) in inventory provision1,702(1,805)
Decrease in onerous contract provision(156)(809)
The following items of expenditure are included in sales and distribution
Depreciation and amortisation5,9361,625
Employee benefit expense13,13710,195
KiwiSaver contributions376252
Rent and storage1,2843,637
The following items of expenditure are included in administrative and operating
Depreciation and amortisation3,2731,725
Employee benefit expense21,46717,986
KiwiSaver contributions618480
Information services5,1183,502
Directors fees802752
Share based payments expense523644
Impairment of intangible assets1,561123
Consultancy3,2682,768
Strategic Initiatives1,362162
Deloitte services included in administrative and operating expenses
Statutory audit fee276185
Half year accounts review5745
Other assurance services13077
Taxation compliance5369
516376
The year on year increase in some expenditure categories is in part due to the acquisition of Dairyworks Limited and Synlait Foods
(Talbot Forest) Limited. These two subsidiaries contributed $1.4m to sales and distribution expenditure and $3.7m to administrative and
operating expenditure since 1 August 2019. Refer to Note 18 for further detail on both acquisitions.
* The Group operates in one principal geographical area being New Zealand. Although the Group sells to many different countries,
it is understood that a significant proportion of both infant nutritional and ingredients sales are ultimately consumed in China.
PAGE 70 & 71
ANNUAL REPORT 2020

03. RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
20202019
$’000$’000
Profit for the year75,20882,239
Non-cash and non-operating items
Depreciation and amortisation of non-current assets43,11227,639
Depreciation of right-of-use assets4,948-
Loss on sale of property, plant and equipment355147
Impairment of property, plant and equipment and intangible assets4,761123
Impairment recovery on property, plant and equipment(2,958)-
Share of (gain)/loss from associate(33)580
Non-cash share based payments expense523644
Interest costs classified as financing cash flow19,7778,819
Interest received classified as investing cash flow(134)(1,232)
Loss on derecognition of financial assets1,7471,842
Deferred tax9,2914,341
(Gain)/loss on derivative financial instruments(23)22
Unrealised foreign exchange losses/(gains)6(143)
Movements in working capital
Decrease/(increase) in trade and other receivables1,833(14,788)
(Increase) in prepayments(2,850)(5,214)
(Increase) in inventories(104,533)(19,444)
(Increase)/decrease in goods and services tax refundable(2,709)2,846
Increase in trade and other payables34,67346,306
(Decrease)/increase in current tax liabilities(4,659)1,828
Working capital items acquired27,205-
Net cash inflow from operating activities105,540136,555
WORKING CAPITAL
The working capital section gives information about the short term assets and
liabilities of the Group. This section includes the following notes:
04 Trade and other receivables 74
05 Inventories 78
06 Trade and other payables 79
PAGE 72 & 73ANNUAL REPORT 2020

04. TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers for merchandise sold or services performed in
the ordinary course of business. If collection is expected in one year or less they are classified as current assets. If
not, they are classified as non-current assets.
Impairment
The Group recognises a loss allowance for expected credit losses (“ECL”) on trade and other receivables. The Group
measures the provision for ECL using the simplified approach to measuring ECL which uses a lifetime expected loss
allowance for all trade receivables. The Group’s credit loss model requires the Group to account for expected credit
losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since
initial recognition of the financial assets. Therefore, it is no longer necessary for a credit event to have occurred
before credit losses are recognised.
The model is based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected
life of a financial instrument. The expected credit loss is estimated as the difference between all contractual cash
flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to
receive, discounted at the original effective interest rate.
The Group writes off a financial asset when there is information indicating that the debtor is in such severe financial
difficulty and there is no reasonable and realistic prospect of recovery.
Furthermore, other impairment losses on an individual basis are determined by an evaluation of the exposures on an
instrument by instrument basis. All individual instruments that are considered significant are subject to this approach.
Credit Risk Management
The Group activities expose it to credit risk which refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Trade and other receivables are potentially subject
to credit risk. The Group performs credit evaluations on trade customers. The Group continuously monitors the
credit quality of its major receivables and does not anticipate non-performance of those customers, nor has
there been historical non-performance of these customers. The Group also maintains strict controls for any credit
reviews such as credit increases.
The receivables assignment processes ensure that the Group’s trade receivables are materially managed in an
efficient and effective basis.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum
exposure to credit risk.
Included in trade receivables are debtors which are past due at balance date, as payment was not received within 30
days, and for which no provision has been made as there has not been a significant change in credit quality and the
amounts are still considered fully recoverable. No collateral is held over these balances and trade credit insurance
cover was not obtained in respect of these receivables. Interest is not charged on overdue debtors.
In the past six financial years, the Group has not written off any bad debts, although it has recognised provisions
for debts when collection was considered doubtful. The historical analysis of bad debts on a customer basis
assists in the determination of any increases in credit risk since initial recognition. There are no significant
credit risk concentrations as at 31 July 2020. Three customers represent 70% of the overdue receivables. There
were no other forward looking indicators to indicate increases in credit risk. Refer to the basis of preparation section
of the accounts for further detail on the impact of COVID-19 on receivables.
For cash and cash equivalents the Group has determined that all bank balances have low credit risk at each
reporting period as they are held by reputable international banking institutions.
The Group has not changed its overall strategy regarding the management of risk from 2019.
20202019
$’000$’000
Trade receivables56,48458,076
Provision for doubtful and impaired receivables(977)(395)
Net trade receivables55,50757,681
Other receivables7,5504,252
Total receivables63,05761,933
PAGE 74 & 75
ANNUAL REPORT 2020

04. TRADE AND OTHER RECEIVABLES (CONTINUED)
20202019
$’000$’000
Overdue by
0 to 30 days5,9506,021
30 to 60 days54960
Over 60 days2,725 1,044
Total overdue trade receivables9,224 7,125
(a) Impaired receivables
As at 31 July 2020, trade receivables of $9.2m were overdue (2019: $7.1m). These relate to a number of independent
customers for whom there is no recent history of default. The majority has since been collected but $3.9m remains
unpaid which is expected to be collected in the 2021 financial year. The aging analysis of these overdue trade
receivables is as follows:
(b) Allowance for bad and doubtful receivables
The Group has recognised a loss of $0.4m in relation to unrecoverable trade receivables during the year (2019: $0.3m).
This relates to debtors that are overdue by more than 60 days. The Group has also recognised a loss of $0.1m for
estimated receivables impairment under NZ IFRS 9 Financial Instruments (2019: $0.1m).
(c) Trade and other receivables
Accounts receivable are amounts incurred in the normal course of business.
Receivables denominated in currencies other than the functional currency comprise NZ$38.5m (2019: $52.6m) of USD
and AUD denominated trade receivables.
(d) Derecognised financial assets
The Group has derecognised trade receivables that have been sold to two banks under the terms of receivables
purchase agreements entered into during January 2015 and January 2016. The Group routinely assess the terms
of the agreements and has determined that substantially all the risks and rewards have been transferred
to the banks. Receivables selected for assignment are with customers with strong credit ratings and good
payment histories. This minimises the risk (and therefore consequences) of late payment or default, as well as
resulting in little volatility in the present value of future cash flows in relation to assigned receivables under the
various scenarios detailed in the terms of the two agreements. An evaluation of external evidence of credit risk
has also been performed for each customer. The Group has assigned $131.3m of receivables as at 31 July 2020
(2019: $109.0m).
The Group has assessed its continuing involvement in the assigned receivables and determined that the
fair value of continuing involvement is immaterial. The Group reassesses the facility for qualification for
derecognition at each reporting date, when the terms of the facility are amended, and assesses each new
customer at the initial assignment of a receivable. No new customers were assigned during the period.
If the Group’s customers defaulted on all trade receivables that have been derecognised at balance date, the Group
would be required to pay a late payment charge of $5,351 per day (2019: $9,003) for each day that these receivables
remain overdue, assuming that market conditions remain unchanged from reporting date. The likelihood that debtors
will fall overdue or remain overdue for a long period of time is small, given the strong credit ratings and good payment
histories of the customers whose receivables have been selected for assignment.
The loss for the period of $1.7m (2019: $1.8m) arising from derecognition of assigned receivables is the discount paid to
the banks for acquiring these receivables.
PAGE 76 & 77ANNUAL REPORT 2020

