SML – Waiver from NZX Listing Rule 5.1.1(b)

32639712_7
27 July 2025
NZX Regulation Limited (NZ RegCo)
Level 2, NZX Centre
11 Cable Street
Wellington
Email: issuer@nzregco.com
Synlait Milk Limited (SML) - Directors' certificate
We refer to the proposed waiver to be issued by NZX Regulation Limited to allow SML and its subsidiaries
to enter into and perform Relevant Contracts (as such term is defined in the waiver).
As the non-interested directors of SML, we hereby certify to NZX that:
(a)the granting of the waiver is in the best interest of each of SML and SML's shareholders as a
whole;
(b)the Relevant Contracts will not significantly change the nature of SML's business and will be in
the ordinary course of SML's business;
(c)the Relevant Contracts are in the best interest of each of SML and SML's shareholders as a
whole; and
(d)the entry into and performance of one or more Relevant Contracts is not, and will not be, a major
transaction requiring shareholder approval of SML's shareholders for the purposes of the
Companies Act 1993.
The core grounds for the certifications provided under paragraphs (a), (b) and (c) above are:
(1)the entry into and performance of the Relevant Contracts are arrangements where SML is
undertaking business as usual activities involving the supply of dairy and non-dairy products
derived from, or manufactured using, dairy and non-dairy products and raw materials supplied to
it for payment under contract, and the procurement of products, raw materials or services
involved in such supply, and are not transactions that significantly change the nature of its
business;
(2)the entry into of the Relevant Contracts are intended to provide further revenue to SML's
business, improve SML's financial performance and maximise shareholder value in the long term;
(3)the Relevant Contracts are in the best interests of SML and its shareholders as a whole, as they
support SML’s strategic goal of expanding its customer base and reducing reliance on a small
number of customers, while maintaining its core business focus on high-value nutritional
products;
(4)while SML’s market capitalisation has improved since its prior waiver application, it remains
materially below the scale of its operations, meaning contracts which are regularly entered into
by SML (and have been for many years as part of its ongoing operations) are being caught by
Listing Rule 5.1.1. SML's shareholders have never previously been required to approve these
business as usual contracts, and the non-interested directors of SML do not consider SML's
shareholders would expect to have to approve those types of contracts, being contracts for the
sale of its manufactured goods (or for the supply to it of materials to allow the manufacture and
sale of those goods). There is also potential that certain counterparties would express concern
with details of the business as usual contracts being included in a notice of meeting, such that
certain Relevant Contracts may not be entered into if they were subject to SML shareholder
approval. This context supports the appropriateness of a time-limited waiver for business as usual
contracts, consistent with the “long-term contracts for cash payments” example in the NZX Major
and Related Party Transactions Guidance Note; and
(5)requiring shareholder approval for each Relevant Contract would impose a disproportionate and
impractical burden on SML’s ability to operate in the ordinary course of business. These contracts
are long-term, cash-generating arrangements that are core to SML’s operations. The need to

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disclose commercially sensitive terms in a notice of meeting could jeopardise negotiations with
counterparties and potentially prevent SML from entering into contracts that are otherwise in the
best interests of the company and its shareholders. This is particularly relevant in the context of
tender-based procurement processes being adopted by major customers, where conditionality
on shareholder approval would materially disadvantage SML’s bids. The financial and time costs
of convening and holding multiple shareholder meetings during the course of the coming year to
approve the entry into and performance of business as usual contracts far outweigh the benefits.

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This certificate may be signed by the relevant non-interested directors of SML in one or more
counterparts (by PDF or otherwise), each of which when so signed will be deemed to be an original and
such counterparts together will constitute one and the same instrument.
Director Director
Print name Print name
Director Director
Print name Print name
Director Director
Print name Print name
Director
Print name
Thomas Harold George ADAMS
Yi (Julia) ZHU
Leon FUNGPaul Douglas MCGILVARY
Paul David WASHER
Tao ZHANG
Yang (Edward) SHIHANG

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29 July 2025

NZ RegCo Decision

Synlait Milk Limited (SML)
Application for Waiver from NZX Listing Rule 5.1.1(b)

