Fonterra Shareholders' Fund

Unitholders are entitled to attend and vote at unitholder meetings, and to elect three directors of the Manager of the Fund.

Unitholders do not have any right to attend or vote or request the Fonterra Farmer Custodian to attend or vote, at any meeting of farmer shareholders. The Fonterra Farmer Custodian also does not have any voting rights at meetings of farmer shareholders, except on certain interest group resolutions. Situations, where interest group resolutions are required, are expected to be rare.

The Fund Size Risk Management Policy is designed to address the following requirements:

• the key goals of the Fund are to supplement liquidity in the Fonterra Shareholders’ Market, thereby promoting price convergence,
• and to provide flexibility for Farmer Shareholders;
• the size of the Fund should remain within specified limits; and
• the Fund size should be managed based on graduated responses.

It is important to note that a change in the number of units on issue does not, of itself, result in a dilution in per unit measures of financial performance (such as distributions per unit or earnings per unit). That is because changes in the number of units on issue need not (and typically will not) reflect any change in the number of shares on issue.

The Fund Size Risk Management Policy is designed to address the following requirements:

• the key goals of the Fund are to supplement liquidity in the Fonterra Shareholders’ Market, thereby promoting price convergence,
• and to provide flexibility for Farmer Shareholders;
• the size of the Fund should remain within specified limits; and
• the Fund size should be managed based on graduated responses.

It is important to note that a change in the number of units on issue does not, of itself, result in a dilution in per unit measures of financial performance (such as distributions per unit or earnings per unit). That is because changes in the number of units on issue need not (and typically will not) reflect any change in the number of shares on issue.