LIC full year financial results 2019-20

LIC is the trading name of Livestock Improvement Corporation Limited




Innovation Led Growth Drives Strong Full Year
Result For LIC

Performance Highlights:
• NPAT: $17.5 million, down 21.1% from $22.2 million last year
• Underlying Earnings*: $22.7 million, up 16.2% from $19.5 million last year
• Total revenue: $254.0 million, up 3.0% from $246.5 million last year
• Dividend: $18.1 million/12.75c per share (80% of underlying earnings), up from $15.6 million/10.98c
last year
*refer notes on page 3 of market statement

Livestock Improvement Corporation (NZX: LIC) (LIC) announces its financial results for the year ending 31
May 2020, reporting an increase in Underlying Earnings*, record revenue and the ongoing strength of the
cooperative’s balance sheet.
LIC will return $18.1 million in dividend to shareholders. This dividend equates to 12.75 cents per share, up
from 10.98 cents last year and represents a gross dividend yield of 22.7% based on the current share price
of 78 cents.

Board Chair Murray King said the strong result was in line with market guidance and achieved despite the
impacts of drought in many areas of New Zealand and the global and domestic impacts of COVID-19 late in
FY20. “The strong result enables LIC to deliver a significant dividend to shareholders at a time when every
dollar counts on-farm.”

“LIC’s result has been driven by our innovation-led growth strategy and our ongoing commitment to pushing
the technological boundaries to deliver genetic gain and other products and services to our farmers. It is
underpinned by ongoing benefits from our strategic initiatives to transform LIC into a modern, progressive co-
op.”

“In FY20 we continued to execute our strategy, kept disciplined management of operating costs and increased
investment in research and development,” King said.
“Net profit after tax was down mainly due to a $7.2 million decrease in the bull team valuation. This is primarily
because of the ongoing shift from daughter-proven bulls to genomic bulls. This change improves the rate of
genetic gain within the dairy industry, but has a negative impact on the value of the bull team as genomic
bulls are used for a shorter time period than daughter-proven bulls.”
Murray King said that, despite a challenging season, with the impacts of drought and COVID-19, farmers
continue to move up the value chain, investing in the latest genomics and other genetics products. The uplift
demand for these premium products and genetics drove revenue up $7.4 million (3%) to a record $254 million.
“The increasing uptake of these products demonstrates the value on-farm of LIC’s ongoing investment to
enhance our core genetics business through world-leading genomics to drive genetic gain in dairy herds and
high-valued premium genetics products like A2 and sexed semen,” said King.

“Use of genomic semen increased from 23% to 38% of LIC semen sold in New Zealand, further demonstrating
the increased confidence our farmers have in genomics.

“LIC is working with DairyNZ to update NZAEL 2.0 and LIC genomic evaluation has been upgraded and
released through MINDA for all cows.”

R&D investment increased to $16 million this year, to give farmers a number of tools in the future to further
improve genetic gain and address environmental challenges, including:

• World-leading methane research that aims to ultimately breed more ‘climate friendly’ cows.
• The Resilient Dairy programme to breed cows with improved health, wellbeing and environmental
resilience.
• LIC’s new HoofPrint® Index, which enables farmers to select bulls based on their predicted ability to
generate daughters with a lower environmental impact.
Impact of Drought and COVID-19
The drought that affected many New Zealand farmers for much of the season, coupled with the disruption of
the COVID-19 lockdown in Q4, impacted herd testing and diagnostics towards the end of the year, with 5%
less milk samples (10.4 million) tested compared to the prior year.
LIC’s experience in biosecurity management through Mycoplasma bovis to protect staff, shareholders and
their herds ensured it was well prepared to implement the required measures to continue as an essential
service under COVID-19 Level 4.
However, physical distancing requirements and measures to minimise on-farm visits meant LIC’s Herd Assist
and GeneMark services were suspended for several weeks. International genetics revenue was also
impacted due to COVID-19-related supply chain issues, including major disruptions to air freight of semen to
key markets.
LIC has not accessed the Government COVID-19 wage subsidy, but has benefitted from a tax change to
reinstate tax depreciation on commercial buildings. The tax change has resulted in a one-off $3 million
improvement in tax expense and a corresponding decrease in deferred tax liability.
Business Highlights

Genetic and Animal Testing

LIC’s testing services to increase herd welfare, productivity and genetic gain showed strong growth:
• A2 genetic reporting to identify A2/A2 cows was up 42%.
• GeneMark™ DNA parentage testing allowing farmers to increase the rate of genetic gain in their herds
by keeping the best replacement animals each year went up 9%.
• Testing for Johne’s disease was up 20% and Milk Pregnancy testing up 27%.
• Significant investment in IT developments continues.
International Genetics
• LIC’s international genetics business is the leading supplier of semen globally for grazing systems,
exporting 857,427 semen straws valued at $12.1 million this year. This is down on the record 1,013,564
straws and revenue of $12.8 million in FY19 due to air freight issues as a result of COVID-19.
• LIC continues to focus on increasing its export business to deliver dividends to its farmer shareholders
in New Zealand.
Research and Development
• Investment in R&D increased 17.5% in 2019-20 to $16.0 million from $13.6 million last year.
• This equates to 6.3% of revenue (5.5% in the prior year) and is well above the primary sector average
of around 1%.
• The increase is largely attributable to additional funding from MBIE and MPI (and associated LIC
funding) to boost key R&D projects, including world leading methane research, to drive improvements
in the health and wellbeing of the national herd and more sustainable milk production.

Outlook
“LIC is match-fit to play its role in supporting our shareholders as they navigate their farming businesses
through the challenges of the 20/21 season. The company has no debt and a strong balance sheet,” said
King.

“We will continue to deliver on LIC’s innovation-led growth strategy focussing on the core New Zealand dairy
industry, including assessing opportunities to best achieve this. Data is at the heart of that strategy. We
continue to assess how best to access and utilise data to drive the performance of the cooperative, our
shareholders’ farming businesses and to protect the reputation and value of New Zealand’s dairy products
with consumers around the world.”

As advised to the market on 20 May 2020, based on the impacts of COVID-19 on forecast milk price, credit
tightening for farmers and increased compliance costs for the next season for New Zealand dairy farmers
and LIC, the Board updated its Underlying Earnings* forecast for the next financial year. Underlying Earnings*
for the year ended 31 May 2021 is still expected to be in the range of $16 million - $22 million.

ENDS

For more information and commentary about the result, visit www.ayearinreview.lic.co.nz/


Media enquiries: Jo Jalfon, jo.jalfon@lic.co.nz 027 297 1904
Shareholder enquiries: 0800 264 632

*Notes to Financial Information:
LIC’s annual results for 2019-20 include the annual non-cash revaluations of its major biological asset, the bull team, and the outstanding Nil Paid Ordinary Shares
receivable, which are both required to reflect “fair value” under accounting standards. Figures have been audited.

Nil Paid Ordinary Shares
These were issued to shareholders as a result of the share simplification in 2018, which brought together LIC’s two previous classes of shares into one Ordinary Share.
For each co-operative share held, one Fully Paid Ordinary Share and three Nil Paid Ordinary Shares were issued. Nil Paid Ordinary Shares carry the same rights to
dividends and voting as Ordinary Shares but cannot be traded on the NZX until they are fully paid up. Over time, shareholders are obliged to pay-up each Nil Paid
Ordinary Share and once fully paid (up to $1) they become subject to market pricing. The Nil Paid Ordinary Shares are repaid by way of retention of dividends paid on
any of those shares, and any repayments of the shares required to satisfy LIC’s Share Standard. LIC records an estimate of the fair value of the outstanding Nil Paid
Ordinary Shares receivable at balance date.

Bull team
The bull team valuation is based on a model designed independently of LIC that looks at future revenue streams and costs associated with the current bulls owned,
discounted back to current value.
Underlying Earnings is the company’s NPAT excluding bull valuation and nil paid share valuation movements and is considered useful to investors as it is the basis on
which LIC has historically reported and it is the basis on which LIC makes its determination of dividends. Non-GAAP financial information does not have a standardised
meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities.

Reconciliation of NPAT to Underlying Earnings 2020 2019
Profit/(loss) after tax for the year

17,487

22,170
Add back Bull team revaluation

7,220

(1,920)
Add back Fair value change in Nil Paid Share receivable

-

(1,258)
Tax effect on fair value revaluations

(2,022)

538
Underlying Earnings

22,685

19,530


About LIC: LIC is a farmer-owned co-operative that provides a range of services and solutions to improve the productivity and prosperity of farmers. This includes dairy
genetics, information technology, herd testing, DNA parentage verification and farm advisory services through FarmWise. Subsidiary business LIC Automation also
provides integrated automation systems and unique milk testing sensors that present real-time data while a cow is being milked. With origins dating back to 1909, LIC
has a long history of world-leading innovations for the dairy industry. Today the New Zealand-based co-operative employs more than 800 permanent staff, swelling to
2000 during the peak dairy mating season. LIC also has offices in the United Kingdom, Ireland and Australia. All LIC profit is returned to its farmer owners/shareholders
in dividends, or reinvested for new solutions, research and development. www.lic.co.nz

---

Livestock Improvement
Corporation Limited (LIC)
Annual Report
For the year ended
31 May 2020

Contents
Key results and position
Our results for the year2
Our position at year end3
Our cash flows for the year4
Changes in our position for the year4
More details
Accounting policies5
Business analysis6 - 7
Our core assets7 - 10
Our funding 11
Risk and Other assets12
Tax and Other expenses13
Other liabilities, Transactions with
Related Parties - Directors and
Management
14
Cash flow reconciliation and
Subsequent events
15
Independent auditor's report16
Directors' report20
Corporate Governance report22