NZ RegCo

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Background
1. The information on which this decision is based is set out in Appendix One to this decision. The waiver
will not apply if that information is not, or ceases to be, full and accurate in all material respects.
2. The NZX Listing Rules (Rules) to which these decisions relate are set out in Appendix Two to this
decision.
3. Capitalised terms which have not been defined in this decision have the meaning given to them in the
Rules.
Waiver from Rule 5.1.1(b)
Decision
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information provided
by Synlait Milk Limited (SML) is complete and accurate in all material respects, NZ RegCo grants SML
a waiver from Rule 5.1.1(b), to the extent required to allow SML to enter into the Relevant Contracts
during a period from 12-months from the date of the waiver and perform the Relevant Contracts without
needing to obtain shareholder approval.
5. The waivers contained in paragraph 4 are subject to conditions that:
a. SML’s Non-Interested Directors certify to NZX that the granting of the waiver is in the best interest
of each of:
i SML; and
ii SML’s shareholders as a whole;
b. SML’s Non-Interested Directors certify to NZX that the Relevant Contracts will:
i not significantly change the nature of SML's business; and
ii be in the ordinary course of SML's business;
c. SML’s Non-Interested Directors certify to NZX that the Relevant Contracts are in the best interest
of each of:
i SML; and
ii SML’s shareholders as a whole;
d. SML’s Non-Interested Directors include in the certificate a summary of the core grounds for the
certifications given under each limb of conditions (a), (b), and (c), described above;
e. SML’s Non-Interested Directors certify to NZX that
entry into and performance of one or more
Relevant Contracts
is not, and will not be, a major transaction requiring shareholder approval of
SML's shareholders for the purposes of the Companies Act 1993; and
f. the waiver and its conditions and implications are disclosed in SML's annual report for the financial
year ending 31 July 2025.
6. NZ RegCo will publish the certificate to market alongside publication of this waiver decision.

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Reasons
7. In coming to the decision to provide the waivers set out in paragraph 4 above, NZ RegCo has
considered that:
a. The policy behind Rule 5.1.1(b) is to regulate those transactions which have a value that
represents a majority of the equity that investors hold in the Issuer and, as a result, are deemed to
be so significant to the Issuer, and therefore so likely to impact shareholders’ interests, that
shareholders should have an opportunity to consider the transaction and exercise their right to
vote before the transaction can take effect. Major transactions significantly change the nature of an
Issuer’s business or represent a majority of the equity that investors hold in the Issuer, and are
therefore significant.
b. NZ RegCo considers that the circumstances underpinning this waiver do not offend the policy
behind Rule 5.1.1(b) because:
i the entry into and performance of the Relevant Contracts

are arrangements where SML is
undertaking primary business activities involving the supply of dairy and non-dairy products
derived from, or manufactured using, dairy and non-dairy products and raw materials
supplied to it for payment under contract, and the procurement of products, raw materials or
services involved in such supply, rather than being transactions that significantly change the
nature of its business. The conditions of the waiver require SML’s Non-Interested Directors
of SML to give certification to this effect which will be published to market;
ii the waiver is restricted to a period of 12-months from the date of this waiver and applies
only to Relevant Contracts, being, in summary, contracts which are SML’s primary business
undertakings, involving the supply

of dairy and non-dairy products derived from, or
manufactured using, dairy and non-dairy products and raw materials supplied to it for
payment under contract, and the procurement of products, raw materials or services
involved in such supply, in excess of 50% of SML’s AMC. The NZX Guidance Note Major
and Related Party Transactions provides examples of the limited situations in which NZ
RegCo might grant a waiver from Rule 5.1.1, such as if an Issuer is entering into a multi-
year arrangement where it is receiving cash under a contract in excess of 50% of the
Issuer’s AMC where the Issuer is undertaking business as usual activities. SML has
demonstrated that it regularly enters into these multi-year contracts for cash that are Major
Transactions under Rule 5.1.1(b) and in those tightly defined circumstances, when related
solely to SML’s primary business undertakings, it may be appropriate to have a waiver for a
period of time
;

iii other than in respect of the Relevant Contracts, SML must comply with the requirements of
Rule 5.1.1, meaning that when seeking to enter into any transaction that would significantly
change its nature of business or involves a Gross Value above 50% of its AMC which is not
a Relevant Contract, SML must seek shareholder approval; and
iv the major transaction provisions of the Companies Act 1993 provide that transactions the
value of which exceed 50% of the value of the company’s assets must be approved by a
special resolution of shareholders, or be contingent upon such approval. This requirement
cannot be waived. SML's shareholders retain the protections of the Companies Act 1993 for
transactions that are significant compared to the value of the company’s assets, and will
have the opportunity to vote on these transactions.
c. On expiry of the waiver, SML will need to consider whether shareholder approval under Rule
5.1.1(b) is required before entering into, or renewing, any other similar contracts, however NZ
RegCo may consider the potential for a further waiver if the policy grounds of Rule 5.1.1(b)
continue to be made out.
d. SML’s continuous disclosure obligations under the Rules continue to apply in respect of Material
Information relating to the entry into and performance of the Relevant Contracts; and

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e. There is precedent for this decision.
Confidentiality
8. SML has requested that this decision be kept confidential until the release of this waiver.
9. In accordance with Rule 9.7.2(a), NZ RegCo grants SML's request.