05. INVENTORIES
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where
applicable, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity. Cost is determined on a weighted average basis and in the
case of manufactured goods, includes direct materials, labour and production overheads. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale.
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
Key management judgement is applied in assessing inventory impairment, and therefore net realisable value
of inventory. Impairment is tested in three ways, stock provision, onerous contracts provision, and inventory
impairment. The stock provision considers the condition of inventory and therefore requires a high level of
management judgement, whereas the onerous contracts and impairment calculations are largely formulaic.
The stock provision tests for the physical impairment of both raw materials and finished goods. Physical impairment
can be for a variety of reasons, including damage, expiry, or obsolescence. Management judgement is required as
often indicators of impairment can be removed through further investigation or rework meaning that no write-down
to net realisable value is required. Management consider historical rework process results and future rework plans
in making that judgement.
Estimates are required in relation to net realisable value, which is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and selling expenses. Net realisable value is determined
by reference to historic achieved market prices, future contracted sales and global dairy trade auction results.
Reviewing the net realisable values is carried out by management on a monthly basis, using their judgement in
determining expected future proceeds based on current indicators of the condition of inventory.
A key management estimation in determining inventory cost is the Monthly Milk Price which is derived from a
forecast milk price for the year. The Monthly Milk Price forms a key component of the product cost through the year.
20202019
$’000$’000
Raw materials at cost71,30540,058
Work in progress at cost11,573-
Finished goods at cost178,336118,090
Finished goods at net realisable value8,1706,701
Total inventories269,384164,849
Raw material inventories at $71.3m (13,614 MT) have increased (2019: $40.1m, 11,307 MT), primarily due to the acquisitions
of subsidiaries. The tonnage has increased at a slower rate than the value as Synlait Milk Limited holds less raw materials
by volume but comparatively more high-value infant additives.
Finished goods have increased to $186.5m (32,109 MT) (2019: $124.8m, 23,318 MT). The increase relates to inventory held
by subsidiaries and an increased holding of our core infant formula products. Finished goods held at net realisable value
have increased as a result of our acquisitions of subsidiaries.
The cost of inventories recognised as an expense during the year was $1,098.3m (2019: $838.0m). The cost of inventories
recognised as an expense includes $10.9m (2019: $7.4m) in respect of write downs of inventory to net realisable value.
The total inventory provision as at reporting date was $2.0m, of which $1.8m related to finished goods and $0.2m to raw
materials (2019: $0.3m, all related to finished goods). The increase primarily relates to production in late May which did not
pass our stringent quality standards.
In addition, the total onerous contracts provision as at reporting date was $0.3m (2019: $0.5m).
06. TRADE AND OTHER PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or
less otherwise they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value plus any directly attributable transaction costs and
are subsequently measured at amortised cost using the effective interest method. Payables that are settled within
a short duration are not discounted.
20202019
$’000$’000
Trade payables106,94282,122
Accrued expenses118,853126,690
Employee entitlements12,8097,208
Other payables166 -
Total trade and other payables238,770 216,020
Payables denominated in currencies other than the functional currency comprise NZ$11.9m (2019: $0.5m) of USD, EUR and AUD
denominated trade payables and accruals.
PAGE 78 & 79
ANNUAL REPORT 2020

LONG TERM ASSETS
The assets section provides information about the long term investments made
by the Group to operate the business and generate returns to shareholders.
This section includes the following notes:
07 Property, plant and equipment 81
08 Intangible assets 84
09 Leases 88
07. PROPERTY, PLANT AND EQUIPMENT
Recognition and measurement
Property, plant and equipment are initially measured at cost less accumulated depreciation.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a
working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on
which they are located.
When a self-constructed asset meets the definition of a qualifying asset under NZ IAS 23 Borrowing Costs, borrowing
costs directly attributable to the construction of the asset are capitalised until such a time as the asset is substantially
ready for its intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
When major components of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost
can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised
in profit or loss as incurred.
Depreciation
Depreciation of property, plant and equipment is recognised in profit or loss on a straight line basis over the estimated
useful lives of each part of an item of property, plant and equipment. Land is not depreciated.
Capital work in progress is not depreciated. The total cost of this work is transferred to the relevant asset category on
the completion of the project and then depreciated.
Estimation and judgement is also required in the selection and application of useful lives. It is management’s best
estimate that the useful lives adopted adequately reflect the flow of resources and the economic benefits required and
derived in the use and servicing of property, plant, and equipment.
The estimated useful lives for the current and comparative periods are as follows:
Buildings 10 - 50 years
Plant and equipment 3 - 35 years
Fixtures and fittings 2 - 25 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
PAGE 80 & 81ANNUAL REPORT 2020

Impairment
Estimation and judgement is required in the impairment of property, plant, and equipment. The Group estimates or
exercises judgement in assessing indicators of impairment, forecasting future cash flows and determining other key
assumptions used for assessing fair values (less costs of disposal) or value in use.
LandBuildingsPlant
and
Equipment
Fixtures and
Fittings
Capital
Work in
Progress
Total
$’000$’000$’000$’000$’000$’000
Cost
Balance as at 1 August 20187,457136,711419,8499,55780,675654,249
Additions27,500---306,100333,600
Reclassification/transfer-46,45795,6104,499(146,566)-
Disposals-(127)(2,251)(1,283)-(3,661)
Balance as at 31 July 201934,957183,041513,20812,773240,209984,188
Additions----129,381129,381
Additions through business combinations (note 18)1,3504,61026,0602,02123334,274
Reclassification/transfer458103,202185,44111,213(300,314)-
Impairment--(1,050)-(2,301)(3,351)
Disposals-(75)(2,777)(746)-(3,598)
Balance as at 31 July 202036,765290,776720,88225,26267,2081,140,893
Accumulated depreciation
Balance as at 1 August 2018-18,36092,8475,373-116,580
Depreciation (note 2)-4,23620,0601,403-25,699
Disposals-(44)(1,964)(1,283)-(3,291)
Balance as at 31 July 2019-22,552110,9435,493-138,988
Depreciation (note 2)-6,90929,8693,177-39,955
Impairment--(151)--(151)
Disposals-(33)(2,300)(668)-(3,001)
Balance as at 31 July 2020-29,426138,3638,000-175,789
Carrying amounts
As at 31 July 201934,957160,489402,2657,282240,209845,202
As at 31 July 202036,765261,350582,52117,26067,208965,104
07. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(a) Impairment
During the period, property, plant, and equipment have been examined for impairment. A $3.2m (2019: $nil) impairment
charge has been recognised to reflect the write-down of select assets to the higher of their fair value less costs of
disposal (FVLCOD) and value-in-use. Of the $3.2m impairment charge, $3.0m related to the write-down of blending and
canning over-cap equipment determined to not be fit for purpose due to engineering and design deficiencies and $0.2m
related to other projects which were assessed as being unlikely to provide future economic benefit. Compensation
for impairment of $3.0m has been recognised in profit and loss on the basis that the Group is contractually entitled to
compensation relating to the write-down of the blending and canning over-cap equipment which was determined to not
be fit for purpose. FVLCOD and value-in-use was determined to be $nil for all assets determined to be impaired.
(b) Capital work in progress
Assets under construction includes capital expenditure projects, until they are commissioned and transferred to property,
plant and equipment. Capital work in progress of $67.2m is significantly lower than 2019 ($240.2m) due to the completion
of Synlait Pokeno and resulting transfer from work in progress to fixed assets.
(c) Capitalised borrowing costs
During the year, the Group has capitalised borrowing costs amounting to $2.1m (2019: $7.5m) on qualifying assets.
Interest has been capitalised at the rate at which borrowing has been specifically drawn to fund the qualifying asset.
In the year, borrowing costs were capitalised for Synlait Pokeno and the Dry Store 4, enterprise resource planning
system, and separator capacity upgrade projects. Borrowing costs continue to be capitalised for the Dry Store 4 and
enterprise resource planning system upgrade projects.
PAGE 82 & 83ANNUAL REPORT 2020

08. INTANGIBLE ASSETS
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the cost of the acquisition over the
net of the fair values of the assets and liabilities of the subsidiaries acquired. Goodwill is tested for impairment
annually and is carried at cost as established at the date of acquisition of the subsidiary, less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to cash-generating units (CGU) that are expected to
benefit from the business combination in which the goodwill arose. The recoverable amount of CGUs is the higher
of fair value less costs to sell and value in use. If this recoverable amount is less than the carrying amount of the
CGU an impairment loss is recognised immediately in the profit and loss, and it is not subsequently reversed.
Brands
Purchased brands have been assessed as indefinite life intangible assets, after considering factors such as the
expected use of the assets, the period of legal control, the typical product life cycle of these assets, the industry in
which the assets are operating, and the level of maintenance expenditure required. Purchased brands are initially
recognised at fair value if acquired as part of a business combination, and are tested for impairment annually,
or more frequently if there are any indicators of impairment, on the same basis as goodwill.
Patents, trademarks and other rights
Separately acquired patents and trademarks are shown at historical cost. Patents and trademarks have a finite
useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight line
method to allocate the cost of patents and trademarks over their estimated useful lives of 10 years.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised on a straight line basis over their estimated useful lives of 3 to 10 years.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the Group are recognised as intangible assets.
New Zealand Units (NZU)
New Zealand Units are purchased to offset carbon emissions under the New Zealand Emissions Trading Scheme.
The units are measured at cost.
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether
there is any indication of impairment.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount.
A CGU is the smallest identifiable asset group that generates cash flows that are largely independent from other
assets and groups.
Impairment losses recognised in respect of CGU’s are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of any other assets in the unit (or group of units) on a
pro rata basis.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss has been recognised. An impairment loss in relation to
goodwill is not reversed.
PAGE 84 & 85ANNUAL REPORT 2020

