Synlait reports FY26 result and operational recovery

Annual Report
2026

Welcome to Synlait’s
Annual Report
Doing Milk
Differently
For A
Healthier
World
Sustainability
Synlait has a proud history of pioneering
sustainability as part of our purpose of
doing milk differently for a healthier world.
Learn more about our approach and read
our latest Integrated Climate Report at:
synlait.com/sustainability/
Corporate governance
Our Corporate Governance Statement
describes Synlait’s current compliance
with the NZX Corporate Governance
Code (NZX Code) recommendations in
the year to 31 July 2026.
The Corporate Governance section
of the Annual Report can be found on
Synlait’s website: synlait.com/investors/
corporategovernance-2026/
Our Annual Report reviews Synlait Milk Limited’s (Synlait) and
subsidiaries’ financial performance and business achievements
for the year ended 31 July 2026.
An online copy of this Annual Report, and previous annual, interim and sustainability
reports, are available at: synlait.com/investors/
Cover photo: Consumer Plant Manager
Rueben Frahm (left) and Hendrik Bakker, Synlait's
Manufacturing Operations Manager – Ingredients.
ANNUAL REPORT 2026PAGE 01 & 02

David Williams, General Manager
Milk Supply & Sustainability
Before we went to the North Island
Synlait was a really successful company.
Now we've sold those assets, things are
much simpler and we are making progress.
David Williams accepts his 18 year service award
at the Synlait Long Service Awards in July.
ANNUAL REPORT 2026PAGE 03 & 04

1521
21
21
Acting CEO Report.
A big year for
Synlait's lab team.
Refreshed business
development approach.
Synlait goes
social in China.
Contents
Chair review 09
Acting CEO review 15
FY26 business milestones 21
Our Board of Directors 23
Our Executive Leadership Team 24
Statutory information 25
CFO review 47
Financial statements 57
Auditor's report 111
Directory 117
ANNUAL REPORT 2026PAGE 05 & 06

Kylie Bay, Synlait Supplier
We love being part of Synlait.
The company has always
taken a leading approach to
sustainability and it’s great to
work alongside other farmers
who share those values.
Rory, Vuyo, Gavin and Kylie Bay from
Bluff Farm in North Canterbury.
PAGE 07 & 08ANNUAL REPORT 2026

What went wrong.
As reported previously, Synlait had a
number of manufacturing challenges in
Dunsandel in early 2025.
One of the many reasons you can have
confidence in Synlait’s team is they take
the responsibility of feeding millions
of people, including newborn babies,
seriously. This is why the company is
trusted by customers and consumers
around the world.
So, when faced with the manufacturing
challenges in 2025, Synlait did the right
thing – stopped production, investigated,
and made repairs and changes to ensure
any issues were properly and sustainably
resolved.
Why this impacted FY26.
As we explained in the HY26 result in
March, Synlait weighed up a lot of options
to work out a plan to recover from these
challenges.
Normally, Synlait produces nutritional
powders during the shoulders of the
season, when milk flows are lower. Instead,
the need to rebuild customer inventory
saw us commit to producing nutritional
powders through the peak of the milk
season as well.
The decision to produce nutritional
powders at peak required us to sell a
significant volume of raw milk. Selling milk
during peak season is always challenging
Dear Shareholders,
FY26 was always going to be a defining
year for Synlait.
The sale of our North Island assets in April
strengthened the company’s balance
sheet and removed a drag on our financial
performance, so we expected FY26 to be
defined by stronger financial results.
Instead, FY26 is best defined as the year
of Synlait’s operational recovery.
Like the repairs to the company’s liquidity,
balance sheet, and milk supply, that
were delivered in FY24 and FY25, this
year’s operational recovery was critical to
creating a future where value is returned
to you – our shareholders.
A poor first half, a better
second.
Our FY26 result shows this is not the year
Synlait needed – the numbers are deeply
disappointing. Our financial result was
largely lost in the first half. The operational
recovery achieved in the second half
delivered an uplift in financial performance.
The honest measure of recovery is what
the numbers show. Comparing FY26’s first
half to its second, you can see:
• Unadjusted net profit after tax
improved from a first-half loss of
$80.6 million to a second-half profit of
$5.2 million (assisted by a gain from
the sale of our North Island assets).
• Manufactured In Spec quality
performance improved from 91% in the
first half to 95% in the second. The full
year average was 93%, up from 88%
in FY25.
These numbers show that, thanks to the
hard work of Synlait’s team members, we
delivered a turnaround in the second half.
I want to extend a heartfelt thank you to
you all.
The business is now stronger, simpler, and
more resilient.
Synlait is now focused on getting the
best out of its Dunsandel assets across
Advanced Nutrition, Ingredients, Consumer
and Foodservice. Dairyworks continues
successfully growing its business – thanks
to the excellent work of its team ably led
by Tim Carter.
There are challenges ahead, but first I
need to provide context around our 2025
manufacturing challenges and explain
why they created this extended period of
financial underperformance.
We owe you, our farmers, our customers
and our people, a plain answer to three
questions: why did these challenges
impact FY26? Have we addressed the
issues? And what is our plan to return the
company to success?
and while we knew the loss would be
significant, the decision was in Synlait’s
and our customers’ best interests.
A number of planned milk sales didn’t go
to plan as the recipients were unable to
accept the milk for a variety of operational
reasons and it had to be sent to Synlait
for processing. The only product we could
make to limit dryer downtime (so we could
return to rebuilding customer inventory
promptly) was whole milk powder.
To make matters worse, global whole milk
powder prices fell sharply, just as we had
a lot of it to sell and that hit our ingredients
margins hard.
Together, these factors drove the poor first-
half result. Thankfully, the second half was
an improvement.
We have addressed
the issues.
This has been achieved through investing
in our two most important assets – our
people and our plant, and deeply resetting
our revenue,
operations and quality functions.

High-level achievements include:
• Achieving operational recovery with
a focus on delivering continuous
excellence.
• A major programme of work over
winter shut with nearly 900 work
orders completed in 65 days.
Chair review
George Adams
PAGE 09 & 10ANNUAL REPORT 2026

• Delivering a whole new approach
to learning and development –
with leadership training for our
operational teams and senior leaders
so they have the skills they need to
do their jobs well.
We’ve also worked to repair and simplify
some of Synlait’s systems which had
become unnecessarily complex.
Synlait is important to
New Zealand’s dairy sector.
Our purpose is Doing Milk Differently For
A Healthier World and Synlait was born
to disrupt.
We’re a comparatively new company
and our founders’ bold decision to grow
from farming into milk processing gave
Canterbury farmers choice. They also led
the way in sustainable dairy farming and,
through innovation, our business model
drives higher returns from Canterbury
dairy producers.
Synlait has never been afraid of being
the first. Despite being financially
constrained, we’ve still enabled our
farmers to earn more for their milk
once they are certified as reaching best
practice dairy standards. We have also
supported the planting of almost 385,000
native trees across Canterbury.
Our plan to maintain positive
momentum.

A core focus is to diversify our revenue
streams and backfill the capacity gap
created by The a2 Milk Company moving
some of its volumes to its Pōkeno facility.
We have already onboarded a new
Advanced Nutrition customer in the Middle
East and have a pipeline of others keen to
work with us.
We will not take our eye off operational
excellence or ensuring we are match fit
to deliver the worldclass quality required
to renew our product registration for the
China market next year. We have stood up
a very experienced business-wide team to
deliver this.
We are strengthening our governance
and have begun the recruitment of a third
Independent Director.
Leon and the team have put together a
plan to win this dairy season by squeezing
value out of every drop of milk our farmers
produce for us. That production plan sits
alongside our plans to mitigate the risks
ahead.
Our focus has been on the first two
horizons of our recovery roadmap –
stabilising and simplifying the business. We
have made sufficient progress that we are
now able to progress our third horizon –
scale. We look forward to sharing that with
you by HY27 (that will be June 2027 given
the change in Synlait’s balance date).
We will continue Synlait’s positive
trajectory so we can deliver value to
you – our shareholders.
Thank you,
George Adams
Chair
Guidance
Some well-deserved thanks.
FY25 and FY26 tested Synlait and proved our
people know how to find a problem, own it, and fix
it properly.
It also showed they can collaborate to execute
complex transactions, including the sale of our
North Island assets.
As I said in my report last year, people across
Synlait have worked enormous overtime to get
this business through – thanks to each and every
one of you.
Thank you to our farmers for standing by us
through another demanding year. I hope Synlait
standing by all its financial commitments to you,
despite our losses, shows how valued you are.
Thank you to our major shareholders Bright
Dairy and The a2 Milk Company for your ongoing
support. Thank you also to all 5,190 independent
shareholders – you have been extraordinarily
patient and understanding as we secured Synlait’s
survival.
Thank you also to Synlait’s banking syndicate and
key customers, including The a2 Milk Company,
Abbott, Danone and Nestlé. Your support is critical
to our company.
Finally, thank you to my fellow Directors for
navigating exceptionally difficult decisions, and to
Paul McGilvary, whose contribution to Synlait and
Dairyworks helped get both companies through
challenging periods.
Synlait’s balance date for financial
reporting is changing from 31 July to
31 December.
We are now in a five-month transitional period from
1 August 2026 to 31 December 2026, known as TP26.
Synlait is still in a recovery phase and TP26 will be
influenced by the timing of production, sales, working
capital movements and other seasonal factors.
Given the short and non-comparable nature of the
transitional period, Synlait is not providing guidance
for TP26.
PAGE 11 & 12ANNUAL REPORT 2026

64%
Total group revenue
6%
Operating cash flow
$348.8M
Net debt²
14%
$42.6M $60.9M
$
215.0M(
$
183.3M)
$
1.94B
$
3 7.7M
Total group NPAT
Total underlying group EBITDA¹
Total underlying group NPAT¹
$35.6M
$22.4M
Total group EBITDA
$
8 .1M
(
$
75.4M)
$
46.3M
(
$
21.6M)
Results include North Island operations, unless otherwise stated³
Total group gross profit
Results at a glance
All comparisons are against FY25.
1 Underlying figures exclude North Island operations and gain on sale from North Island assets.
² Net debt includes cash, bank debt, transaction costs, and the shareholder loan from Bright Dairy; it excludes lease liabilities.
³ The financial statements include both continuing and discontinued operations, with appropriate classification and disclosure. This will result in differences in the figures
presented in this presentation.
⁴ This comprises Lead With Pride, winter milk, secured milk, A1 protein free and customer sustainability premiums. Customer Sustainability Partnership incentives of $1.5m were
paid in April 2026, and were for the FY25 season.
FY26 milk price
Synlait total average
milk payment
Average Synlait
milk incentive4
+=
$
0.38
Base milk price
$
9.69
$
10.07
Synlait's operations
stabilised in the second half
Operational stability helped
improve 2H financial performance
Reported EBITDA($34.7m)$42.8m$8.1m
$4.1m$42.2m$46.3m
($80.6m)$5.2m($75.4m)
($27.3m)$5.7m($21.6m)
Half-on-half growth
Underlying EBITDA
Reported NPAT
Underlying NPAT
1H FY262H FY26¹FY26
+$77.5m
+$38.1m
+$85.8m
+$33.0m
¹ Figures influenced by the sale of North Island assets.
Manufactured in spec (MIS)91%95%93%88%
89.7%102.6%95.5%91.7%
Year-on-year
improvement
Production plan attainment
1H FY262H FY26
FY26
average
FY25
average
+5 pts
+3.8 pts
PAGE 13 & 14ANNUAL REPORT 2026

Acting CEO review
Leon Fung
There is no doubt
Synlait is stronger today.
The divestment of the North Island assets
means we are once again focused solely
on our Dunsandel base. When you look at
historic financials, it is clear Synlait was its
most profitable before it expanded to the
North Island.
Refocusing on our core strengths
should give confidence as to our future
profitability, although, as I said before, we
have some way to go before our financial
performance will reach where we want it
to be.
In the meantime, the data shows we made
some progress in the second half.
Our financial processes have been
tightened with a focus on reducing
cost. For example, every team across
the business is now reviewing actual
expenditure against budget every month
with gaps being interrogated.
Synlait’s people
are stronger too.
The company’s overall engagement score
increased this year – given the tough times
our people have been through, this is a
great achievement.
There has been a deliberate approach to
strengthening our people, with leadership
training for frontline and senior leaders
and a huge reset of our learning and
development programme.
Dear Shareholders,
When I walked in the door of Synlait
Dunsandel as Acting CEO in mid-May, I
already knew a lot about the business
we are in. I started my career 30 years
ago at a dairy factory in Northland, after
completing a Master's Degree in Dairy
Technology at Massey.
Since then, my career has enabled
me to grow a deep knowledge of the
dairy and nutrition sectors – not just in
manufacturing, but in scaling operations,
optimising supply chains and connecting
to global markets.
Having sat on the Board since June
2024, I have been part of the team that
has helped the company through the
worst of its crises. In the four months
since my first day in the CEO chair, I have
grown my understanding of the company,
its people, the challenges and the
opportunities we have ahead of us.
My confidence in
Synlait’s future has grown.
While leaning in to support the efforts
to stabilise our operations (my technical
curiosity has meant I have spent a lot
of time with our frontline teams), I have
taken the time to understand the nuances
of the business so we can shape a clear
plan to maximise its potential.
As the Chair said in his report, the focus
to date has been on activating the first
two horizons of our recovery roadmap –
stabilising and simplifying Synlait. In 2025,
the Board instructed the business to adopt
a ‘Back to Basics’ approach and focus on
the ‘Big 6’ – operational stability, quality
performance, customer satisfaction,
financial performance, strengthening
culture and financial resilience.
The team is actioning this in a disciplined
and deliberate way and the capability and
passion of Synlait's people gives me real
confidence the company will return to
success.
Learning from the past.
The Executive Leadership Team is taking a
holistic view of why Synlait has performed
poorly, not just in FY26 but historically,
so we can learn from the past and
fundamentally reset the company.
There were many factors contributing
to that underperformance; the lack of
diversification in Synlait’s revenue streams,
the financial burden created by the heavy
investment in the North Island assets and
their loss making operations, and in recent
years, significant operational issues.
I am pleased to report that the second half
of FY26 saw Synlait's operations stabilise.
However, we need to retain our focus
so we can achieve continual operational
excellence.
We have just completed our first
year tying performance ratings to
the Synlait Spirit high-performance
culture framework. There are specific
behaviours that underpin the Synlait
Spirit and its values (Be the Difference,
Move as One, and Right on the Mark).
The framework is designed to get
people to think twice, ask why, break
down silos, work together and execute
with accuracy.
Challenging Synlait’s
status quo.

Deep understanding of the dairy
industry gives me the ability to ask
detailed operational and technical
questions of the team and work with
them to find solutions.
I am told my approach is sparking teams
to think about new ways to improve the
way they do things. That is a much-
needed mindset shift. Synlait is a large
and complex business, and over time
some processes have been made
harder than they need to be.
Challenging the status quo offers
the chance to look for improvements
and efficiency that have not been
considered before.
Disciplined prioritisation is also
necessary. The business simply cannot
do everything at once. A stronger focus
on the critical tasks will strengthen
our solid foundation. Only when
that foundation is secure should the
business move to the next phase.
PAGE 15 & 16ANNUAL REPORT 2026

An important reminder
of Synlait's potential
Historically, Synlait's financial performance was strongest when it was a South Island
focused business.
As the Chair has indicated, the
progress we have made means
that now is the time to consider our
strategy to scale our performance. We
will have a strategy to share in 2027.
In my view, maintaining operational
discipline and not losing focus are the
most important things Synlait needs
to do.
Strengthening customer
partnerships.

Synlait has a proud history of
delivering complex, high-value
nutritional products alongside
unparalleled levels of attentive
customer service.
The a2 Milk Company has been our
valuable partner for a very long time.
Synlait is proud to have helped fuel
their growth with our capability in
making high-quality infant formula
powders. We believe that our
businesses will remain fundamental
to each other’s success, so we have
helped support their move into
manufacturing at a2 Pōkeno.
Synlait has not had available
manufacturing capacity to have been
able to onboard customer partnerships
of scale for some time. However,
the space created by The a2 Milk
Company shifting the production of
its English label products creates
this opportunity. This represents
an important milestone for Synlait
– our priority is to secure the right
customers, at the right value, and then
deliver consistently.
the more than 100 team members
who have worked at Synlait for
more than 10 years. Those people
have experienced the business at
its best, know what it is capable
of and many have told me they
believe it is on the right path to a
successful future.
3. Our farmers.
Synlait farmers are among the best
in New Zealand. More than 90%
have now been independently
certified, under our Lead With
Pride programme, as reaching
best practice dairy farming. That
means they are going above what
is legally required to care for the
environment, their animals, their
milk quality and their people.
The result is a high quality diverse
milk supply, including one of the
world’s largest A1 protein free
pools.
We are well-positioned
for the future.

