Ann: Notice of Meeting and update to remuneration practices, page-18

I think we are basically on the same page.

I do understand that the exclusivity applies to both labels, what I meant was that a2's objective is to transfer EL production to MVM whilst allowing Synlait to maintain de facto exclusivity over China label for the remainder of the current SAMR approval until 2027.

EL production will move to MVM, it is just a matter of when. If A2 succeeds in the arbitration, or can negotiate a solution with Synlait (which may involve some kind of compensation to smooth things over like you suggest) it will occur in the next 1-2 years or as soon as the MVM facility is ready.

If A2 fails in arbitration, they can give 3 years termination of contract notice, which starts the Mutually Assured Destruction clock ticking down for both companies. The contract termination date would coincide with the expiry of Synlait's current SAMR approval in 2027.

From 2024 - 2027 A2 has to continue EL production at Synlait (for longer than intended) and MVM goes underutilised for about 1 year longer than planned.

However, A2 has more options than Synlait in terms of securing themselves beyond 2027 when the contract clock runs out. For instance, during this time A2 and CAHG can pursue their own SAMR approval for the same CL product that Synlait is currently producing, the only caveat being that production cannot commence until 2027 when the Synlait contract terminates. If they are unsuccessful, or want to secure additional capacity, they can still pursue a new SAMR approval through Synlait for post-2027, and sign a new non-exclusive CL supply arrangement with Synlait.

From Synlait's perspective, I think they have to recognise that A2 has a reasonable chance of obtaining their own SAMR approval for MVM. Synlait's best chance to secure better long term arrangements, such as extended exclusivity over CL, or guaranteed minimum volumes of either label, would be give A2 what it wants and let go of exclusivity over EL sooner rather than to make them wait. In my view, the long term risk lies more in Synlait's court than it does in A2's.