08. INTANGIBLE ASSETS (CONTINUED)
GoodwillBrandsPatents,
Trademarks
and Other
Intangibles
Computer
Software
Intangibles
in Progress
New
Zealand
Units
Total
$’000$’000$’000$’000$’000$’000$’000
Year ended 31 July 2019
Opening net book amount (restated)6,026-3524,5323,2002,96717,077
Additions--4973,1707,1175,76516,549
Development costs recognised as an asset----(3,667)-(3,667)
Amortisation charge (note 2)--(131)(1,809)--(1,940)
Asset disposals/surrendered----(123)(1,756)(1,879)
Closing net book value (restated)6,026-7185,8936,5276,97626,140
Year ended 31 July 2019
Current-----3,6863,686
Non-current6,026-7185,8936,5273,29022,454
Closing net book value (restated)6,026-7185,8936,5276,97626,140
Year ended 31 July 2020
Opening net book value6,026-7185,8936,5276,97626,140
Additions--9085,23411,3284,13821,608
Acquisition through business combination (note 18)59,51917,545107263160-77,594
Development costs recognised as an asset--2515(6,183)-(6,143)
Impairment (note 2)----(1,561)-(1,561)
Amortisation charge (note 2)--(344)(2,813)--(3,157)
Asset disposals/surrendered-----(2,203)(2,203)
Closing net book value65,54517,5451,4148,59210,2718,911112,278
Year ended 31 July 2020
Current-----4,2304,230
Non-current65,54517,5451,4148,59210,2714,681108,048
Closing net book value65,54517,5451,4148,59210,2718,911112,278
Intangibles in progress of $10.3m at balance date is predominantly constituted of project to date spend on systems and
process development.
The opening goodwill balance for the year ended 31 July 2019 has been restated to correct an immaterial prior period error
which was identified during the current year. Please refer to Note 18 for further detail.
*This range includes a 30% decrease in Talbot Forest branded FY21 sales, reflecting a conservative downside resulting from the recent
voluntary recall of Talbot Forest branded cheese from customers throughout New Zealand. Refer to Note 18 for further information on
the brand assets acquired.
(a) Impairment tests for indefinite life intangibles
As at 31 July 2020 management has determined that there is no impairment of any CGU containing goodwill.
For the purposes of goodwill impairment testing, goodwill has been allocated to two CGU groups; the Auckland
blending and canning CGU and consumer foods CGU. The recoverable amounts of the CGU’s have been determined
based on value in use.
The value-in-use calculation uses five year future cash flows based on Board approved business plans, due diligence
performed as part of the acquisition, and managements past experience. Based on projected future cash flows,
management has determined that the recoverable amount of the CGU’s exceeds the combined carrying values and
therefore goodwill is not impaired. The business plans were modelled using the following key assumptions:
20202019
Annual revenue growth rates(0.6%) - 7.9%0.0%
Allowance for increase in expenses1.9% - 4.0%2.5%
Pre-tax discount rate10.7% - 15.2%11.8%
Terminal growth rate0.0% - 2.0% 0.0%
20202019
Annual revenue growth rates(30.0%)* - 7.9%0.0%
Allowance for increase in expenses1.9% - 4.0%2.5%
Royalty rate25.0%0.0%
Post-tax discount rate8.5% - 11.2%8.5%
Terminal growth rate0.0% - 2.0% 0.0%
Indefinite life intangibles, which is comprised entirely of brands, has been calculated using the relief from royalty method.
The impairment testing was modelled using the following key assumptions:
Management has carried out a sensitivity analysis and believe that any reasonably possible change in the key assumptions
would not cause the book value of any of the CGU’s, or groups of CGU’s, to exceed their recoverable amount.
PAGE 86 & 87ANNUAL REPORT 2020

09. LEASES
The Group’s leased assets include buildings and plant and equipment. Effective 1 August 2019, the Group adopted
NZ IFRS 16 as outlined in the significant accounting policies section, recognising ROU assets and lease obligations of
$7.2m. The following table reconciles the Group’s lease commitments disclosed in the consolidated financial statements
as at 1 August 2019, to the lease obligations recognised on initial application of NZ IFRS 16:
Lease commitments, 31 July 20198,902
Recognition exemptions for short-term and low-value leases(2,444)
Discounted using the incremental borrowing rate at 1 August 2019(683)
Lease remeasurements1,417
Lease obligations recognised at 1 August 20197,192
Lease obligations were measured at the present value of remaining lease payments at the transition date, discounted at
the Group’s incremental borrowing rate. The Group’s weighted average rate applied at 1 August 2019 was 3.49%.
BuildingsPlant and
Equipment
Total
$’000$’000$’000
RIGHT-OF-USE ASSETS
Cost
Balance as at 1 August 20196,7264667,192
Additions and acquisitions6,497606,557
Acquisitions through business combinations (note 18)8,9927089,700
Foreign exchange differences(9)-(9)
Balance as at 31 July 202022,2061,23423,440
Depreciation
Balance as at 1 August 2019---
Depreciation4,7022464,948
Foreign exchange differences(5)-(5)
Balance as at 31 July 20204,6972464,943
Carrying amounts
Balance as at 1 August 20196,7264667,192
Balance as at 31 July 202017,51098718,497
Total
$’000
LEASE OBLIGATIONS
Contractual, undiscounted cash flows associated with the Group’s lease obligations are as follows:
Within one year5,061
Between one and five years15,015
Beyond five years2,443
Total undiscounted lease obligations22,519
Discounted lease obligations recognised on the Company’s consolidated balance sheet are as follows:
Current4,422
Non-current14,838
Total discounted lease obligations19,260
Interest expense on lease obligations for the year ended 31 July 2020 was $0.45m and is included in finance expense. Operating lease
expenses relating to short-term and low-value leases not included in the measurement of lease obligations for the year ended 31 July
2020 were $1.4m.
PAGE 88 & 89
ANNUAL REPORT 2020

DEBT AND EQUITY
The debt and equity section gives information about the Group’s capital
structure and financing costs related to this structure. This section includes the
following notes:
10 Finance income and expenses 91
11 Loans and borrowings 92
12 Share capital 94
13 Share based payments 95
14 Reserves and retained earnings 97
10. FINANCE INCOME AND EXPENSES
Interest income is recognised using the effective interest method. When a loan or receivable is impaired,
the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted
at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
Interest income on impaired loans and receivables is recognised using the original effective interest rate.
Interest expense on borrowings, bank and facility fees and transaction costs are recognised in the income
statement over the period of the borrowings, using the effective interest rate method, unless such costs relate
to funding capital work in progress. Interest expense on lease obligations are also recognised in the income
statement in accordance with NZ IFRS 16, which was adopted by the Group during the period. Refer to Note 9 and
Changes in accounting policies for further detail.
20202019
$’000$’000
Interest income on loans and deposits1341,232
Total finance income1341,232
Interest and facility fees(21,414)(16,345)
Capitalised borrowing cost2,0897,526
Interest on leases(452)-
Total finance costs(19,777)(8,819)
Loss on derecognition of financial assets(1,747)(1,842)
Net finance costs(21,390)(9,429)
PAGE 90 & 91
ANNUAL REPORT 2020

11. LOANS AND BORROWINGS
Interest bearing liabilities are recognised initially at fair value, net of transaction costs incurred. Interest bearing liabilities
are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the profit and loss component of the statement of comprehensive income over the
period of the borrowings using the effective interest method.
20202019
Drawn Facility
Amount
Transaction
Costs
Carrying
Amount
Drawn Facility
Amount
Transaction
Costs
Carrying
Amount
$’000$’000$’000$’000$’000$’000
Working capital facility NZD68,910-68,91047,240-47,240
Working capital facility USD33,927-33,92752,386-52,386
Current liabilities102,837-102,83799,626-99,626
Retail bonds180,000(2,987)177,013---
Revolving credit facility250,000(259)249,741250,000(518)249,482
Non-current liabilities430,000(3,246)426,754250,000(518)249,482
(a) Terms of loans and borrowings
The revolving credit facility and working capital facility within the Group are secured under the terms of the General Security
Deed dated 26 June 2013, by which all present and future property is secured to the ANZ Bank and Bank of New Zealand.
The Group facilities include:
• A secured revolving credit facility (Facility A) of $150m maturing on 1 August 2021.
• A secured revolving credit facility (Facility B) of $50m maturing 1 August 2023.
• A secured revolving credit facility (Facility C) of $50m maturing 1 August 2023.
• A secured working capital facility of NZD $320m maturing on 30 September 2020.
The Group recently finalised an additional revolving credit facility of $100m commencing 1 October 2020, stepping down
to $70m on 1 January 2021 and maturing 1 May 2021. It also reduced the working capital facility of $320m to $250m and
extended it for a period of twelve months and extended revolving credit facility A to 1 October 2021.
The Group is subject to capital requirements imposed by its bank through covenants agreed as part of the lending facility
arrangements. The Group has met all externally imposed capital requirements for the twelve months ended 31 July 2020
and 31 July 2019.
Retail Bonds
Borrowings under the retail bond programme are supported by a Master Trust Deed and supplemented by the Series
Supplement entered into between the Group and the New Zealand Guardian Trust Company Limited. The retail bonds are
unsecured and unsubordinated. At 31 July 2020, the retail bonds had a fair value of $187.7m, based on NZDX valuation.
Nominal Interest
Rate %
Financial Year of
Maturity
Carrying
Amount 2020
Carrying Amount
2019
Secured revolving credit facility (Facility A, B & C) - ANZ/BNZ1.48 %2021, 2023250,000250,000
Secured working capital facility - ANZ/BNZ - USD1.26 %202033,92752,386
Secured working capital facility - ANZ/BNZ - NZD1.50 %202068,91047,240
Subordinated retail bonds3.83 %2025180,000-
The nominal interest rate is calculated by adding the BKBM rate for NZD facilities, US LIBOR rate for USD facilities and
the applicable margin rate. It excludes line fees and swap costs. Nominal interest rate for the subordinated retail bonds
excludes transaction costs.
PAGE 92 & 93ANNUAL REPORT 2020