Key results and position
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/20
2
Note20202019
1
253, 986246, 541
(40,084)(36,447)
(103,895)(100,749)
3,4,5
(30,812)(26,804)
(16,007)(13,624)
10
(35,833)(41,653)
(571)(336)
2
(7,220)1,92 0
STATEMENT OF RESULTS FOR THE YEAR
For the year ended 31 May 2020
In thousa nds of New Zealand doll ars
Revenue
Purcha sed materi als
People costs
Depreciation and amortisation
Resea rch and development
Other exp enses
Net finance costs
Bull team revaluation
Fair valu e change in Nil Paid Shar e receivable
6
-1,2 58
19,56430,106Profit/(loss) before tax expense
Tax expense
9
(2,077)(7,936)
Profit/(loss) for the year17,48722,170
6
(29)146
6
(3,415)3,707
Hedge rev alua tions
Investment revalua tions
Land and buildings revaluations
3,6
1,160542
(2,284)4,395
Comprehensive income for the year
15,20326,565
Profit per Ordina ry Share (excl. trea sury stock )$ 0.12$ 0.16
17,48722,170
7,220(1,9 20)
-
(1,258)
Profit/(loss) for the year
Less Bull team revaluation
Less Fair value chan ge in Nil Paid Share receivable
Tax effect on Bull team revaluation
(2,022)
538
2222,,6688551199,,553300
Underlying earnings per Ordinary Share (excl. treasury stock)
$
0.16
$
0.14
Supplementary non-GAAP the results for the year:
Underlying earnings

Key results and position
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/203
STATEMENT OF POSITION FOR THE YEAR
As at 31 May 2020
Note20202019
In thou sa nds of New Zea la nd dolla rs
Ca sh16,4 884 ,52 9
Debtors
8
4 1,14 445,254
Bull team
2
115,508122,728
La nd, bu ildings a nd equ ipment - owned & lea sed
3,5
95,39481,03 4
Software, goodwill and other intangible assets
4
67,81073,781
Nil Paid Shares receivable
6
15,72 718,690
Other a ssets
8
2 7,8693 4 ,719
Total assets379,940380,735
Creditors
7
22,3632 8,590
B orrowings
7
1,6164,661
Deferred tax
9
34,5434 0,83 8
Other liabilities
11
3 1,17615,2 09
Total liabilities89,69889,298
Net assets290,242291,437
Share capital678,4 3 278,4 3 2
Reta ined ea rnings6170,720169,765
Other reserves64 1,09043,240
Total equity290,242291,437
DirectorDirector
Date: 22 July 2020Date: 22 July 2020

Key results and position
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/204
Note20202019
12 53 ,702247,470
( 192 ,981)(190,454)
(8,385)( 2 ,14 3 )
STATEMENT OF CASH FLOWS FOR THE YEAR
For the year ended 31 May 2020
In thousands of New Zealand dollars
Customer receipts
Su pplier payments
Tax payments
Other opera ting ca sh flows
( 3 18)294
Net operating cash flows1352,01855,167
Software development4(13,822)(18,994)
Net sales/(purchases) of land, buildings and equipment3(6,229)( 16,177)
Other inv estment ca sh flows( 1,3 50)(1,639)
Net investment cash flows(21,401)(36,810)
Payment of principal portion of lease liabilities(2,964)-
Dra wdown/ ( repa yment) of ba nk debt( 3 ,000)( 15,000)
Issue of Co-opera tive Control Sha res-1,13 0
Nil Paid Share receipts38660
Dividends paid( 13 ,117)(2,535)
Net financing cash flows(18,695)(16,345)
Movement in cash for year11,9222,012
Ca sh a t beginning of the yea r4 ,52 92,521
Currency movement on ca sh holdings37(4)
Cash at end of the year16,4884,529
STATEMENT OF CHANGES IN POSITION FOR THE YEAR
For the year ended 31 May 2020
In thou sa nds of New Zea la nd dolla rs
Note
Share
capital
Retained
earnings
Other
reserves Total equity
Balance at 1 June 201978,4 3 2169,76543,240291,437
Adjustments on a doption of NZ IFRS 165-( 704 )-(704)
Profit/ (loss) for the yea r-17,2 812 0617,487
Dividends paid-(15,622)(72)(15,694)
Hedge revaluations--(29)(29)
Inv estment rev a lua tions--( 3 ,4 15)(3,415)
Land and buildings revaluations3--1,1601,160
Balance at 31 May 202078,432170,72041,090290,242
Balance at 1 June 201853 ,12 6150,14 138,834242,101
Profit/ (loss) for the yea r-22,06710322,170
Dividends paid-(2,443)(92)(2,535)
Hedge revaluations--14 6146
Inv estment rev a lua tions--3 ,7073,707
Land and buildings revaluations3--542542
Tra nsfer of a sset reva lua tions on sa le7,3 92--7,392
Investment Share repurchases17,914--17,914
Balance at 31 May 201978,432169,76543,240291,437

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/20
5
Accounting Policies
Accounting entity
These financial statements set out the performance, position and cash flows of Livestock Improvement Corporation Limited ("LIC" or
the "Company") and its subsidiaries (the "Group") for the year ended 31 May 2020.
LIC is domiciled in New Zealand, registered under the Companies Act 1993 and the Co-operative Companies Act 1996, and
listed on the Main Board of the New Zealand Stock Exchange Limited ("NZX"). LIC is an FMC Reporting Entity for the purposes
of the Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013.
Basis of Preparation
(i) Statement of compliance
These financial statements comply with NZ GAAP as appropriate for Tier 1, for-profit entities, NZIFRS and IF RS.
(ii) Basis of measurement
The financial statements have been prepared on a GST exclusive basis, with the exception of trade receivables and trade
pay
ables, which are reported inclusive of GST.
(iii) Functional and presentation currency
The functional currency of the Company and the presentation cur rency of the financial statements is New Zealand Dollars
("NZD"), with amounts rounded to the nearest thousand.
(iv) Use of estimates and judgements
The key estimations and judgements made in preparing these financial statements are the valuation of the Bull team and the
impairment testing of software and other intangible assets.
(v) New or amended standards adopted in current year and standards issued but not yet effective
The accounting policies have been applied consistently with prior periods with the exception of NZ IFRS 16 Leases which has been
impl emente d with effe ct fro m 1 Jun e 2019.
(vi ) Imp act of COVI D-19
In prepar ing th ese fi nanc ial statement s, the directors have considered the pot ential impa cts of COVID-19 on future revenues, asset va lues
and oth er area s, and b eli eve any im pacts are appropriately recognised.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/206
In thousands of New Zealand dollars
2020
NZ market
geneticsHerd testingFarm software
Farm
automationOther
Eliminations
Total
External revenue97,1593 2 ,05149,96916,39658,4 11-253,986
Inter-segment revenue---1,9722 ,4 88(4,460)-
Total revenue97,1593 2 ,05149,96918,3 6860,899(4,460)253,986
Depreciation & amortisation( 1,106)( 4 ,4 75)( 7,52 8)( 4 ,3 4 3 )( 13 ,3 60)-(30,812)
Segment profit before tax66,68710,7963 1,1615,02 933,194-146,867
Bull team revaluation(7,220)
Unallocated amounts(120,083)
Profit/ (loss) before ta x 19,564
2019
NZ market
geneticsHerd testingFarm software
Farm
automationOtherTotal
External revenue97,8763 2 ,8154 5,12 719,67551,04 8-246,541
Inter-segment revenue---2 ,3 54820( 3 ,174 )-
Total revenue97,8763 2 ,8154 5,12 722,02951,868( 3 ,174 )246,541
Depreciation & amortisation( 73 1)(3,138)( 7,62 5)( 3 ,816)( 11,4 94 )
-(26,804)
Segment profit before tax66,74411,4 0628,0256,5913 5,2 62-148,028
Bull team revaluation1,920
Unallocated amounts(119,842)
Profit/ (loss) before ta x 30,106
Notes to the Financial Statements
1. Business analysis
(i) Operating segments
The Group operates in four key operating segments, and across four key geographies as set out below. Figures in the
following tables reflect information regularly reported to the Chief Executive on those key operating segments:
- NZ market genetics: provides bovine genetic breeding material and related services, predominately to
da iry fa rmers.
- Herd testing: herd testing a nd a nima l recording for pa stora l fa rmers.
- Farm software: data recording and farm management information services.
- Farm automation: provides dairy automated equipment and technology.
The Other segment includes international operations, diagnostics, animal health, research & development and support
services. Una lloca ted a mounts include personnel costs, a dministra tive a nd other fixed costs a nd net fina nce costs.
Eliminations

Notes to the Financial Statements
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/207
1. Business analysis (cont.)
(ii) Geographic analysis
In thousands of New Zealand dollars
2020
New
ZealandAustraliaIreland
United
KingdomOther
Total
Revenues2 3 4 ,9768,13 73 ,4 044 ,3 033 ,166253,986
Non- current a ssets292,6286,14 34848,701-307,956
2019
Revenues223,8558,0014 ,1175,2 095,359246,541
Non- current a ssets295,1976,08545211,886152313,772
The Group's significant subsidiaries are:
2. Bull team
In thousands of New Zealand dollars20202019
Opening ba la nce122,72812 0,808
Bull team revaluation(7,220)1,92 0
Closing balance115,508122,728
Key drivers of the model:
Mea n 3 yea r forwa rd Fonterra Fa rmga te Milk Price* $ 6.3 5$6.67
WACC annualised post tax rate5.59% - 6.4 8%5.94% - 6.68%
Existing Sire Proving Scheme bull team size180180
Expected average bull useful life4 .84 .9
* This is the a vera ge of ma rket a na lyst consensus
The bull team is the cornerstone asset of LIC's genetics business. The 943 total bulls (2019: 968 bulls) from which the bull team
are selected are carried at their fair value, which is based on LIC's modelling of future cash flows from the bulls (a "Level 3
valuation"). Changes in their fair value are reported in profit.
The fair value from the bulls is partly dependent on the future sales mix of LIC's genetics products, which is historically strongly
correlated to the Farmgate Milk Price paid by Fonterra Co-operative Group. The valuation is therefore most sensitive to this
input a nd the WACC ra te used to discount those future ca sh flows. A cha nge of 100 ba sis points in the WACC ra te, up or down,
impacts the valuation by approximately $3.7m. The expected useful life of the existing bull team is also considered to be a key
driver of the model.
-New Zealand: LIC Agritechnology Company Limited (100%), LIC Automation Limited (100%)
-Australia: Liv estock Improv ement Pty Ltd (100% ), B ea con Automa tion Pty Ltd (75% )
-Ireland: LIC Ireland Limited (100%)
-United Kingdom: Livestock Improvement Corpora tion (UK) Ltd (100% )
The Group is not dependent on any one major customer in any of its reportable segments. New Zealand revenues include
government grant income of $4.834 million (2019: $2.925 million).

