Fonterra Shareholders’ Fund Interim Results 2022

Page 1


Results for announcement to the market
Name of issuer Fonterra Shareholders’ Fund
Reporting Period 6 months to 31 January 2022
Previous Reporting Period 6 months to 31 January 2021
Currency NZD
Amount (m’s) Percentage change
Revenue from continuing
operations
($10) (112%)
Total Revenue ($10) (112%)
Net profit/(loss) from
continuing operations
$nil -%
Total net profit/(loss) $nil -%
Interim Distribution
Amount per Quoted Equity
Security
$0.05
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date 24/03/2022
Distribution Payment Date 14/04/2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$3.50 $4.54
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the interim financial statements for further
explanation.
Revenue from continuing operations comprises net fair value
movements of Economic Rights of Fonterra Shares, and (if any)
dividend income.
Authority for this announcement
Name of person

authorised
to make this announcement
Andrew Cordner

Contact person for this
announcement
Simon Till

Contact phone number
+64 21 777 807

Contact email address
Investor.relations@fonterra.com

Date of release through MAP

17/03/2022

Unaudited interim financial statements accompany this announcement.

---

Fonterra
Shareholders’
Fund Interim
Financial
Statements
FOR SIX MONTHS ENDED 31 JANUARY 2022

Contents
CHAIRMAN’S REPORT2
MANAGER’S STATEMENT6
STATEMENT OF COMPREHENSIVE INCOME7
STATEMENT OF CHANGES IN AMOUNTS ATTRIBUTABLE TO UNIT HOLDERS7
STATEMENT OF FINANCIAL POSITION8
C A SH FLOW STATEMENT8
SIGNIFICANT ACCOUNTING POLICIES9
NOTES TO THE INTERIM FINANCIAL STATEMENTS10
INDEPENDENT REVIEW REPORT12
DIRECTORY13
INTERIM FINANCIAL STATEMENTS 2022
1

