Ausnutria Dairy Corporation Ltd (Stock Code: 1717) (referred to as “Ausnutria”) has announced a Probiotics Supply Framework Agreement with Inner Mongolia Yili Industrial Group Co., Ltd. (Yili Industrial), its controlling shareholder holding 60.18% of Ausnutria’s issued shares. According to the announcement dated 31 October 2025, Yili Industrial and its subsidiaries (excluding Ausnutria) will purchase probiotics and related products from Ausnutria during the term of this arrangement, which extends from execution through 31 December 2027.

Under this agreement, the prices for the relevant products will be determined after arm’s length negotiations, factoring in whether a tender and bidding process exists, comparable market prices, or quotations for similar products from independent third-party suppliers. Historical transactions of similar nature amounted to approximately RMB3.75 million for the nine months ended 30 September 2025. Given higher expected demand, the annual caps under the Probiotics Supply Framework Agreement are set at RMB10 million for 2026, RMB40 million for 2027, and RMB65 million for 2028.

Since Yili Industrial is a connected person of Ausnutria under the Listing Rules, the agreement constitutes continuing connected transactions. The highest applicable percentage ratios for these transactions exceed 0.1% but are below 5%, placing them under reporting, announcement, and annual review requirements, but exempting the transactions from independent shareholders’ approval.

Ausnutria’s board of directors views the Probiotics Supply Framework Agreement as beneficial for leveraging both parties’ expertise and resources across multiple territories, noting that the associated synergy will enhance efficiency and flexibility. The adopted internal controls, along with annual review by independent non-executive directors and external auditors, aim to ensure fair and reasonable terms for all shareholders.