LARK DISTILLING CO. LTD — Investor Presentation 2004

Nov 18, 2004

Montec International Limited

Making dairy foods healthlet... naturally

Presentation Overview

1. Company Background 2. Company Operations

Company Background

Immediate Expansion Opportunities

• Accelerate distribution in China with the Notional Agency Network
• Expand Australian and New Zealand O morketho
• Expend to Jepen, Singepore, Telwen end O The lone
• Product extensions n

n

DIODECK-

Expand to non-grocery channels $\overline{\phantom{a}}$

Technology Highlights

SHORE

	High Growth High growth in demand for healthy dairy over general dairy
Defensive Sector	Low correlation between milk consumption and share market volatility
China Growth	High growth in milk consumption to 18 billion litres pa by 2015
Alliances	Danisco, Unilever, ISP, Central Dairy Project Office, National Agency Network, Qingdao Dairy General Corporation etc
Health	Targets cardiovascular disease, a leading cause of death Globally
Competitive Advantages	Competitive advantages for dairy counterparties E High growth consumer sector Preserves good cholesterol. No bad cholesterol Taste and consistency E Standard processing Support by governments and authorities u International supply arrangements Continued development of products and markets

Share Performance

Performations

• 30 Day Moving Average: 30 June 2004: \$0.55 $\Box$
• Price of 30 June: \$0.56 per shore m
• 52 week high: \$0.78 per shore
• 52 week low 50.44 per shore п

Company Ownership as at 30^th June 2004

Share
Ownership	Shares Million	$\mathcal{H}_0$
Public Shareholders	24.35	76.63%
Founder and Directors	12437	23.32%
ाठावा	67. W	400%

Options
	Options Million	M
Public Shareholders	1437 Z ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	BIRDZI
Founder and Directors	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 5400 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	38740% 100000000000000000000000000000000000000
ro al	epa: 71	a sa mana mana mana mana mana mana mana 10024 a di kabing kaliman kabing kaliman kabing kabing kaliman ng kabing kabing kabing kabing kabing kabing kabing k Kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabing kabin

CIRCICILE

CORE PRODUCT - HEALTHY DAIRY

Patented Premix formula

• Added to dairy products (milk)
• Replaces saturated fat and cholesterol (harmful) ◘ with mono-unsaturated fat (healthy)
• Oraziny rasta О

Action of HDL & LDL

"Good Cholestero! (HDL) is stable and carries "bad" cholestero! (LDL) away from the arteries. "Bad" cholesterol (LDL) sticks to artery walls and contributes to plaque build up.

Core Application - Healthy Dairy Products

• Provides dairy processors with advantages including higher margins
• Used in Farmers Best Milk for 12 years and Meng Tai milk in China
• Consumer and manufacturer trend towards healthy foods
• 5-Year program to extend the formula to 14 healthy dairy products to include ice-creams, yoghurts, dips, spreads and cheeses
• Plans to extend channel scope to include non-grocery distribution channels such as fast food and specialty outlets

Development

Research and development from 1987 to 1992

Commercellsation

• Farmers Best milk captured 5% NSW milk market within 10 weeks
• More than \$200 million sales in NSW
• Establishment of China operations and preliminary negotiations

Commercialisation Development 1987-1991 1992-2002

Expansion

Miesiones

• 2002: Agreements executed with ODPO and ODGO
• T 2008: Positive results from AC Nielsen consumer trials
• 2003: China brands and trademarks registered
• 2003: Australian Stock Exchange Listing
• 1 2004: Certification in China
• 2004: Distribution of Meng Tai via China supermarkets
• 2004: Distribution of Meng Tai via wholesale and vendor networks

Expansion

SErom 2002

• E 2004: Product extensions
• 2004: Expansion of distribution channels

Australia and NZ Markets

• Australia (1990 to 2001) : 1.9 billion litres per annum
• Overall 54% rise in consumption of healthy dairy
• Overall 14% fall in consumption of general dairy
• New Zealand: similar trends to Australia: 360 m litres pa

Australia per capita consumption trends

AUGICIE INITY

Asia Markets

Food and Agriculture Organisation of the United Nations:

"Amongst the developing countries, consumption of milk and milk products is expected to grow most strongly in Asia, which is projected to account for almost 55 percent of growth in world demand"

EX-10	TELES Let o la ferme de la ferme de la ferme de la ferme de la ferme de la ferme de la ferme de la ferme de Millton lines	PARTON Consumental WITH POINT READ	GTONIE
KOLEE	2469	87.63	6924
ATELELLE	CREES	2586	TOOS
MEIEVSE	ENDER	ERGES	4624
86106118	10,725	11,409	6%

China

Total estimated population

CDP crowin

Montec Margin (Meng Tai Milk)

Daily finalistry growth

Milk consumption 2001

Milk consumption 2015 (est)

Highest consumption

Urban mik 2001

Urban milk 2015

Counterparties

13 Billon people

9.9% to March 2003. Estimated 9.4 % 2004

AU 17.7 c per litre + premium

10% oerannum

CI216111011111035

TSM billion littes

Shanghai and Beijing (50%)

8.27 billion litres (90% total).