12. SHARE CAPITAL
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a
deduction from the proceeds.
During the reporting period, 83,880 new ordinary shares were granted to participants of the Group’s Long Term Incentive
scheme as a result of share options that were granted under the scheme vesting and being converted to ordinary shares
(2019: nil). These shares were issued to the participants at no cost. Refer to Note 13 for further information.
2020 Shares2019 Shares20202019
$’000$’000
(a) Share capital
Ordinary shares
On issue at beginning of period179,223,028179,223,028268,074268,074
Issue of share capital under employee share plans83,880-470-
On issue at end of period179,306,908179,223,028268,544268,074
(b) Ordinary shares
All issued shares are fully paid and have no par value. Ordinary shares are entitled to one vote per share at meetings of
Synlait Milk Limited. All ordinary shares rank equally with regard to Synlait Milk Limited’s residual assets.
(c) Capital risk management
The Group’s capital includes share capital, retained earnings and reserves.
The Group’s policy is to maintain a sound capital base so as to maintain investor and creditor confidence and to sustain
future development of the business. The impact of the level of capital on shareholders’ return is also recognised and
the Group recognises the need to maintain a balance between the higher returns that might be possible with greater
gearing and the advantages and security afforded by a sound capital position.
The Group is subject to various security ratios within the bank facilities agreement.
The Group’s policies in respect of capital management and allocation are reviewed by the Board of Directors.
(d) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to shareholders by the weighted average number of shares outstanding during the period. Diluted
EPS is determined by adjusting the profit or loss attributable to shareholders and the number of shares outstanding to include
the effects of all potential dilutive shares.
Basic EPS for the 2020 financial period was 41.95 cents (2019: 45.89). Diluted EPS for the 2020 financial period was 41.85 cents
(2019: 45.77).
13. SHARE BASED PAYMENTS
(a) LTI share scheme
Under the LTI share scheme, participants receive Performance Share Rights (“PSRs”) which can be converted into
Ordinary Shares in Synlait Milk Limited in three financial years’ time provided performance hurdles have been
met during the assessment period (the date of award of the PSRs plus three financial years). The number of PSRs
granted to participants is set at one quarter of their base salary divided by Synlait Milk Limited’s share price on the
date of the award of the PSRs.
The PSRs consist of 50% Total Shareholder Return Rights (“TSR Rights”) and 50% Earnings Per Share Rights (“EPS
Rights”). The vesting for both TSR Rights and EPS Rights is determined in accordance with progressive vesting scales.
Synlait Milk Limited’s TSR must be greater than or equal to the 50th percentile of the constituents of the TSR Peer
Group over the assessment period for 50% of the TSR Rights to vest, scaled so that 100% of the TSR Rights vest
if Synlait Milk Limited’s TSR equals or exceeds the 75th percentile of the TSR Peer Group over the assessment
period. The TSR Peer Group is determined as at the date of award of the PSRs.
If Synlait Milk Limited’s EPS over the assessment period equals a Board approved EPS target, 50% of the EPS
Rights vest, scaled so that 100% of the EPS Rights vest if Synlait Milk Limited’s EPS over the assessment period
equals the Board approved EPS target plus 10%.
For either performance hurdle to be met, Synlait Milk Limited’s TSR must be positive over the assessment period.
No exercise price is payable upon exercise of a PSR, Synlait Milk Limited’s ordinary shares being delivered to a
participant for nil consideration. The LTI share scheme is an annual scheme with PSRs granted to Board approved
participants each year, noting however that the annual award is assessed over a three year period.
None of the above shares are held by the Group or its subsidiaries.
PAGE 94 & 95
ANNUAL REPORT 2020

The table below sets out the movement in LTI share scheme PSR’s during the year:
20202019
Outstanding 1 August472,934506,839
Granted during the year148,005134,582
Forfeited during the year(202,079)(168,487)
Exercised during the year(83,880)-
Total334,980 472,934
2020 PSRs2019 PSRs
Risk free rate0.83 %1.97 %
Volatility37.70 %35.84 %
Share price at entitlement date9.7910.81
Share price at grant date9.1 88.66
Total value of options granted at grant date ($000’s)783559
20202019
$’000$’000
Expenses for equity settled share based payment transactions523 644
During the period, 83,880 new ordinary shares were granted to participants of the LTI scheme. See Note 12 for further detail.
The fair value of the PSRs awarded at grant date has been determined by an independent third party valuer, using a Monte
Carlo simulation to model the total share return for Synlait and the TSR peer group. The fair value of the PSRs awarded,
along with key assumptions, are listed below:
The estimated value of the PSRs is amortised over the vesting period from grant date.
(b) Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognised during the period as part of employee benefit
expense were as follows:
14. RESERVES AND RETAINED EARNINGS
(a) Retained earnings
Movements in retained earnings were as follows:
Group
20202019
$’000$’000
Balance 1 August248,775166,536
Net profit for the year75,20882,239
Balance 31 July323,983 248,775
(b) Nature and purpose of reserves
(i) Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value hedging
instruments and the cost of cash flow hedging instruments. Cash flow hedging instruments relate transactions that have
not yet occurred.
(ii) Employee benefits reserve
The current year movement in the employee benefits reserve of ($0.3m) is comprised of the cumulative share based
payment expense for share options not yet vested of $0.5m (2019: $0.6m), vesting of rights during the period of ($0.5m)
(2019: $nil) and the related movement in deferred tax asset of ($0.3m) (2019: $0.1m)
(c) Dividends
No dividends were declared by the Group during the year.
PAGE 96 & 97ANNUAL REPORT 2020

FINANCIAL RISK
MANAGEMENT
The financial risk management section presents information about the Group’s
financial risk exposures and the financial instruments used to mitigate this. This
section includes the following notes:
15 Financial risk management 99
16 Financial instruments 106
15. FINANCIAL RISK MANAGEMENT
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk,
foreign exchange rate risk, and commodity price risk including forward exchange contracts, interest rate swaps
and commodity derivative contracts.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk
and commodity price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance. The Group uses derivative financial instruments to hedge certain risk exposures.
On 1 April 2020, the Group completed the acquisition of 100% of the shares of Dairyworks Limited (“Dairyworks”). See
Note 18 for further details. The acquisition has introduced additional financial risks similar to the financial risks of the
Group. Dairyworks currently has its own separate treasury policy from the Group’s policy with the need for its own risk
management parameters to reflect the business and markets that it operates in. Any deviation in Dairyworks’ policy
from the Group is made explicit in the notes below.
Market risk
Foreign exchange risk
The Group is exposed to foreign currency risk on its sales, which are predominantly denominated in US dollars.
The Group is also exposed to foreign currency risk on the purchase of raw materials for production and capital
equipment purchases from overseas. The Group enters into derivative arrangements in the ordinary course of
business to manage foreign currency risk. These instruments include forward exchange contracts, option collars and
vanilla options. These instruments enable the Group to mitigate the risk the variable exchange rates present to future
cash flows for sales receipts or purchases by fixing or limiting the exchange rate at which these cash receipts or
payments are exchanged into NZ dollars.
In relation to foreign exchange contracts are entered into based on forecast cash receipts or payments, variability
in the expected timing or amounts of future cash flows can lead to ineffective hedging. To mitigate the risk of
ineffectiveness the Group’s policy is to hedge a decreasing proportion of the risk exposure the further into the
future the exposure exists given the increasing uncertainty of cash flows. Additionally the Group’s policy is that the
proportion of risk exposure to be hedged changes on a monthly basis in response to the movement in market rates.
As at 31 July 2020, the Group has hedged 62% of its exposure to foreign exchange risk on sales, and 23% of its
exposure to foreign exchange risk on payables, over the following 2 years.
In addition to the above exposure, Dairyworks had entered USD $2.8m of foreign exchange contracts for confirmed
purchase of raw materials for production payable within several months of reporting date.
PAGE 98 & 99ANNUAL REPORT 2020

Interest rate risk
Interest rate risk is the risk that the value of the Group’s assets and liabilities will fluctuate due to changes in market
interest rates. The Group is exposed to interest rate risk primarily through its bank overdrafts and borrowings.
The Group manages its interest rate risk by using interest rate swaps to convert a portion of its floating rate debt to
fixed interest rates in relation to the benchmark interest rate element. As interest rate swaps are entered into based on
forecast debt levels, variability in future cash flows and debt levels can lead to ineffective hedging. To mitigate the risk
of ineffectiveness the Group’s policy is to hedge a decreasing proportion of the risk exposure the further into the future
the exposure exists given the increasing uncertainty of cash flows.
The Group has a Board approved treasury policy that sets the parameters to the extent of the cover taken. The policy
requires the Group to hedge 30% to 80% of its exposure to interest rate risk that matures within 3 years, 20% to 60% of
the risk that matures between 3 and 5 years, and 0% to 40% of the risk that matures between 5 and 10 years.
Commodity Price Risk
Dairy commodity price risk is the risk of volatility in profit and loss from the movement in dairy commodity prices to
which the Group may be exposed. Volatility in global dairy commodity prices can have an adverse impact on the
Groups earnings and milk price by eroding selling prices and increasing input costs.
The Group primarily manages its dairy commodity price risk by:
• Determining the most appropriate mix of products to manufacture based on the milk supply curve and global
demand for dairy products;
• Governing the length and terms of sales contracts so that sales revenue is reflective of current market prices
and is, where appropriate, linked to Global Dairy Trade (GDT) prices; and
• Using commodity derivative contracts to manage sales price volatility caused by fluctuations in GDT prices.
The Group has a Board approved treasury policy that sets the parameters under which commodity cover is to be
taken, including permitted derivative types and volume limits.
Credit risk
The Group’s exposure to credit risk is mainly influenced by its customer base and banking counterparties.
Management has a credit policy in place under which each new customer is rigorously analysed for credit
worthiness. Investments and derivatives are only entered into with reputable financial banks.
The carrying amount of financial assets represents the Group’s maximum credit exposure. The Group also retains
all the late payment risk in the derecognition of financial assets, as described in note 4.
Synlait Milk Limited guarantees all facilities held by Synlait Milk Finance Limited.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations as they fall due. The Group
evaluates its liquidity requirements on an ongoing basis and uses a variety of facilities to manage liquidity risk.
The Group has negotiated banking facilities sufficient to meet its medium term facility requirements.
The Group has internal limits in place in order to reduce exposure to liquidity risk, as well as having committed lines
of credit. It is the Group’s policy to provide credit and liquidity enhancements only to wholly owned subsidiaries.
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
Market risk
(i) Foreign exchange risk
The Group’s exposure to foreign currency risk at the reporting date was as follows:
20202019
USDAUDEURRMBUSDAUDEURRMB
$’000$’000$’000$’000$’000$’000$’000$’000
Trade receivables23,0393,479--34,46236-18
Trade payables(7,142)(605)(243)-(363)-(11)-
Working capital facility(22,487)---(34,300)---
PAGE 100 & 101
ANNUAL REPORT 2020