If we keep managing our operations
and quality performance well,
improved financial performance will
follow.
The support of Bright Dairy as our
major shareholder, who are long term
focused, provides stability. Synlait
has also demonstrated to its banking
syndicate that we can manage through
difficult conditions.
We have been grateful for the support
of all of our stakeholders – including
you, our shareholders. As our financial
performance recovers, I believe the
confidence in Synlait will grow too.
I am committed to doing all I can to
enable that. It will take time, but I
believe we will get there.
Thank you for your support,
Leon Fung
Acting CEO
North Island
assets commence
manufacturing
Key
North Island
asset divestment
North Island assets
in operation
Reported NPAT ($m)
($182.1m)
FY24FY23FY22FY21FY20FY19FY18FY17FY16FY15
($200.0m)
($150.0m)
($100.0m)
($50.0m)
$0.0m
$50.0m
$100.0m
FY25FY26
$34.4m
$38.2m
$74.6m
$82.2m
$74.3m
($28.5m)
($4.3m)
($39.8m)
($75.4m)
$38.5m
$10.5mDunsandel only
This means diversifying Synlait’s
revenue streams by customer, product
and geography. We'll then be less
vulnerable to future shocks, like
COVID. Already, we have a pipeline
of potential customers with annual
demand indications significantly
higher than the expected capacity
resulting from the volume shift.
In our business, onboarding Advanced
Nutrition customers can take 2-3
years. However, we have already
signed a new agreement for FY27 with
a Middle East customer, and we are in
advanced talks with others.
Synlait has three primary
competitive advantages.
1. Nutritional product expertise.
Synlait's strength in infant
nutrition is a platform that extends
into adult nutrition, aged care
nutrition, and special-purpose
nutritional products. We are
working with new markets to
deepen and commercialise this
advantage. We have world-
class manufacturing capability
and other markets interested
in working collaboratively with
us because they consider us
uniquely positioned to produce
these products.
2. Our people.
There is a genuine desire by our
people to do a good job and see
the business succeed. They are
highly motivated and uniquely
qualified. A powerful signal of
their dedication to this company is
PAGE 17 & 18ANNUAL REPORT 2026

The Synlait Long Service Awards
celebrated the 111 staff who have worked
at the company for at least ten years.
PAGE 19 & 20ANNUAL REPORT 2026

Synlait’s laboratory is the first in New Zealand to be independently accredited
for cereulide testing. This milestone reduces our reliance on external
laboratories. Synlait’s internal testing capability is extensive with our state-of-
the-art, full-service laboratory regularly completing more than 55,000 tests per
month. The lab has completed four million tests in 11 years of operation. From
routine testing to complex calibration work, the team has built a reputation for
accuracy and trust. The lab plays a critical role in ensuring every product that
leaves our factory is safe for the millions of people Synlait feeds every month.
More than 90% of the farmers who supply Synlait have now been
independently certified as going above and beyond what is legally required
to reach best practice dairy farming. The certification is part of our Lead With
Pride programme, with farmers independently audited in how they care for
the environment, animals, milk quality and people. Launched in 2013, Lead
With Pride sets Synlait apart from other processors and is why the company
has attracted forward-thinking farmers who are committed to being the best.
Once certified, farmers are paid more for their milk.
Our farmers are leading with pride
A big year for Synlait's lab team
In July, we celebrated the 111 people who have worked at Synlait for at least
10 years at a special event. This was an opportunity to bring together those
who have helped shape Synlait’s story, share memories, and thank them for
supporting the company. Together they have contributed more than 1,398
years of service. Longest-serving team member David Williams has been
with Synlait for 18 years and was appointed to the executive team this year as
General Manager of Milk Supply and Sustainability. He reminded attendees
that Synlait was strongest when it was focused on Dunsandel, so he's
confident about the future.
Celebrating Synlait’s best assets
Synlait goes social in China
FY26 business milestones
Ian Tucker has spent the past two-and-a-half years rebuilding Synlait’s
operator training system to better reflect the scale and complexity of its
manufacturing environment. The new framework separates training from
assessment, with clear competency checks and practical task verification.
Nearly 200 documents have already been created, starting with warehouse
and dryer operations, with more areas to follow. Built through observation and
conversations with operators, the system captures their expertise, pride and
decision-making. For Ian, it is about evidence; proving people can do the job,
while helping experience grow into real operational skill.
Deepening capability in our operational teams
Refreshed business development approach
In her first year at Synlait, Rachael Grooby has helped shift product
development toward a more market-led approach. As Category Strategy
Manager, she looks for emerging opportunities, tests their commercial potential
and connects them with Synlait’s manufacturing capability. Her focus is on
understanding where consumer demand is heading, then adapting existing
operations to meet it. Adult nutrition, healthy ageing and nutrition support for
people on weight control medications are early examples. For Rachael, the
opportunity is to get ahead of the innovation cycle, partner with customers and
develop premium solutions that may look different from the past.
Synlait launched its official WeChat account, Synlait新莱特, strengthening the
company's presence in one of the world's most important dairy markets. With
more than 1.3 billion monthly users, WeChat is China's leading platform for
business communication and engagement. The channel enables Synlait to
connect with customers, distributors and industry partners, while showcasing
the company's expertise, premium product capabilities and commitment to
quality. The platform will play an important role in building brand awareness
and supporting future growth opportunities in China.
PAGE 21 & 22ANNUAL REPORT 2026

Our Executive Leadership Team
Leon Fung¹
Acting Chief Executive Officer
Andy Liu
Chief Financial Officer
Glenn Laing⁴
Director – Special Projects
David Williams⁵
General Manager Milk Supply
& Sustainability
Stephanie Manning
Director Safety, People & Culture
Richard Hickson²
Chief Operating Officer
Abby Ye
President China &
Director of Foodservice
Hamish Yates³
Chief Revenue Officer
Tim Carter
Dairyworks Chief Executive Officer
Katherine Turner²
Audit & Risk Committee Chair
People, Environment &
Governance Committee Member
Leon Fung¹
Executive Director
Julia Zhu
People, Environment &
Governance Committee Chair
Audit & Risk Committee Member
Edward Yang
People, Environment &
Governance Committee Member
Tao Zhang
George Adams
Audit & Risk Committee Member
People, Environment &
Governance Committee Member
Chair
Independent Director
Non-independent Directors
Our Board of Directors
1
Leon Fung was appointed Acting Chief Executive Officer on 14 May 2026.
2
Richard Hickson joined as Chief Operating Officer on 2 February 2026.
3
Hamish Yates joined as Chief Revenue Officer on 1 December 2025.
4
Glenn Laing has resigned as Director – Special Projects, and will leave Synlait in December 2026.
5
David Williams was appointed General Manager Milk Supply & Sustainability on 25 May 2026.
1
Leon Fung was a Non-independent Director until 14 May 2026, when he was appointed Acting CEO.
2
Katherine Turner joined the Board as an Independent Director on 18 May 2026, replacing Paul McGilvary.
PAGE 23 & 24ANNUAL REPORT 2026

Statutory information
1. Business operations
Synlait is a nutrition company that combines expert farming with state-of-the art
processing to produce Advanced Nutrition, Foodservice, and Ingredient products.
In September 2025, Synlait entered into a binding conditional agreement to
sell its North Island assets to global healthcare leader Abbott. Following the
satisfaction of all conditions, settlement occurred on 1 April 2026.

Following the divestment of the North Island assets, Synlait has simplified its
operating model to re-focus its manufacturing operations and growth strategy on
the Dunsandel site.
Other than the completion of the North Island asset sale, Synlait made no
material changes to its corporate structure during the year.
Irish David, Process Technician
– Blending and Canning.
PAGE 25 & 26ANNUAL REPORT 2026

2. Directors
Synlait’s Directors are profiled on our website: synlait.com/people/
This table sets out the people that held office (or ceased to hold office) as a Director of Synlait and its subsidiaries during
the year ending 31 July 2026:
3. Director interests
The following declarations of interest were made by Directors of Synlait and its subsidiaries under section 140 of the
Companies Act 1993.
Entries which are italicised indicate new disclosures during the year ended 31 July 2026.
Company Directors Appointed
Synlait Milk Limited
Synlait Milk Finance Limited
George Adams (Chair)Independent21 March 2024
Paul McGilvary¹Independent24 January 2022
Paul Washer²Independent2 December 2022
Katherine TurnerIndependent18 May 2026
Leon Fung³Executive Director (Non-independent)3 June 2024
Sihang Yang (Edward)Non-independent11 November 2010
Tao ZhangNon-independent26 February 2024
Zhu Yi (Julia)Non-independent19 June 2023
CompanyDirectors
The New Zealand Dairy
Company Limited
Robert Stowell⁴
Leon Fung⁵
Lei Liu (Andy)⁶
Eighty Nine Richard Pearse
Drive Limited
Robert Stowell⁴
Leon Fung⁵
Lei Liu (Andy)⁶
Synlait Business Consulting
(Shanghai) Co., Ltd
Robert Stowell⁴
Paul Mallard7
Dairyworks LimitedTimothy Carter
Leon Fung⁵
Synlait Milk (Dunsandel Farms) LimitedRobert Stowell⁴
Leon Fung⁵
Lei Liu (Andy)⁶
Synlait Milk (Holdings) No.1 Limited Robert Stowell⁴
Leon Fung⁵
Lei Liu (Andy)⁶
Synlait has considered the independence of its two Independent Directors against the definition in the NZX Listing Rules,
the commentary to recommendation 2.4 in the NZX Corporate Governance Code and its Board Charter and is satisfied
its Independent Directors meet the requirements for independence.
George Adams
Chair and Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Chair, Director and Shareholder Insightful Mobility Limited
Chair and Director Netlogix Group Holdings Limited
Director and Shareholder Arborgen Holdings Limited
Chair, Director and Shareholder Apollo Foods Limited
Director The Apple Press Limited
Director Mars Manufacturing Limited
Director Apollo Brands Limited
Chair and Director NZFF Holdco Limited
Chair and Director Redshield Security Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Board of Directors
Leon Fung
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Director The New Zealand Dairy Company⁸
Director Eighty Nine Richard Pearse Drive Limited⁸
Director Dairyworks Limited⁸
Director Synlait Milk (Dunsandel Farms) Limited⁸
Director Synlait Milk (Holdings) No.1 Limited⁸
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Chief Executive Officer NIG Nutritionals Limited
9
Director and Shareholder Auspocean Limited
Director Silver Fern Biotech & Products Limited
Director and Shareholder MTC Information Technology NZ Limited
Director and Shareholder Tec-Pe New Zealand Limited
Director and Shareholder Beverly Hills Asset Management Limited
Director Gambol Pet Food (New Zealand) Co., Limited
⁸ Leon Fung was appointed Director of this subsidiary on 18 June 2026.
9
Leon Fung resigned as Chief Executive Officer NIG Nutritionals Limited on 30 September 2025.
¹ Paul McGilvary retired from the Board as an Independent Director on 18 May 2026 and was replaced by Katherine Turner.
² Paul Washer retired from the Board as an Independent Director on 21 November 2025.
³ Leon Fung was a Non-independent Director until 14 May 2026, when he was appointed Acting CEO.
⁴ Robert Stowell resigned as Chief Supply Chain & Technology Officer and Director of associated Synlait subsidiary companies on 18 June 2026.
⁵ Leon Fung was appointed Director of this subsidiary on 18 June 2026.
⁶ Lei Liu (Andy) was appointed Director of this subsidiary on 18 June 2026.
⁷ Paul Mallard left his role as Chief Operating Officer in December 2025. New directors are in the process of being appointed for this subsidiary company.
PAGE 27 & 28ANNUAL REPORT 2026

Paul McGilvary
10
Director and Shareholder Synlait Milk Limited
Director Synlait Milk Finance Limited
Director New Zealand Hops Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Paul Washer
11
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Chief Financial Officer Pact Group Holdings (Australia) Pty Ltd
Director Pact Group Holdings Limited
12
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Sihang Yang (Edward)
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Tao Zhang
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Zhu Yi (Julia)
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Lei Liu (Andy)
Shareholder Synlait Milk Limited
Director The New Zealand Dairy Company Limited
15
Director Eighty Nine Richard Pearse Drive Limited
15
Director Dairyworks Limited
15
Director Synlait Milk (Dunsandel Farms) Limited
15
Director Synlait Milk (Holdings) No.1 Limited
15
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Robert Stowell
13
Director Synlait Milk (Dunsandel Farms) Limited
Director Eighty Nine Richard Pearse Drive Limited
Director The New Zealand Dairy Company Limited
Director Synlait Milk (Holdings) No.1 Limited
Director Synlait Business Consulting (Shanghai) Co., Ltd.
Director and Shareholder Orange Homes (2022) Limited
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Timothy Carter
Director Dairyworks Limited
Director and Shareholder Niko Holdings 2003 Limited
Shareholder Tatahi Holdings Limited
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
Paul Mallard
14
Director Synlait Business Consulting (Shanghai) Co., Ltd.
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
13
Robert Stowell resigned as Chief Supply Chain & Technology Officer and Director of associated Synlait subsidiary companies on 18 June 2026.
14
Paul Mallard left his role as Chief Operating Officer in December 2025.
15
Lei Liu (Andy) was appointed Director of this subsidiary on 18 June 2026.
16
Katherine Turner joined the Board as an Independent Director on 18 May 2026.
10
Paul McGilvary retired from the Board as an Independent Director on 18 May 2026.
11
Paul Washer retired from the Board as an Independent Director on 21 November 2025.
12
Pact Group Holdings (NZ) Limited is the ultimate holding company of a number of subsidiaries, some of which, Paul Washer is also a Director and/or Shareholder of. Pact Group,
via its subsidiaries Alto Packaging Limited, Astron Plastics Limited and VIP Plastic Packaging (NZ) Limited, is a supplier to Synlait on normal terms of trade. There was a protocol
in place whereby Paul Washer abstained from all Board discussions and decisions involving the supply agreements between Synlait and Pact Group.
Katherine Turner
16
Director Synlait Milk Limited
Director Synlait Milk Finance Limited
Board Trustee Garden to Table
Director and Shareholder Cresta Properties Limited
Receipt of Directors’ Fees from Synlait Milk Limited at approved rate
Insurance cover arranged by Synlait Milk Limited
Deed of Indemnity and Access from Synlait Milk Limited
PAGE 29 & 30ANNUAL REPORT 2026

Richard Wyeth
17
Director and Shareholder Rise Corporation Limited
Director and Shareholder Ngaranui 2024 Limited
Shareholder Omakau Milk Company Limited, the sole shareholder of Lake Satinburn Dairies Limited
18
Richard Hickson
19
Director and Shareholder 1891 Holdings Limited
Yanlin Ye (Abby)
Director Primary Collaboration New Zealand Limited
Executive Leadership Team
17
Richard Wyeth was employed by Synlait until 30 June 2026 following his resignation as Chief Executive Officer on 14 May 2026.
18
Lake Satinburn Dairies Limited was incorporated on 11 September 2025.
19
Richard Hickson joined as Chief Operating Officer on 2 February 2026.
4. Director remuneration
There was no change to the fees paid to Directors of Synlait this financial year. The fees received by Directors,
as approved by shareholders on 27 November 2019 and effective 1 April 2020, are:
RoleFee
Directors, excluding the Chair and Committee Chairs$88,900
Board Chair$178,000
Audit and Risk Committee Chair$104,150
People Environment and Governance Committee Chair$100,900
This table sets out the total remuneration and the value of other benefits received by Synlait Directors during the year
ended 31 July 2026:
DirectorRole Remuneration
George AdamsIndependent Director
Board Chair
$178,000
Paul McGilvary
20
Independent Director$74,676.61
Paul Washer
21
Independent Director$32,112.92
Leon Fung
22
Non-independent Director$75,501.08
Sihang Yang (Edward)Non-independent Director$88,900
Tao ZhangNon-independent Director$88,900
Zhu Yi (Julia)
23
Non-independent Director
Chair of People, Environment and Governance Committee
$98,792.67
Katherine Turner
24
Independent Director
Chair of Audit and Risk Committee
$20,997.98
Fees are not paid to Directors or employees of Synlait for acting as a Director of any Synlait subsidiary companies.
The Board is committed to maintaining a remuneration framework for Directors that supports effective governance while
reflecting shareholder interests and market practice.
Under Synlait's Strategic Remuneration Policy, the People, Environment and Governance Committee reviews Director
remuneration as required to ensure it remains appropriate having regard to the size, complexity and strategic priorities
of the business, as well as market benchmarks and governance expectations. Independent external advice is obtained
when required.
Any proposed changes to the Director fee pool are disclosed to shareholders, together with the supporting rationale and
independent market review, and are subject to shareholder approval at the Annual Meeting.
Non-executive Directors receive fixed fees only and do not participate in Synlait's short-term or long-term incentive
arrangements. This approach supports independent decision-making and ensures Directors remain focused on the long-
term interests of shareholders.
20
Paul McGilvary retired from the Board as an Independent Director on 18 May 2026, and chaired the People, Environment and Governance Committee until 21 November 2025.
21
Paul Washer retired from the Board as an Independent Director on 21 November 2025, and chaired the Audit and Risk Committee until his retirement.
22
Leon Fung was a Non-independent Director until his appointment as Acting Chief Executive Officer on 14 May 2026, after which he no longer received any Director fees. During
that period, he chaired the People, Environment and Governance Committee from 21 November until his appointment as Acting Chief Executive Officer.
23
Julia Zhu chaired the Audit and Risk Committee between 22 November 2025 and 18 May 2026, and has chaired the People, Environment and Governance Committee since
19 May 2026.
24
Katherine Turner joined the Board as an Independent Director on 18 May 2026, and has chaired the Audit and Risk Committee since her appointment.
PAGE 31 & 32ANNUAL REPORT 2026