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/208
LandBuildingsEquipmentTotalLandBuildingsEquipmentTotal
Opening ba la nce3 5,4 172 8,15417,4 6381,03432,26925,35814,40372,030
Additions
- 2,282
4 ,9557,2373 ,1623 ,8659,26516,292
Disposa ls( 1,152 ) (336) (113)(1,601)
(3) (113)
(335) (451)
Depreciation
- (1,988)
(5,954)(7,942)
- (1,724)
(5,854)(7,578)
Revaluation
- 1,721
-1,721
(11) 768
-757
Foreign exchange
- (15)
3015--( 16)(16)
Lea sed a ssets - note 5-9,3 545,57614,930
Closing balance34,26539,17221,95795,39435,41728,15417,46381,034
Value if carried at cost11,69119,322N/A12,84319,364N/A
Estimated useful livesN/A10-40 years3-10 y ea r sN/A10-40 years3-10 y ea r s
In thousands of New Zealand
dollars
Software
& IP
GoodwillDatabaseTotal
Software
& IPGoodwillDatabaseTotal
Opening ba la nce56,8106,4 7110,50073,78156,9986,51310,50074,011
Additions13 ,713--13,71319,2 04--19,204
Disposa ls( 71)--(71)(82)--(82)
Amortisa tion(19,765)--(19,765)(19,226)--(19,226)
Foreign exchange12 329-152(84)(42)-(126)
Closing balance50,8106,50010,50067,81056,8106,47110,50073,781
20202019
Notes to the Financial Statements
3. Land, buildings and equipment
La nd a nd buildings a re ca rried at fa ir value, determined by an independent valuer at lea st every three yea rs ( most recent full
valuation as at 30 April 2018, with limited 'desk top' reviews completed in April 2019 a nd April 2020). Revaluations are
reflected in the revaluation reserve. Equ ipment includes plant, vehicles, furniture and fittings and IT hardware, and is carried
at depreciated cost. Buildings a nd equipment are depreciated on a straight-line ba sis over their estimated useful lives, a nd
reviewed annually for any indications of impairment.
20202019
In thousands of New Zealand
dollars
4. Software and other intangibles
(i) Softwa re a nd other intangible a sset balances
Software development expenditure is capitalised only where costs are directly attributable, and once the produ c t or proc ess is
commercially fea sible, the benefits a re probable, a nd the Group intends to sell or use the completed software.
Software assets are amortised over their useful lives of up to seven years on a straight line basis, and reviewed annually for
indicators of impa irment.
Intellectual property ( IP) assets are amortised over their estimated useful lives, being up to 13 years.
The genetic data in the LIC database increases in value with each successive generation. Both goodwill and the LIC
database have indefinite useful li ves. They are recognised at cost and are not amortised, are allocated to a cash
generating unit ("CGU") and tested for impairment annually.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/209
In thousands of
New Z ea l a n d
dollars
Farm
automation
CGU
Other
CGU
Total
Farm software
and herd
testing CGU
Farm
automation
CGU
Other
CGU
Total
LIC database--10,50010,500--10,500
Goodwill
4,144
2 ,3 566,500
-4,144 2,3276,471
10,5004,1442,35617,00010,5004,1442,32716,971
Buildings EquipmentVehiclesTotal
10,3 862504 ,91115,547
11,0902504 ,91116,251
In t ho us a n d s of New Zealand dollars
IInnccrreeaassee iinn::
Right of use assets
Lease liabilities
Equity
( 704 )--(704)
Notes to the Financial Statements
4. Software and other intangibles (cont.)
At reporting da te, softwa re includes $ 2 0.565 million ( 2 019: $ 17.2 90 million) of work in progress, whic h is not being
amortised until it is ready for use.
(ii) Impa irment testing of intangible a ssets
Allocation of Goodwill a nd the LIC Database to CGUs:
20192020
As 1 June 2019 (restated)
The LIC database and all goodwill recoverable amounts have been determined using value in use.
A disc ou nted ca sh flow model is used for impa irment testing ba sed on expected results a nd capital expenditure from the
current year foreca st, B oa rd approv ed budgets a nd a projection for further periods using a termina l growth ra te. A five year
ca sh flow projection period is used for the Da taba se a nd Other CGU a nd a ten year ca sh flow projection is used for the Fa rm
automation CGU. The termina l growth rate used is 0-1.0% (2019: 2.0%) for the Databa se a nd Good
will. The discount rate
applied is reviewed a nd updated a nnua lly for movements in published Trea sury risk-free rates and is 6.8% for the Database
and 6.8-10.2% for Goodwill (2019: 7.5% for the Databa se a nd 7.5-9.0% for Goodwill). Key a ssumptions in the projection period
for the Fa rm Automa tion CGU a re restructuring a nd a ssocia ted cost redu c tions, as well as successful roll out of In Line Milk
Meter technology.
5. Leases
(i) LIC as a lessee
The Group has lease contracts for buildings, equipment and vehicles used in its operations. The Group’s obligations under its
leases are secured by the lessor’s title to the leased assets. Several lease contracts include extension and termination
options. The Group's discount or incremental borrowing rate applicable to leases is 4.4%.
The Group also has certain leases of machinery with
lease terms of 12-months or less and leases of office equipment with low
value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these
leases.
(ii) Lease balances in the Statement of Position
Transition
On transition to NZ IFRS 16, using the modified retrospective approach, opening balances were calculated and
recognised in the statement of financial position as follows:
Farm software
and herd
testing CGU
10,500

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2010
In thousands of New Zealand dollars
Buildings EquipmentVehiclesTotal
Balance at 1 June 2019 (restated)10,3 862504 ,91115,547
Depreciation charge for the period( 1,2 95)( 153 )( 1,657)(3,105)
Additions2732681,9522,493
Adjustments4-59
Derecognition( 14 )--(14)
Closing balance9,3543655,21114,930
Lease terms
2-10 y ea r s2-5 y ea r s3-7 y ea r s
Lease liabilities
In thousands of New Zealand dollars
Buildings EquipmentVehiclesTotal
Within 1 year1,2 682 021,6923,162
Between 1 to 5 years4 ,2 821703 ,4 007,852
More tha n 5 yea rs4 ,596-3 004,896
10,1463725,39215,910
(iii) Lease balances in the Statement of Results for the year
In thousands of New Zealand dollars
Buildings EquipmentVehiclesTotal
Lease depreciation1,2 951531,6573,105
Interest expense on lease liabilities4 0412278694
Lease expenses on short-term and low-value leases-75-75
Total amount recognised 1,6992401,9353,874
Notes to the Financial Statements
5. Leases (cont.)
Right of use assets
Set out below are the carrying amounts of right-of-use assets recognised ( u nder Land, buildings and equ ipment) and the
movements du ring the period:
2020
2020
2020
The Group ha d tota l ca sh outflows for lea ses of $4.075m in 2020 ($4.409m in 2019).
Set out below are the carrying amounts of lease liabilities recognised at 31 May 2020 (included in Other liabilities):

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2011
Hedge
revaluation
reserve
Investment
revaluation
reserve
Non-
controlling
interests
Other
reserves
Balance at 1 June 2019978,4 7334,42124943,240
Profit/ (loss) for the yea r---2 06206
Dividends paid---(72)(72)
Revaluations(29)( 3 ,4 15)1,160-(2,284)
Balance at 31 May 2020685,05835,58138341,090
Balance at 1 June 2018(49)4 ,76633,87923838,834
Profit/ (loss) for the yea r---103103
Dividends paid---
Revaluations14 63 ,707542
(92)(92)
(93)
Balance at 31 May 2019978,47334,42124943,240
( iv ) B a nk debt
Bank loans are secured by a Negative Pledge granted to Westpac and Rabobank over certain New Zealand-based
subsidia ries.
(iii) Other reserves and equity
In thousands of New Zealand dollars
Land & building
revaluation
reserve
Notes to the Financial Statements
6. Funding
The Grou p's funding comes from Share capital, retained earnings, other reserves and borrowings.
(i) O rdina ry Sha res
In July 2 018 LIC's share structure was simplified and its two classes of shares, Investment Shares and Co-operativ e Control
Shares, were brou ght together into a single class of O rdinary Shares. All O rdinary Shares have v oting rights and the right to
receive dividends based on the profits of the Company.
At reporting da te there were 142,344,836 Ordina ry Sha res on issue, excluding 5,3 3 7,584 sha res held as trea sury stock ( 2 019:
142,344,836 O rdinary Shares, excluding 5,337,584 shares held as treasury stock).
(ii) Nil Pa id Sha res
Ordina ry Sha res includes both fully paid sha res a nd sha res on which full payment has not yet been made. These Nil Pa id
Shares must be paid up over time by Shareholders via a c ombination of div idend payments forgone, voluntary payments and
payments made on exit as a Shareholder. At year-end the outstanding amount on Nil Paid Shares has been recorded in the
Statement of Position as a receivable, valued at $ 15.7m using a disc ou nted cash flow model. The model uses assumptions on
expected future div idends, v olunta ry a nd compulsory pa yments a nd a pplies a disc ou nt ra te of 4 .5% ( 2 019: 5.7% ) .
4,395