20202019
Weighted Average
Interest Rate
Nominal
Balance
Weighted Average
Interest Rate
Nominal
Balance
%$’000%$’000
Less than 1 year4.26 %57,2504.23 %79,500
1 to 2 years4.36 %40,0004.26 %57,250
2 to 3 years4.36 %40,0004.36 %40,000
3 to 4 years4.20 %30,0004.36 %40,000
4 to 5 years3.54 %15,0004.20 %30,000
5 to 6 years3.56 %10,0003.54 %15,000
6 to 7 years-%-3.56 %10,000
Post-tax impact on the
income statement
Post-tax impact on cash
flow hedge reserve (equity)
2020201920202019
$’000$’000$’000$’000
Interest rates
100 basis point increase in interest rate(2,879)(2,185)1,2521,764
100 basis point decrease in interest rate2,8792,185(1,303)(1,843)
Foreign exchange rates
5% increase in exchange rate--27,12723,985
5% decrease in exchange rate--(29,966)(26,504)
(ii) Interest rate risk
As at the reporting date, the Group had the following interest rate swap contracts outstanding:
The above balances include forward start swap contracts for various periods and do not necessarily reflect the current active
contracts held at any one point in time.
In managing interest rate risks, the Group aims to reduce the impact of short term fluctuations on the Group’s earnings.
Over the longer term, however, changes in interest rates will have an impact on profit.
(iv) Commodity derivatives
During the reporting period the Group entered into a small number of commodity derivative contracts to further support
the Group’s existing financial risk management strategy. The movement in the fair value of the commodity derivatives is
included within the cash flow hedge reserve.
Liquidity risk
The total repayments and associated maturity of financial liabilities as at balance date is reported below.
Less than
12 months
Between
1 and 2 years
Between
2 and 5 years
Over
5 years
Total
$’000$’000$’000$’000$’000
At 31 July 2020
Working capital facility102,837---102,837
Trade and other payables238,770---238,770
Loans and borrowings-149,790276,964-426,754
Derivative financial instruments14,1488352,7821,18818,953
Lease liabilities4,4223,2068,1063,52519,260
Total360,177153,831287,8524,713806,574
At 31 July 2019
Working capital facility99,626---99,626
Trade and other payables216,020---216,020
Loans and borrowings-149,58099,902-249,482
Derivative financial instruments27,9606,5693,20191638,647
Total343,606156,149103,103916603,775
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
20202019
Weighted Average
Exchange Rate
Nominal
Balance
Weighted Average
Exchange Rate
Nominal
Balance
USD$’000USD$’000
Exports
Less than 1 year0.6478379,5000.6895353,150
1 to 2 years0.6318192,0500.6765160,600
Imports
Less than 1 year0.6368(46,021)0.6752(42,467)
The Group’s exposure to foreign currency in the period ended 31 July 2020 is limited to its sales of dairy products,
purchases of raw materials for production, capital equipment purchases and USD working capital facility. As at the
reporting date, the Group had the following foreign exchange derivative instruments outstanding in respect of future
sales and purchases transactions:
(iii) Sensitivity analysis
The following table summarises the sensitivity of the Group’s profit and equity to interest rate risk and foreign exchange risk.
The sensitivity analysis below has been determined based on the mark to market impact on financial instruments of
changing interest and foreign exchange rates at balance date. The analysis is prepared assuming the amount of the
financial instrument outstanding at the balance sheet date was outstanding for the whole year, and by adjusting one
input whilst keeping the others constant.
PAGE 102 & 103ANNUAL REPORT 2020

Hedging instruments used
in cash flow hedges
Nominal
Amount
Carrying AmountHedge Accounted
Amounts in Cash
Flow Reserve
Total Cash Flow
Hedge Reserve
AssetsLiabilities Intrinsic Value
$’000NZD$’000NZD$’000NZD$’000NZD’000
31 July 2020
Foreign exchange risk
Foreign exchange contracts (USD)528,33736,41912,07824,34124,341
Interest rate risk
Interest rate swaps57,250-6,777(6,777)(6,777)
Commodity price risk
Dairy commodity futures (NZD)12,016195---
Total36,61418,85517,56417,564
At 31 July 2019
Foreign exchange risk
Foreign exchange contracts (USD)471,2832,32031,531(29,211)(29,211)
Interest rate risk
Interest rate swaps79,500-7,116(7,116)(7,116)
Commodity price risk
Dairy commodity futures (NZD)5,30783--8
Total2,40338,647(36,327)(36,319)
Cash flow hedges
The Group enters into cash flow hedges of highly probable forecast transactions and firm commitments, as described in
accounting policy section of this note.
The above table does not include USD $2.8m foreign exchange contracts held by Dairyworks as it has not elected to cash flow hedge.
Hedging instruments are located within the derivative financial instruments line items in the statement of financial position, classified as
assets or liabilities, current or non-current.
15. FINANCIAL RISK MANAGEMENT (CONTINUED)
20202019
Effects of Cash Flow
Hedges on Statement of
Comprehensive Income
Hedging Gains/(losses)
Recognised in Other
Comprehensive Income
Hedge Ineffectiveness
Recognised in Profit
or Loss
Hedging Gains/(losses)
Recognised in Other
Comprehensive Income
Hedge Ineffectiveness
Recognised in Profit
or Loss
$’000$’000$’000$’000
Foreign exchange risk
Forward exchange contracts53,551-(19,703)-
Foreign currency collars--154-
Interest rate risk
Interest rate swaps339-(1,578)-
Commodity price risk
Dairy commodity futures (NZD)(8)(299)(196)-
Total53,882(299)(21,323)-
Impact to reserves in equity
The impact of the Group’s hedge accounting policies on the reserves in equity is presented in the table below:
20202019
Hedge Reserves$’000$’000
Opening balance(26,148)(10,796)
Movements attributable to cashflow hedges:
Change in value of effective derivative hedging instruments16,841(29,589)
Reclassifications to the income statement as hedged transactions occurred37,0418,266
Tax (credit)/expense(15,087) 5,971
Total movement38,795(15,352)
Closing balance12,647 (26,148)
PAGE 104 & 105
ANNUAL REPORT 2020

16. FINANCIAL INSTRUMENTS
Classification
The Group classifies its financial assets in three categories: at amortised cost, at fair value through other
comprehensive income and at fair value through profit or loss. The classification of financial assets depends on the
business model within which the financial asset is held and its contractual cash flow characteristics.
The Group classifies its financial liabilities in two categories: at amortised cost and at fair value through profit or loss.
(i) Financial instruments at amortised cost
Financial assets are classified as measured at amortised cost if the Group’s intention is to hold the financial
assets for collecting cash flows and the contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest.
The Group currently classifies its cash and cash equivalents, restricted cash equivalents, accounts receivable and
other receivables as financial assets measured at amortised cost.
Financial liabilities are classified as measured at amortised cost using the effective interest method, with the
exception of those classified at fair value.
The Group currently classifies its accounts payable, accrued liabilities (excluding derivatives) and term debt as
financial liabilities measured at amortised cost.
(ii) Financial instruments at fair value through other comprehensive income (“FVOCI”)
The Group has elected to designate certain investments in equity instruments that are not held for trading as FVOCI
at initial recognition and to present gains and losses in other comprehensive income. Dividends earned from such
investments are recognised in profit or loss.
(iii) Financial instruments at fair value through profit or loss (“FVPL”)
Financial assets that do not meet the criteria for classification as measured at either amortised cost or FVOCI
are classified as FVPL.
Derivative financial instruments that are not in an effective hedge relationship are classified as FVPL.
Recognition and measurement
The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions
of the instrument.
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
financial assets not classified at fair value through profit or loss. Financial assets carried at fair value through profit or
loss are initially recognised at fair value, and transaction costs are expensed in the profit and loss component of the
statement of comprehensive income.
Where financial assets are subsequently measured at amortised cost, interest revenue, credit losses and
foreign exchange gains or losses are recognised in profit or loss. On derecognition, any gain or loss is
recognised in profit or loss. Financial liabilities subsequently measured at amortised cost are measured using
the effective interest method.
Where investments in equity instruments are designated as FVOCI, fair value gains and losses are recognised in other
comprehensive income. Dividends earned from such investments are recognised in profit or loss.
Where financial assets are subsequently measured at FVPL, all gains and losses are recognised in profit or loss.
A key management judgement is the assessment that substantially all the risks and rewards of ownership have been
transferred in the derecognition of financial assets.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the contractual obligations are discharged, cancelled or expired.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
As the Group’s financial instruments, with the exception of retail bonds, are not traded in active markets their fair value
is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance date.
All financial instruments held at fair value are included in level 2 of the valuation hierarchy as defined in NZ IFRS 13, with
the exception of the retail bonds, which are included in level 1. The retail bonds are listed instruments on the NZDX and
the Group is satisfied there is sufficient trading in these instruments to qualify as an active market.
PAGE 106 & 107ANNUAL REPORT 2020