Chairman’s Report
Dear unit holders
At the start of the 2022 Financial Year (FY22) Fonterra set out its long-term
strategy and targets for the value it is aiming to create over the next eight
years. Fonterra also shared its aspiration to be net zero with its emissions
by 2050.
To achieve these outcomes, Fonterra made three important strategic choices
– to focus on creating value from New Zealand milk and to be a leader in both
sustainability and dairy innovation and science.
Fonterra CEO Miles Hurrell believes that while it’s early days, they are making
good progress in putting in place the necessary buildings blocks to achieve
their 2030 targets.
I will take the opportunity to note in this report some of the highlights and
challenges so far. For further clarity and detail, I encourage you to read
Fonterra’s FY22 Interim Report.
Fonterra’s performance for the six months to 31 January 2022 reflects
consistent and strong demand across its multiple markets and products
at a time when constrained milk supply and a significantly higher cost of
milk are having a significant impact.
Profit after tax for the first six months to 31 January 2022 is $364 million, and
an interim dividend of 5 cents per share has been declared. As a result, unit
holders will receive an interim distribution of 5 cents per unit. The record date
for the interim distribution is 24 March 2022 and the payment date is 14 April
2022. The suspension of the distribution reinvestment plan remains in place
as Fonterra progresses the requirements to be able to implement its Flexible
Shareholding structure.
Performance for the first six months
to 31 January 2022
Fonterra’s cost of milk has been around $2 per kgMS higher for the first
six months relative to the prior year. In the context of this significant
increase Fonterra has performed well.
Fonterra’s gross margin in its Ingredients channel improved for the first
six months compared to the same period last year. This was mainly due
to improved pricing, particularly in the protein portfolio for its casein and
whey protein concentrate products. However, the higher cost of milk put
pressure on Fonterra’s gross margins in the Foodservice and Consumer
channels, and it also felt the impact of COVID-19 in many of its markets.
Lower New Zealand milk collections reduced total production, and this
impacted overall sales volumes.
Despite these challenges, the region comprising Africa, Middle East, Europe,
North Asia, and Americas (AMENA) has had a strong start to the year,
delivering a 25% increase in normalised EBIT to $250 million. Fonterra
achieved this through improved pricing and product mix in the Ingredients
channel and continued volume and gross margin growth in its consumer
business in Chile.
In Greater China, Fonterra continues to see strong demand for dairy
as it finds new ways to drive demand. However, normalised EBIT from
this region is down 20% to $236 million, mainly due to the Foodservice
channel where, despite steady volumes, the higher milk cost has impacted
gross margins.
In Asia Pacific, normalised EBIT decreased 33% to $158 million. Fonterra’s
Australian business experienced improved gross margins due to better
pricing in its Ingredients channel. However, this was more than offset by
lower gross margins in the Foodservice and Consumer channels across
the Asia Pacific region, which was most notable in the South East Asia
and New Zealand businesses.
Overall, Fonterra’s Total Group normalised EBIT is down $77 million to
$607 million. However, the decrease in EBIT was partially offset by lower
interest expense due to reduced debt levels and gains from fixed interest
rate hedges as interest rates have risen. Consequently, Fonterra’s normalised
profit after tax of $364 million is down $54 million.
Outlook for the remainder of FY22
Fonterra has reaffirmed the forecast Farmgate Milk Price range of $9.30 –
$9.90 per kgMS and forecast normalised earnings guidance of 25 – 35 cents
per share.
Fonterra has noted that pricing within its Ingredients channel, for both
reference products (which inform its farmgate milk price) and non-reference
products, has been supportive of both milk price and earnings and expects
this to continue in the second half. However, pressure will remain on
its Foodservice and Consumer channel gross margins due to the higher
input costs.
Fonterra has highlighted several risks they are continuing to watch closely
in the second half. These include inflationary pressures, the potential
impact of high dairy prices on demand, economic disruption due to the
rapid spread of the Omicron variant and geopolitical events, such as
Russia’s invasion of Ukraine.
Progress towards 2030 targets
Fonterra’s short-term financial performance is critical, as it funds the future.
However, it is also aware it needs to focus on its long-term targets and,
as a result, take action today that will pay off in the future. Fonterra CEO
Miles Hurrell considers that solid progress is being made across all three
of Fonterra’s strategic choices.
Focus on New Zealand milk
Fonterra believes its new ‘Flexible Shareholding’ capital structure is critical
in helping maintain a sustainable New Zealand milk supply in an increasingly
competitive environment. Following the positive farmer vote in December,
discussions with the Government are progressing well and Fonterra expects
to be able to provide a timeline for the implementation to farmers and unit
holders in the next couple of months.
Fonterra is also continuing to make progress on the divestment of its Chilean
business and the ownership review of the Australian business. As noted
earlier, both businesses are performing well this year and it is Fonterra’s
priority to maximise their value. Hence, Fonterra will take time to ensure the
best outcomes from these processes and remains confident on delivering on
its intention to return around $1 billion of capital to Fonterra shareholders
and unit holders by FY24.
Be a leader in dairy innovation and science
Fonterra continues to build on its legacy of dairy innovation, developing new
solutions to solve problems customers face and helping people live longer
and healthier lives. In doing so, it is looking at new ways to commercialise
its intellectual property.
An example of this is the collaboration with VitaKey. VitaKey specialises in
precision delivery of nutrition – an emerging area of research that seeks
to deliver the right nutrients, in the right amount, to the right part of the
body at the right time. Fonterra is working with them to explore how they
can apply their capability to specific dairy nutrients in a way that allows
the nutrients to be more active and beneficial in the body. This has started
with two of Fonterra’s probiotics that are used to address digestive issues
and immunity.
Be a leader in sustainability
By investing in sustainability, Fonterra is making sure its milk is backed by the
sustainability credentials consumers want and will be better able to support
customers in their sustainability journey.
In this regard, finding a solution to the methane challenge will be significant.
Fonterra is excited about the results of the next phase in the Kowbucha™
trials - a probiotic which could switch off the bugs that create methane
in cows. After moving from the lab to farm, initial results have shown a
reduction in methane emissions of up to 20% when fed to calves. The trial
is now continuing to the next phase.
Fonterra’s focus on sustainability is helping maintain and win business.
The combination of New Zealand milk having a carbon footprint one
third the global average for milk production and Fonterra’s sustainability
credentials recently helped retain business in its Foodservice channel.
Like Fonterra, one of their Quick Service Restaurant customers has a goal
to be net zero by 2050. By using Fonterra’s products over a competitor’s,
they’ve been able to reduce their carbon emissions by the equivalent of
taking 1,760 cars off the road.
As said earlier, it is only early days on the long-term strategy – but it is
evident progress is underway.
Capital Structure Review
As noted above, Fonterra is continuing to negotiate with the Government
to achieve the legislative changes required to implement the new flexible
shareholding structure. In communications with unit holders last year, the
independent directors of the manager of the Fonterra Shareholders’ Fund
explained their concerns over the impact of the restructuring on the unit
price, and advocated that Fonterra make an offer to unit holders to buy the
Fund out. They noted that the purpose underlying the formation of the Fund
was no longer relevant and that its retention under the new capital structure
could have a further negative impact on value for unit holders.
Fonterra has not accepted the independent directors’ recommendation.
They say that consultation with farmers shows that they want to retain
the Fund. They also argue that having the Fund provides transparency
and scrutiny (from analysts and others) that is positive for all investors,
including farmer shareholders.
The independent directors are not able to force a buyout of the Fund.
Looking ahead, the value of units will primarily be a function of Fonterra’s
earnings’ performance and dividends. To that end it is positive to see
Fonterra maintaining its current year earnings forecast.
We will continue to monitor the impact of the restructuring proposals on
unit holders, and to communicate accordingly. We will also continue to
emphasise to Fonterra the importance of unit holders as a stakeholder group.
John Shewan
INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
23

INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
45

Manager’s Statement
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
FSF Management Company Limited (the Manager) presents to the unit
holders the interim financial statements for the Fonterra Shareholders’ Fund
(the Fund) for the six months ended 31 January 2022.
The Manager is responsible for presenting interim financial statements for
the six months which fairly present the financial position of the Fund and
its financial performance and cash flows for that period.
The Manager considers the interim financial statements of the Fund have
been prepared using accounting policies which have been consistently
applied and supported by reasonable judgements and estimates, and that all
relevant financial reporting and accounting standards have been followed.
The Manager believes that proper accounting records have been kept which
enable, with reasonable accuracy, the determination of the financial position
of the Fund and facilitate compliance of the interim financial statements with
the Financial Markets Conduct Act 2013 and the Fonterra Shareholders’ Fund
Trust Deed.
The Manager considers that it has taken adequate steps to safeguard the
assets of the Fund, and to prevent and detect fraud and other irregularities.
The Manager approves and authorises for issue the interim financial
statements for the six months ended 31 January 2022 presented on
pages 7 to 11.
For and on behalf of the Board of the Manager:
John Shewan
Chairman
FSF Management Company Limited
16 March 2022
Kimmitt Ellis
Director
FSF Management Company Limited
16 March 2022
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2022
UNAUDITED
31 JAN 2021
UNAUDITED
31 JUL 2021
AUDITED
Net fair value (loss)/gain on revaluation of Economic Rights of Fonterra shares(26)76(9)
Dividend income16511
Investment (expense)/income(10)812
Net decrease/(increase) in fair value of amounts attributable to unit holders26(76)9
Distributions to unit holders(16)(5)(11)
Finance income/(cost)10(81)(2)
Profit before tax–––
Tax exp ense–––
Profit for the period–––
There are no items of other comprehensive income.
The accompanying notes form part of these interim financial statements.
Statement of Comprehensive Income
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
Statement of Changes in Amounts
Attributable to Unit Holders
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
$ MILLION
Amounts attributable to unit holders at 1 August 2021402
Movements:
Revaluation of amounts attributable to unit holders(26)
Issue of units–
Redemption of units–
Amounts attributable to unit holders at 31 January 2022 (unaudited)376
Amounts attributable to unit holders at 1 August 2020400
Movements:
Revaluation of amounts attributable to unit holders76
Issue of units21
Redemption of units(14)
Amounts attributable to unit holders at 31 January 2021 (unaudited)483
Amounts attributable to unit holders at 1 August 2020400
Movements:
Revaluation of amounts attributable to unit holders(9)
Issue of units51
Redemption of units(40)
Amounts attributable to unit holders at 31 July 2021 (audited)402
INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
67