16.40 billion litres (90% total)

QDGC, CDPO, NAN

Montec
in China

Danisco

• Processing, importing, warehousing and logistics facilities
• 10-year global partnership paid in Australia
• One of world's largest dairy processors

China Covernments (CDPO)

• Dairy sector governing body + European Union
• Contract to promote Montec throughout China and arrange meetings
• E Health + WTO competitive advantages

$\Omega$

• Montec paid 17.7c for ingredients + premium margin
• Co-branding to leverage market position

National Aceney Network

• Major distributor to wholesale and retail channels
• Minimum volume of 1 million to 3 million litres per month

Montec

Operations

1st Half: July 2003 to December 2003

ASXIBSHO

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Pre-Requisites for China Launch

• E Successful consumer trials in China
• Finalisation of agreements with Qingdao Dairy
• Finalisation of arrangements with Australian Go-operative Foods
• Shipments of mono premix to Qingdao
• Completion of Meng Tai trademark application
• Finalisation of China milk packaging designs
• Receipt of Chinese statutory approvals
• Conclusion of point of sale merchandising materials
• Conclusion of in-store promotional materials and arrangements
• Conclusion of media advertising campaign

2nd Half: January 2004 to June 2004

Mene Tai Milk Launch

EXPLEMENT

• Completion of milk production trial
• Supermarket approvals secured
• Distribution via supermarkets and wholesale channels
• . Indicative terms agreed for national distribution with NAN
• L Negotiations non-grocery channel distribution
• Doubling of monthly enterprise premix revenues
• Plans established for entry to Beijing and Shanghai
• Plans to launch 4 product extensions in 2004

1^st Quarter : July 2004 to September 2004

20

Meng Tai Milk - Positioned for Growth

• Successfully reached maximum sales in test market
• Successfully lobbied via CDPO for increased Raw Milk access
• Proven distribution via supermarkets, wholesale and agent channels
• Agreement for national distribution via NAN completed
• Agreement for Contract Processing in Tianjin finalised
• Agreement reached for national distribution via non-grocery channel
• Implementation of plans for entry to Beijing, Shanghai and Shenzhen
• Commercialisation well advanced for new product extensions into Niche Vertical Markets with major announcements planned early 2005

Meng Tai Launch Results

Manonich

• Doubling of Montec's monthly enterprise revenues □
• High growth in revenue / store ratio n
• High repeat consumption + word of mouth marketing n

AC Nielsen Trials

• Strong preference for Montec product and brand L
• Appreciation of health benefits $\overline{\phantom{a}}$
• Price premium $\Box$

5 Core Objectives: 2005 to 2006

• 1. Expanding Sales Growth & Market Share in China
• National Agency Network and CDPO
• Beijing, Shanghai and National Sales
• 1. Expansion Within Asia Pacific - Japan, Singapore, Taiwan, Thailand • When China operations firmly established
• 1. Expansion of Market Share within Australia Expansion to state markets outside of NSW
• 1. Product Extensions (Healthy Dairy Cabinet) - 4 to 6 Product extensions on sales during 2005 - 14 Product extensions by 2008
• 5. Non-Grocery Distribution Channels
• L Fast food, franchises

Objectives

Annuity cash flows, enterprise growth, cross promotion

National Agency Network

$\blacksquare$ NAN:

NAN

• Leading distribution channel to China's retail sector.
• Distribution, marketing, promotion, retail shelf space, warehousing, inventory, financing trading stock.
• Key participant: in China's food retail sector, more than 90 retail Chains and more than 8,000 chain stores
• Indicative Terms: minimum of 1 million litres of mono-premix based milk per month, rising to 3 million litres per month within 12 months
• Exercited Referoist Tax of filte
• Montec to commit: \$2.8 million for year 1 to the launch and marketing of Meng Tai milk in Beijing, Shanghai and regional cities. Agent channel to continue promotional activities in stores, sales, marketing and merchandising activities over subsequent twelve month period.

National Agency Network

$\blacksquare$ NAN:

XXX

• This Leading distribution channel quickly overhauls alternative entry.

• The agents are dynamic as they see the trends first and capitalise on them.

The quantity of Meng Tai milk distributed via Hypermarkets and the depot/wholesale channel is consistent notwithstanding the Variation in the mumber of points of presence perfamme to each as presented in the charaction e

Supermarkets have simply accepted this munka intallizance and have comedy rely upon it as to what should be stocked and at what level.

National Agency Network

NAN

The marketing spend on Meng Tai sales activity has a higher upfront marketing cost which is then followed by delayed growth in sales. This is due to the requirement to book and pay for marketing / advertising costs ahead of delivery as seen by the actual sales results below.

The initial investment into marketing is essential in order to establish the sales volume that not only underpins the required performance via revenues but actually provides the information for management of required THERSHIP SYDEINS

Distribution Activity v Marketing Expenditue

Montec International Limited

Questions