Core Viewpoint - Synlait Milk Limited, a subsidiary of the company, is engaging in forward foreign exchange contracts to hedge against currency fluctuations related to the sale of its North Island assets for a price of USD 170 million [2][3][26]. Group 1: Business Overview - The purpose of the business is to mitigate the financial impact of currency fluctuations on the sale of North Island assets, which will be priced in USD [2]. - The forward foreign exchange contracts will be executed with qualified banks and financial institutions, with a maximum transaction amount of USD 170 million [2][3]. - The forward foreign exchange contracts are expected to cover 90%-100% of the sale price of the North Island assets [4]. Group 2: Financial Details - The sale price of the North Island assets is set at USD 170 million, with the specific investment amount for the forward foreign exchange contracts to be determined based on Synlait's needs [3]. - The expected delivery date for the transaction is April 1, 2026 [5]. Group 3: Approval Process - The business has been approved by the company's board of directors and the audit committee, with unanimous votes in favor [8][25]. - The project requires approval from Synlait's shareholders and the New Zealand Overseas Investment Office [27][44]. Group 4: Financial Impact - The project is expected to increase Synlait's net profit by approximately NZD 10 million to NZD 15 million in the 2026 fiscal year [53]. - The sale will help Synlait address excess capacity issues and improve operational quality by focusing resources on core business activities [53]. Group 5: Risk Management - The company has established risk control measures, including strict adherence to legal and prudent principles in conducting forward foreign exchange contracts [11][12]. - The company will monitor currency fluctuations and adjust its hedging strategy accordingly to ensure price stability [30][59].

Group 1 - The company aims to conduct derivative hedging business to lock in costs, reduce or avoid exchange rate risks, and enhance financial stability [1][2] - The board of directors approved the hedging proposal on July 17, 2025, allowing the company and its subsidiaries to engage in this business for a period of 12 months [1][3] - The hedging strategy will utilize forward foreign exchange contracts, foreign exchange swaps, foreign exchange options, and interest rate swaps to mitigate risks associated with foreign currency transactions [2][3] Group 2 - The maximum limit for the hedging transactions is set at RMB 5 million, with a maximum contract value of RMB 200 million on any trading day [2][3] - The company will engage with reputable financial institutions approved by the State Administration of Foreign Exchange and the People's Bank of China for these transactions [2][3] - The necessity of this hedging business is underscored by the company's significant import and export activities, which are closely tied to foreign exchange fluctuations [3][4] Group 3 - The company has established risk control measures, including careful selection of trading partners and strict management of transaction scales [4] - The company will adhere to relevant accounting standards for financial instruments and hedge accounting to ensure proper financial reporting [4][5] - The overall conclusion is that the derivative hedging business is both necessary and feasible for the company to mitigate foreign exchange risks and enhance operational efficiency [5]