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2012
In thousands of New
Zealand dollars
6 months
to 1 year 1 year plusTotal
6 months
to 1 year1 year plus
Total
B orrowings1,616--1,6164,661--4,661
Creditors22,363--22,3632 8,590--28,590
23,979--23,97933,251--33,251
(ii) Other a ssets20202019
In thousands of New Zealand dollars
Inventories13 ,59916,3 56
Inv estments13 ,51617,53 8
Derivatives used for hedging6189
Other liv estock693736
27,86934,719
Inventories utilised and expensed during the period amounted to $22.857 million (2019: $23.062 million). Inventories written off in
2020 totalled $0.259 million (2019: $0.027 million).
Notes to the Financial Statements
7. Liquidity and interest rate risk
(i) Liquidity risk
Liquidity risk is the risk of ha ving insufficient liquid a ssets to pa y the Grou p's debts as they fa ll du e. The Grou p ma na ges the risk
by monitoring forecast cash flows and holding sufficient bank facilities to meet the Grou p's needs. The contractual maturity of
the Grou p's funding is shown below.
20202019
Demand to
6 months
Demand to
6 months
The Grou p has bank funding facilities in pl ace until February 2023 and expects to be able to meet any obligations which fall du e.
All borrowings outsta nding at 31 Ma y 2020 a re considered current.
(ii) Interest ra te risk
Interest rate risk is the risk that changes in interest rates will impact the Grou p's results or position. The weighted average
interest ra te pa id on borrowings in 2020 wa s 3.23% ( 2 019: 3 .89% ) . A 1% increa se in interest ra tes wou ld redu c e profit a fter ta x by
approximately $0.126 million (2019: $0.146 million).
8. Debtors and other assets
(i) Debtors
Bad debts of $0.038 million have been expensed during the year (2019: $0.134 million), a nd 92% of trade receivables
are not pa st due (2019: 93%).

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2013
In thousands of New Zealand dollars
( i) Ta x expense20202019
Profit/ (loss) for the yea r17,4 8722,170
Ta x expense2 ,0777,93 6
Profit/ (loss) for the yea r before ta x19,56430,106
Tax at 28% NZ company tax rate5,4 788,4 3 0
Effect of oversea s income( 11)2 12
Non- dedu c tible items44(23)
Adjustments from prior periods( 4 10)(683)
Impact of changes to building depreciation( 3 ,02 4 )-
Tax expense2,0777,936
Current tax expense8,8238,2 58
Deferred tax expense(6,746)(322)
Imputation credits available21,24418,792
As at 31
May 2020
T hr o ug h
Profit/(loss)
T hr o ug h
Ot her
r es er ves
As at 31
May 2019
T hr o ug h
Profit/(loss)
As at 31 May
2018
31,983( 1,983 )-33,966801-33,165
1,226(4,525)4515,300(885)2 155,970
1,334(238)-1,572(238)-1,810
34,543(6,746)45140,838(322)2 1540,945
2019
187
-
Other expenses includes the following amounts paid to the Group's auditors, KPMG:
In thousands of New Zealand dollars
Audit of the financial statements
Research & development tax credit re view
Other assurance work
6
162193
Notes to the Financial Statements
9. Tax
Tax expense is recognised for items arising this year that are either taxable this year (current tax) or in other years (deferred tax).
The main items giving rise to deferred tax are revaluations of the Bull team and Land & Buildings.
(ii) Deferred tax liability
In t ho us a n d s of New Zealand
dollars
Liv estock
La nd & buildings
Other
Total
10. Other expenses
2020
147
9
6
T hr o ug h
Ot her
r es er ves

Notes to the Financial Statements
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2014
20202019
5,5974,740
2 ,5822,739
6,9646,533
15,910-
11. Other liabilities
In t ho us a n d s of New Zealand dollars
Provisions for employee entitlements
Provision for sire proving rebate
Provision for tax
Lea se liabilities
Other
12 31,197
31,17615,209
In thousands of New Zealand dollars20202019
Remuneration of key Management and Directors 4 ,5074,320
Sale of goods and services to key Management and Directors620597
There are no loans or deposits with related entities outside of the consolidated Group.
Directors of the Company and their related entities hold 307,952 Ordinary Shares, representing 0.21% of shares on issue
( 2 019: 4 4 6,511 O rdina ry Sha res, representing 0.3 0% ) .
Following the a pprov a l by Sha reholders of the sha re simplification desc ribed in Note 6, a sma ll nu mber of Sha reholders
elected to exercise their minority buy-out rights arising from the proposa l u nder the Compa nies Act 1993. As a result, on 19
April 2 018 LIC agreed to pu rc ha se the 1,334,396 Investment Sha res held by the Sha reholders concerned a nd offered to
pay $4 .00 per In vestment Share. The Shareholders objected to the price paid by LIC and the price for the affected shares
will therefore be determined in an arbitration. The $4.00 price was the relative value attributed to each Investment Share
under the sha re simplification proposa l accepted by Sha reholders.
Ea ch Investment Sha re wa s subsequently recla ssified into four fully paid Ordina ry Sha res with a relative value of $ 1.00
per share resulting in LIC holding 5, 337,584 Ordinary Shares as
treasury stock. No provision has been made for any
additiona l payments in these fina ncia l statements as LIC believes the price paid was fa ir a nd rea sonable a nd is
supported by independent valuations.
12. Transactions with Related Parties - Directors and Management
The Grou p has had the following short-term transactions with key Management and Directors du ring the year, noting sale
of goods a nd services were u nder norma l tra de terms:

Notes to the Financial Statements
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2015
13. Reconciliation of the Profit/(loss) for the year to Net operating cash flows
In thousands of New Zealand dollars
20202019
Profit/(loss) for the year
17,48722,170
Adju sted for:
Deprecia tion a nd a mortisa tion on owned a ssets27,7072 6,804
Bull team revaluation7,220( 1,92 0)
Lease liability principal repayment (classified as financing activity)(2,964)-
Working ca pita l movements a nd other non-ca sh items2 ,5688,113
Net operating cash flows52,01855,167
14. Subsequent events
After 31 Ma y 2020 a div idend of 12 .75 cents per Ordina ry Sha re wa s proposed by the Directors in relation to the 2020
year, or $18.1 million (2019: 10.98 cents per Ordinary Share, or $15.6 million).
After 31 Ma y 2020 the LIC B oa rd a nnounced a review of LIC Automa tion's structure a nd opera tions with the proposa l of
re- integrating LIC Automation’s New Zealand operations back into LIC.

16


Independent Auditor’s Report
To the shareholders of Livestock Improvement Corporation Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of Livestock Improvement
Corporation Limited (the ’company’) and its
subsidiaries (the 'group') on pages 2 to 15:
i.present fairly in all material respects the Group’s
financial position as at 31 May 2020 and its
financial performance and cash flows for the year
ended on that date; and
ii.comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying consolidated
financial statements which comprise:
—the consolidated statement of position as at 31
May 2020;
—the consolidated statements of results for the
year, changes in position for the year and cash
flows for the year then ended; and
—notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (‘IESBA
Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has also provided other assurance services to the group in connection with the certification of the
Group’s grant funding, and review of initiatives and recommendations relating to the research and development
tax credit. Subject to certain restrictions, partners and employees of our firm may also deal with the group on
normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as auditor of the group. The firm has no other relationship with, or interest in, the
group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality for the consolidated financial
statements as a whole. The materiality for the consolidated financial statements as a whole was set at $1.19
million.

17

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements in the current period. We summarise below those matters and our key
audit procedures to address those matters in order that the shareholders as a body may better understand the
process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not
express discrete opinions on separate elements of the consolidated financial statements
The key audit matter How the matter was addressed in our audit
Valuation of the bull team
Refer to Note 2 in the Financial Statements.
Determining the valuation of the bull team, which
is the core asset to both the domestic and
international genetics operations of the Group, is a
highly judgmental and complex area. Management
prepare a model that projects the number of
straws that the current team can produce and will
be sold over the life of the bulls. The valuation
model factors the cost of rearing, animal and farm
management costs, and forecasts of processing
costs to make sales. The calculated surplus is
discounted to reflect the time value of money.
Our audit procedures included, among others, valuation
specialist review of the model and challenge of
management’s significant assumptions such as:
— Projected sales volumes and pricing;
— Discount rates applied; and
— Useful life of the bulls.
We compared sales and costs growth, and inflation
rates to historical data and published market forecast
data where available. We reviewed market and
industry data to assess management’s discount rate
applied to the final model. We assessed the life of the
bulls against historical data. We found the inputs to be
comparable.
We also considered management’s forecasts in
previous years and found it to be sufficiently accurate
based on actual results achieved.
Carrying value of intangible assets
Refer to Note 4 to the Financial Statements.
The Group has two categories of intangible assets
with indefinite useful lives:
—Goodwill of $6.5m, arising primarily from
acquisitions made to facilitate growth and
diversification of the Group’s farm
automation products; and
—The LIC Animal Database of $10.5m which
is used by the Group to deliver its Herd
Testing and Farm Software services.
The three significant cash generating units (CGUs)
holding these assets are tested annually for
impairment using discounted cashflow models to
determine the recoverable amount.
The annual impairment tests performed by the
Group were significant to our audit due to the
magnitude of the intangible assets and because
the discounted cashflow models involve judgment
about the future performance of the CGU’s,
including considering future economic and market
conditions.
We challenged management on the reasonableness of
the assumptions included in the cashflow forecast
models, with particular attention paid to the following:
—Assessing management’s future sales and growth
assumptions compared to external market and
industry data and historical performance of each of
the CGUs. We used our own valuation specialists
to assist us with the consideration of discount
rates;
—Comparing management’s previous forecasts to
actual results achieved in each CGU; and
—Performing sensitively analysis around the key
assumptions used in the model.
We also challenged management on whether the
market capitalisation of the Group is an indicator of
impairment, and subsequently used our own valuation
specialists to challenge management’s assessment of
appropriate maintainable earnings and earnings
multiple applied in their impairment test.
Our testing supported management’s conclusion that
there is no impairment.