5. Director holdings
This table sets out the relevant interests held by Directors during the period in securities issued by Synlait:
DirectorSecurities held (legally or beneficially)
as at 31 July 2026
Securities held (legally or beneficially)
as at 31 July 2025
George Adams00
Leon Fung0 0
Paul McGilvary
25
3,500 ordinary shares3,500 ordinary shares
Paul Washer
26
0 0
Sihang Yang (Edward)00
Tao Zhang00
Zhu Yi (Julia)00
Katherine Turner
27
00
25
Paul McGilvary retired from the Board as an Independent Director on 18 May 2026.
26
Paul Washer retired from the Board as an Independent Director on 21 November 2025.
27
Katherine Turner joined the Board as an Independent Director on 18 May 2026.
6. Employee remuneration
During the year ended 31 July 2026, 556 employees (including former employees) of Synlait and its subsidiaries (not
being Directors) received remuneration and other benefits, in their capacity as employees, of $100,000 or more,
information includes overtime and company contribution to KiwiSaver, as set out below:
Salary bracket ($)Number of employees
100,000 – 109,999 111
110,000 – 119,99988
120,000 – 129,99993
130,000 – 139,99972
140,000 – 149,99943
150,000 – 159,99926
160,000 – 169,99925
170,000 – 179,99917
180,000 – 189,99914
190,000 – 199,99911
200,000 – 209,9996
210,000 – 219,9998
220,000 – 229,9997
230,000 – 239,9995
240,000 – 249,9992
250,000 – 259,9991
260,000 – 269,9993
270,000 – 279,9992
280,000 – 289,9991
290,000 – 299,9992
310,000 – 319,999 1
320,000 – 329,9992
340,000 – 349,9991
370,000 – 379,9991
380,000 – 389,9992
390,000 – 399,9991
400,000 – 409,9992
430,000 – 439,9992
450,000 – 459,9991
460,000 – 469,9991
470,000 – 479,9991
510,000 – 519,9991
550,000 – 559,9991
770,000 – 779,9991
2,020,000 – 2,029,9991
Synlait's Strategic Remuneration Policy is endorsed by the People, Environment and Governance Committee for approval
by the company's Board.
6. Employee remuneration
During the year ended 31 July 2026, 556 employees (including former employees) of Synlait and its subsidiaries (not
being Directors) received remuneration and other benefits, in their capacity as employees, of $100,000 or more,
information includes overtime and company contribution to KiwiSaver, as set out below:
Salary bracket ($)Number of employees
100,000 – 109,999 111
110,000 – 119,99988
120,000 – 129,99993
130,000 – 139,99972
140,000 – 149,99943
150,000 – 159,99926
160,000 – 169,99925
170,000 – 179,99917
180,000 – 189,99914
190,000 – 199,99911
200,000 – 209,9996
210,000 – 219,9998
220,000 – 229,9997
230,000 – 239,9995
240,000 – 249,9992
250,000 – 259,9991
260,000 – 269,9993
270,000 – 279,9992
280,000 – 289,9991
290,000 – 299,9992
310,000 – 319,999 1
320,000 – 329,9992
340,000 – 349,9991
370,000 – 379,9991
380,000 – 389,9992
390,000 – 399,9991
400,000 – 409,9992
430,000 – 439,9992
450,000 – 459,9991
460,000 – 469,9991
470,000 – 479,9991
510,000 – 519,9991
550,000 – 559,9991
770,000 – 779,9991
2,020,000 – 2,029,9991
PAGE 33 & 34ANNUAL REPORT 2026

Chief Executive Officer remuneration
The table below sets out remuneration paid to Synlait’s Chief Executive Officer in the year to 31 July 2026:
RemunerationRichard Wyeth28Leon Fung29
Salary$884,231$170,180
KiwiSaver$111,817$5,956
Medical insurance$9390
LT I00
STI00
Other remuneration
30
$1,029,3850
Total$2,026,372$176,136
The remuneration of the Chief Executive Officer is reviewed annually by the People, Environment and Governance
Committee and approved by the Board.
The CEO's remuneration is structured in accordance with the same principles that apply to the broader executive team,
comprising fixed remuneration, short-term incentives and long-term incentives. A substantial portion of the CEO's
remuneration opportunity is linked to the achievement of company and individual performance objectives and the
delivery of long-term shareholder value.
This structure ensures the CEO's remuneration is aligned with the successful execution of Synlait's strategy and the
achievement of sustainable business performance.
CEO Short-Term Incentive (STI)
The Chief Executive Officer participates in Synlait's Short-Term Incentive (STI) Scheme, which is designed to reward the
achievement of annual business and individual performance objectives that support Synlait's strategy and long-term
success.
For FY26, the CEO's target STI opportunity was up to 40% of base salary.
The FY26 STI comprised:
ComponentWeightingDescription
Company performance60%Based on achievement of Board-approved financial performance objectives,
including EBITDA targets.
Individual performance40%Based on achievement of Board-approved strategic, operational, transformation
and cost-efficiency objectives.
The individual performance component included measures relating to strategic planning, organisational transformation,
operational performance, regulatory milestones, cost management and delivery of key strategic projects.
Performance measureWeighting
Shareholder value creation30%
Capital efficiency and long-term financial performance70%
The Company Performance component operates as a gateway to payment of the Individual Performance component.
Subject to Board discretion, if the minimum Company Performance threshold is not achieved, no payment will be
made in respect of the Individual Performance component.
Individual objectives trigger payment entitlements at a defined threshold of achievement and are subject to a
maximum payout cap.
The Board retains discretion to adjust outcomes where necessary to ensure remuneration outcomes appropriately
reflect overall business performance, shareholder experience, risk management outcomes and individual contribution.
Final STI payments are determined by the Board following completion of the annual financial audit.
CEO Long Term Incentive (LTI)
The Chief Executive Officer participates in Synlait's Long-Term Incentive (LTI) framework, which is designed to align
executive reward with the creation of sustainable long-term shareholder value and the successful delivery of Synlait's
strategic objectives.
The current LTI programme operates over a three-year performance period and provides a target opportunity
equivalent to 40% of base salary. Awards are subject to achievement of Board-approved long-term performance
measures and may vest in part, in full, or not at all depending on performance outcomes.
The FY25-FY27 programme is weighted across two long-term performance measures:
As the current programme remains within the three-year assessment period ending in FY27, no payments have been
made under the scheme during FY26. Any future payment remains subject to achievement of the approved performance
conditions and Board approval.
No STI or LTI payments were made to the former CEO during FY26. The CEO departed the business before the end of
the financial year and before completion of the relevant performance assessment and vesting periods.
The Board is currently reviewing Synlait's executive incentive arrangements to ensure they remain aligned with the
company's strategic priorities, shareholder interests and market practice. Any changes arising from this review will be
disclosed in future remuneration reports.
28
Richard Wyeth was employed by Synlait until 30 June 2026 following his resignation as Chief Executive Officer on 14 May 2026.
29
Leon Fung assumed the role of Acting CEO on 14 May 2026. No further director fees were payable to Leon during the reporting period due to his executive director status
from that date.
30
Includes payment of accrued annual leave entitlements and discretionary payments.
PAGE 35 & 36ANNUAL REPORT 2026

7. Donations
Donations made by the Synlait Group (including wholly owned subsidiary Dairyworks Limited) during the year ended
31 July 2026 totalled $40,419
Synlait made no political donations.
8. Auditors
In the year to 31 July 2026, Synlait’s total payments to its auditors KPMG were as follows:
KPMG service included in administration and operating expenses
Statutory audit fee$420,000
Half year accounts review $105,000
Bright Group financial audit$325,000
Other assurance services-
Total$850,000
Executive remuneration framework
Synlait's executive remuneration framework is designed to attract, retain and motivate high-calibre leaders while
supporting the delivery of the company's strategy and the creation of sustainable long-term shareholder value.
The framework is governed by the Board through the People, Environment and Governance Committee and is reviewed
regularly to ensure it remains aligned with business strategy, market practice and shareholder expectations.
Executive remuneration comprises three key components:
ComponentPurposePerformance link
Fixed RemunerationProvides competitive remuneration reflecting the
role, responsibilities, skills and experience required.
Annual remuneration reviews take into account
individual performance, contribution, market
competitiveness and internal relativities.
Short-Term Incentive
(STI)
Rewards the achievement of annual business and
individual performance objectives.
Directly linked to annual performance outcomes.
Long-Term Incentive
(LTI)
Encourages sustainable value creation and long-
term decision-making.
Directly linked to multi-year performance measures
aligned to shareholder returns and capital efficiency.
While performance may influence fixed remuneration adjustments over time, the majority of performance-based reward
is delivered through the STI and LTI arrangements. This ensures remuneration outcomes are appropriately aligned with
business performance and shareholder value creation.
Executive Short-Term Incentive (STI)
The STI rewards executives for delivering annual objectives that support Synlait’s business plan and strategic priorities.
Performance is assessed against Board-approved company and individual measures. Awards are not guaranteed.
For each financial year, the Board approves:
• the threshold, target and maximum incentive opportunity;
• the performance measures and their weightings;
• the performance level required for threshold, target and maximum outcomes;
• any financial or other gateway applying before an award may be paid; and
• the treatment of significant risk, safety, conduct or quality events.
At the end of the performance period, the Board assesses results against the approved measures. The Board may adjust
an outcome where the calculated result does not fairly reflect underlying company performance, shareholder experience,
risk outcomes or individual contribution.
Executive Long-Term Incentive (LTI)
The Long-Term Incentive Scheme is designed to align executive interests with those of shareholders by linking reward
outcomes to the achievement of sustained long-term performance.
LTI awards are assessed over a three-year performance period and are subject to achievement of clearly defined
performance measures that support long-term value creation.
The FY25-FY27 performance measures include:
• Total Shareholder Return (TSR), which measures the value delivered to shareholders through changes in share
price and returns over the performance period.
• Return on Net Capital Employed (RoNCE), which measures the company's ability to generate returns from the
capital invested in the business.
These measures encourage disciplined capital allocation, sustainable profitability and decisions that support long-term
business success. LTI awards are contingent on performance and may vest in part, in full or not at all depending on the
extent to which performance conditions are achieved.
PAGE 37 & 38ANNUAL REPORT 2026

10. Top 20 security holders and substantial security holders
Synlait had the following securities on issue as at 31 July 2026:
• 603,198,098 ordinary shares
Set out below are Synlait’s largest shareholders, as recorded on Synlait’s share register, as at 31 July 2026:

Number of shares held
Percentage of ordinary
shares on issue
01. Bright Dairy Holding Limited393,599,93865.3%
02. Citicorp Nominees Pty Limited119,787,97719.9%
03. New Zealand Depository Nominee Limited
31
13,657,7072.3%
04. Lowquest Pty Ltd5,733,7601.0%
05. BNP Paribas Nominees Pty Ltd5,065,9370.8%
06. John Penno3,022,5800.5%
07. Wairahi Investments Limited2,500,0000.4%
08. BNP Paribas Nominees (NZ) Limited
31
2,485,3980.4%
09. Lennon Holdings Limited1,800,0000.3%
10. Custodial Services Limited1,320,5380.2%
11. Rainer & Shanti Huebner1,300,0000.2%
12. Paul & Bronwyn Lancaster1,055,6230.2%
13. Juanjuan Wang958,0000.2%
14. Therese Roche900,0000.1%
15. FNZ Custodians Limited893,3520.1%
16. Citibank Nominees (New Zealand) Limited
31
859,5540.1%
17. Amare Holdings Limited775,0000.1%
18. Jingli Fan699,2480.1%
19. Forsyth Barr Custodians Limited609,6360.1%
20. Phuong Thi Ngoc Duong565,9170.1%
Total 557,590,16592.4%
According to notices given under section 280(1)(b) of the Financial Markets Conduct Act 2013, the following are Synlait’s
substantial product holders as at 31 July 2026. The number of shares owned is as advised by the shareholder in their last
Substantial Security Holder Notice.
Substantial product holderNumber of ordinary shares in
which relevant interest is held
Percentage of total
ordinary shares on issue
Bright Dairy Holding Limited393,599,93865.3%
The a2 Milk Company Limited119,635,61319.8%
Total513,235,55185.1%
9. Stock exchange listings
Synlait’s ordinary shares have been listed on the NZX Main Board since 23 July 2013 (ticker code: SML).
On 24 November 2016 Synlait completed a compliance listing on the ASX as a foreign exempt issuer (ticker code: SM1).
As an ASX foreign exempt issuer, Synlait complies with the NZX Listing Rules (other than as waived by NZX Regulation)
and is exempt from complying with most of the ASX Listing Rules, as set out in ASX Listing Rule 1.15.
In December 2019, Synlait issued $180 million of unsecured, subordinated, fixed rate bonds with an interest rate of 3.83%
per annum. These securities were quoted and traded on the NZX Debt Market (ticker code: SML010).
In November 2020, Synlait successfully completed a $200 million equity raise to complete the investment phase of its
strategy and strengthen its balance sheet. The equity raise comprised of a $180 million underwritten placement at a fixed
price of NZ$5.10 per share and a $20 million underwritten share purchase plan at the same share price.
In September 2024, Synlait announced and completed a recapitalisation, which included aggregate new equity of
$217.8 million, with its two largest shareholders. The recapitalisation required a Special Shareholders’ Meeting which
was held on Wednesday 18 September 2024. Shareholders approved by way of ordinary resolutions the issuance of
approximately $217.8 million of new equity capital by way of:
• A $185 million issue of shares to Bright Dairy Holding Limited (Bright Dairy) at an issue price of $0.60 (a 100%
premium to the closing price of Synlait’s shares on the NZX Main Board on 15 August 2024 (which was the last
undisturbed share price prior to announcement of the settlement with The a2 Milk Company and its support of
Synlait’s equity raise, and a 40% premium to the issue price of $0.43 for the a2MC placement)), which increased its
shareholding in Synlait from 39.01% to 65.25% (Bright Dairy placement); and
• A $32.8 million issue of shares to The a2 Milk Company Limited (a2MC) at an issue price of $0.43 (a 43% premium
to the closing price of Synlait’s shares on the NZX Main Board on 15 August 2024 (which was the last undisturbed
share price prior to announcement of the settlement with a2MC and its support of Synlait’s equity raise), which
resulted in its holding of 19.83% being retained (a2MC placement). The settlement with a2MC and a2 Infant Nutrition
Limited announced on 16 August 2024 was conditional on a number of matters including the Bright Dairy placement
and a2MC placement and accordingly has been included in the resolution to approve the a2MC placement.
The shares were issued to Bright Dairy and The a2 Milk Company on Tuesday 1 October 2024.
The placement of shares to Bright Dairy triggered a change of control event in relation to the SML010 bonds. Following
the change of control event, holders of the SML010 bonds had a 10-working day period to elect to have their bonds
redeemed. Following the elections, holders holding approximately $169 million of the $180 million bonds elected to have
their bonds redeemed early on Wednesday 13 November 2024. The remainder of the bonds matured on Tuesday 17
December 2024.
31
These shares are held through New Zealand Central Securities Depository Limited (NZCSD), a depository system operated by New Zealand Clearing and Depository Corporation
Limited which allows electronic settlement and trading of securities. New Zealand Depository Nominee Limited is the entity that holds legal title to securities lodged in the
NZCSD depository.
PAGE 39 & 40ANNUAL REPORT 2026

13. NZX Waivers
During the financial year, Synlait obtained and relied on a number of waivers from the NZX Listing Rules. A summary of
those waivers, together with the relevant conditions and implications, is set out below. Copies of the waivers described
in this section, and other waivers obtained or relied on by Synlait, are available in the Investor Centre on Synlait's website
and on nzx.com and asx.com.au under the ticker codes "SML" and "SM1", respectively.
Major Transactions
On 29 May 2024, Synlait was granted a waiver by NZ RegCo from NZX Listing Rule 5.1.1(b), to the extent required to allow
Synlait to enter into certain “Relevant Contracts” during a period of 12 months from the date of the waiver and perform the
Relevant Contracts without needing to obtain shareholder approval (“Major Transaction Waiver”). This waiver was relied
upon throughout most of the financial year ended 31 July 2025 and expired on 29 May 2025. A new waiver on analogous
terms was subsequently issued on 29 July 2025, permitting Synlait to continue entering into and performing Relevant
Contracts without shareholder approval for a further 12-month period, until 29 July 2026. NZ RegCo noted that the 2025
Waiver covers routine renewals or rollovers of key Relevant Contracts previously entered under the 2024 Waiver.
A condition of each Major Transaction Waiver is that the waiver, its conditions, and implications are disclosed in Synlait’s
annual report for the relevant financial year. NZ RegCo published the Non-Interested Directors’ certificate to market
alongside publication of the waiver decision.
The Major Transaction Waivers have provided relief from NZX Listing Rule 5.1.1(b) as set out below (with the conditions):
Waiver from Rule 5.1.1(b): To the extent required to allow Synlait to enter into Relevant Contracts during a period of
12 months from the date of the waiver and perform the Relevant Contracts without needing to obtain shareholder approval
by ordinary resolution.
Conditions: The Major Transaction Waivers are subject to the following conditions:
• Synlait’s Non-Interested Directors certify to NZX that the granting of the waiver is in the best interest of each of (i)
Synlait, and (ii) Synlait’s shareholders as a whole;
• Synlait’s Non-Interested Directors certify to NZX that the Relevant Contracts will (i) not significantly change the nature
of Synlait’s business, and (ii) be in the ordinary course of Synlait’s business;
• Synlait’s Non-Interested Directors certify to NZX that the Relevant Contracts are in the best interest of each of (i)
Synlait, and (ii) Synlait’s shareholders as a whole;
• Synlait’s Non-Interested Directors include in the certificate a summary of the core grounds for the certifications given
under each limb of the three conditions described above;
• Synlait’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 Synlait’s shareholders for the purposes of
the Companies Act 1993; and
• the waiver and its conditions and implications are disclosed in Synlait’s annual report for the financial year ending
31 July 2025.
11. Spread of product holders
The spread of Synlait’s ordinary shareholders as at 31 July 2026 is as follows*:
12. Credit rating
Synlait does not have a credit rating.
Size of holding Number of investors Percentage of investors Total number of shares Percentage issued
1 – 1,0002,10940.00%897,2860.15%
1,001 – 5,0001,77335.03%4,660,5780.77%
5,001 – 10,00053810.60%4,114,7960.68%
10,001 – 50,000 58310.93%12,710,4622.11%
50,001 – 1,000,0001903.23%29,485,5184.89%
1,000,001 and over 120.21%551,329,45891.40%
Total5,205100.00%603,198,098100.00%
* Based on the data of registered holders.
PAGE 41 & 42ANNUAL REPORT 2026