NZ RegCo

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Appendix One
Background
1. Synlait Milk Limited (
SML
) is a Listed Issuer with Equity Securities
Quoted on the NZX Main Board.
2.
The SML Group is a dairy and non-dairy manufacturer, with its primary business being the supply of
high value advanced nutritional formulas and powders, dairy ingredients and liquid dairy products to
leading health and nutrition companies internationally. As part of its primary business, SML undertakes
the supply of dairy and non-dairy products derived from, or manufactured using, dairy and non-dairy
products and raw materials supplied to it for payment under contract and the procurement of products,
raw materials or services involved in such supply. Certain of those products do not relate exclusively to
those products and ingredients. A number of those contracts can be for multi-year terms.
3.
SML’s market capitalisation is currently around $390 million. Relative to its market capitalisation, SML is
a significant business, with $1.6 billion of revenue in FY24, total assets of approximately $1.7 billion and
net tangible assets of approximately $659.9 million as at 31 January 2025 being SML’s half year
balance date.

Application of Rule 5.1.1(b)
4.
Accordingly, certain contracts entered into by SML as part of its primary business undertaking and have
a Gross Value of more than 50% of the Average Market Capitalisation (
AMC
) of SML. Under Rule
5.1.1(b) the entering into of these transactions, or a related series of transactions, involving the
acquisition or disposal of assets (which includes cash) which involves a Gross Value above 50% of the
Issuer’s AMC requires shareholder approval by way of an ordinary resolution.
5.
For the purposes of this waiver,
Relevant Contracts
are contracts entered into and performed by SML
or any of subsidiaries (the
SML Group
and each a
SML Group Member
) transactions which are its
primary business undertakings and which are principally:
(a) for the purchase and payment for dairy products or non-dairy nutritional products;
(b) for the purchase and payment for products, raw materials or services involved in the
manufacture and sale of dairy products and non-dairy nutritional products; or
(c) with a customer for the supply by a SML Group Member of dairy products or non-dairy nutritional
products derived from, or manufactured using, dairy products or non-dairy nutritional products or
raw materials supplied to a SML Group Member,
to the extent that such Relevant Contract:
(d) is entered into in the 12-month period after the date of the waiver;
(e) has a Gross Value of more than 50% of SML's AMC; and
(f) is a transaction or series of related transactions falling within, or in connection with, (a), (b) or (c)
above.
6.
While
the Relevant Contracts are principally for the matters set out in paragraph 5(a), (b) and (c) above,
SML also expects that the agreements may also have non-material components of capital investment,
trial or registration services. Examples of these ancillary matters are the use of specific tools or storage,
emissions reduction activity, or product development. SML submits that these ancillary matters are
standard features for contracts of this nature and it would be commercially difficult to enter into the
Relevant Contracts without also agreeing the ancillary matters.

7.
On 29 May 2024, SML was previously granted a standing waiver from Rule 5.1.1(b) to the extent required
to allow SML to enter into Relevant Contracts during a period of 12-months from the date of that waiver

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and perform the Relevant Contracts without needing to obtain shareholder approval (2024 Waiver) on
analogous grounds to this waiver decision. The 2024 Waiver expired on 29 May 2025.
8.
Any Relevant Contracts stipulated under this waiver are routine renewals or rollovers of key Relevant
Contracts entered into and performed in reliance on the 2024 Waiver.
Best interest of shareholders
9.
SML submits that the entry into of the Relevant Contracts and the waiver are in the best interests of
each of SML and its shareholders as a whole, as they are intended to provide further revenue to SML's
business, improve SML's financial performance and maximise shareholder value in the long term. SML
contracts through tender-based procurement processes with its major customers, where conditionality
on shareholder approval would materially disadvantage SML’s bids.
10.
The Relevant Contracts support SML’s strategic goal of expanding its customer base and reducing
reliance on a small number of customers, while maintaining its core business focus on high-value
nutritional products.
Not change the nature of business and in the ordinary course
11.
SML also submits that the Relevant Contracts are arrangements where SML is undertaking its primary
business activities involving the supply of dairy and non-dairy products derived from, or manufactured
using, dairy and non-dairy products and raw materials supplied to it for payment under contract, and the
procurement of products, raw materials or services involved in such supply, and are not transactions
that significantly change the nature of its business.

These contracts are long-term, cash generating
arrangements that are core to SML’s operations.
12.
The conditions of the waiver require Non-Interested Directors of SML to give certification that the Relevant
Contracts will not significantly change the nature of SML’s business and be in the ordinary course of
SML’s business; the waiver is in the best interest of SML and shareholders; and the Relevant Contracts
are in the best interests of SML and shareholders, which will be published to market.

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Appendix Two
Rule 5.1 Disposal or Acquisition of Assets
5.1.1 An Issuer must not enter into any transaction, or a related series of transactions, to acquire, sell, lease
(whether as lessor or lessee), exchange, or otherwise (except by way of charge) dispose of assets
where the transaction or related series of transactions:
(a) would significantly change, either directly or indirectly, the nature of the Issuer's business; or
(b) involves a Gross Value above 50% of the Average Market Capitalisation of the Issuer,
unless the transaction, or related series of transactions, is:
(c) approved by an Ordinary Resolution, or a special resolution if approval by way of special
resolution is required under section 129 of the Companies Act 1993, or
(d) conditional upon such approval required by paragraph (c) above.