18


Other information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Other information includes the Directors Report and the Governance Report. Our opinion on the
consolidated financial statements does not cover any other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters we are required to state to them in the
independent auditor’s 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 shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated financial
statements
The Directors, on behalf of the company, are responsible for:
—the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards;
—implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is 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 audit of the consolidated financial
statements
Our objective is:
—to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
—to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.

19

Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor's report is Matthew Prichard.
For and on behalf of

Auckland
22 July 2020

Directors’ Report 2019-20
LIC’s strong result reflects innovation led growth
The LIC Board is pleased to present the co-op’s financial results for the year ended 31 May 2020. The result is in line
with expectation and achieved despite the impacts of drought in many areas of New Zealand and the global and
domestic impacts of COVID-19 late in the financial year.
LIC’s result reflects the company’s innovation-led growth strategy and an ongoing commitment to research and
development to deliver genetic gain and industry leading products and services to our farmers.
During 2019-20 LIC continued to execute our strategy, kept disciplined management of operating costs and
increased investment in research and development.
R&D investment increased to $16 million this year, to give farmers a number of tools in the future to further improve
genetic gain and address environmental challenges, including:
• World-leading methane research that hopes to ultimately breed more ‘climate friendly’ cows.
• The Resilient Dairy programme to breed cows with improved health, wellbeing and environmental resilience.
• LIC’s new HoofPrint® Index, which enables farmers to select bulls based on their predicted ability to generate
daughters with a lower environmental impact.
In February 2020 LIC sought shareholder approval to acquire a 50% stake in Afimilk, which develops and
commercialises dairy farm technology and farm automation systems. While Directors respected and understood
shareholders’ decision not to support the Afimilk proposal, particularly in light of the impacts of COVID-19, the
strategic drivers behind the investment remain. LIC will continue to assess how best to maintain LIC’s world-
leading edge in pastoral dairy farming data, while broadening access to new information to meet future needs and
challenges.
Impact of Drought and COVID-19
The drought that affected many New Zealand farmers for much of the season, coupled with the disruption of the
COVID-19 lockdown in Q4, impacted herd testing and diagnostics towards the end of the year, with 5% less milk
samples (10.4 million) tested compared to the prior year.
LIC’s experience in bio-security management through Mycoplasma bovis to protect staff, shareholders and their
herds ensured it was well prepared to implement the required measures to continue as an essential service under
COVID-19 Level 4.
However, physical distancing requirements and measures to minimise on-farm visits meant LIC’s Herd Assist and
GeneMark services were suspended for several weeks. International genetics revenue was also impacted due to
COVID-19-related supply chain issues, including the delay of some air freight of semen to key markets.
LIC has not accessed the Government COVID-19 wage subsidy, but has benefitted from a tax change to reinstate
tax depreciation on commercial buildings. The tax change has resulted in a one-off $3 million improvement in tax
expense and a corresponding decrease in deferred tax liability.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2020

Directors’ Report 2019-20
Business Highlights
Genetic and Animal Testing
LIC’s testing services to increase herd welfare, productivity and genetic gain showed strong growth:
• A2 genetic reporting to identify A2/A2 cows was up 42%.
• GeneMark™ DNA parentage testing allowing farmers to increase the rate of genetic gain in their herds by
keeping the best replacement animals each year went up 9%.
• Testing for Johnes Disease was up 20% and Milk Pregnancy testing up 27%.
• Significant investment in IT developments continues.
International Genetics
• LIC’s international genetics business is the leading supplier of semen globally for grazing systems, exporting
857,427 semen straws valued at $12.1 million this year. This was slightly down on the record 1,013,564 straws and
revenue of $12.8 million in FY19 due to air freight issues as a result of COVID-19.
• LIC continues to focus on increasing its export business to deliver dividends to its farmer shareholders in New
Zealand.
Research and Development
• Investment in R&D increased 17.5% in 2019-20 to $16.0 million from $13.6 million last year.
• This equates to 6.3% of revenue (5.5% in the prior year) and is well above the primary sector average of around
1%.
• The increase is largely attributable to additional funding from MBIE and MPI (and associated LIC funding) to
boost key R&D projects, including world leading methane research, to drive improvements in the health and
wellbeing of the national herd and more sustainable milk production.
Outlook
LIC is in a strong position to continue to support shareholders as they navigate their farming businesses through the
challenges of the 2020-21 season. The company has no debt, has cash reserves and a strong balance sheet.
As advised to the market on 20 May 2020, based on the impacts of COVID-19 on forecast milk price, credit tightening
for farmers and increased compliance costs for the next season for New Zealand dairy farmers and LIC, the Board
updated its Underlying Earnings forecast for the next financial year. Underlying Earnings for the year ended 31 May
2021 is still expected to be in the range of $16 million - $22 million.
We thank you for all your support over the last 12-months and look forward to the year ahead.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2021

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2022
Corporate Governance
On LIC’s website you will find the following corporate governance documents:
• Constitution
• Code of Conduct and Ethics
• LIC Board Charter
• Audit, Finance & Risk Committee Charter
• Remuneration and Appointment Committee Charter
• Disclosure Committee Charter
• External Audit Independence Policy
• Share Trading and Disclosure Policy
• Continuous Disclosure Policy
• Diversity and Inclusion Policy
• Dividend Policy
Corporate Governance Statement
LIC is a New Zealand Co-operative Company. Its shares are quoted on the New Zealand Stock Exchange (NZX). We
are reporting against the Principles and Recommendations of the NZX Corporate Governance Code (the NZX Code).
This statement is current to 31 May 2020, and has been approved by the Directors of LIC.
LIC is primarily involved in the development, production and marketing of artificial breeding, genetics, farm software,
farm automation and herd testing services in the New Zealand dairy industry, the control and maintenance of the LIC
database and the execution of research relating to dairy herd improvement.
Co-operative Principles
The Company is committed to the following co-operative principles:
1. The Company will remain a Co-operative Company;
2. The Company is controlled by Users of the Company’s qualifying products and services;
3. Core products and services are made available to all Shareholders at fair commercial prices;
4. Products and services which benefit Shareholders and which otherwise might not be made available, are
developed and made available to Shareholders, provided that the company receives a commercial return;
and
5. Shareholders co-operate with the Company and each other, including the sharing of information to promote
their common interests.
NZX Code Principle 1, Code of Ethical Behaviour: Directors should set high standards of ethical behaviour,
model this behaviour and hold management accountable for these standards being followed throughout the
organisation.
Code of conduct and ethics
LIC’s Code of Conduct and Ethics sets out the ethical and behaviour standards expected of Directors and employees
of LIC. The Policy is reviewed biennially (or as required) to keep it up to date with employee and stakeholder
expectations. Directors and employees are also expected to uphold LIC’s values.