The fair value of foreign currency forward contracts is determined using forward exchange rates at balance date.
The fair value of foreign exchange option agreements is determined using forward exchange rates at balance date.
The fair value of interest rate swaps is determined using forward interest rates as at reporting date. The fair value of
commodity derivatives is determined using NZX settlement prices.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there
is a current legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously. There are master netting agreements in place for derivative
financial instruments held, however these instruments have not been offset in the statement of financial position as they
do not currently meet the criteria for offset.
Impairment of financial assets
The Group has adopted the expected credit loss (“ECL”) model. For further detail please refer to Note 4.
The Group assesses whether there is evidence that a financial asset or group of financial assets is impaired,
with the exception of assets that are fair valued through profit or loss. A financial asset or a group of financial
assets can be impaired and the impairment losses are recognised in accordance with IFRS 9. The Group continues
to assess if historical and future objective evidence of impairment exists after the initial recognition of the asset.
Derivative financial instruments - hedge accounting
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk,
foreign exchange rate risk, and commodity price risk including forward exchange contracts, interest rate swaps, and
commodity derivative contracts.
Derivatives are initially recognised at fair value at the date the derivative contact is entered into and are
subsequently remeasured to fair value at each reporting date. For derivatives measured at fair value, the gain
or loss that results from changes in fair value of the derivative is recognised in earnings immediately, unless the
derivative is designated and effective as a hedging instrument. Hedges of highly probable forecast transactions or
hedges of foreign currency risk of firm commitments are designated as cash flow hedges by the Group, with the
exception for Dairyworks.
The full fair value of a hedging derivative is classified as a current asset or liability when the remaining term of the
hedged item is 12 months or less from balance date, or when cash flows arising from the hedged item will occur
within 12 months or less from balance date. The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining maturity of the hedged item is more than 12 months and no cash flows will occur
within 12 months of balance date.
16. FINANCIAL INSTRUMENTS (CONTINUED)
(i) Hedge accounting
The Group designates certain hedging instruments in respect of foreign currency risk and interest rate risk as cash
flow hedges. Hedges of risk on firm commitments and highly probably transactions are accounted for as cash flow
hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether
the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values
or cash flows of the hedged item.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in other comprehensive income and accumulated as a separate component of equity
in the hedging reserve. The gain or loss relating to the ineffective portion and reclassification adjustments are
recognised immediately in profit or loss, included in revenue for foreign exchange instruments and commodity
price derivatives, and finance costs for interest rate swaps.
Amounts recognised in the hedging reserve are classified from equity to profit or loss (as a reclassification
adjustment) in the periods when the hedged item is recognised in profit or loss, in the same line as the recognised
hedged item.
Hedge accounting is discontinued when the Group revokes the hedging relationships, the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss
recognised in the hedging reserve at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was recognised in the hedging reserve is immediately recorded in profit or loss.
The Group separates the intrinsic value and time value of vanilla option and collar contracts, designating only the
intrinsic value as the hedging instrument. The time value, including any gains or losses, is recognised in other
comprehensive income until the hedged transaction occurs and is recognised in profit or loss.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in the income statement.
PAGE 108 & 109ANNUAL REPORT 2020

At Amortised CostAt Fair Value Through
Other Comprehensive
Income
At Fair Value Through
Profit or Loss
Total
Financial assets$’000$’000$’000$’000
At 31 July 2020
Cash and cash equivalents5,887--5,887
Derivative financial instruments--36,61436,614
Trade and other receivables63,057--63,057
Instruments in equity-143-143
Total68,94414336,614105,701
At 31 July 2019
Cash and cash equivalents16,007--16,007
Derivative financial instruments--2,4032,403
Trade and other receivables61,933--61,933
Instruments in equity-110-110
Total77,9401102,40380,453
At Amortised CostAt Fair Value Through
Profit or Loss
Total
Financial liabilities$’000$’000$’000
At 31 July 2020
Derivative financial instruments-18,95318,953
Working capital facility102,837-102,837
Trade and other payables238,770-238,770
Borrowings426,754-426,754
Total768,36118,953787,314
At 31 July 2019
Derivative financial instruments-38,64738,647
Working capital facility99,626-99,626
Trade and other payables216,020-216,020
Borrowings249,482-249,482
Total565,12838,647603,775
(a) Financial instruments by category
All derivative financial instruments are designated in effective hedge relationships, with exception for derivative financial
instruments held by Dairyworks.
For instruments held at amortised cost, carrying amount is considered a reasonable approximation for fair value, with exception to
the Retail Bond.
16. FINANCIAL INSTRUMENTS (CONTINUED)OTHER
This section contains additional information regarding the performance of the
group during the financial year. This section includes the following notes:
17 Income tax 112
18 Business combinations 116
19 Other investments 120
20 Related party transactions 122
21 Contingencies 125
22 Commitments 126
23 Events occurring after the reporting period 127
24 Other accounting policies 127
PAGE 110 & 111ANNUAL REPORT 2020

17. INCOME TAX
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss
component of the statement of comprehensive income, except to the extent that it relates to items recognised
in either other comprehensive income or directly in equity. In these cases, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
New Zealand tax consolidated group
Synlait Milk Limited and its wholly-owned New Zealand controlled entity, Synlait Milk Finance Limited, form a tax
consolidated group. The New Zealand Dairy Company Limited, Eighty Nine Richard Pearse Drive Limited, Synlait
Foods (Talbot Forest) Limited and Dairyworks Limited are not members of the tax consolidated group.
20202019
$’000$’000
(a) Income tax expense
Current tax expense
Current tax on profits for the year(21,614)(29,220)
Current tax on prior period adjustments4,212721
Total(17,402)(28,499)
Deferred tax expense
Temporary differences(7,070)(3,433)
Changes in tax rates and laws2,229-
Prior year adjustments(4,473)(925)
Tax losses to carry forward2317
Total deferred tax(9,291)(4,341)
Income tax expense(26,693)(32,840)
(b) Reconciliation of effective tax rate
Profit before income tax101,901115,079
Income tax using the Group’s domestic tax rate - 28%(28,532)(32,222)
Non-deductible costs(889)(533)
Total(29,421)(32,755)
Prior year adjustments(261)(85)
Deferred tax credit relating to changes in tax rates and laws2,229-
Research and development tax credit779-
Other tax effects for reconciliation between accounting profit and tax expense(19)-
Total2,728(85)
Income tax expense(26,693)(32,840)
20202019
$’000$’000
(c) Imputation credits
Imputation credits available directly and indirectly to the shareholders of the Group98,00983,219
As part of the New Zealand Government’s COVID-19: Economic Response Package, depreciation deductions will be
reintroduced for new and existing industrial and commercial buildings from the 2020/21 tax year. The Group have determined
that, as a result of this legislative change, the tax base of certain assets has increased, reducing a taxable temporary
difference (deferred tax liability) previously recognised. The impact of these changes has resulted in a reduction in deferred
tax liabilities and a reduction in tax expense of $2.2m.
PAGE 112 & 113ANNUAL REPORT 2020

17. INCOME TAX (CONTINUED)
(d) Income tax recognised in other comprehensive income
The tax (charge)/credit relating to components of other comprehensive income is as follows:
(e) Deferred taxation
The balance comprises temporary differences attributable to:
Before TaxTax (Expense)/BenefitAfter Tax
$’000$’000$’000
31 July 2020
Cash flow hedges53,882(15,087)38,795
Other comprehensive income subject to tax53,882(15,087)38,795
31 July 2019
Cash flow hedges(21,323)5,971(15,352)
Other comprehensive income subject to tax(21,323)5,971(15,352)
20202019
$’000$’000
(restated)
Assets
Derivatives-10,170
Tax losses carried forward23112
Other items2,7932,128
Total deferred tax assets2,81612,410
Liabilities
Property, plant and equipment(47,632)(37,444)
Derivatives(4,918)-
Intangible assets(4,913)-
Total deferred tax liabilities(57,463)(37,444)
Total deferred tax(54,647)(25,034)
Balance
1 Aug 2018
Recognised
in Profit or
Loss
Recognised
in Other
Comprehensive
Income
Recognised
Directly in
Equity
Recognised
from a
Business
Combination
Prior Year
Adjustment
Balance 31
July 2019

Movements - Group
$’000
(restated)
$’000$’000$’000$’000$’000$’000
Property, plant and equipment(32,528)(4,165)---(751)(37,444)
Derivatives4,199-5,971---10,170
Other items1,287603-84-1552,128
Tax losses carried forward295(178)---(5)112
Total(26,747)(3,740)5,97184-(602)(25,034)
Balance
1 Aug 2019
Recognised
in Profit or
Loss
Recognised
in Other
Comprehensive
Income
Recognised
Directly in
Equity
Recognised
from a
Business
Combination
Prior Year
Adjustment
Balance 31
July 2020