Related Party Transaction – Replacement Bright Loan
On 29 June 2026, Synlait was granted a waiver by NZ RegCo from NZX Listing Rule 5.2.1, to the extent required to
allow Synlait to enter into a replacement shareholder loan facility with Bright Dairy International Investment Limited
(“Replacement Bright Loan”) without obtaining shareholder approval by ordinary resolution (“Related Party Transaction
Waiver”). The waiver was granted in connection with the refinancing of Synlait's existing syndicated banking facilities and
the replacement of the existing Bright shareholder loan.
A condition of the Related Party Transaction Waiver is that the waiver, its conditions and implications are disclosed in
Synlait's annual report for the year ended 31 July 2026. NZ RegCo published the Non-Interested Directors’ certificate to
market alongside publication of the waiver decision.
The Related Party Transaction Waiver provided relief from NZX Listing Rule 5.2.1 as set out below (with the conditions):
Waiver from Rule 5.2.1: To the extent required to allow Synlait to enter into the Replacement Bright Loan without obtaining
shareholder approval by ordinary resolution.
Conditions: The Related Party Transaction Waiver was granted subject to the following conditions:
• the non-interested Directors certify that the terms of the Replacement Bright Loan have been entered into, and have
been negotiated, on an arm’s length commercial basis;
• the non-interested Directors certify that Synlait was not influenced to enter into the Replacement Bright Loan by Bright
Dairy Holding Limited or Bright Dairy International Investment Limited;
• the non-interested Directors certify that the granting of the waiver in respect of the Replacement Bright Loan is in the
best interests of Synlait and all of Synlait’s shareholders;
• the non-interested Directors of Synlait certify that the Replacement Bright Loan is in the best interests of Synlait, all of
Synlait’s shareholders, and all of Synlait’s shareholders who are not precluded from voting under Rule 6.3;
• the non-interested Directors include in the certificate a summary of the core grounds for the certification given under
each limb of conditions listed above; and
• the waiver, its conditions and implications being disclosed in Synlait’s next annual report.
Implications: NZX Listing Rule 5.2.1 ordinarily requires shareholder approval before an issuer enters into a material
transaction with a related party. The purpose of the rule is to ensure shareholders have an opportunity to consider and
vote on transactions where there may be actual or perceived influence by a related party. NZ RegCo granted the waiver
after being satisfied that the Replacement Bright Loan had been negotiated on an arm's length basis by an Independent
Directors' Committee, that Bright Dairy's involvement had not influenced Synlait's decision to enter into the transaction,
and that the transaction and waiver were in the best interests of Synlait and its shareholders. NZ RegCo noted that
the Replacement Bright Loan is on substantially the same terms as the existing Bright shareholder loan approved by
shareholders in July 2024, and that entry into the Replacement Bright Loan was required to facilitate the refinancing
of Synlait's syndicated banking facilities. NZ RegCo also noted that, without the waiver, Synlait could not be certain of
completing the refinancing within the required timeframe.
Synlait relied on the Major Transaction Waiver granted on 29 May 2025 during the financial year ending 31 July 2026,
through to its expiry on 29 July 2026.
Implications: The Major Transaction Waivers note that the policy behind NZX Listing 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. The waivers were sought because the application of NZX Listing Rule 5.1.1(b) in respect of entry into and
performance of the Relevant Contracts would otherwise impose an unreasonable and disproportionate restriction on
Synlait’s ability to enter into long-term and multi-year arrangements that are part of its primary business undertakings.
The Major Transaction Waivers allow Synlait to enter into Relevant Contracts without the need for shareholder approval,
meaning a shareholder meeting will not need to be called and shareholders will not have the opportunity to vote on
whether Relevant Contracts are entered into by Synlait. Relevant Contracts are contracts entered into and performed by
Synlait or any of its subsidiaries as part of its primary business undertakings (ordinary course) and which are principally:
• for the purchase and payment for dairy products or non-dairy nutritional products;
• 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
• with a customer for the supply by a Synlait 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 Synlait
group member,
to the extent that such Relevant Contract:
• is entered into in the 12-month period after the date of the waiver;
• has a Gross Value of more than 50% of Synlait’s Average Market Capitalisation;
• and is a transaction or series of related transactions falling within, or in connection with, the transactions described
above.
Synlait’s Non-Interested Directors have certified to NZX that:
• the granting of the waiver is in the best interest of each of Synlait and Synlait’s shareholders as a whole;
• the Relevant Contracts will not significantly change the nature of Synlait’s business and will be in the ordinary course
of Synlait’s business;
• the entry into and performance of one or more Relevant Contracts is not, and will not be, a major transaction
requiring shareholder approval of Synlait’s shareholders for the purposes of the Companies Act 1993.
Outside the scope of the waiver, NZX Listing Rule 5.1.1 continues to apply, and the Companies Act 1993 major transaction
protections remain unchanged.
PAGE 43 & 44ANNUAL REPORT 2026

17. Board skills matrix
33
Number of Directors
(Total 6)
Level of capability
Capability DescriptionHighMedium
Consumer productsExperience as a senior executive in, or as a professional advisor
to, consumer products businesses, including sales and marketing,
product innovation and supply chain.
Data and technologyExperience in the implementation of digital transformation or
new digital product development, including digital marketing and
commerce and leveraging data and technology in a consumer
products business.
Financial acumenUnderstanding of financial statements and reporting, key
drivers of financial performance, corporate finance and internal
controls.
Food and manufacturing
safety and quality
Technical or managerial experience relating to food, food product
development and development and/or implementation and
management of safe practices for the sourcing, production, transport
and distribution of foods.
GovernanceExperience in and commitment to the highest standards of corporate
governance, including as a non-executive director of a listed company,
large or complex organisation or government body, or through former
C-suite executive experience in a large organisation.
International business
experience
Experience as a senior executive in, or as a profession adviser to,
international businesses and exposure to global markets and a range
of different political, regulatory and business environments.
LeadershipExperience in a senior management position in a listed company,
large or complex organisation or government body, including
experience in leading strategy development and execution.
Health and SafetyExperience in development of health, safety and wellbeing
frameworks and risk-management tools at large organisations, or
experience in health & safety leadership positions.
People and cultureLeadership experience in the oversight, development and
implementation of people and culture programmes at large
organisations, people management, development and succession
planning, setting remuneration frameworks and promoting diversity
and inclusion.
Risk managementExperience in identification, assessment, monitoring and management
of material financial and non-financial risks and understanding,
implementation and oversight of risk management frameworks and
controls.
StrategyExperience in strategic oversight, including the development and
implementation of strategic plans for organisations of similar scale and
complexity.
SustainabilityKnowledge, understanding or experience in sustainable practices to
manage the impact of business operations on the environment and
community and the impact of climate change on business operations.
Industry involvement
and advocacy
Experience in being a leading voice within the food or consumer
goods industry.
33
Reflecting Board composition as at 31 July 2026.
14. NZX Corporate Governance Code
Synlait’s statement on the extent to which Synlait has followed the recommendation in the NZX Code during the year to
31 July 2026 can be found at: synlait.com/investors/corporate-governance
Synlait’s operating subsidiaries operate largely independently from Synlait. Synlait does not require them to comply with
the recommendations in the NZX Code.
15. Gender composition
This table sets out the gender composition of Synlait’s Directors and Officers (CEO and direct reports to the CEO) as at
31 July 2026. The prior year’s comparison is in brackets.
16. Performance against Diversity and Inclusion Policy
Synlait’s Diversity and Inclusion Policy promotes a culture of diversity and inclusiveness, putting in place appropriate
strategies and measurable objectives. We aim to achieve three main goals:
• Workforce diversity – employ, develop and retain more women and Māori.
• Diversity through leadership – empower and equip our people leaders to recruit, develop and retain a diverse and
competent workforce.
• Workforce inclusion – foster a culture that encourages flexibility and fairness, to enable all employees to realise their
potential, and thereby increase employee retention.
To help us meet these goals we have our Mātua (Parental Leave) Policy and our Tāwariwari (Flexible Working) Policy,
and report to the Board on candidate diversity. Our success will be measured against the following as at the end of FY26.
The prior year’s comparison is in brackets.
Group
32
FemaleMale Total
Board 2 (1)4 (6)6 (7)
Officer 2 (3)7 (8) 9 (11)
Total41115
MeasureProgress as at 31 July 2026
Reduction of the gender pay gap to ≤ 8%Median 13.22%, Average 9.6% (Median 14%, Average 8.7%)
40-50% of leadership positions (people leaders, supervisors,
specialist roles and senior leadership) held by women
39.7% (41.3%)
No regretted losses of high potential female employees8 (9)
32
Leon Fung has been included in the numbers for both Board and Officer because he was an Executive Director and Acting Chief Executive Officer as at 31 July 2026.
PAGE 45 & 46ANNUAL REPORT 2026

CFO Review
Below is a detailed summary of
Synlait’s financial result for the
12 months ended 31 July 2026.
In this finance review Synlait’s
performance is detailed under
our four business units which are:
With a high quality milk pool and infant-
formula grade dryers, Synlait’s bulk
ingredients portfolio delivers year-round
consistency. Products, including milk
powders and AMF, are sold to manufacturers
for use in a range of applications.
Ingredients
This strategic product category delivers
high-value, formulated products in bulk
and in consumer-ready formats, tailored to
all ages – from early life to adult nutrition.
Advanced Nutrition
A range of fresh milk, butter, cream and
cheese products produced and sold
under the Dairyworks, Rolling Meadow,
Alpine, Pams and Value brands.
Consumer
Manufactured from our high-quality milk
pool in Dunsandel, Synlait’s UHT cream
delivers increased stability and is sold for
out-of-home consumption in a range of
settings – including bakeries, cafés and
beverage chains.
Foodservice
Andy Liu
Financial performance
FY26 was a year of contrasts. Operational disruption and commercial pressures, particularly in the first half, resulted in
a disappointing full-year financial outcome. Improved operational stability through the second half supported a better
earnings result and measurable progress in Synlait’s recovery.
Revenue increased 6% to $1.9 billion reflecting strong growth in Dairyworks and Foodservice revenue.
Operating cash flow was negative, reflecting weaker operating performance and higher working-capital requirements.
North Island sale proceeds strengthened the balance sheet and reduced net debt by $35.7 million to $215.0 million.
The next phase of recovery is focused on converting operational progress into stronger cash generation and further
debt reduction.
Key metrics
Key financial metrics1
Currency in NZD unless otherwise stated (in millions)FY22FY23FY24FY25FY26
Income statement
Revenue 1,661 1,604 1,637 1,8271,937
Gross profit1471445610538
EBITDA
2
13291(4)518
EBIT
2
6531(183)(6)(38)
NPAT39(4)(182)(40)(75)
Net cash from/(used in) operating activities23339(47)166(183)
Balance sheet
Capital employed1,0901,2041,1561,040923
Net operating assets
3
9951,2051,1251,008862
Return on net operating assets6%3%(16%)(1%)(4%)
Net return on capital employed (pre-tax)6%3%(15%)(1%)(4%)
Debt/debt + equity (excl. derivatives)30%34%47%24%23%
Net debt/EBITDA⁴3x5x(133x)5x27x
Earnings per share18c(2c)(83c)(7c)(13c)
Average FX conversion rate (NZD:USD) 0.6732 0.6446 0.62680.5963 0.5938
Base milk price9.308.227.8310.169.69
Total milk price (kgMs)9.598.498.1110.6610.07
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, and non-cash impairment accordingly.
³ Net operating assets includes current assets, property, plant, and equipment, right-of-use assets, and intangible assets. It deducts trade payables and excludes capital work in
progress, derivative balances, loans and borrowings, goodwill, and tax balances.
⁴ Net debt calculation excludes lease liabilities.
PAGE 47 & 48ANNUAL REPORT 2026

Sales and gross profit performance
Total group revenue increased by $109 million to $1.94 billion, supported by growth in Consumer and Foodservice.
Total production across the four business units decreased by 12,000 MT, reflecting the North Island divestment, tactical
raw milk sales and lower Ingredients production. Higher Advanced Nutrition, Consumer and Foodservice volumes partly
offset the reduction in Ingredients.
Underlying business-unit gross profit decreased by 35% to $93.3 million. The decline in Advanced Nutrition and
Ingredients more than offset growth in Consumer and Foodservice, with most of the pressure occurring in the first half.
FY25FY26
Reported EBITDA50.78.1
Items affecting comparability
Onerous contract expense on North Island milk sales¹4.7-
Costs relating to power outage5.6-
Insurance proceeds net of claim preparation costs-(6.4)
One-off milk incentive-6.4
Manufacturing challenges²43.51.4
Losses relating to tactical raw milk sales-37.0
Cost related to third party manufacture to clear customer order backlog-12.6
Losses relating to input material-9.6
North Island divestment transaction cost2.7-
North Island discontinued operations-3.6
Gain on sale of North Island assets-(26.0)
Total EBITDA adjustment56.538.3
Underlying EBITDA107.246.3
Reported NPAT including North Island(39.8)(75.4)
Reported tax expense14.5(8.1)
Reported NPBT including North Island(54.4)(67.3)
EBITDA adjustments as above56.538.3
North Island discontinued operations ITDA-6.3
Underlying NPBT2.1(22.7)
Tax at 28%(0.6)6.4
Other tax expense(0.8)(5.2)
Underlying NPAT0.8(21.6)
Advanced
Nutrition

Ingredients

Consumer

Foodservice

Total
FY26
Production volume (MT)45,29482,96059,71112,135200,099
Revenue ($ millions)522575498741,669
Gross profit ($ millions)20.99.751.711.093.3
FY25
Production volume (MT)39,997107,51956,1008,471212,087
Revenue ($ millions)526677376451,624
Gross profit ($ millions)95.013.139.0(4.6)142.5
% Change
Production volume (MT)13%(23%)6%43%(6%)
Revenue ($ millions)(1%)(15%)32%62%3%
Gross profit ($ millions)(78%)(26%)32%n.m(35%)
Underlying gross profit by business unit including North Island
Advanced Nutrition
Advanced Nutrition net production was up 13% to 45,294MT as a result of catching up from FY25 operational challenges.
Meanwhile revenue was down 1% to $522 million, driven by a year-on-year reduction in lactoferrin volumes and infant
volumes produced exclusively in the North Island. Gross profit decreased 78% to $20.9 million. Operational disruption,
production-plan changes and enhanced quality controls reduced manufacturing efficiency, while catch-up production
increased costs. These pressures eased as operational stability improved through the second half.
Lactoferrin production was broadly stable year on year, decreasing by 7 MT as lower milk processing volumes reduced
available input material.
Ingredients
Ingredients production decreased 23% to 82,960 MT, reflecting tactical raw milk sales and the prioritisation of Advanced
Nutrition production. Revenue decreased 15% to $575 million, primarily reflecting lower sales volumes.
Gross profit decreased 26% to $9.7 million. Peak-season capacity constraints shifted production towards whole milk
powder when market price and stream returns were unfavourable to Synlait. Performance progressed later in the year as
the product mix shifted towards SMP and AMF with more favourable stream returns.
Consumer
Production volumes increased by 6% to 59,711 MT while revenue increased 32% to $498 million, reflecting the business’s
resilience in navigating elevated commodity price conditions and business development. The business has also benefitted
from a full year in the butter category, positioning itself for future growth in value-added dairy offerings. Gross profit
improved by 32%, supported by the continued strength of Dairyworks’ export strategy, which delivered solid international
performance. Margin improvement in the liquid milk segment also contributed positively to overall profitability.
Reconciliation of reported to underlying EBITDA and NPAT ($m)
¹ Related to Synlait ceasing North Island milk collection, with the existing contracted farms’ milk collected and processed by Open Country Dairy. Part of the loss results from
Synlait’s committed 5 cents one-off incentive for 2024/2025 dairy season.
² Related to resolved manufacturing challenges which resulted in additional one-off costs.
PAGE 49 & 50ANNUAL REPORT 2026