Statement of Financial Position
AS AT 31 JANUARY 2022
Cash Flow Statement
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
The accompanying notes form part of these interim financial statements.
$ MILLION
NOTES
31 JAN 2022
UNAUDITED
31 JAN 2021
UNAUDITED
31 JUL 2021
AUDITED
Assets
Economic Rights of Fonterra shares2376483402
Total assets376483402
Liabilities
Amounts attributable to unit holders3376483402
Total liabilities376483402
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2022
UNAUDITED
31 JAN 2021
UNAUDITED
31 JUL 2021
AUDITED
Cash flows from operating activities
Cash was provided from:
– Sale of Economic Rights of Fonterra shares–1440
– Dividends received (net of dividends reinvested)16410
Cash was applied to:
– Purchase of Economic Rights of Fonterra shares–(20)(50)
Net cash flows from operating activities16(2)–
Cash flows from financing activities
Cash was provided from:
– Proceeds from issue of units–2050
Cash was applied to:
– Outflows on redemption of units–(14)(40)
– Distributions paid to unit holders (net of distributions reinvested)(16)(4)(10)
Net cash flows from financing activities(16)2–
Net change in cash and cash equivalents–––
Cash and cash equivalents at the beginning of the period–––
Cash and cash equivalents at the end of the period–––
Significant Accounting Policies
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
a) General information
The Fonterra Shareholders’ Fund (FSF or the Fund) is a New Zealand managed
investment scheme established to be the ‘Authorised Fund’ under Fonterra’s
Trading Among Farmers scheme. It is registered under the Financial Markets
Conduct Act 2013 and its governing document is the Fonterra Shareholders’
Fund Trust Deed (the Trust Deed) dated 23 October 2012 (as amended)
and has a life of 80 years. Under the Trust Deed, the Fund may invest only
in authorised investments, which are Economic Rights of Fonterra shares
(Economic Rights), and issue units to investors. It may not invest directly
in Fonterra shares.
The Fund is listed on the NZX Main Board operated by NZX Limited and
as a Foreign Exempt Listing on the Australian Securities Exchange operated
by ASX Limited. The Manager is an FMC reporting entity under the Financial
Markets Conduct Act 2013.
These interim financial statements were authorised for issue by the Manager
on 16 March 2022.
Fonterra interim financial statements
Investors are encouraged to read the interim financial statements of Fonterra
Co-operative Group Limited (Fonterra), together with the interim financial
statements of the Fund, given that the performance of the Fund is driven by
the performance of Fonterra. The Fonterra interim financial statements can
be found at www.fonterra.com in the ‘Investors/Results & Reporting’ section.
Fonterra’s capital structure review
At a Special Meeting held on 9 December 2021, Fonterra shareholders
voted in favour of capital structure related amendments to Fonterra’s
Constitution that would give effect to the Flexible Shareholding structure.
The Constitution amendments and new structure will come into effect once
the Fonterra Board is satisfied that any steps necessary for implementation
have been (or will be) completed. The Co-operative is aiming to implement
the changes as soon as possible from the beginning of next season, which
commences on 1 June 2022.
Information about Fonterra’s capital structure review is available in the
‘Investors/Capital Structure’ section of Fonterra’s website.
Activities
The principal activity of the Fund is to acquire Economic Rights and issue
units to investors to allow investors in the Fund an opportunity to earn
returns based on the financial performance of Fonterra.
Since Fonterra’s capital review was announced on 6 May 2021 the ability
for the Fund to acquire Economic Rights and issue units to investors on a
day-to-day basis has been suspended and this remains, as a capped Fund
is a feature of the Flexible Shareholding structure that Fonterra shareholders
voted in favour of at a Special Meeting held on 9 December 2021. The
Flexible Shareholding structure also sets the overall limit on the Fund size at
10% of the total number of Fonterra shares on issue, rather than its current
size, which is around 6.7%. This provides scope for the Fund to be increased
in size up to 10% in the future, subject to Fonterra Board approval.
Units continue to be available on the NZX or ASX to buy and sell and unit
holders continue to be eligible to receive distributions.
b) Basis of preparation
These unaudited interim financial statements comply with International
Accounting Standard 34 Interim Financial Reporting and New Zealand
Equivalent to International Accounting Standard 34 Interim Financial
Reporting. They have also been prepared in accordance with Generally
Accepted Accounting Practice (GAAP) applicable to for-profit entities.
These interim financial statements do not include all the information and
disclosures required in the annual financial statements, and should be read
in conjunction with the financial statements for the year ended 31 July 2021.
These interim financial statements are presented in New Zealand dollars ($),
which is the Fund’s functional and presentation currency, and rounded to
the nearest million, except where otherwise stated.
The accounting policies applied in the preparation of these interim financial
statements are consistent with those applied in the financial statements for
the year ended 31 July 2021.
c) Operating segments
The Fund’s investments only include Economic Rights assets and the Fund’s
performance is evaluated on an overall basis. Therefore, the Fund is a single-
segment entity.
All of the Fund’s income is from investments in the Economic Rights.
The internal reporting provided to the Board of the Manager, which is the
Fund’s chief operating decision maker, for the Fund’s assets, liabilities and
performance is prepared on a consistent basis with the measurement and
recognition principles of NZ IFRS. The Board of the Manager reviews the
Fund’s internal reporting in order to assess the performance and position
of the Fund.
INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
89