Whistleblowing
The Code of Conduct and Ethics and the Company’s Employment Relations Policy, which are available to employees
on LIC’s intranet, include guidance on specific action to be taken by a person who suspects a serious wrongdoing. A
protected disclosure can be made to the Company Secretary or a Director.
Avoiding conflicts of interest
The Code of Conduct and Ethics includes direction on disclosing and managing conflicts of interest. We update
the Board at each meeting on changes in interests and any potential conflicts. The Company Secretary holds
a Directors’ interests register and the Board reviews the register at least annually. The register records relevant
transactions and disclosures of interests. A copy of the interests register is on page 35.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2023
Corporate Governance
Trading in securities
The Company has a Share Trading and Disclosure Policy for Directors, Shareholder Councillors, Restricted Persons
and other Employees wanting to deal in the securities of the Company.
The Policy outlines:
a) when Directors, Shareholder Councillors, Restricted Persons and other Employees of the Company may deal in
the shares of the Company;
b) procedures to reduce the risk of insider trading; and
c) disclosure requirements.
The Policy records the Company’s procedures for compliance with the Financial Markets Conduct Act 2013 (FMC
Act) and other relevant legislation/regulation for the trading and disclosure of trading in the shares of the Company
and details the exemption granted by the Financial Markets Authority from certain provisions of the FMC Act. The
exemption permits LIC’s constitutional and co-operative requirements and the Rules of its Employee Share Scheme
to operate alongside the insider trading provisions of the FMC Act.
The Policy aims to protect Directors, Shareholder Councillors, Restricted Persons and Employees, as well as the
Company and the Company’s Shareholders, against acts of insider trading that could disadvantage holders of the
Company’s shares.
An Elected Director must hold the minimum shareholding requirement and can hold additional shares in accordance
with the Company’s Constitution.
NZX Code Principle 2, Board composition and performance: To ensure an effective board, there should be a
balance of independence, skills, knowledge, experience and perspectives.
Role of the Board
Legislation, the NZX Listing Rules and the Constitution establish the Board’s responsibility and include provisions
for how the Co-operative will operate. The structure of the Board and its governance arrangements are set out
in the Company’s Constitution and in the Board’s written Charter setting out the Board and Management’s roles
and responsibilities. The Board is responsible for the direction and control of LIC’s activities. It is committed
to the guiding values of the Company: integrity, respect and innovation to improve products and service to its
Shareholders.
Board composition
The Board is comprised of seven Elected Directors and up to three Appointed Directors. Elected Directors are
elected by Shareholders within the region each Director represents (four regions in total) and hold office for a
period of four years. The term coincides with the Rotation Schedule. All recommendations and deliberations on the
selection of Appointed Directors are undertaken by the full Board. Appointed Directors hold office for up to three
years. A retiring Director is eligible for re-election or re-appointment as a Director of the Company. All Appointed
Directors have entered into written agreements setting out the terms of their engagement and all newly Elected
Directors will also do so.
In relation to the nomination and appointment of Directors, appropriate checks are undertaken. This includes the
provision of key information about candidates to Shareholders and/or the Board, such as relevant skills, experience
and directorships; and any material adverse information of which the Company has become aware.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2024
Corporate Governance
Information about each director, including their independence, ownership interests and director attendance
at board meetings is included in this Corporate Governance section of the report. A profile of each director’s
experience, including the length of their service, is included on the LIC website.
Elected Directors are Murray King (Chair), Gray Baldwin, Ben Dickie, Ken Hames, David Jensen, Matt Ross and Dr
Alison Watters.
Appointed Directors are Tim Gibson, Sophie Haslem and Candace Kinser.
The Directors for the Midland region (Gray Baldwin and David Jensen) were re-elected unopposed in 2020 for
four-year terms, effective 1 June 2020.
Sophie Haslem’s appointment as an Appointed Director was ratified by shareholders at the 2019 Annual Meeting.
Appointed Director Tim Gibson was due to retire, by rotation, in October 2019 and sought re-election. Tim Gibson was
appointed by Shareholders for a further three-year term.
Board responsibilities
The Board is responsible for setting the strategy of LIC and monitoring delivery against that strategy. In 2018 the
Board launched an innovation-led growth strategy to Shareholders which advised them that LIC would focus:
• 60% of its activity on optimising the core – driving value from the current business;
• 30% of its activity on enhancing the core – growth through innovation;
• 10% of its activity on capturing value beyond the core – leveraging existing capabilities for profitable growth
outside pastoral dairy.
Full details of the strategy are available on LIC’s website.
The Board is also responsible for approval of significant expenditures, policy determination, appointment of
Directors, and stewardship of the Co-operative’s assets. Management is responsible for implementing the strategic
objectives, operating within the risk appetite set by the Board, and for all other day-to-day running of the Company.
The Board delegates the day-to-day leadership and management of the Company to the Chief Executive (CE). The
delegations are set out in the Board Charter and in a Delegated Authority framework, which also sets out authority
levels for types of commitments that the Company’s management can make. A copy of the Board Charter is
available on LIC’s website.
The Board and the Shareholders shall not, except with the written consent of the Minister of Primary Industries, or
other relevant Minister, exercise any of their rights, directions and powers under, or alter the Constitution so as to
cause or permit the Company to cease to be a Co-operative supplying goods and services to Shareholders.
Meetings
The Board met six times in 2019/20 with two additional strategy days. A further nine additional meetings of the Board
were held to consider LIC’s proposed investment in Afimilk Agricultural Cooperative Limited and the impact of the
COVID-19 pandemic on LIC.

Corporate Governance
Board Attendance:
The number of meetings shown below is the number that a Director is expected to attend as a Board member.
Diversity and Inclusion Policy
The Company fosters an inclusive working environment that promotes employment equity and workforce diversity at
all levels, including within the Senior Leadership Team and the Board. The Diversity and Inclusion Policy is available
on LIC’s website.
The year-end gender composition of the Board and the Senior Leadership Team were:
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2025
BoardSpecial Board MeetingsBoard Strategy Days
Number of
meetings
AttendanceNumber of
meetings
AttendanceNumber of
days or part
days
Attendance
Gray Baldwin669822
Ben Dickie659922
Tim Gibson669722
Ken Hames669922
Sophie Haslem669921
David Jensen659822
Murray King669922
Candace Kinser 669922
Matt Ross669922
Alison Watters669722
20202019
MaleFemaleMaleFemale
LIC Board7373
LIC Senior Leadership Team7281
LIC is in the process of setting objectives in relation to diversity and inclusion. As a first step, over the past year
LIC has collected baseline data from its employees in relation to age, gender and ethnicity. This information has
highlighted that LIC is a reasonably diverse company with a number of staff from different ethnicities as well as a
larger percentage of females than males. Focus groups have been conducted to not only start the conversation on
diversity and inclusion but also to highlight the types of initiatives that staff would like to see. The establishment of a
Diversity and Inclusion Committee is in progress.
The LIC Board has also approved the following:
1. All external advertising for positions at LIC are worded to encourage a diverse range of applicants and state
LIC’s desire to drive for diversity and inclusion within our workplace;
2. Any management appointment interviews are conducted by a panel that represents diversity of thought;
3. Training for all employees on the benefits of diversity and inclusion; and
4. Training developed and implemented for all employees to drive an understanding of unconscious bias.
In addition to the above, LIC is looking at employment practices, including protection of vulnerable persons, regional
presence and youth employment.

Corporate Governance
Director training
Directors each undertake appropriate education to remain current in how to best perform their duties as directors.
Directors maintain memberships of relevant bodies such as the Institute of Directors, and receive information
individually and from Management in relation to specific issues relevant to LIC, the markets in which it operates and
the dairy industry.
The Chair has put in place revised development plans for each of the Directors. These plans specifically focus on
areas that will not only develop the individual Director but will also enhance the overall Board capability. The Board
development and engagement plan is actively referenced and reviewed at each Board meeting.
A planned strategy visit to the United States was cancelled due to COVID-19.
Board performance
The Board uses an external party to assist with reviewing the performance of the Board and its committees on a
regular basis. The last review took place in 2018 and the next review is scheduled for 2021.

Director Independence
Directors are appointed in accordance with the Constitution, as outlined above. The Appointed Directors are not
co-operative members, as they are appointed to bring external expertise to the Board. For the purposes of the
Listing Rules, the Board has assessed all of the Directors to be independent with the exception of Gray Baldwin, who
may not be perceived as independent due to his role as a Director of Trinity Lands Limited, LIC’s largest shareholder.
While a number of the Directors are co-operative members and acquire goods and services from LIC, the Board does
not consider them to have a relationship that could reasonably influence, or be perceived to influence, their ability to
bring an independent view to decisions in relation to LIC, to act in the best interest of LIC or to represent the interests
of LIC Shareholders generally.
Chair
As noted above, LIC’s Chair is assessed to be an independent Director. LIC’s Board also endorses the separation of
the roles of the Chair and Chief Executive (CE) and a Director should not simultaneously hold both roles.
However, to ensure appropriate management where necessary, the Company Constitution sets out an exception to
this whereby the Board may appoint a Director to assume the post of CE concurrently on a temporary basis when the
post of CE is vacant, for a period of no longer than six months. This can be extended, only where the position of CE is
still vacant for a further maximum period of six months. At the termination of that further period, that Director shall
resign from the Board.
NZX Code Principle 3, Board committees: The board should use committees where this will enhance its
effectiveness in key areas, while still retaining board responsibility.
Committees
Our Board committees review and consider in detail the policies and proposals developed by Management and
make recommendations to the Board. They do not take action or make decisions on behalf of the Board unless
specifically mandated to do so. A committee or an individual Director can engage independent legal counsel at
LIC’s expense with the prior approval of the Chairman.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2026

Corporate Governance
The Board will occasionally appoint a committee of Directors to consider or approve a specific proposal or action
if the timing of meetings or availability of Directors means the matter cannot be considered by the full Board. Their
deliberations and decisions are reported back to the Board no later than the next meeting.
Due to our Co-operative Company status and Constitution based shareholding restrictions, it is not necessary to
have takeover protocols in place. Under LIC’s Constitution no person shall hold a relevant interest of more than 5% of
the total number of ordinary shares in the Company.