Milk price and milk supply
In FY26, Synlait collected 76.02 million kgMS from contracted farms in the South Island. This was an increase of
2.59 million kgMS versus FY25, despite five fewer farms supplying milk. From 1 June 2026 Synlait has 176 contracted
farms. This reduction in supplying farms has been purposeful to ensure milk supply is optimised to make the highest
margin products, while also minimising milk sales.
For the 2025/2026 season, Synlait set a final FY26 base milk price of $9.69 per kgMS, compared with $10.16 per kgMS
in FY25. Farmers received a further average $0.38 per kgMS through the A1 protein free milk premium, Lead With Pride,
winter milk, customer-funded sustainability and secured milk premium programmes. This resulted in a total average milk
payment of $10.07 per kgMS, reflecting the company’s ongoing commitment to suppliers through competitive pricing and
a robust advance rate structure.
Operating expenditure
Synlait delivered a strong performance in cost management, underscoring our commitment to operational efficiency
and financial discipline. Unadjusted Selling, General, and Administrative (SG&A) expenses – including Dairyworks –
decreased by $11.1 million to $114.6 million, despite inflationary pressures. This result reflects the execution of targeted
cost-saving initiatives, which are now embedded as part of our permanent operating model.
The key driver of these savings was a reduction in air freight costs. Other savings across employee costs and lease costs
are offset by an uplift in third party storage costs to support UHT volume growth.
Unadjusted manufacturing costs increased by $15.8 million during the year, this is primarily driven by additional secured
milk premiums (to support our South Island milk volume) and additional milk transport costs (to support milk sales
and free up plant capacity for high value product). The uplift is offset by depreciation savings on North Island assets
recognised as held for sale for most of FY26.
Looking ahead, Synlait remains focused on maintaining a lean cost base while supporting growth. The structural nature
of the cost savings provides a strong foundation for improved profitability and long-term value creation.
EBITDA
Earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by $42.6 million to $8.1 million.
Net financing costs
Net financing costs decreased $18.5 million or 38.5% to $29.5 million, primarily driven by lower wholesale interest rates,
reduced debt levels following the repayment of debt using North Island sale proceeds, and lower banking costs achieved
through the successful refinancing.
The loss on derecognition of financial assets, and the financing cost associated with our receivables financing
programme, decreased $2.4 million, reflecting lower wholesale interest rates and the transition of a key customer
receivables financing arrangement to a new banking partner on more favourable terms.
Foreign exchange
Management of foreign exchange exposure is one of Synlait’s key competencies. Many product sales are to overseas
markets, creating a primarily USD exposure risk. Our foreign exchange policy seeks to achieve a competitive annual
average New Zealand Dollar (NZD)/USD exchange rate for the year. In FY26, we achieved a net annual average
NZD/USD export exchange rate of 0.5938 (FY25: 0.5963).
$ millionFY26FY25
(Loss)/profit before tax(67.3)(54.4)
Add back: net financing costs29.548.0
EBIT(37.8)(6.3)
Add back: depreciation and impairment45.957.0
EBITDA8 .150.7
$ millionFY26FY25Change
Gross term debt interest(13.6)(18.4)4.8
Less capitalised interest0.2-0.2
Net term funding interest(13.4)(18.4)5.0
Working capital and revolving credit interest(7.1)(17.7)10.6
Interest received1.20.80.3
Loss on derecognition of financial assets(6.7)(9.2)2.4
Net short-term funding interest(12.6)(26.1)13.4
Interest on lease liabilities(3.5)(3.6)0.1
Net finance costs(29.5)(48.0)18.5
Foodservice
Production volumes increased 43% to 12,135 MT as UHT cream product sales increased. Revenue increased
accordingly to $74 million, a 62% increase. The business unit is profit-making, with a gross profit of $11 million, driven
by improved sales pricing and lower fat pricing in FY26.
PAGE 51 & 52ANNUAL REPORT 2026

Overview
North Island sale proceeds strengthened the balance sheet and reduced net debt by $35.7 million to $215.0 million.
The operating cash outflow limited the reduction.
Our reported net profit after tax loss of ($75.4 million) decreased total retained earnings to $30.4 million from
$105.9 million. Total shareholders’ equity decreased to $708.4 million due to the combined losses recognised after tax.
We successfully completed refinancing in June 2026, securing $320 million of bank facilities and renewing the
$130 million Bright Dairy shareholder loan for a further two years. This provides a more stable funding platform as Synlait
progresses its recovery.
Working capital
Working capital increased during FY26, primarily reflecting higher receivables and inventory and lower payables.
These movements, together with weaker operating performance, contributed to the operating cash outflow.
Closing trade and other receivables increased by $71.6 million to $166.6 million year-on-year, mainly reflecting increased
customer receivables, alongside the remaining receivables from the North Island asset sale proceeds.
Decreased trade and other payables primarily reflects the sale of the North Island operations during FY26, resulting in a
lower creditor base and reduced purchasing activity compared to the prior year. Trade and other payables decreased by
$60.1 million to $318.2 million.
Group inventories increased by $14.1 million to $295.5 million. Lower Synlait Milk inventory volumes were more than
offset by a higher-value Advanced Nutrition inventory mix and increased Dairyworks inventory.
Financial position
Closing inventoriesFY26FY25
$ millionMT$ millionMT
Synlait Milk Limited21326,12520634,025
Dairyworks Limited837,356755,896
Total29633,48128139,921
Sale of the North Island assets
The sale of the North Island assets was successfully completed on 1 April 2026, offering Synlait the ability to focus on
achieving continued success out of our Dunsandel site as well as providing further support towards debt reduction,
financial performance and liquidity.
Operating cash flows and total net debt
Cash inflows from investing activities totalled $260.7 million, an increase of $283.3 million compared with the prior year.
The increase was primarily driven by the receipt of $295.7 million in proceeds from the North Island asset sale, which
was completed in April 2026.
$ millionFY26FY25
Current debt103.0328.8
Term debt (carrying amount)129.7-
Transaction costs 1.10.2
Less cash on hand(18.7)(78.3)
Total net debt (excluding lease liabilities) 215.0250.7
$ million

FY26

FY25
Year-on-year
change
Cash receipts from customers1,860.01,850.79.4
Cash paid for milk purchased(1,003.5)(1,021.5)17.9
Cash paid to other creditors and employees(1,033.1)(661.4)(371.7)
GST refunds(6.7)(5.9)(0.8)
Income tax refunds/payments(0.0)3.6(3.7)
Operating cash flows(183.3)165.5(348.8)
Total net debt level reduced following the repayment of debt using North Island sale proceeds. However, weaker
operating performance and elevated working capital requirements absorbed a significant portion of operating cash flows,
limiting further reductions in net debt.
PAGE 53 & 54ANNUAL REPORT 2026

Derivatives
At 31 July 2026 the Group held US$202 million (net) in foreign exchange contracts as detailed in note 19 of the Financial
Statements. The Group hedges foreign exchange risk over the following 18 months from balance date. Additionally, the
Group held AU$11.5 million and CNH¥234 million in export contracts.
Given NZD/USD exchange rate depreciation across the last 18 months, we have a mark-to-market unrealised loss
associated with these contracts at year-end of $7.6 million before tax. As our foreign exchange contracts hedge against
future USD receipts and payment, this unrealised loss 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,
forming part of our annual average NZD/USD exchange rate in those periods.
We also have in place a nominal balance of $85 million of current interest rate swap agreements at year-end
(FY25: $45 million) at various weighted average interest rates. The agreement has unrealised mark-to-market gain of
$0.6 million before tax.
Dairy commodity derivative contracts entered into in the prior financial year remained outstanding at 31 July 2026. No
new milk-price derivative contracts were entered into during FY26.
Most unrealised gains and losses on derivatives detailed above are deferred to the cash flow hedge reserve. Year-on-
year, there was a $5.0 million movement in the reserve, with a closing balance of $0.4 million in FY26 from $5.4 million
in FY25.
Funding facilities and covenants
During June 2026, the Group completed the refinancing of its syndicated banking facilities and entered into a
replacement shareholder loan agreement with Bright Dairy International Investment Limited. The Group's banking
syndicate comprises ANZ bank, China Construction Bank ("CCB"), Bank of China ("BOC"), HSBC, Bank of Communications
("BOCOM"), Industrial and Commercial Bank of China ("ICBC"), Shanghai Rural Commercial Bank ("SHRCB"), China
Merchants Bank ("CMB") and Bank of Beijing ("BoB").
The refinance was fully executed on 30 June 2026.
The new bank funding arrangements total NZ$320 million and comprise of:
• a secured overdraft facility of NZ$15 million.
• a secured seasonal working capital A of NZ$53 million.
• a secured seasonal working capital B of NZ$30 million.
• a secured seasonal working capital C of NZ$63 million.
• a secured term loan facility A of NZ$12 million.
• a secured term loan facility B of NZ$65 million.
• a secured term loan facility C of NZD/CNH of NZ$3 million.
• a secured term loan facility D of NZ$24 million.
• a secured term loan facility E of NZ$15 million.
• a secured NZD/CNH facility of NZ$15 million.
• a secured NZD/CNH facility of NZ$25 million.
The seasonal working capital facilities, term loan facility A, term loan facility C and both NZD/CNH A and B facilities
mature on 30 June 2027 and include extension options exercisable by the relevant lenders. The aggregate limits under
the seasonal working capital facilities reduce to NZ$86 million from 1 March 2027 and NZ$26 million from 1 June 2027.
Certain term loan facilities mature 12 months after first drawdown. The overdraft facility is repayable on demand.
The Group's key financial covenants are:
• net senior leverage ratio of 3.0x, first tested on 30 June 2027.
• working capital ratio of 1.50x through to 28 February 2027 and 1.75x thereafter.
• interest cover ratio of 2.5x for each quarter through to 30 June 2027, increasing to 3.0x thereafter.
• shareholders' funds in excess of NZ$450 million at all times.
• quarterly minimum EBITDA milestones.
Shareholder loan
In addition to the above, Synlait entered into a replacement of the $130 million shareholder loan from Bright Dairy
International Investment Limited, a related company of Bright Dairy Holding Limited, for a further 24-month term, maturing
July 2028.
PAGE 55 & 56ANNUAL REPORT 2026

Synlait Milk Limited
Financial Statements for the
Year Ended 31 July 2026
PAGE 57 & 58
Directors’ responsibility statement 59

Financial statements 60
Income statement 60
Statement of comprehensive income 61
Statement of changes in equity 62
Statement of financial position 63
Statement of cash flows 64

Notes to the financial statements 65
Auditor’s report 111
Contents
ANNUAL REPORT 2026

PAGE 59 & 60

-59-

Synlait Milk Limited
Directors' responsibility statement
For the year ended 31 July 2026

Directors' responsibility statement
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) Co., Ltd, Dairyworks Limited, Synlait Milk (Holdings) No.1 Limited, and Synlait Milk (Dunsandel
Farms) Limited (together "the Group") as set out on pages 60-110 for the year ended 31 July 2026.
The Directors are responsible for ensuring that the financial statements present fairly the financial position of the Group as
at 31 July 2026 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.



George Adams Katherine Turner
Chair Independent Director

28 September 2026 28 September 2026

The accompanying notes form part of and are to be read in conjunction with these financial statements.
-60-

Synlait Milk Limited
Income Statement
For the year ended 31 July 2026

Income statement
For the year ended 31 July 2026
2026
2025
(re-presented)

Notes $'000 $'000
Revenue 2 1,682,291 1,590,160
Cost of sales 4 (1,649,582) (1,478,777)
Gross profit 32,709 111,383
Other income 11,238 9,526
Sales and distribution expenses 4 (44,565) (48,490)
Administrative and operating expenses 4 (55,041) (54,517)
(Loss) / earnings before net finance costs and income tax (55,659) 17,902
Finance expenses 14 (20,891) (33,086)
Finance income 14 1,108 694
Loss on derecognition of financial assets 7,14 (6,065) (7,719)
Net finance costs (25,848) (40,111)
Loss before income tax for the year (81,507) (22,209)
Income tax (expense) / benefit 21 (10,038) 5,536
Loss after tax for the year

(91,545) (16,673)
Profit / (loss) after tax from discontinued operations 1 16,105 (23,149)
Net loss for the year

(75,440) (39,822)
Earnings per share
Basic earnings per share (cents) 16
(12.51) (7.39)
Diluted earnings per share (cents) 16 (12.51) (7.39)

Attributable to continuing operations:

Basic earnings per share (cents) 16
(15.18) (3.55)
Diluted earnings per share (cents) 16 (15.18) (3.55)

Attributable to discontinued operations:

Basic earnings per share (cents) 16
2.67 (3.84)
Diluted earnings per share (cents) 16 2.67 (3.84)



Income statement
For the year ended 31 July 2026.
Directors’ responsibility statement
The accompanying notes form part of and are to be read in conjunction with these financial statements.
ANNUAL REPORT 2026

PAGE 61 & 62

The accompanying notes form part of and are to be read in conjunction with these financial statements.
-62-

Synlait Milk Limited
Statement of Changes in Equity
For the year ended 31 July 2026

Statement of changes in equity
For the year ended 31 July 2026


Share
capital
Employee
Benefits
Reserve
Hedging
reserves
Foreign
currency
translation
reserve
Retained
earnings
Total
equity

Notes $'000 $'000$'000 $'000$'000 $'000
Equity as at 1 August 2024 464,774 1,120 (6,814) 43 145,675 604,798
Loss for the year

- - - -
(39,822)

(39,822)
Other comprehensive income
Effective portion of changes in fair
value of cash flow hedges
19 -
- 16,964 - - 16,964
Exchange differences on translation of
foreign operations
19 -
- - (2) - (2)
Income tax on other comprehensive
income
21 -
- (4,750) - - (4,750)
Total other comprehensive income

-
- 12,214 (2) - 12,212
Transactions with owners
Issue of new shares 16 212,107
- - - - 212,107
Employee benefits reserve 17,18 -
(509) - - - (509)
Total contributions by and
distributions to owners

212,107
(509) - - - 211,598
Equity as at 31 July 2025 676,881 611 5,400 41 105,853 788,786
Equity as at 1 August 2025 676,881 611 5,400 41 105,853 788,786
Loss for the year

-
- - - (75,440) (75,440)
Other comprehensive income
Effective portion of changes in fair
value of cash flow hedges
19 -
- (6,922) - - (6,922)
Exchange differences on translation of
foreign operations
19 -
- - 66 - 66
Income tax on other comprehensive
income
21 -
- 1,938 - - 1,938
Total other comprehensive income

-
- (4,984) 66 - (4,918)
Equity as at 31 July 2026 676,881 611 416 107 30,413 708,428
Statement of comprehensive income
For the year ended 31 July 2026.
Statement of changes in equity
For the year ended 31 July 2026.

The accompanying notes form part of and are to be read in conjunction with these financial statements.
-61-

Synlait Milk Limited
Statement of Comprehensive Income
For the year ended 31 July 2026

Statement of comprehensive income
For the year ended 31 July 2026
2026
2025
(re-presented)

Notes $'000 $'000
Loss for the period (75,440) (39,822)
Items that may be reclassified subsequently to profit and loss
Effective portion of changes in fair value of cash flow hedges 19
(6,922) 16,964
Exchange differences on translation of foreign operations 66 (2)
Income tax benefit / (expense) on other comprehensive income 21 1,938 (4,750)
Total items that may be reclassified subsequently to profit and loss (4,918) 12,212
Other comprehensive income for the year, net of tax (4,918) 12,212
Total comprehensive income for the year (80,358) (27,610)

Total comprehensive income attributable to:
Continuing operations
(96,463) (4,461)
Discontinued operations 1 16,105 (23,149)


(80,358) (27,610)
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.
ANNUAL REPORT 2026

PAGE 63 & 64

The accompanying notes form part of and are to be read in conjunction with these financial statements.
-64-

Synlait Milk Limited
Statement of Cash Flows
For the year ended 31 July 2026

Statement of cash flows
For the year ended 31 July 2026
2026 2025

Notes $'000 $'000
Cash flows from operating activities
Cash receipts from customers
1,860,020 1,850,664
Cash paid for milk purchased (1,003,545) (1,021,493)
Cash paid to other creditors and employees (1,033,069) (661,380)
Net movement in goods and services tax (6,665) (5,897)
Income tax payments (paid) received (34) 3,628
Net cash (outflow) / inflow from operating activities 6 (183,293) 165,522
Cash flows from investing activities
Interest received
1,168 842
Acquisition of property, plant and equipment (27,670) (22,935)
Proceeds from sale of biological assets 1,011 -
Proceeds from sale of property, plant, and equipment 295,682 526
Acquisition of intangible assets (8,154) (728)
Acquisition of biological assets (56) 117
Acquisition of interest in joint venture (1,295) (441)
Net cash inflow / (outflow) from investing activities

260,686 (22,619)
Cash flows from financing activities
Repayment of borrowings
(737,160) (179,236)
Receipt of borrowings 623,935 30,020
Net movement in working capital facility 19,647 (82,901)
Interest paid (35,966) (48,883)
Repayment of lease liabilities (7,436) (6,012)
Receipt of cash from issue of shares 16 - 212,108
Net cash outflow from financing activities (136,980) (74,904)
Net movement in cash and cash equivalents (59,587) 67,999
Cash and cash equivalents at the beginning of the financial year 78,277 10,273
Effects of exchange rate changes on cash and cash equivalents 25 5
Cash and cash equivalents at end of year 5 18,715 78,277

The accompanying notes form part of and are to be read in conjunction with these financial statements.
-63-

Synlait Milk Limited
Statement of Financial Position
As at 31 July 2026

Statement of financial position
As at 31 July 2026
2026 2025

Notes $'000 $'000
ASSETS
Current assets
Cash and cash equivalents 5
18,715 78,277
Trade and other receivables 7 150,297 94,985
Intangible assets 12 1,557 3,650
Net investment in lease 13 3,085 -
Goods and services tax refundable 12,860 6,195
Prepayments 28,610 13,810
Inventories 8 295,514 281,418
Derivative financial instruments 19,20 4,233 13,716
Current tax asset 1,046 1,623
Total current assets 515,917 493,674
Non-current assets
Property, plant and equipment 10
601,806 882,445
Biological assets 11 5,803 4,731
Goodwill 12 58,163 58,163
Other intangible assets 12 66,167 70,494
Other investments 22 3,596 2,301
Trade and other receivables 7 16,291 -
Derivative financial instruments 19,20 512 1,587
Deferred tax assets 21 4,000 9,606
Other non-current assets 260 -
Net investment in lease 13 13,674 -
Right-of-use assets 13 23,240 40,877
Total non-current assets 793,512 1,070,204
Total assets 1,309,429 1,563,878
LIABILITIES
Current liabilities
Trade and other payables 9
318,185 378,341
Loans and borrowings 15 102,985 328,839
Derivative financial instruments 19,20 3,964 8,162
Lease liabilities 13 5,840 6,499
Total current liabilities 430,974 721,841
Non-current liabilities
Loans and borrowings 15
129,686 -
Derivative financial instruments 19,20 207 608
Lease liabilities 13 39,297 48,734
Other non-current liabilities 837 3,909
Total non-current liabilities 170,027 53,251
Total liabilities 601,001 775,092
Net assets 708,428 788,786
Equity
Share capital 16
676,881 676,881
Reserves 18 1,134 6,052
Retained earnings 18 30,413 105,853
Total equity attributable to equity holders of the Group 708,428 788,786
Total liabilities and equity 1,309,429 1,563,878
The accompanying notes form part of and are to be read in conjunction with these financial statements.
Statement of financial position
For the year ended 31 July 2026.
Statement of cash flows
For the year ended 31 July 2026.
The accompanying notes form part of and are to be read in conjunction with these financial statements.
ANNUAL REPORT 2026

PAGE 65 & 66
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-66-

Material uncertainties related to going concern
At 31 July 2026, the Group recorded a net loss after tax of $75.4m, net operating cash outflows of $183.3m and net assets
of $708.4m. The Directors have considered these results, the Group’s forecast cash flows, available funding and the
matters described below in assessing the Group’s ability to continue as a going concern. In particular, the Group’s banking
facilities reduce progressively between February and June 2027 and management’s forecasts assume sufficient cash
generation, together with the refinancing or replacement of facilities as required, to meet the Group’s funding requirements.