Notes to the Interim Financial Statements
FOR THE SIX MONTHS ENDED 31 JANUARY 2022
1 Fair Value Measurement
The Fund measures the Economic Rights and amounts attributable to unit
holders at fair value.
The Fund uses the following fair value hierarchy that reflects the
significance of the inputs used in making the measurements:
–Level 1: Quoted price (unadjusted) in an active market for an
identical instrument.
–Level 2: Valuation techniques based on observable inputs, either directly
(i.e. as prices) or indirectly (i.e. derived from prices). This category includes
instruments valued using: quoted prices in active markets for similar
instruments; quoted prices for identical or similar instruments in markets
that are considered less than active; or other valuation techniques for
which all significant inputs are directly or indirectly observable from
market data.
–Level 3: Valuation techniques using significant unobservable inputs.
The Fund has no Level 3 instruments.
The Fund’s amounts attributable to unit holders is a Level 1 instrument
as the unit price is quoted on the NZX Main Board, which is considered to
be an active market. The Manager considers market prices to be the most
representative measure of fair value as they are used by market participants
as a practical expedient for fair value measurement.
The market is monitored on an on-going basis to confirm that it remains
active for the purposes of establishing fair value.
Economic Rights are Level 2 instruments as Economic Rights are not listed
and there is no active market for Economic Rights assets. Economic Rights
are valued using the quoted price of units (which are considered to be a
materially comparable instrument) in the Fund listed on the NZX Main Board.
The validity of assumptions relating to the comparability between a unit and
an Economic Right has been considered in the context of Fonterra’s capital
structure review and remains appropriate.
There have been no transfers between the categories in the fair value
hierarchy during any of the periods presented.
2 Economic Rights of Fonterra Shares
The Economic Rights are held on trust for the Fund by the Fonterra Farmer Custodian Trust under the Fonterra Economic Rights Trust.
AS AT
31 JAN 2022
UNAUDITED
AS AT
31 JAN 2021
UNAUDITED
AS AT
31 JUL 2021
AUDITED
Value of Economic Rights ($ million)376483402
Number of Economic Rights1 0 7, 4 1 7, 3 2 2106,336,396107,420,162
The Economic Rights are measured at fair value, calculated as the number of Economic Rights held multiplied by the established fair value for each
Economic Right.
$ MILLION
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2022
UNAUDITED
31 JAN 2021
UNAUDITED
31 JUL 2021
AUDITED
Opening value of Economic Rights 402400400
Movements:
Purchase of Economic Rights
1
–2151
Sale of Economic Rights–(14)(40)
Revaluation of Economic Rights(26)76(9)
Closing value of Economic Rights376483402
1 There have been no Economic Rights acquired in conjunction with Fonterra’s Dividend Reinvestment Plan for the six months ended 31 January 2022 (31 January 2021: $0.6 million; 31 July 2021: $0.6 million).
3 Amounts Attributable to Unit Holders
SIX MONTHS ENDEDYEAR ENDED
31 JAN 2022
UNAUDITED
31 JAN 2021
UNAUDITED
31 JUL 2021
AUDITED
Value of amounts attributable to unit holders at the end of the period ($ million)
1
376483402
Opening number of units on issue
2
107,420,162104,581,516104,581,516
Movements:
Number of units issued
3
–5,111,88911,794,492
Number of units redeemed (2,840)(3,357,009)(8,955,846)
Closing number of units on issue1 0 7, 4 1 7, 3 2 2106,336,396107,420,162
1 The amounts attributable to unit holders is measured at fair value, calculated as the number of units on issue multiplied by the unit market price at 31 January 2022 of $3.50 (31 January 2021: $4.54; 31 July
2021 : $3.74).
2 Included in the total number of units is one Fonterra unit, held by the Fonterra Farmer Custodian Trust, which was issued at inception of the Fund. The key rights of the Fonterra unit holder are set out in the
Fund’s Annual Financial Statements for the year ended 31 July 2021.
3 No units have been issued under the Distribution Reinvestment Plan for the six months ended 31 January 2022 (31 January 2021: 145,300 units with a value of $0.6 million; 31 July 2021: 145,300 units with a
value of $0.6 million).
4 Net Assets per Security
As at 31 January 2022, the net assets per unit on issue was $3.50
(31 January 2021: $4.54; 31 July 2021: $3.74).
5 Commitments and Contingent Liabilities
The Fund has no material commitments or contingent liabilities as at
31 January 2022 (31 January 2021: nil; 31 July 2021: nil).
6 Subsequent Events
Declaration of distribution
On 16 March 2022, the Board of Directors of Fonterra declared an interim
dividend of 5 cents per share. Following Fonterra’s dividend declaration, the
Board of the Manager declared an interim distribution of 5 cents per unit.
The distribution will be paid on 14 April 2022 to the unit holders on the
register at 24 March 2022.
The Distribution Reinvestment Plan does not apply to this distribution.
Changes in unit price
Units are traded on the NZX and ASX and accordingly the unit price changes
regularly, including during the period between balance date and the date
these interim financial statements were authorised for issue. Changes in
the market price of the units result in a corresponding change in the value
of the Economic Rights asset held by the Fund. Daily unit prices are available
on the NZX website.
INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
1011