Audit, Finance & Risk Committee
A Sub-Committee of the Board, the Audit, Finance & Risk Committee ensures the Company complies with its audit,
financial and risk management responsibilities. It operates under a written charter, which is available on the LIC
website. The Committee is chaired by Appointed Director Sophie Haslem with the other members being: Murray King,
Gray Baldwin, David Jensen and Ben Dickie. A majority of the current members of the Committee are considered to
be independent. Employees only attend Committee meetings at the invitation of the Committee.
The Committee meets at least four times a year and met six times in 2019/20.
Remuneration and Appointment Committee
A Sub-Committee of the Board, the Remuneration and Appointment Committee approves appointments and terms
of remuneration of the Chief Executive, oversees the people policies for LIC and also considers and assists the Board
in its director appointment process, and if appropriate recommends to the Board any wage and salary percentage
adjustments for the Co-operative’s employees. It operates under a written charter, which is available on the LIC
website. Current members are: Tim Gibson (Chair), Murray King, Dr Alison Watters, David Jensen and Matt Ross.
All current members of the Committee are considered to be independent. Management only attends Committee
meetings at the invitation of the Committee.
The Committee meets at least four times a year and met four times in 2019/20.
Disclosure Committee

A Sub-Committee of the Board, the Disclosure Committee assists the Board and Company in ensuring that all
material information is identified, reported for review by the Committee, and if required, disclosed in a timely manner
to the NZX. It operates under a written charter, which is available on the LIC website. Current members are: Murray
King (Chair), Sophie Haslem, the CE and the Chief Financial Officer. Disclosure Committee meetings are also
attended by key senior managers, including the Company Secretary and Senior Communications Advisor.
The Committee meets as and when required and met five times in 2019/20.
Afimilk Transaction Committee
The LIC Board established a sub-committee to consider the proposed investment in Afimilk Agricultural Cooperative
Limited. Members of the Committee were Tim Gibson (Chair), Murray King, Gray Baldwin, David Jensen and Sophie
Haslem. The Committee has been disestablished following the shareholders’ vote on the proposed transaction in
April 2020.
The Committee met eighteen times in 2019/20.
Governance and Representation Review Working Group
A Working Group, with equal representation from the Board and the Shareholder Council, has been charged by the
Board with progressing the review of LIC’s current governance and representation structures. At the heart of the
review is how LIC can enhance shareholder engagement through these structures. In addition the Working Group is
looking to ensure that any changes to LIC’s governance and representation make the arrangements more efficient,
effective, and fit for purpose. Recommendations will be put to the Board by the Working Group, and if supported by
the Board, will be put to shareholders for their approval. The members of the Working Group are Directors:
Ben Dickie Corporate Governance Report under NZX 29 (Chair), Murray King and Matt Ross, and Shareholder
Councillors: Nathan Keoghan, Mark Meyer, and Bruce Murphy.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2027

Corporate Governance
Board committee attendance:
The number of meetings shown below is the number that a Director is expected to attend as a member of the
relevant Committee
In addition to the above committees, Candace Kinser chaired three meetings of LIC’s Technology Advisory Board.
NZX Code Principle 4, Reporting and disclosure: The Board should demand integrity in financial and non-
financial reporting, and in the timeliness and balance of corporate disclosures.
Financial reporting

The Board is responsible overall for ensuring the integrity of the Company’s reporting to Shareholders, including
financial statements that comply with generally accepted accounting practice (NZ GAAP).
The Board’s Audit, Finance & Risk Committee oversees the quality, reliability and accuracy of the financial
statements and related documents and its role is more fully described in its Charter which is available on the LIC
website. In undertaking its role, the Committee makes enquiries of Management and the external auditors, including
requiring Management representations, so that the Directors can be satisfied as to the validity and accuracy of all
aspects of LIC’s financial reporting.

Non-financial reporting
LIC has not adopted a formal environmental, social and governance (ESG) reporting framework at this time.
However, we continue to work towards providing integrated reporting that is relevant to our stakeholders and which
will include environmental, social responsibility and sustainability factors and practices.
As well the developments underway on diversity and inclusion, LIC has demonstrated an active commitment to
advancing our work in both sustainability and broader environmental impacts. LIC has signed up to the Climate
Leaders Coalition and the Sustainable Business Council (SBC).
The Climate Leaders Coalition was launched in July 2018 to promote business leadership and collective action on
the issue of climate change. LIC joined in June 2019 and was the Coalition’s 100th signatory. In joining the Coalition,
we are committed to measuring and publicly reporting our greenhouse gas emissions, setting a public emissions
reduction target, and working with suppliers to reduce their emissions. As well as improvements to our business
practices, playing our part to reduce emissions also includes the wider benefits we can bring to the industry by
continuing to offer farmers the tools and genetics they need to breed more efficient cows and drive sustainability
improvements on-farm.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2028
Audit, Finance &
Risk Committee
Remuneration
& Appointments
Committee
Disclosure
Committee
Afimilk
transaction
Committee
Number of
meetings
AttendanceNumber of
meetings
AttendanceNumber of
meetings
AttendanceNumber of
meetings
Attendance
Gray Baldwin651816
Ben Dickie66
Tim Gibson441817
Ken Hames
Sophie Haslem66551816
David Jensen65421814
Murray King6644551817
Candace Kinser
Matt Ross44
Alison Watters44

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2029
Corporate Governance
Joining the Sustainable Business Council also commits us to reducing our greenhouse gas emissions and building
sustainability into our purchasing decisions. The SBC is a CEO led group of companies that catalyses the New
Zealand business community to have a leading role in creating a sustainable future for business, society, and
the environment. The SBC has a clear timetable for members to work towards and LIC is working to meet the
requirements after joining in August 2019.
A short summary of the actions being taken to meet our Coalition and SBC commitments are set out below:
• Collecting emission data relevant to road and air travel, from June 2017 on a monthly basis and using an
emissions calculator to calculate and report on our carbon emissions;
• Collecting our power and water usage data for LIC’s four main sites (Newstead, Riverlea, Maui Street and
Christchurch); and
• Investigating sustainable procurement practices and suppliers.
In addition the Company is:
• Reviewing LIC’s fleet vehicles to move to hybrid models;
• Data gathering and benchmarking our vendors;
• Sharing knowledge from attending and hosting various external forums; and
• Leveraging government funding for, and contributing to, research initiatives that have multiple animal health
and welfare components.
LIC has been improving the lives of our dairy farmers for more than 100 years: innovation and co-operation are at
the heart of what we do. We have made breakthroughs in genetics, reproduction and automation. As a result New
Zealand herds have some of the highest rates of genetic gain in the world and our farmers enjoy a high level of
insight into herd management due to their voluntary participation in herd improvement. We play an important role in
assisting dairy farmers to adapt to changing environmental requirements and ensure sustainability of the industry.
An Environmental and Welfare Steering Group has been set up and has established LIC’s on-farm priorities for
2020-21, including:
• Driving sustainability improvements and reducing emissions on-farm through the provision of superior
genetics, LIC’s work on the Resilient Dairy research programme will help drive improvements in the health and
wellbeing of the national dairy herd and drive a step-change in sustainable milk production;
• Actively pursuing, with others in the industry, the identification and breeding of environmentally efficient
animals that produce lower methane emissions; and
• Assessing where we can best add value by supporting and leading animal research into a more sustainable
cow.
LIC continues to focus on environmental performance and improvements on LIC owned farms.
LIC supports the industry, rural communities and our farmers by sponsoring a variety of initiatives, events,
programmes and organisations. This provides opportunities within the dairy industry and promotes excellence within
the sector (details included on the LIC website under Sponsorship).
LIC’s assessment of exposure to non-financial risks, including economic, environmental and health and safety risks,
is included in LIC’s risk assessment process described under Principle 6.
Disclosure to the market
LIC has a written disclosure policy: the Continuous Disclosure Policy, found on our website. It sets out requirements
for full and timely disclosure to the market of material issues, so that all stakeholders have equal access to
information. The Board’s Disclosure Committee reviews and approves material announcements. The Board also
specifically consider with Management at each board meeting whether there are any issues which might require
disclosure to the market under the NZX continuous disclosure requirements.

LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2030
Corporate Governance
Information for investors
LIC’s website includes the Company’s presentations, reports, announcements and media releases, as well as
the Charters and guidelines referred to in this report. The Annual Report is available in electronic and hard copy
formats. LIC’s Annual Meeting will be held on 15 October 2020 at its Head Office in Newstead, Hamilton. We
welcome Shareholders’ attendance and questions. The external auditors, KPMG, will be at the meeting and will be
available to answer questions about the audit and audit report. A Notice of Meeting will be sent to Shareholders in
August 2020.

NZX Code Principle 5, Remuneration: The remuneration of directors and executives should be transparent, fair
and reasonable.
Director’s remuneration
The total remuneration for LIC’s Directors is set at the Annual Meeting and a pool of $669,600 was approved at the
meeting held in October 2019.
Directors of the Company received the following remuneration for the twelve months ending 31 May 2020:
In thousands of New Zealand dollars
Fees
M King124
G Baldwin53
B Dickie53
T Gibson67
S Haslem73
K Hames53
D Jensen53
C Kinser 67
M Ross53
A Watters53
649
Fees
E Ruiz14
14
Directors of subsidiaries of the Company received the following remuneration for the twelve months ending 31 May
2020:
In thousands of New Zealand dollars
Except as set out above, no other Directors of subsidiaries received any remuneration or other benefits in their role
as a Director of that subsidiary. The remuneration of employees that receive more than $100,000 as a result of
employee remuneration (and other benefits) is included in the Employees’ Remuneration table on page 31.
Under LIC’s constitution, we have an Honoraria Committee, comprised of four elected Shareholders, that is
responsible for considering and recommending to Shareholders, the form and amount of Director remuneration.
LIC also has a Remuneration Policy for all employees, which is available to employees on LIC’s intranet.