Funding and refinancing
During June 2026, the Group completed the refinancing of its banking facilities. The Group’s banking facilities include
seasonal working capital and term facilities which reduce progressively through the milk season and mature at various
dates through to June 2027, with certain facilities subject to lender extension options. Further details of the facilities,
including committed amounts, amounts drawn and undrawn at 31 July 2026 and the respective maturity dates, are set out
in Note 15 – Loans and Borrowings. Access to the facilities remains subject to the individual facility limits, permitted
purposes and conditions for drawing. The Group also has a $130 million Bright Dairy shareholder loan maturing in July
2028.
The Group complied with its applicable banking covenants at 31 July 2026. However, minimum EBITDA requirements
increase during FY27 and continued covenant compliance is dependent on the Group achieving its forecast operating
performance. The banking facilities maturing in June 2027 are not expected to be repaid solely from available cash
resources and will therefore require refinancing or replacement. Management intends to refinance or replace these facilities
prior to maturity. The Group’s ability to do so will depend, among other factors, on the Group demonstrating sustained
improvement in trading performance and continued covenant compliance. As replacement funding has not currently been
secured beyond June 2027, the outcome is not wholly within the Group’s control.
Trading performance
FY26 performance was adversely affected by operational and manufacturing challenges, which affected production of
higher-value nutritional products and contributed to additional costs and losses. Management has implemented changes to
manufacturing processes, maintenance and employee training aimed at improving operational reliability and reducing the
risk of these issues recurring. However, the 2026/27 milk season has only recently commenced and the effectiveness of
these actions has not yet been demonstrated over a sustained period.
During FY26, the Group completed the sale of its North Island operations, using the proceeds principally to reduce debt
and strengthen liquidity while increasing management’s focus on the South Island operations. Further, the prior-year
uncertainty regarding future milk supply has substantially reduced following the resolution of farmer cessation notices.
Management’s forecasts assume continued improvements in manufacturing reliability, production attainment, product mix,
margins and cash generation. Recent trading provides some evidence of this improvement, with August financial
performance ahead of management expectations across EBITDA, operating cash flow and covenant metrics, and
September production generally tracking in line with, or ahead of, plan across a number of key product categories.
However, the improved performance has been demonstrated over only a limited period and the forecast recovery remains
dependent on these improvements being sustained.
Management’s forecast cash flows indicate that, taking into account forecast cash generation and the committed facilities
available to the Group, the Group expects to have sufficient liquidity to meet its obligations as they fall due in the next 12
months from the authorisation of the financial statements. The forecasts are dependent on the operating improvements
described above being sustained, continued compliance with banking covenants and minimum EBITDA milestones,
successful renewal of the State Administration for Market Regulation (SAMR) registration by 5 September 2027, continued
access to lender and shareholder support, and the successful refinancing or replacement of the senior banking facilities
before 30 June 2027.
Refer to Note 15 for further information on the Group’s borrowing facilities and covenants and Note 19 for liquidity risk and
contractual maturities.
Conclusion
The Directors consider that the actions completed to date, available funding and forecast improvement in operating
performance provide a reasonable basis to prepare the financial statements on a going concern basis.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026

-65-

Notes to the financial statements
Reporting entity
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) Co., Ltd, Dairyworks Limited, Synlait Milk (Holdings) No.1
Limited, and Synlait Milk (Dunsandel Farms) Limited.
Synlait Milk Limited and its subsidiaries are primarily involved in the manufacture and sale of dairy products.
The parent company, Synlait Milk Limited ("the Company"), 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 an FMC reporting entity under the Financial Markets Conduct Act 2013 and its financial statements
comply with that Act. The company's registered office is at 1028 Heslerton Road, Rd 13, Rakaia, New Zealand.
Basis of preparation
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’).
Comparative balances
Comparative information has been re-presented to reflect the classification of the North Island operations as discontinued
operations. There has been no change to the Group's previously reported total profit/(loss) for the comparative period.
The financial statements were authorised for issue by the Directors on 28 September 2026.
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 Group operates (‘the functional currency’). The financial statements are presented in New
Zealand Dollars ($), which is
the Company's functional currency and the Group's presentation currency, and are rounded to
the nearest thousand ($'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.
Use of accounting estimates and judgements
The preparation of these financial statements in conformity with NZ IFRS requires the Group 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 assessment of impairment of goodwill and any other
intangible assets. The individual notes in the financial statements provide additional information.
Notes to the financial statements
ANNUAL REPORT 2026

PAGE 67 & 68
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-67-

However, the Group's ability to continue as a going concern remains dependent on achieving and sustaining the forecast
improvement in trading performance and cash generation, continued compliance with banking covenants and minimum
EBITDA requirements, successful renewal of the SAMR registration, and the refinancing or replacement of the senior
banking facilities before 30 June 2027. The Group's ability to refinance or replace these facilities is itself dependent, amo
ng
other factors, on sustained improvement in trading performance and continued covenant compliance. If the forecast
operating improvements or covenant requirements are not achieved, the Group's ability to obtain replacement funding may
be adversely affected.
These events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Group's abilit
y
to continue as a going concern. If these matters are not satisfactorily resolved, including obtaining sufficient replacement
funding, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-68-

Recoverability of tax losses
At 31 July 2026, the Group estimates that it has $495.6m of gross New Zealand tax losses available for use against future
taxable profits. A deferred tax asset of $88.3m has been recognised in respect of these tax losses.
The recognition of deferred tax assets for unused tax losses requires judgement in assessing whether sufficient future
taxable profits will be available against which the tax losses can be utilised. In making this assessment, the Group
considers the availability and timing of future taxable profits and the reversal of existing taxable temporary differences.
During the year, the Directors reassessed the recoverability of the deferred tax asset based on the information available at
31 July 2026. Following this reassessment, the Group has recognised a deferred tax asset only to the extent supported by
the expected reversal of taxable temporary differences.
This represents a change from the prior year assessment and has resulted in a reduction in the deferred tax asset
recognised at 31 July 2026 of $4.8m. The recoverability of deferred tax assets will continue to be reassessed at each
reporting date.
Change in reporting date
During the year, the Group announced a change in its reporting date from 31 July to 31 December to align its financial
reporting period with that of its ultimate parent, Bright Dairy & Food Co., Ltd.
Accordingly, the Group’s next reporting period will be the five-month period ending 31 December 2026, with subsequent
annual reporting periods ending on 31 December.
Climate risk
The Group's operations may be impacted by future climate change. These impacts may be physical (e.g. severe or unusual
weather patterns and events) or transitional (e.g. changes to government regulations or customer and supplier needs and
demands).
The Group regularly assesses its operating environment with regard to the impact of climate change. Specific consideration
has been given in these financial statements to the impact of future climate change on the useful lives of the Group’s
property, plant, and equipment and impairment of intangible assets (NZUs). No significant impacts were noted during the
period.
Basis of consolidation
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.
Use of accounting estimates and judgements
The preparation of these financial statements in conformity with NZ IFRS requires the Group 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 assessment of impairment for goodwill and any other
intangible assets. The individual notes in the financial statements provide additional information.
ANNUAL REPORT 2026

PAGE 69 & 70
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-70-

1 Discontinued operation
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations and is part of a single coordinated plan to
dispose of such a line of business or area of operations. The results of discontinued operations are presented separately in
the statement of profit or loss.
The North Island CGU, comprising the North Island operations of Synlait Milk Limited, was disposed of on 1 April 2026
following completion of the sale to Abbott Nutrition NZ Limited. The North Island CGU has continued to be presented as a
discontinued operation in accordance with NZ IFRS 5 and all profit and loss disclosures have been re-presented to exclude
the impact of the discontinued operation.
The disposal included the Pokeno manufacturing facility, the Richard Pearse Drive blending and canning facility, the Jerry
Green Street warehouse arrangements and associated inventory. Total consideration under the sale agreements was
US$178.0 m, of which US$14.0 m remains subject to holdback arrangements and will be released progressively over a
period of up to 36 months following completion, subject to any valid claims under the sale agreements.
(a) Financial performance and cash flow information



2026 2025

$'000
$'000
Revenue 254,375 237,255
Cost of sales (249,384) (243,299)
Other Income 1,892 4,493
Sales and distribution expenses (7,149) (9,778)
Administrative and operating expenses (7,840) (12,893)
Net finance costs (3,686) (7,930)
Income tax - 9,003
Gain on disposal before tax 25,983 -
Tax on gain on disposal 1,914 -
Profit / (loss) from discontinued operation 16,105 (23,149)
Net cash inflow / (outflow)
Net cash outflow from operating activities
(9,999) (6,043)
Net cash inflow / (outflow) from investing activities 287,966 (1,172)
Net cash outflow from financing activities (21,517) (13,917)
Net increase / (decrease) in cash generated by the discontinued operation 256,450 (21,132)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026

-69-

Significant accounting policies
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.
Standards, amendments and interpretations adopted during the period
There are no new policies, standards, interpretations, or amendments that were adopted in the period which have or are
expected to have a material impact on the Group.
Standards, amendments and interpretations to existing standards that are not yet effective
NZ IFRS 18 - Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 - Presentation and Disclosure in Financial Statements to improve reporting of
financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements. It carries forward many requirements
from IAS 1 unchanged and introduces increased disclosure of management defined performance measures as well as new
principles for aggregation and disaggregation of information included in the consolidated income statement. NZ IFRS 18 is
effective for annual reporting periods beginning on or after 1 January 2027. The Group will apply the standard from its
annual reporting period ending 31 December 2027. The Group has commenced an assessment of the impact of NZ IFRS
18 on its financial statements. At the date of authorisation of these financial statements, the asses
sment is ongoing and the
Group is not yet in a position to reasonably estimate the full impact that initial application of NZ IFRS 18 will have on its
financial statement presentation and disclosures. The Group expects the principal impacts to relate to the presentation of
the statement of profit or loss, the statement of cash flows, and additional disclosures relating to management-defined
performance measures.
NZ IFRS 9 Financial Instruments and NZ IFRS 7 Financial Instruments: Disclosures amendments
In 2024, the IASB issued amendments to IFRS 9 and IFRS 7 addressing the classification and measurement of financial
instruments and introducing additional disclosure requirements for certain financial assets and liabilities, including contra
cts
that reference nature-dependent electricity. The amendments are effective for annual reporting periods beginning on or
after 1 January 2026. For the Group, the amendments will first be applicable to the annual reporting period ending 31
December 2026. The amendments include clarification of the assessment of contractual cash flow characteristics for
certain financial assets; guidance regarding financial assets and liabilities settled through electronic payment systems;
additional disclosure requirements for investments in equity instruments designated at fair value through other
comprehensive income; and disclosure requirements for contracts referencing nature-dependent electricity. The Group is
currently assessing the impact of these amendments on its financial statements. Based on work performed to date, the
Group does not expect the amendments to have a material impact on the recognition and measurement of its financial
assets and liabilities. The impact on future disclosures is still being evaluated.
NZ CS 1, CS 2, CRDC - Climate related disclosures
There have been no significant changes to legislation which impact the Group’s financial statements.

Significant accounting policies1. Discontinued operation
ANNUAL REPORT 2026

PAGE 71 & 72
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-72-

3 Segment reporting
(a) Reportable segments
NZ IFRS 8 Operating Segments requires disclosure of information about operating segments, products and services,
geographical areas of operation, and major customers. Information is based on internal management reports, both in the
identification of operating segments and measurement of disclosed segment information.
The Group has identified the following segments:
 Synlait: manufacture and sale of milk and plant based products (nutritionals, ingredients, fresh milk, and ultra heat
treatment (‘UHT’) milk and cream products). The Synlait segment comprises fixed assets, organisational structures,
product margins, classes of customers, and long term growth rates. The Synlait segment combines Synlait Milk Limited
and its subsidiaries excluding Dairyworks. The segment's results and net assets include amounts relating to both
continuing and discontinued operations.
 Dairyworks: manufacture and sale of cheese and other products (cheese, butter).
The accounting policies of the Group have been consistently applied to the operating segments. Net Profit After Tax
(NPAT) is the measure reported to the chief operating decision-maker ("the Board") for the purposes of resource allocation
and assessment of performance for the Group. A consistent measure has been used for the purpose of reporting the
performance of each operating segment.
(b) Segment revenues and results
The following is an analysis of the Group's revenue and results by reportable segment:

31 July 2026

Synlait Dairyworks Eliminations Total
$'000 $'000 $'000 $'000
External revenue 1,492,450 444,216 - 1,936,666
Revenue from sale of goods 1,492,450 444,216 - 1,936,666
Net profit / (loss) after tax for the period (91,752) 16,312 - (75,440)
Finance income 1,090 77 - 1,167
Finance expenses (21,445) (2,542) - (23,987)
Depreciation and amortisation (40,235) (5,275) (346) (45,856)
Income tax (expense) / benefit (975) (6,254) (895) (8,124)

Total assets
1,219,099 176,817 (86,487) 1,309,429
Total liabilities (539,176) (96,508) 34,683 (601,001)
Net assets 679,923 80,309 (51,804) 708,428
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-71-

2 Revenue recognition
Sales of goods
The Group manufactures and sells a range of dairy and non-dairy products, including but not limited to milk powder, milk
powder related products, fresh milk, UHT milk and cream, 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 expected 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.

2026 2025
$'000 $'000
Product sales 1,682,291 1,590,160
1,682,291 1,590,160
2. Revenue recognition3. Segment reporting
ANNUAL REPORT 2026

PAGE 73 & 74
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-74-

4 Expenses
2026
2025
(re-presented)

$'000
$'000
Loss before income tax includes the following specific expenses:

Depreciation and amortisation (notes 10, 12 and 13)
38,458 40,509
Employee and contractor costs 145,943 124,423
Energy costs 28,652 24,256
Freight 15,954 25,810
Milk transport 24,901 14,354
Repairs and maintenance 21,105 14,851
Consultancy, legal, and transaction costs 5,101 4,183
Increase in inventory provision 23,799 31,623
Increase in onerous contract provision 2,069 1,513
Insurance 8,260 7,434
Director fees 663 739
Information services and subscriptions 10,469 8,137

Auditors' fees
During the year the following fees were paid or payable for services provided by the auditor of the Group:

2026 2025

$'000 $'000
(a) Assurance services
Audit services
Audit of financial statements - KPMG
850 890
Total remuneration for audit services 850 890
Other assurance services
Other assurance - KPMG
75 130
Total remuneration for other assurance services 75 130
Total remuneration for assurance services 925 1,020


2026 2025

$'000 $'000
(b) Advisory services

Other consulting services
16 -
Total remuneration for advisory services 16 -
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

3 Segment reporting (continued)
-73-

31 July 2025
Synlait Dairyworks Eliminations Total

$'000


$'000

$'000

$'000

External revenue 1,503,168 324,247 - 1,827,415
Inter-segment revenue from sale of goods 219 - (219) -
Revenue from sale of goods 1,503,387 324,247 (219) 1,827,415
Net (loss) / profit after tax for the period (50,128) 10,306 - (39,822)
Finance income 800 42 - 842
Finance expenses (36,272) (3,449) - (39,721)
Depreciation and amortisation (51,681) (5,357) - (57,038)
Income tax (expense) / benefit 18,914 (4,375) - 14,539

Total assets 1,407,660
156,218 - 1,563,878
Total liabilities (683,140) (91,952) - (775,092)
Net assets 724,520 64,266 - 788,786
(c) Sales by geographical area
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 portion of both infant nutritional and ingredients sales are ultimately consumed
in China.
The proportion of sales revenue for continuing operations by geographical area is summarised below:
Year ended

31 July 31 July
2026 2025


China 6% 10%
Rest of Asia 18% 30%
Middle East and Africa 2% 2%
New Zealand 64% 46%
Australia 5% 4%
Rest of World 5% 8%
Total 100% 100%
All Group non-current assets are in New Zealand.
(d) Major customers
Revenue from the Group’s three largest external customers represents 38% of total revenue (2025: 55%). A2 Infant
Nutrition Limited accounts for 21% of total revenue.
3. Segment reporting (continued)4. Expenses
ANNUAL REPORT 2026

PAGE 75 & 76
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-75-

5 Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits, current accounts in banks net of overdrafts and other
short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.