Directory
REGISTERED OFFICE OF THE MANAGER
OF THE FUND – NEW ZEALAND
109 Fanshawe Street
Auckland Central, Auckland 1010
Telephone: +64 9 374 9000
REGISTERED OFFICE OF THE MANAGER
OF THE FUND – AUSTRALIA
C/o Fonterra Australia Pty. Ltd.
Level 2, 40 River Boulevard
Richmond, Victoria 3121
Telephone: +61 3 8541 1588
DIRECTORS OF THE MANAGER
OF THE FUND
Mary-Jane Daly
Kimmitt Rowland Ellis
Andrew Webster Macfarlane
John Bruce Shewan
Donna Maree Smit
COMPANY SECRETARY
Andrew Cordner
SUPERVISOR
The New Zealand Guardian Trust Company Limited
Level 6, 191 Queen Street
Auckland Central, Auckland 1010
New Zealand
AUDITOR OF THE FUND AND THE MANAGER
OF THE FUND
KPMG
18 Viaduct Harbour Avenue
Auckland 1010
New Zealand
LEGAL ADVISERS TO THE MANAGER
OF THE FUND
Chapman Tripp
Level 34, PwC Tower
15 Customs Street West, Auckland 1010
New Zealand
SHARE REGISTRAR – NEW ZEALAND
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
Private Bag 92119, Auckland 1142
Telephone: +64 9 488 8777
SHARE REGISTRAR – AUSTRALIA
Computershare Investor Services Pty. Limited
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067
GPO Box 3329
Melbourne, Victoria 3001
Telephone: 1800 501 366 (within Australia)
Telephone: +61 3 9415 4083 (outside Australia)
Independent Review Report
To the unit holders of Fonterra Shareholders’ Fund
REPORT ON THE INTERIM FINANCIAL STATEMENTS
Conclusion
We have completed a review of the accompanying interim financial statements which comprise:
–the statement of financial position as of 31 January 2022;
–the statements of comprehensive income, changes in amounts attributable to unit holders and the cash flow statement for the 6 month period then
ended; and
–notes, including a summary of significant accounting policies and other explanatory information.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements on pages 7 to 11 do not:
i. present fairly in all material respects, the Fund’s financial position as at 31 January 2022 and its financial performance and cash flows for the 6 month
period ended on that date; and
ii. comply with NZ IAS 34 Interim Financial Reporting (NZ IAS 34) and IAS 34 Interim Financial Reporting (IAS 34).
Basis for conclusion
A review of interim financial statements in accordance with NZ SRE 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity
(“NZ SRE 2410”) is a limited assurance engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures.
As the auditor of Fonterra Shareholders’ Fund, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual
financial statements.
Other than in our capacity as auditor we have no relationship with, or interests in, the Fund.
Use of this Independent Review Report
This report is made solely to the unit holders as a body. Our review work has been undertaken so that we might state to the unit holders those matters
we are required to state to them in the Independent Review Report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the unit holders as a body for our review work, this report, or any of the opinions we have formed.
Responsibilities of the Manager for the interim financial statements
The Manager, on behalf of the Fund, are responsible for:
–the preparation and fair presentation of the interim financial statements in accordance with NZ IAS 34 and IAS 34;
–implementing necessary internal control to enable the preparation of interim financial statements that are fairly presented and free from material
misstatement, whether due to fraud or error; and
–assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless they either intend to liquidate or to cease operations or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the interim financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review. We conducted our review in accordance with NZ SRE
2410. NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the interim financial statements are
not prepared, in all material respects, in accordance with NZ IAS 34 and IAS 34.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on
Auditing (New Zealand). Accordingly, we do not express an audit opinion on these interim financial statements.
This description forms part of our Independent Review Report.
KPMG
Auckland
16 March 2022
insight
creative.co.nz
FONTERRA093
INTERIM FINANCIAL STATEMENTS 2022FONTERRA SHAREHOLDERS’ FUND
1213