Movements - Group
$’000 $’000$’000$’000$’000$’000$’000
Property, plant and equipment(37,444)(5,921)--227(4,495)(47,633)
Derivatives10,170-(15,087)---(4,918)
Other items2,1281,080-(389)(160)1342,793
Tax losses carried forward11223---(112)23
Intangible assets----(4,912)-(4,912)
Total(25,034)(4,818)(15,087)(389)(4,845)(4,473)(54,647)
The opening deferred tax balance relating to Plant, Property and Equipment for the year ended 31 July 2019 has been restated to
correct an immaterial prior period error which was identified during the current year. Please refer to Note 18 for further detail.
PAGE 114 & 115
ANNUAL REPORT 2020

18. BUSINESS COMBINATIONS
Acquisitions of businesses are accounted for using the acquisition method. The cost of the acquisition is
measured at fair value, which is calculated as the sum of the assets given, liabilities incurred or assumed, and
equity instruments issued by the Group, at acquisition date, in exchange for control of the acquiree. Acquisition
related costs are recognised in profit or loss as incurred. The results of subsidiaries acquired or disposed of
during the year are included in the Consolidated Income Statement from the date of acquisition or up to the date
of disposal as appropriate.
(a) Talbot Forest Cheese Limited
On 1 August 2019, the Group completed the acquisition of selected assets and liabilities of Talbot Forest Cheese Ltd (“TFC”)
for total consideration of $38.3m, including inventory. The acquirer was a newly incorporated company, Synlait Foods (Talbot
Forest) Limited. On the acquisition date, the Group paid $18.8m. Of the remaining consideration payable, $18.1m was applied
against an intercompany loan owed by the vendor to the Group and the remaining $1.4m was paid over the course of FY20
upon completion of pre-completion works and plant acceptance tests. The acquisition has been accounted for in accordance
with IFRS 3, Business Combinations.
The acquisition of TFC includes a cheese manufacturing plant located in Temuka, New Zealand, capable of
manufacturing a variety of cheese products with an annual production capacity of 12,000MT, along with a consumer
cheese brand. The acquisition excludes the Talbot Forest Cheese artisan factory in Geraldine, New Zealand.
The following summarises the consideration paid for TFC and amounts of assets acquired and liabilities assumed
recognised at the acquisition date:
August 1, 2019
$’000
Current Assets
Inventory2,520
Non-current Assets
Property, plant and equipment12,745
Land and buildings5,960
Brand1,700
Non-current Liabilities
Deferred Tax(708)
Total identifiable net assets at fair value22,217
Goodwill arising on acquisition16,132
Total consideration38,349
Less: Debt and accrued interest payable owed to the Group extinguished upon acquisition(18,077)
Net cash outflow on acquisition20,272
The land, buildings, plant and equipment, inventory, and brand have been recognised at acquisition date fair values
based on third party valuations. Goodwill arose in the acquisition of the business operations of TFC because the cost of
acquisition reflected the benefit of future cash flows above the current fair market value of the assets acquired, and the
synergies and future market benefits expected to be obtained from the cheese manufacturing plant and related brand.
Acquisition costs of $0.1m and $0.3m have been recognised in the income statements for the years ended 31 July 2020
and 31 July 2019, respectively.
Impact of the acquisition on the results of the Group
From the date of acquisition, TFC has contributed $11.5m to revenue and a loss of ($4.7m) to net profit after tax. Had the
combination not taken place, revenue of the Group from continuing operations would have been $1,290.5m, and the net
profit from continuing operations for the Group would have been $79.9m.
(b) Dairyworks Limited
On 1 April 2020, the Group completed the acquisition of 100% of the shares of Dairyworks Ltd. (“Dairyworks”). The
purchase price of Dairyworks was $112 million on the basis of a debt and cash-free business. The acquisition was priced
using a locked box mechanism whereby the equity price of Dairyworks was determined or “locked-in” based on an
effective date balance sheet of 30 September 2019.
Debt, working capital, and other purchase price adjustments, based on the 30 September 2019 locked box adjustments
resulted in final consideration of $63.6m being transferred to the vendors of Dairyworks. Immediately following
acquisition, the Group repaid $43.0m of outstanding debt and accrued interest which was assumed as part of the
acquisition, utilising existing banking facilities.
Dairyworks’ operations are located in Christchurch, New Zealand. It specialises in the processing, packaging, and
marketing of dairy products including cheese, butter, ice cream, and milk powder through it’s four brands Alpine, Rolling
Meadow, Dairyworks, and Deep South. Dairyworks is one of the largest sellers of everyday dairy products in the New
Zealand consumer market.
The acquisition has been accounted for in accordance with IFRS 3, Business Combinations. The following summarises
the consideration paid for Dairyworks and fair values of assets acquired and liabilities assumed recognised at the
acquisition date.
PAGE 116 & 117ANNUAL REPORT 2020

18. BUSINESS COMBINATIONS (CONTINUED)
August 1, 2020
$’000
Current Assets
Cash and cash equivalents10,932
Trade receivables26,508
Inventory31,474
Other current assets413
Non-current Assets
Intangible assets530
Deferred tax assets472
Capital work in progress233
Property, plant and equipment15,336
Right-of-use assets9,700
Brands15,845
Current Liabilities
Trade and other payables(29,137)
Current tax liabilities(4,573)
Loans and borrowings(43,224)
Lease liability - current(1,399)
Non-current Liabilities
Deferred tax liabilities attributable to fair value differentials(4,609)
Lease liability - non-current(8,301)
Total identifiable net assets at fair value20,200
Goodwill arising on acquisition43,387
Total consideration63,587
Purchase price112,000
Less: Effective date adjustment for working capital and net debt(40,441)
Less: Interim period and other adjustments(7,972)
Total consideration transferred63,587
Less: Cash and cash equivalents acquired(10,932)
Net cash outflow on acquisition52,655
The land, buildings, plant and equipment, inventory, and brands have been recognised at acquisition date fair values
based on third party valuations. Right of use assets have been recognised at acquisition date present values of
remaining lease payments.
The acquisition gave rise to brand assets for the Rolling Meadow, Alpine, Dairyworks, and Deep South brands. The
brands were valued using the relief from royalty method. Key assumptions used in the valuation of the brand assets
were: notional royalty rate (25.0%), annual revenue growth rate (2.0% to 5.2%), post-tax discount rate (13.5%), and
terminal growth rate (2.0%).
This error has had no impact on either the earnings per share or diluted earning per share of the Group in any of the reporting
periods affected.
2017201820192020
Balance sheet (extract)$’000$’000$’000$’000
Goodwill2,3832,3832,3832,383
Deferred tax liabilities(2,383)(2,383)(2,383)(2,383)
Increase/(decrease) to net assets----
Goodwill arose in the acquisition of the business operations of Dairyworks because the cost of acquisition reflected the
benefit of future cash flows above the current fair market value of the assets acquired, and the synergies and future
market benefits expected to be obtained from Dairyworks’ operations and related brands.
Acquisition costs of $0.8m and $0.1m have been recognised in the income statements for the years ended 31 July 2020
and 31 July 2019, respectively.
Impact of the acquisition on the results of the Group
From the date of acquisition, Dairyworks has contributed $81.5m to revenue and $2.5m to net profit after tax. Had the
combination not taken place, revenue of the Group from continuing operations would have been $1,220.5m, and the net profit
from continuing operations for the Group would have been $72.7m. Had the acquisition occurred on 1 August 2019, revenue of
the Group would have been $1,465.8m and net profit would have been $79.0m.
During FY20 the Group began to leverage synergies between Synlait Foods (Talbot Forest) Limited and Dairyworks by
establishing an integrated cheese value chain. For the purposes of goodwill impairment testing, the Group has treated Synlait
Foods (Talbot Forest) Limited and Dairyworks as a single consumer food service cash generating unit. See Note 8 for further
detail on goodwill and impairment testing.
(c) Prior Period Error
During the year, an immaterial prior period error was identified in relation to the recognition of the acquisition of Eighty-
Nine Richard Pearse Drive Limited (see Note 17 in the Group financial statements for the year ended 31 July 2017 for further
information on the acquisition).
As part of the acquisition, a building was acquired which was non-depreciable for tax purposes as it had an estimated useful
life of 50 years or greater (building cost of $8.5m). A deferred tax liability was not recognised on the building in accordance
with NZ IAS 12 Income Taxes and NZ IFRS 3 Business Combinations as the initial recognition exemption was incorrectly
applied. Had a deferred tax liability been recognised, goodwill recognised on the acquisition would have increased by $2.4m.
The Group has elected to correct the error in the current period to ensure accuracy of these balances going forward. Each of
the affected financial statement line items for the prior periods have been restated as follows
PAGE 118 & 119ANNUAL REPORT 2020

19. OTHER INVESTMENTS
Investments in associates
Associates are those entities in which the Group, either directly or indirectly, holds a significant but not a controlling
interest, and has significant influence. Investments in associates are accounted for using the equity method and are
measured in the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets.
Goodwill relating to associates is included in the carrying amount of the investment. Dividends reduce the carrying
value of the investment.
Associates
In January 2015, the Group acquired 25% of the shares of Sichuan New Hope Nutritionals, an infant formula company
registered in China. This company owns and markets the “Akara” and “E-Akara” infant formula brands in the Chinese
market, which are exclusively manufactured by Synlait Milk Limited.
The investment is not individually significant to the Group. The Group’s share of this equity accounted investment is as follows:
The carrying value of the investment in New Hope Nutritionals at balance date:
20202019
$’000$’000
Equity securities110110
Investment in associates33-
Total other investments143110
Synlait Milk Limited held, either directly or indirectly, interests in the following entities at the end of the reporting period:
Equity Holding