2026 2025

$'000 $'000


Cash on hand
18,715 78,277
18,715 78,277
6 Reconciliation of loss after income tax to net cash flows from operating activities
2026 2025
$'000 $'000
Loss for the year (75,440) (39,822)
Non-cash and non-operating items:
Depreciation and amortisation of non-current assets (notes 10 and 12)
41,048 50,561
Depreciation of right-of-use assets (note 13) 4,154 6,478
Loss / (gain) on sale of property, plant and equipment (25,983) (291)
New Zealand Units surrendered (note 12) 5,972 -
Gain on sale of New Zealand Units - 4,466
Non-cash share based payments (recovery) / expense - (509)
Interest costs classified as financing cash flow 24,049 39,721
Interest received classified as investing cash flow (1,168) (842)
Loss on derecognition of financial assets 6,652 9,162
Deferred tax movement (7,513) (14,522)
Loss on derivative financial instruments 11,252 1,000
Unrealised foreign exchange (loss) / gain 2,722 (5)
Livestock trading (47) (119)
(Loss) / gain on revaluation of biological assets (1,989) (1,613)
Movements in working capital:
(Increase) / decrease in trade and other receivables
(71,603) 49,938
(Increase) / decrease in prepayments (14,800) 13,965
Increase in inventories (14,096) (71,716)
(Increase) / Decrease in goods and services tax refundable and other current assets (6,924) (5,897)
(Decrease) / increase in trade and other payables (60,156) 121,956
Decrease in current tax assets 577 3,611
Net cash (outflow) / inflow from operating activities (183,293) 165,522
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-75-

5 Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits, current accounts in banks net of overdrafts and other
short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.

2026 2025

$'000 $'000


Cash on hand
18,715 78,277
18,715 78,277
6 Reconciliation of loss after income tax to net cash flows from operating activities
2026 2025
$'000 $'000
Loss for the year (75,440) (39,822)
Non-cash and non-operating items:
Depreciation and amortisation of non-current assets (notes 10 and 12)
41,048 50,561
Depreciation of right-of-use assets (note 13) 4,154 6,478
Loss / (gain) on sale of property, plant and equipment (25,983) (291)
New Zealand Units surrendered (note 12) 5,972 -
Gain on sale of New Zealand Units - 4,466
Non-cash share based payments (recovery) / expense - (509)
Interest costs classified as financing cash flow 24,049 39,721
Interest received classified as investing cash flow (1,168) (842)
Loss on derecognition of financial assets 6,652 9,162
Deferred tax movement (7,513) (14,522)
Loss on derivative financial instruments 11,252 1,000
Unrealised foreign exchange (loss) / gain 2,722 (5)
Livestock trading (47) (119)
(Loss) / gain on revaluation of biological assets (1,989) (1,613)
Movements in working capital:
(Increase) / decrease in trade and other receivables
(71,603) 49,938
(Increase) / decrease in prepayments (14,800) 13,965
Increase in inventories (14,096) (71,716)
(Increase) / Decrease in goods and services tax refundable and other current assets (6,924) (5,897)
(Decrease) / increase in trade and other payables (60,156) 121,956
Decrease in current tax assets 577 3,611
Net cash (outflow) / inflow from operating activities (183,293) 165,522
5. Cash and cash equivalents
6. Reconciliation of loss after income tax to net cash flows from operating activities
7. Trade and other receivables
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-76-

7 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 and 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 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's 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 manner.

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.

Specific provisions are maintained for identified impaired receivables where there is objective evidence that amounts may
not be recoverable. The Group recognises loss allowances for expected credit losses (ECL) on trade receivables and
measures these loss allowances at an amount equal to lifetime ECL. In estimating ECL, the Group considers reasonable
and supportable information available without undue cost or effort, including both quantitative and qualitative information,
historical credit loss experience and relevant forward-looking information.

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.

There have been no significant changes in the Group's credit risk management policies and processes during the year.
ANNUAL REPORT 2026

PAGE 77 & 78
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

7 Trade and other receivables (continued)
-77-


2026 2025

$'000
$'000
Current
Trade receivables
106,739 62,128
Provision for doubtful and impaired receivables (1,119) (4,302)
Net trade receivables 105,620 57,826
Other receivables 44,677 37,159
Total current receivables 150,297 94,985
Non-current
Other receivables
16,291 -
Total non-current receivables 16,291 -
(a) Impaired receivables
As at 31 July 2026, trade receivables of $15.9m were overdue (2025: $7.3m). These balances relate to a limited number of
long-standing customers. While certain invoices were overdue at year-end, there is no recent history of payment default. A
large portion of the balance has since been collected with a remaining $7.8m unpaid and expected to be collected in the
2027 financial year.
The ageing analysis of these overdue trade receivables is as follows:

2026 2025

$'000
$'000
Overdue by
0 to 30 days
14,123 5,055
30 to 60 days 14 1,687
Over 60 days 1,858 565
Total overdue trade receivables 15,995 7,307

(b) Allowance for bad and doubtful receivables
The Group has recognised $0.7m of losses in relation to provisions raised for potentially unrecoverable trade receivables
during the year (2025: $1.6m). The Group has also recognised a loss of $0.4m for estimated receivables impairment under
NZ IFRS 9 Financial Instruments (2025: $0.2m).
(c) Trade and other receivables
Accounts receivable are amounts incurred in the normal course of business. Other receivables (current and non-current)
primarily relate to amounts arising from the North Island business sale.
7. Trade and other receivables (continued)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

7 Trade and other receivables (continued)
-78-

(d) Derecognised financial assets
The Group has derecognised trade receivables that have been sold to three banks (ANZ, Rabobank and HSBC) under the
terms of underlying receivables purchase agreements. The Group routinely assesses the terms of the agreements and has
determined that substantially all the risks and rewards have been transferred to the banks limited to certain contractual
provisions relating to late payment charges and specified recourse events under certain receivables purchase agreements.
Receivables selected for assignment are with customers with strong credit ratings and good payment histories. This results
in immaterial volatility in the present value of future cash flows in relation to assigned receivables under the various
scenarios detailed in the terms of the three agreements. An evaluation of external evidence of credit risk has also been
performed for each customer. The Group has $116.5m of receivables assigned as at 31 July 2026 (2025: $147.0m).
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.
The loss on derecognition for the period of $6.6m (2025: $9.2m) arising from derecognition of assigned receivables is the
discount paid to the banks for acquiring these receivables.
8 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. 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.

2026 2025

$'000
$'000
Raw materials
Raw materials at cost
128,207 134,434
Raw materials at net realisable value 2,490 689
130,697 135,123
Work in progress
Work in progress at cost
68,851 26,007
Work in progress at net realisable value 1,294 6,683
70,145 32,690
Finished goods
Finished goods at cost
86,726 72,107
Finished goods at net realisable value 7,946 41,498
94,672 113,605
Total inventories 295,514 281,418
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

7 Trade and other receivables (continued)
-78-

(d) Derecognised financial assets
The Group has derecognised trade receivables that have been sold to three banks (ANZ, Rabobank and HSBC) under the
terms of underlying receivables purchase agreements. The Group routinely assesses the terms of the agreements and has
determined that substantially all the risks and rewards have been transferred to the banks limited to certain contractual
provisions relating to late payment charges and specified recourse events under certain receivables purchase agreements.
Receivables selected for assignment are with customers with strong credit ratings and good payment histories. This results
in immaterial volatility in the present value of future cash flows in relation to assigned receivables under the various
scenarios detailed in the terms of the three agreements. An evaluation of external evidence of credit risk has also been
performed for each customer. The Group has $116.5m of receivables assigned as at 31 July 2026 (2025: $147.0m).
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.
The loss on derecognition for the period of $6.6m (2025: $9.2m) arising from derecognition of assigned receivables is the
discount paid to the banks for acquiring these receivables.
8 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. 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.

2026 2025

$'000
$'000
Raw materials
Raw materials at cost
128,207 134,434
Raw materials at net realisable value 2,490 689
130,697 135,123
Work in progress
Work in progress at cost
68,851 26,007
Work in progress at net realisable value 1,294 6,683
70,145 32,690
Finished goods
Finished goods at cost
86,726 72,107
Finished goods at net realisable value 7,946 41,498
94,672 113,605
Total inventories 295,514 281,418
8. Inventories
ANNUAL REPORT 2026

PAGE 79 & 80
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-79-

9 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.

2026 2025

$'000
$'000
Trade payables 143,556 191,377
Accrued expenses 161,431 172,909
Employee entitlements 13,198 14,055
Total trade and other payables 318,185 378,341
Payables denominated in currencies other than the functional currency comprise NZD $23.9m (2025: NZD $43.4m) of
USD, EUR, GBP, RMB, SGD, and AUD denominated trade payables and accruals.

9. Trade and other payables10. Property, plant and equipment
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-80-

10 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 where the Group has an obligation to remove and restore.
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.
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 are also required in the selection and application of useful lives. It is the Group'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 - 60 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.
Impairment
Estimation and judgement are 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.
ANNUAL REPORT 2026

PAGE 81 & 82
10. Property, plant and equipment (continued)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

10 Property, plant and equipment (continued)
-81-

Land Buildings
Plant and
equipment
Fixtures and
fittings
Capital work
in progress Total

$'000 $'000 $'000 $'000 $'000 $'000
Cost
Balance as at 1 August 2024 51,242 309,255 831,245 30,406 31,603 1,253,751
Additions - - - - 18,315 18,315
Reclassification / transfer 128 440 22,653 1,354 (24,575) -
Disposals - - (2,606) (935) - (3,541)
Balance as at 31 July 2025 51,370 309,695 851,292 30,825 25,343 1,268,525
Balance as at 1 August 2025 51,370 309,695 851,292 30,825 25,343 1,268,525
Additions - - - 191 27,480 27,671
Reclassification / transfer - 1,165 9,509 536 (11,210) -
Disposals (24,605) (89,148) (224,606) (10,778) (2,573) (351,710)
Balance as at 31 July 2026 26,765 221,712 636,195 20,774 39,040 944,486
Accumulated depreciation
Balance as at 1 August 2024 - 57,864 270,180 17,264 - 345,308
Depreciation (note 4) - 6,556 34,440 2,283 - 43,279
Disposals - - (2,027) (480) - (2,507)
Balance as at 31 July 2025 - 64,420 302,593 19,067 - 386,080
Balance as at 1 August 2025 - 64,420 302,593 19,067 - 386,080
Depreciation (note 4) - 4,908 27,044 1,679 - 33,631
Disposals - (12,389) (57,655) (6,987) - (77,031)
Balance as at 31 July 2026 - 56,939 271,982 13,759 - 342,680
As at 31 July 2025 51,370 245,275 548,699 11,758 25,343 882,445
As at 31 July 2026 26,765 164,773 364,213 7,015 39,040 601,806
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

10 Property, plant and equipment (continued)
-82-

(a) Impairment assessment
During the year ended 31 July 2026, the Group identified indicators of impairment in relation to the South Island
cash-generating unit (CGU), including the Group's ongoing loss position, operational challenges and market capitalisation
being below the carrying amount of net assets. Accordingly, the Directors performed an impairment assessment in
accordance with NZ IAS 36.
The recoverable amount of the South Island CGU was assessed using both a value in use (VIU) model and an
independent fair value less costs of disposal (FVLCD) assessment. The Directors placed significant weight on the FVLCD
assessment, which was performed by Ernst and Young Shanghai, an independent valuation specialist, using a
market-based valuation approach supported by recent comparable dairy industry transactions and market participant
assumptions.
The independent FVLCD assessment indicated a range of supportable values for the South Island CGU. The Directors
considered valuation outcomes ranging from $700m to $774m, all of which exceeded the carrying value of the South Island
CGU as at 31 July 2026.
Key assumptions included sustainable processing capacity and utilisation levels, expected operating performance, market
participant earnings assumptions, valuation multiples observed in recent comparable transactions and estimated disposal
costs. Based on
the impairment assessment, the Directors concluded that the recoverable amount of the South Island CGU
exceeded its carrying value at 31 July 2026 and no impairment loss was recognised.
11 Biological assets
Biological assets comprise livestock (dairy cows) and are measured at fair value less costs to sell at both initial recognition
and at the end of each reporting period. Changes in the fair value of biological assets are recognised in profit or loss. The
fair value of biological assets is determined by an independent valuer with reference to local area market prices at the end
of each reporting period. The fair value measurement of livestock is facilitated by grouping livestock by age and type. All of
the Group's biological livestock assets are classified as bearer biological assets.

2026 2025

$'000 $'000



Balance as at 31 July 5,803
4,731
As at 31 July 2026 there were 2,279 dairy cows on hand (2025: 2,297). The dairy cows are used for the purposes of
producing milk to be utilised in the Group's milk processing operations.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

10 Property, plant and equipment (continued)
-82-

(a) Impairment assessment
During the year ended 31 July 2026, the Group identified indicators of impairment in relation to the South Island
cash-generating unit (CGU), including the Group's ongoing loss position, operational challenges and market capitalisation
being below the carrying amount of net assets. Accordingly, the Directors performed an impairment assessment in
accordance with NZ IAS 36.
The recoverable amount of the South Island CGU was assessed using both a value in use (VIU) model and an
independent fair value less costs of disposal (FVLCD) assessment. The Directors placed significant weight on the FVLCD
assessment, which was performed by Ernst and Young Shanghai, an independent valuation specialist, using a
market-based valuation approach supported by recent comparable dairy industry transactions and market participant
assumptions.
The independent FVLCD assessment indicated a range of supportable values for the South Island CGU. The Directors
considered valuation outcomes ranging from $700m to $774m, all of which exceeded the carrying value of the South Island
CGU as at 31 July 2026.
Key assumptions included sustainable processing capacity and utilisation levels, expected operating performance, market
participant earnings assumptions, valuation multiples observed in recent comparable transactions and estimated disposal
costs. Based on
the impairment assessment, the Directors concluded that the recoverable amount of the South Island CGU
exceeded its carrying value at 31 July 2026 and no impairment loss was recognised.
11 Biological assets
Biological assets comprise livestock (dairy cows) and are measured at fair value less costs to sell at both initial recognition
and at the end of each reporting period. Changes in the fair value of biological assets are recognised in profit or loss. The
fair value of biological assets is determined by an independent valuer with reference to local area market prices at the end
of each reporting period. The fair value measurement of livestock is facilitated by grouping livestock by age and type. All of
the Group's biological livestock assets are classified as bearer biological assets.

2026 2025

$'000 $'000



Balance as at 31 July 5,803
4,731
As at 31 July 2026 there were 2,279 dairy cows on hand (2025: 2,297). The dairy cows are used for the purposes of
producing milk to be utilised in the Group's milk processing operations.
11. Biological assets
ANNUAL REPORT 2026

PAGE 83 & 84
12. Intangible assets
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-83-

12 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 (CGUs) 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 or 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, trademarks, and other rights are shown at historical cost. Patents, trademarks, and other
rights 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, trademarks, and other rights over their estimated useful lives of 4 to 20
years.
Computer software
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design, testing, and implementation of identifiable and unique
software products controlled by the Group are recognised as intangible assets. Amortisation is calculated using the
straight-line method to allocate the cost of computer software over an estimated useful life of 1 year to 12 years.
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 and expensed on a first-in first-out basis. Units are surrendered during the year to meet our
obligations under the New Zealand Emissions Trading Scheme.
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 CGUs 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.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

12 Intangible assets (continued)
-84-

Goodwill Brand
Patents,
trademarks
and other
intangibles
Computer
software
Intangibles
in
progress
New
Zealand
Units
Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000
Cost
Balance as at 1 August 2024 58,163
16,569 8,773 69,677 2,663 8,116 163,961
Additions - - - - 4,989 1,193 6,182
Reclassification/transfer - - 20 7,624 (7,644) - -
Disposals - - (109) (1,183) - - (1,292)
Surrenders - - - - - (5,659) (5,659)
Amortisation charge (note 4) - - - - - - -
Balance as at 31 July 2025 58,163 16,569 8,684 76,118 8 3,650 163,192
Balance as at 1 August 2025 58,163 16,569 8,684 76,118 8 3,650 163,192
Additions - - - 1,039 3,236 3,879 8,154
Reclass/transfer - - 8 2,197 (2,205) - -
Impairment - - - 298 - - 298
Surrenders - - - - - (5,972) (5,972)
Disposals - - (591) (2,445) (23) - (3,059)
Balance as at 31 July 2026 58,163 16,569 8,101 77,207 1,016 1,557 162,613

Accumulated amortisation
Balance as at 1 August 2024 -
- 3,532 21,283 - - 24,815
Amortisation (note 4) - - 1,617 5,665 - - 7,282
Disposals - - (109) (1,103) - - (1,212)
Balance as at 31 July 2025 - - 5,040 25,845 - - 30,885

Balance as at 1 August 2025 - - 5,040 25,845 - - 30,885
Amortisation (note 4) - - 1,610 5,807 - - 7,417
Disposals - - (591) (985) - - (1,576)
Balance as at 31 July 2026 - - 6,059 30,667 - - 36,726
Carrying amounts
Year ended 31 July 2025
Current -
- - - - 3,650 3,650
Non-current 58,163 16,569 3,644 50,273 8 - 128,657
Closing net book value 58,163 16,569 3,644 50,273 8 3,650 132,307
Year ended 31 July 2026
Current -
- - - - 1,557 1,557
Non-current 58,163 16,569 2,042 46,540 1,016 - 124,330
Closing net book value 58,163 16,569 2,042 46,540 1,016 1,557 125,887
ANNUAL REPORT 2026