fonterra.com

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Page 1

Distribution Notice
Section 1: Issuer information
Name of issuer
Fonterra Shareholders’ Fund
Financial product name/description Fonterra Shareholders’ Fund Units
NZX ticker code FSF
ISIN (If unknown, check on NZX website) NZFSFE0001S5
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 24/03/2022
Ex-Date (one business day before the
Record Date)
23/03/2022
Payment date (and allotment date for DRP) 14/04/2022
Total monies associated with the
distribution
1

$5,370,866
Source of distribution (for example, retained
earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.05000000
Gross taxable amount
3
$0.05000000
Total cash distribution
4
$0.05000000
Excluded amount (applicable to listed PIEs) $0.05000000
Supplementary distribution amount Not Applicable
NOTE: FSF is a Foreign Investment Variable Rate PIE. The whole distribution is excluded income for NZ
resident investors. PIE tax (for resident investors) or NRWT (for non-residents) may be deducted at the rate
appropriate for the investor.

1
Based on the number of units on issue at the date of the form.
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of Resident
Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT. This should include
any excluded amounts, where applicable to listed PIEs.

Page 2

Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
6

Not Applicable
Imputation tax credits per financial product Not Applicable
Resident Withholding Tax per financial
product
$-
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any) Not Applicable
Start date and end date for determining
market price for DRP
Not Applicable Not Applicable
Date strike price to be announced (if not
available at this time)
Not Applicable
Specify source of financial products to be
issued under DRP programme (new issue
or to be bought on market)
Not Applicable
DRP strike price per financial product Not Applicable
Last date to submit a participation notice for
this distribution in accordance with DRP
participation terms
Not Applicable
Section 5: Authority for this announcement
Name of person authorised to make this
announcement
Andrew Cordner
Contact person for this announcement Simon Till
Contact phone number +64 21 777 807
Contact email address Investor.relations@fonterra.com
Date of release through MAP 17/3/2022


5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is fully imputed the
imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute advice as to whether or not RWT
needs to be withheld.
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.