Name of entity
Country of
Incorporation
Class of
Shares
2020
%
2019
%
Synlait Milk Finance Limited (Subsidiary)New ZealandOrdinary100100
The New Zealand Dairy Company Limited (Subsidiary)New ZealandOrdinary100100
Eighty Nine Richard Pearse Drive Limited (Subsidiary)New ZealandOrdinary100100
Sichuan New Hope Nutritional Foods Co. Ltd (Associate)ChinaOrdinary2525
Synlait Business Consulting (Shanghai) Limited (Subsidiary)ChinaOrdinary100100
Synlait Foods (Talbot Forest) Limited (Subsidiary)New ZealandOrdinary100-
Dairyworks Limited (Subsidiary)New ZealandOrdinary100-
Dairyworks (Australia) Pty Limited (Subsidiary)AustraliaOrdinary100 -
20202019
$’000$’000
Gain/(loss) from continuing operations33 (580)
Total33 (580)
20202019
$’000$’000
Opening balance-580
Share of gains/(losses)33(580)
Total33-
PAGE 120 & 121
ANNUAL REPORT 2020

20. RELATED PARTY TRANSACTIONS
Parent entity
Bright Dairy Holding Limited hold 39.02% of the shares issued by Synlait Milk Limited (2019: 39.04%). Bright Dairy Holding
Limited is a subsidiary of Bright Food (Group) Co. Limited, a State Owned Enterprise domiciled in the Peoples’ Republic of China.
Other related entities
In June 2013, a subsidiary of Synlait Milk Limited, Synlait Milk Finance Limited, was set up primarily for holding all
banking facilities for the Group and related interest rate swaps. Funds are loaned to Synlait Milk Limited and interest is
charged at market rates.
In January 2015, the Group acquired 25% of the shares of Sichuan New Hope Nutritionals, an infant formula company
registered in China. This company owns and markets the “Akara” and “E-Akara” infant formula brands in the Chinese
market, which are exclusively manufactured by Synlait Milk Limited. New Hope Innovation (Hong Kong) Trading
Company Limited is a related entity of Sichuan New Hope Nutritionals and is engaged in the import and export of dairy
foods. Main products include whole milk powder, skim milk powder and whey powder. The company is the Hong Kong
operations of the Chinese New Hope Dairy group, New Hope Dairy.
In May 2017 Synlait Milk Limited acquired 100% of the share capital of The New Zealand Dairy Company Limited and
Eighty Nine Richard Pearse Drive Limited. The New Zealand Dairy Company Limited was constructing a blending and
canning plant in Auckland, which was subsequently sold to Synlait Milk Limited. The New Zealand Dairy Company
Limited is now a non-trading entity. Eighty Nine Richard Pearse Drive Limited owns the land and buildings at which the
Auckland blending and canning plant was constructed. Eighty Nine Richard Pearse Drive Limited leased its land and
buildings to The New Zealand Dairy Company Limited, and now leases them to Synlait Milk Limited.
In May 2019, Synlait Business Consulting (Shanghai) Limited was incorporated. The wholly owned foreign entity started
operations from 1 August 2019 and the principal activity of the entity is to provide services to assist Synlait to market
products in China.
In August 2019, the Group acquired selected assets and liabilities of Talbot Forest Cheese Limited. The acquirer was a
newly incorporated company, Synlait Foods (Talbot Forest) Limited. Synlait Foods (Talbot Forest) Limited manufactures a
variety of cheese products. Synlait Milk Limited supplies various dairy products to Synlait Foods (Talbot Forest) Limited,
most notably raw milk.
In April 2020, Synlait Milk Limited acquired 100% of the share capital in Dairyworks Limited. Dairyworks Limited
specialises in the processing, packaging, and marketing of dairy products, including cheese, butter, ice cream and milk
powder. Synlait Foods (Talbot Forest) Limited supplies manufactured cheese products to Dairyworks Limited. Dairyworks
Limited owns an Australian subsidiary, Dairyworks (Australia) Pty Limited.
Refer to Note 18 for further information on the acquisitions of both Synlait Foods (Talbot Forest) Limited and Dairyworks
Limited which occurred in the year ended 31 July 2020
Key management and personnel compensation
Other than their salaries and bonus incentives, there are no other benefits paid or due to directors and executive
officers as at 31 July 2020. The total short-term benefits paid to the key management and personnel is set out below.
20202019
$’000$’000
Short term benefits6,3985,773
Share based payments expenses (note 13)523644
PAGE 122 & 123
ANNUAL REPORT 2020

20. RELATED PARTY TRANSACTIONS (CONTINUED)21. CONTINGENCIES
(c) Outstanding balances
The following balances are outstanding at the reporting date in relation to transactions with related parties other than key
management personnel:
20202019
$’000$’000
Purchase of goods and services
Bright Dairy and Food Co Ltd - Directors fees259196
Sale of goods and services
Bright Dairy and Food Co Ltd - Sale of milk powder products4,0746,464
Bright Dairy and Food Co Ltd - Reimbursement of costs-(91)
New Hope Innovation (Hong Kong) Trading Company Limited - Sale of milk powder products1,773-
(b) Transactions with other related parties
20202019
$’000$’000
Current receivables (sales of goods and services)
Bright Dairy and Food Co Ltd - Sale of milk powder products-1
Bright Dairy and Food Co Ltd - Reimbursement of costs(492)(233)
Sichuan New Hope Nutritionals Ltd - Sale of milk powder products(71)(72)
Sichuan New Hope Nutritionals Ltd - Other costs292296
The Group is currently involved in a dispute regarding restrictive covenants attached to land it purchased in Pokeno.
In February 2018, the Group announced the conditional purchase of 28 hectares of land in Pokeno to establish its
second nutritional powder manufacturing site. The land was subject to restrictive covenants limiting the development
of the land that the vendor was required to remove. The vendor applied to the High Court to have the restrictive
covenants removed.
In November 2018, the High Court removed the restrictive covenants. The High Court also declined to award
compensation to the covenant holder on the basis that they would not suffer any loss due to the extinguishment of the
covenants as they were of little practical value. The Group took legal title to the land following the High Court’s decision.
The covenant holder appealed to the Court of Appeal which in May 2019 overturned the High Court’s decision.
In June 2019, the Group filed an application for leave to appeal to the Supreme Court to have the Court of Appeal’s
decision overturned. The Supreme Court held an oral hearing on 21 October 2019 where leave to appeal was granted.
The appeal was heard by the Supreme Court on 3 and 4 June 2020 and the Group is yet to receive the Court’s ruling.
There are a range of possible outcomes for the Group including a negotiated settlement between the parties. Given the
range of possible outcomes the Group is not able to reliably estimate any potential liability.
No other significant contingent liabilities are outstanding at balance date (2019: $nil).
(a) Other transactions with key management personnel or entities related to them
Information on transactions with key management personnel or entities related to them, other than compensation,
are set out below.
(i) Loans to directors
There were no loans to directors issued during the period ended 31 July 2020 (2019: $nil).
(ii) Other transactions and balances
Directors of Synlait Milk Limited control 3.0% of the voting shares of the company at balance date (2019: 3.0%)
PAGE 124 & 125ANNUAL REPORT 2020

22. COMMITMENTS
23. EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a) Capital commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
On 3 August 2020, Synlait Milk Limited incorporated a new subsidiary, Synlait Milk (Dunsandel Farms) Limited. The newly
incorporated entity acquired two farms adjacent to the Group’s Dunsandel facility for $25.7m on the same day. The Group
received Overseas Investment Office approval to acquire the land on 24 February 2020.
There were no further events occurring subsequent to balance date which require adjustment to or disclosure in the
financial statements.
(b) Operating lease commitments – group as lessee
The above balances have been committed in relation to future expenditure on capital projects. Amounts already spent
have been included as work in progress. There are no commitments to note for Synlait Foods (Talbot Forest) Limited and
Dairyworks Limited.
20202019
$’000$’000
Pokeno processing plant10,26449,455
Liquid dairy packaging facility1,18816,916
Separator capacity upgrade4195,820
Dry Store 414,1002,523
Pokeno Waste Water Initiative571-
Dunsandel farms (note 23) 25,700-
Total52,24274,714
Leases
The Group leases certain buildings, plant and equipment. Operating leases are where the lessor, rather than the
Group, has effectively retained the substantial risk and benefit of ownership of a leased item. Operating lease
payments are included in the determination of profit or loss in equal instalments over the period of the lease.
Lease incentives received are recognised on a straight line basis over the lease period. From 1 August 2019, this
policy only applies to short term and low value leases.
20202019
$’000$’000
Less than one year1673,468
Between one and five years1424,897
Greater than five years-537
Total309 8,902
The operating leases relate to the leasing of warehouse and office space, vehicles and printers. All terms are reviewed on a regular
basis. All leases are subject to potential renewal.
24. OTHER ACCOUNTING POLICIES
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and cash held on trust by Tax Management New
Zealand Ltd.
Goods and Services Tax (GST)
The profit and loss components of the statement of comprehensive income have been prepared so that all components
are stated exclusive of GST. All items in the financial position are stated net of GST, with the exception of receivables
and payables, which include GST invoiced.
PAGE 126 & 127ANNUAL REPORT 2020