PAGE 85 & 86
13. Leases
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

12 Intangible assets (continued)
-85-

(a) Impairment assessment
During the period, intangible assets were examined and there were no indicators of a further impairment. The Dairyworks
CGU was tested for impairment due to the non-depreciating assets which require an annual impairment assessment.
The Dairyworks CGU has a goodwill allocation of $58.2m. In addition, non-depreciating intangible assets with indefinite
useful lives, primarily brand and trademark assets, have been allocated to the CGU with a carrying amount of $16.6m.
The recoverable amount of the Dairyworks CGU was determined using the value in use methodology. This assessment
was based on projected cash flows that reflect both historical performance and management’s expectations of future
market conditions for Dairyworks’ products. A pre-tax discount rate of 11.82% was applied, alongside a terminal growth
rate of 2.5%. A sensitivity analysis was also performed. It indicated that an increase of 7.2% in the pre-tax discount rate
would reduce the CGU’s recoverable amount below its carrying amount, resulting in an impairment. Similarly, a reduction in
projected cash flows of 35.2% would also lead to impairment. However, the results of the impairment test showed that the
recoverable amount exceeded the carrying amount by $211.7m. Accordingly, no impairment loss was recognised for the
Dairyworks CGU.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-86-

13 Leases
Measurement of right-of-use assets and lease obligations
Right-of-use assets are initially measured at an amount equal to the present value of the remaining lease liability.
Subsequent additions are 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.
ROU assets are 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. ROU assets are also adjusted for impairment
and any remeasurements of the lease liability.
Measurement of lease obligations
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 exercises 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.
The Group does not 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 on the consolidated income statement. The
Group has also elected to apply a single discount rate to portfolios of leases with reasonably similar characteristics.
Group as lessor
The Group acts as lessor in respect of certain assets that are leased to third parties under finance lease arrangements. A
lease is classified as a finance lease where substantially all of the risks and rewards incidental to ownership of the
underlying asset are transferred to the lessee.
At lease commencement, the Group recognises a finance lease receivable equal to its net investment in the lease. The net
investment comprises the present value of the lease payments receivable and, where applicable, any unguaranteed
residual value accruing to the Group.
Finance income is recognised over the lease term so as to reflect a constant periodic rate of return on the Group’s net
investment in the lease.
12. Intangible assets (continued)
ANNUAL REPORT 2026

PAGE 87 & 88
13. Leases (continued)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

13 Leases (continued)
-87-

(a) Group as lessee
Right-of-use assets Buildings
Plant and
equipment Total

$'000
$'000 $'000
Cost
Balance as at 1 August 2024 52,769
3,462 56,231
Additions and acquisitions 513 305 818
Reassessments and modifications 7,160 - 7,160
Disposals - (196) (196)
Balance as at 31 July 2025 60,442 3,571 64,013
Balance as at 1 August 2025 60,442 3,571 64,013
Additions and acquisitions 1,225 588 1,813
Disposals (27,058) (2,185) (29,243)
Balance as at 31 July 2026 34,609 1,974 36,583
Accumulated Depreciation
Balance as at 1 August 2024 15,266
1,627 16,893
Disposals - (197) (197)
Reassessments and modifications (38) - (38)
Depreciation 5,787 691 6,478
Balance as at 31 July 2025 21,015 2,121 23,136
Balance as at 1 August 2025 21,015 2,121 23,136
Disposals (12,512) (1,436) (13,948)
Depreciation 3,496 659 4,155
Balance as at 31 July 2026 11,999 1,344 13,343
Carrying amounts
Balance as at 31 July 2025
39,427 1,450 40,877
Balance as at 31 July 2026 22,610 630 23,240
2026 2025

$'000 $'000

Current
5,840 6,499
Non-current 39,297 48,734
Total discounted lease obligations 45,137 55,233
Interest expense on lease obligations for the year ended 31 July 2026 was $3.0m (2025: $3.0m) and is included in finance
expense.
The total cash outflow for leases in the year ended 31 July 2026 was $7,436,000 (2025: $6,012,000).
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

13 Leases (continued)
-88-

(b) Group as lessor
As part of the disposal of the North Island operations to Abbott Nutrition NZ Limited on 1 April 2026, the Group entered into
a sublease arrangement in respect of the Jerry Green Street warehouse property. The Group has classified the
arrangement as a finance sublease in accordance with NZ IFRS 16, as substantially all of the risks and rewards associated
with the underlying right-of-use asset have been transferred to the sublessee.
The Group recognises a net investment in the finance sublease and records finance income over the lease term using the
effective interest method.


2026 2025

$'000 $'000
Amounts recognised during the year
Interest received on the net investment in finance leases 393
-
Reconciliation of gross investment to net investment
Gross investment in finance sublease
20,412 -
Unearned finance income (3,653) -
Net investment in finance sublease 16,759 -
Maturity analysis of undiscounted lease payments receivable
Within one year
3,268 -
Between one and two years 3,383 -
Between two and three years 3,501 -
Between three and four years 3,624 -
Between four and five years 3,750 -
Later than five years 2,886 -
Total undiscounted lease payments receivable 20,412 -
The net investment in finance leases is presented as follows:
Current
3,085 -
Non-current 13,674 -
Total net investment in finance sublease 16,759 -
Risk management
The Group is exposed to credit risk in relation to lease payments receivable from the sublessee. This risk is managed
through ongoing monitoring of the counterparty's ability to meet its contractual obligations.
The Group is not exposed to significant residual value risk in relation to the finance sublease as the underlying property
remains subject to the head lease arrangements and the residual value risk associated with the underlying asset is not
significant.
ANNUAL REPORT 2026

PAGE 89 & 90
14. Finance income and expenses15. Loans and borrowings
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-89-

14 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 is also recognised in the income statement in accordance with NZ IFRS 16.

2026 2025

$'000
$'000
Finance income
Interest income on loans and deposits
1,108 694
Total finance income 1,108 694
Finance costs
Interest and facility fees
(18,037) (30,066)
Capitalised borrowing costs 182 -
Interest on leases (3,035) (3,020)
Total finance costs (20,891) (33,086)
Net finance costs (19,783) (32,392)
Loss on derecognition of financial assets (6,065) (7,719)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-90-

15 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.

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as
part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to become
ready for its intended use or sale. All other borrowing costs are recognised in the statement of comprehensive income in
the period in which they are incurred.


2026 2025

Drawn
facility
amount
Transaction
costs
Carrying
amount
Drawn
facility
amount
Transaction
costs
Carrying
amount

$'000
$'000 $'000 $'000 $'000 $'000
Working capital facility NZD 50,000 (481) 49,519 - - -
Revolving credit facility - - - 141,411 (161) 141,250
Term loan facility 14,905 (110) 14,795 57,589 - 57,589
NZD/CNH Facility 38,846 (174) 38,672 - - -
Shareholder loan - - - 130,000 - 130,000
Current liabilities 103,750 (765) 102,985 329,000 (161) 328,839
Shareholder loan 130,000 (314) 129,686 - - -
Non-current liabilities 130,000 (314) 129,686 - - -

Total loans and borrowings 233,750
(1,079) 232,671 329,000 (161) 328,839
(a) Terms of loans and borrowings
The bank loans 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 ANZ, China Construction Bank ("CCB"), Bank of
China ("BOC"), HSBC, Bank of Communications ("BOCOM"), Industrial and Commercial Bank of China ("ICBC"), Shanghai
Rural Commercial Bank ("SHRCB"), China Merchants Bank ("CMB") and Bank of Beijing ("BoB").
A shareholder loan of $130.0m from the Group's majority shareholder, Bright Dairy, has been obtained. The maturity date
is 7 July 2028.
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 covenants for the reporting period ended 31 July 2026.
Key financial covenants include a net senior leverage ratio of 3.0x (first tested 30 June 2027), a working capital ratio of
1.50x for the period to 28 February 2027 and 1.75x thereafter. This is an “at all times” covenant. An interest cover ratio of
2.5x for each quarter to (and including) 30 June 2027 (and 3.0x thereafter), Shareholders’ Funds to always exceed $450
million. In addition, the Group is subject to quarterly minimum EBITDA milestones.
The Group’s interest bearing loans and borrowings are on floating rates of interest. The nominal interest rate is calculated
by adding the BKBM rate for NZD facilities, HIBOR rate for CNH facilities and the applicable margin rate. It excludes line
fees and swap costs. As at year end the interest was charged at a rate between 2.0% to 4.4933%.

ANNUAL REPORT 2026

PAGE 91 & 92
15. Loans and borrowings (continued)16. Share capital
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

15 Loans and borrowings (continued)
-91-

The Group completed its syndicated banking facilities with ANZ, China Construction Bank ("CCB"), Bank of China ("BOC"),
HSBC, Bank of Communications ("BOCOM"), Industrial and Commercial Bank of China ("ICBC"), Shanghai Rural
Commercial Bank ("SHRCB"), China Merchants Bank ("CMB") and Bank of Beijing ("BoB") continuing as members. The
12-month facilities peak at $320.0m and mature on 30 June 2027. The banks have the option to extend the facility for a
further three months, up to 30 September 2027.
At 31 July 2026, the Group had senior banking facilities of approximately $320.0m, of which $103.8m was drawn and
$215.0m was undrawn. Access to undrawn facilities is subject to the individual facility limits, permitted purposes and
applicable conditions for drawing.
The Group's $146.0m of seasonal working capital facilities reduce progressively through the 2026/27 milk season, with
$60.0m maturing in February 2027, a further $60.0m maturing in May 2027 and the remaining $26.0m maturing in June
2027.
The Group also has other term and credit facilities totalling approximately $68.8m that mature in June 2027. In addition, the

Group has $104.0m of undrawn term facilities which mature 12 months from their respective drawing dates.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-92-

16 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, no new ordinary shares were granted to participants of the Group’s Long Term Incentive
scheme as a result of share rights that were granted under the scheme vesting and being converted to ordinary shares
(2025: $nil). Refer to note 17 for further information.
During the reporting period, no new common shares were issued by the Group (2025: 384,616,437 common shares
issued).


2026

2025

2026

2025

Shares
Shares $'000 $'000
(a) Share capital

Ordinary shares

On issue at beginning of period
603,198,098 218,581,661 676,881 464,774
Shares issued during period - 384,616,437 - 212,107
603,198,098 603,198,098 676,881 676,881
None of the above shares are held by the Group or its subsidiaries.

(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 position 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.
(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.
Total basic EPS for the 2026 financial period was (12.51) cents (2025: (7.39) cents). Diluted EPS for the 2026 financial
period was (12.51) cents (2025: (7.39) cents). Weighted average shares outstanding for the 2026 financial period were
603,198,098 (2025: 538,919,735). Weighted average shares outstanding, adjusted for potentially dilutive shares for the
2026 financial period were 603,198,098 (2025: 538,919,735).
ANNUAL REPORT 2026

PAGE 93 & 94
17. Share based payments18. Reserves and retained earnings
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-93-

17 Share based payments

LTI Share Scheme Overview
Under the Long-Term Incentive (LTI) share scheme, eligible participants are granted Performance Share Rights (“PSRs”).
These PSRs are designed to incentivise long-term performance and align the interests of participants with those of Synlait
Milk Limited’s shareholders.
From the 2024 financial year onward, PSRs are to be settled in cash, unless otherwise noted.
PSRs are typically awarded annually, with each grant assessed over a three-year performance period commencing from
the date of award. The number of PSRs allocated is calculated as 20% of the participant’s base salary divided by Synlait
Milk Limited’s share price on the entitlement date.
Performance Conditions and Vesting Criteria
Financial Year 2026 Grants:
PSRs were granted during the financial year ended 31 July 2026 in respect of the Financial Year 2025 LTI share scheme.
Financial Year 2025 Grants:
 PSRs consist of 30% Total Shareholder Return Rights (“TSR Rights”) and 70% Return on Net Capital Employed
Rights (“RoNCE Rights”).
 Vesting of TSR Rights and RoNCE Rights is subject to progressive vesting scales based on performance outcomes.
 For TSR Rights, 100% vesting requires Synlait’s TSR to reach $1.20 for the volume weighted average price (VWAP)
over the last 10 trading days as at 31 July 2027.
 For RoNCE Rights, 100% vesting requires Synlait’s RoNCE to exceed the 4.89% per year target over the performance
period.
 Both TSR and EPS Rights vest using progressive scales.
For both TSR and EPS hurdles, Synlait’s TSR must be positive over the assessment period for vesting to occur.
Additional Terms
No exercise price is payable on the exercise of PSRs. Ordinary shares are delivered to participants at nil consideration.
The LTI share scheme is operated annually, with awards subject to Board approval. Each award is assessed over a
three-year period.

2026 2025
Outstanding 1 August
2,239,301 1,638,673
Granted during the year 474,917 1,796,915
Forfeited during the year (1,815,549) (1,196,287)
898,669 2,239,301
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-94-

18 Reserves and retained earnings
2026 2025

$'000 $'000
(a) Reserves

Hedging reserve - cash flow hedges
416 5,400
Share-based payments reserve 611 611
Foreign currency translation reserve 107 41
1,134 6,052
(b) Retained earnings
Movements in retained earnings were as follows:

2026 2025

$'000 $'000


Balance 1 August
105,853 145,675
Net loss for the year (75,440) (39,822)
Balance 31 July 30,413 105,853
(c) 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 of cash flow
hedging instruments and the cost of cash flow hedging instruments. Cash flow hedging instruments relate to hedged
transactions that have not yet occurred.
(ii) Employee benefits reserve
There is no movement in the employee benefits reserve (2025: $0.6m).
(d) Dividends
No dividends were declared by the Group during the year.
ANNUAL REPORT 2026

PAGE 95 & 96
19. Financial risk management
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

-95-

19 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.
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 that 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 that 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 2026, the Group has hedged 49% of its exposure to forecast foreign exchange risk on USD sales. As at 31
July 2026, the Group has hedged 20% of its exposure to forecast foreign exchange risk on USD purchases. The Group
hedges foreign exchange risk over the following 18 months from balance date.
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 for 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 Group's earnings
and milk price by eroding selling prices and increasing input costs.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

19 Financial risk management (continued)
-96-

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. The Group has a
credit policy in place under which each new customer is rigorously analysed for creditworthiness. 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 retains limited
exposure to certain risks associated with assigned receivables, principally the risk of immaterial late payment charges and
specific recourse events under certain receivables purchase agreements. The Group has assessed these exposures and
concluded that they do not represent significant continuing involvement and that substantially all risks and rewards of
ownership have transferred to the purchasing banks. Accordingly, the assigned receivables are derecognised in
accordance with NZ IFRS 9, as described in note 7.
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.
Market risk
(i) Foreign exchange risk
The Group’s exposure to foreign currency risk at the reporting date was as follows:
2026 2025
USD
AUD EUR RMB SGD USD AUD EUR RMB

$'000
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Trade receivables
31,055 2,758 112 39,128 - 21,100 5,326 707 15,235
Trade payables (1,834) (95) (200) (1,914) (30) (8,449) (1,477) (225) (1,179)
Total 29,220 2,663 (88) 37,214 (30) 12,651 3,849 482 14,056
ANNUAL REPORT 2026

PAGE 97 & 98
19. Financial risk management (continued)
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

19 Financial risk management (continued)
-97-

The Group's exposure to foreign currency in the period ended 31 July 2026 is limited to its sales of dairy products,
purchases of raw materials for production and capital equipment purchases. As of the reporting date, the Group held the
following foreign exchange derivative instruments outstanding in relation to future foreign currency transactions, including
those associated with the North Island divestment.

2026 2025

Weighted
average
exchange rate
Nominal
balance
Weighted
average
exchange rate
Nominal
balance

'000
'000
USD
Exports

Less than 1 year 0.5868 229,600 0.5909 423,750
1 to 2 years 0.5714 8,000 0.5697 18,000
Imports
Less than 1 year
0.5887 (35,165) 0.5962 (48,620)
1 to 2 years - - 0.6087 (1,313)
Options
Less than 1 year
- - 0.6200 10,000
AUD
Exports
Less than 1 year 0.8490 11,500 0.9200 8,000
CNH
Exports
Less than 1 year 3.9921 206,000 4.1016 97,000
1 to 2 years 3.8846 28,000 4.1562 18,000
EUR
Imports

Less than 1 year
0.4960 (1,862) - -
1 to 2 years 0.5031 (118) - -

(ii) Interest rate risk
As at the reporting date, the Group had the following interest rate swap contracts outstanding:

2026 2025

Weighted
average
interest rate
Nominal
balance
Weighted
average
interest rate
Nominal
balance

%
$'000 % $'000

Less than 1 year
4.13% 85,000 4.47% 45,000
1 to 2 years 4.19% 50,000 4.73% 35,000
2 to 3 years - % - 4.70% 20,000

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.
Synlait Milk Limited
Notes to the Financial Statements
For the year ended 31 July 2026
(continued)

19 Financial risk management (continued)
-98-

(iii) Sensitivity analysis
The table below presents the effect on the income statement and cash flow hedge reserve at balance date if various
market rates had been higher or lower with all other variables held constant. A positive number in the table represents an
increase in profit or the cash flow hedge reserve.

Post-
tax impact on the
income statement
Post-tax impact on cash flow
hedge reserve (equity)
2026 2025 2026 2025

$'000
$'000 $'000 $'000

100 basis points increase in interest rate
(2,473) (2,649) 787 681
100 basis points decrease in interest rate 2,473 2,649 (801) (699)
Foreign exchange rates
5% increase in exchange rate
(2,633) (1,020) 22,959 40,654
5% decrease in exchange rate 2,910 1,127 (22,629) (27,963)
(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 are 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
As at 31 July 2026

Trade and other payables 318,185
- - - 318,185
Loans and borrowings 102,985 129,686 - - 232,671
Derivative financial instruments 3,964 207 - - 4,171
Lease liabilities 5,831 6,058 8,764 24,484 45,137
Total 430,965 135,951 8,764 24,484 600,164
As at 31 July 2025

Trade and other payables 378,341
- - - 378,341
Loans and borrowings 328,839 - - - 328,839
Derivative financial instruments 7,656 390 724 - 8,770
Lease liabilities 6,499 6,135 14,401 28,198 55,233
Total 721,335 6,525 15,125 28,198 771,183
ANNUAL REPORT 2026