Corporate Governance
Chief Executive remuneration
The Chief Executive’s salary is made up of a combination of base salary, vehicle and performance payments.
His performance is assessed based on a range of factors including Health and Safety, the company’s financial
performance, organisational health, and delivery of key projects.
Employee remuneration
LIC aims to have a remuneration framework and policies to attract and retain talented and motivated people. The
Company wants to:
• Be recognised as a great place to work;
• Recognise and reward successes, while encouraging teamwork and a high performance culture;
• Be fair and consistent;
• Be true to our values of integrity, innovation, spirit of co-operation, in tune and passion.
We use market data to determine fair remuneration levels for all staff. Short term incentives apply to executive and
certain Management roles for achievement of specific objectives and in relation to achievement of project initiatives.
During the period 1 June 2019 to 31 May 2020 the following numbers of employees (not being Directors) received total
remuneration, including benefits, of at least $100,000:
Remuneration Range
(Gross)
Current EmployeesExited EmployeesTotal
100,000 – 109,999 43 2 45
110,000 – 119,999 37 1 38
120,000 – 129,999 29 1 30
130,000 – 139,999 27 1 28
140,000 – 149,999 6 - 6
150,000 – 159,999 8 - 8
160,000 – 169,999 5 - 5
170,000 – 179,999 6 1 7
180,000 – 189,999 6 - 6
190,000 – 199,999 4 - 4
200,000 – 209,999 7 - 7
210,000 – 219,999 2 - 2
220,000 – 229,999 4 1 5
230,000 – 239,999 2 - 2
240,000 - 249,999 1 - 1
260,000 – 269,999 1 - 1
280,000 – 289,999 2 - 2
290,000 - 299,999 1 - 1
370,000 – 379,999 1 - 1
440,000 – 449,999 1 - 1
500,000 – 509,999 1 - 1
1,000,000 – 1,009,999 1 - 1
195 7202
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2031

Corporate Governance

NZX Code Principle 6, Risk Management: Directors should have a sound understanding of the material risks
faced by the issuer and how to manage them. The Board should regularly verify that the issuer has appropriate
processes that identify and manage potential and material risks.
LIC has a risk management framework in place to identify, oversee, manage and control risk. That framework
includes a Risk Management Policy (available on the LIC website) and associated processes. The risk management
framework is reviewed every two years and was last reviewed in October 2019. LIC’s risks are reported to the Audit,
Finance & Risk Committee and reviewed on a regular basis. LIC believes compliance with this framework constitutes
a robust risk management process.
LIC’s key risk areas include:
Health and safety
Due to the diverse nature of our business, LIC has a wide variety of health and safety risks, including: working
with hazardous substances, large animals and machinery and regular presence on customer farms. The Senior
Leadership Team is responsible for reviewing, monitoring and mitigating LIC’s health and safety risk. The Board
ensures that the systems used to identify and manage health and safety risks are fit for purpose, are being
effectively implemented, regularly reviewed and improved.
This year the Board have continued their visibility and focus on health and safety with their commitment to health
walk-arounds. Significant reduction in traffic infringements from previous years shows a shift in culture. Business
units have health and safety representatives and there is a regular formal governance forum chaired by LIC’s CE.
Monthly report cards are published to keep all staff informed and to re-iterate Company health and safety targets.
Actions are in place for improvements identified.
LIC uses a Total Reportable Incident Rate (TRIR) to measure health and safety performance against lag indicators:
notifiable events, lost time injuries, medical treatment claims and traffic infringements. The rate is based on the
number of incidents per 100 full-time equivalent employee. The TRIR for 2019/20 was 4.5, a decrease from 6.6 for
2018/19. There were no notifiable events for 2019/20 (although four events were reported to Worksafe NZ as a
precaution).
LIC’s continued focus on health and safety saw LIC increase to secondary level status following the annual ACC
audit. LIC has also introduced an electronic incident management system and has seen improved employee
participation in health and safety governance. The focus for the future is adding lead indicators to reporting,
reviewing LIC’s critical safety risks and controls, further increasing the frequency of Board and Senior Leadership site
visits and inspections and continuing to improve the management of hazardous substances.
Disruption to production or service delivery
The Company’s ability to provide sufficient quality semen during a season relies on a number of factors, including the
maintenance and operation of key equipment, staff training and adherence to approved procedures and processes.
An inability to meet demand for the Company’s semen would result in significant reputational damage as well as a
reduction in New Zealand revenue. Standard operating procedures are well documented and regularly reviewed.
Semen quality is monitored daily and non-return rates are monitored weekly during the peak of the season.
Increased reliance both by farmers and the Company on technology, IT systems and services increases vulnerability
to system outages and data loss as a result of cyber intrusions or system failures. Security strategy, measures,
reviews and audits are performed both within the Company and with its technology service providers. Business
continuity and disaster recovery plans and procedures are documented and regularly tested.
Economic conditions on farm
The Company’s revenue may be reduced as farmers decrease expenditure as a consequence of reduced returns,
availability of cash or an increased cost of production. Reductions in New Zealand’s milk price will affect returns
paid to farmers: as a net exporter of milk, New Zealand’s milk price is heavily influenced by reference to the price
set by the Global Dairy Trade (GDT). Rural lenders approach to their lending portfolio may result in a tightening in
policy and in turn less cash on farm. As a result, farmers may look to reduce both their capital spend as well as farm
working expenses, including herd improvement. Increased compliance costs on farm may result in an increase in
production costs, with farmers seeking to reduce costs elsewhere.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2032

Corporate Governance
The Board and Management continue to explore growth opportunities, both in New Zealand and internationally, and
ways to improve efficiency within LIC and for dairy farmers through innovative products and solutions. There is also
a continued focus on genomic evaluation, appropriate selection principles and careful monitoring of the elite portion
of the national herd to ensure LIC’s breeding scheme continues to deliver superior dairy genetics to assist farmers in
improving productivity.
Financial
LIC has stringent processes in place to ensure budgets, forecasts and financial reporting are accurate and timely.
LIC maintains strict internal controls to manage delegated authority and remove the opportunity for fraudulent
activity. LIC also has a well-documented and verified accounts payable and receivable process which has been
independently verified.
Bio-security and animal health
An exotic disease outbreak in New Zealand could severely limit the Company’s ability to provide biological products,
including semen, to dairy farmers in New Zealand and overseas, and to continue testing of milk and other biological
samples. Health issues within the Company’s bull team could equally reduce its ability to provide quality products
and services to dairy farmers. Quarantine procedures are in place in all LIC-controlled locations. Animals are
maintained at separate locations and bulls are regularly inspected and undergo health testing. Business continuity
plans are in place with regular reviews and scenario testing. LIC has veterinary and epidemiological expertise within
the Company.
LIC has continued its work on managing the risk of the transmission of Mycoplasma bovis (M. bovis). Quarantine
controls remain heightened on LIC’s bull farm, and the purchase of an additional quarantine block has further
reduced the risk to LIC’s production bulls held on LIC’s main Newstead centre. Antibiotics are added to semen and
daily PCR testing is performed to provide customers with complete confidence that every batch of semen dispatched
is free of M. bovis. LIC continues to work with the Ministry for Primary Industries on contingency plans for a possible
M. Bovis event.
The environment
To some extent, environmental risks are covered in one or more of LIC’s key risk areas. However, we recognise that
this is a growing area of risk, both for the Company, our customers and suppliers. In particular, changes to improve
the Company and industry’s impact on climate change may impact on operational efficiency and costs.
As highlighted in this report, LIC has signed up to the Climate Leaders Coalition and has joined the Sustainable
Business Council. We are committed to measuring and publicly reporting our greenhouse gas emissions, setting
a public emissions reduction target, and working with suppliers to reduce their emissions as well as building
sustainability into our purchasing decisions. We continue to offer farmers the tools and genetics they need to
breed more efficient cows and drive sustainability improvements on-farm. Our Resilient Dairy programme is a great
example of this.
Market disruption
The inability to commercialise innovations and/or respond quickly to market disruption or emerging technologies
could cause reduced use by Shareholders of existing products and services with a resultant reduction in revenue.
LIC has adopted agile product development methodologies to enable quicker commercialisation of new and
improved products and services and the Board prioritises capital spend to ensure developments align with farmer
needs.
Compliance
Breaches of laws, regulations, licences, standards, NZX continuous disclosure requirements, or market access
requirements, could result in restrictions, penalties, or loss. LIC uses the New Zealand legal compliance software
tool ComplyWith to ensure clarity of obligations across the organisation and for tracking adherence to compliance
requirements.
Strategic risk
Disruption, planning, risk, resourcing or other barriers not identified or managed could lead to an inability to deliver
on LIC’s agreed strategy, as too would the lack of availability, capability and engagement of our people and key
vendors.
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Corporate Governance
NZX Code Principle 7, Auditors: The Board should ensure the quality and independence of the external audit
process.
LIC has an External Auditor Independence Policy that requires the external auditor to be independent and to be
seen as independent. The Board is satisfied that there is no relationship between the Auditor and LIC or any related
person at this time, which could compromise the Auditor’s independence. The Board also obtains confirmation of
independence formally from the Auditor.
To ensure full and frank discussion between the Audit, Finance & Risk Committee and the auditors, the auditor’s
senior representatives meet separately with the Committee.
The External Auditor Independence Policy sets out restrictions on non-audit work that can be performed by the
auditor and the Audit, Finance & Risk Committee is required to approve all engagements with the auditor. The policy
requires rotation of the key audit partner every five years: we are fully compliant. LIC asks its external auditor to
attend its annual shareholder meeting to answer questions from shareholders in relation to the audit.
LIC does not have a separate internal audit function. The Risk & Assurance Manager performs, reviews and
arranges for external audit resource to perform internal audits as agreed with the Audit, Finance & Risk Committee.
The Risk & Assurance Manager reports to each Audit, Finance & Risk Committee meeting on audit or review issues
and incidents, improvements and changes to internal controls.
NZX Code Principle 8, Shareholder rights and relations: The Board should respect the rights of shareholders and
foster constructive relationships with shareholders that encourage them to engage with the issuer.
The LIC Board recognises that its shareholders are the Company’s owners, customers and key stakeholders and
is responsible for overseeing shareholder engagement. Shareholder engagement reflects LIC’s co-operative
ownership structure and values and aims to be efficient, effective, fit for purpose and meet shareholder expectations
with regard to increased transparency about LIC’s activities.
The LIC website is the key place for LIC’s financial and operational information, and for its important corporate
governance documents. It is updated immediately when any announcement is made to the NZX.
LIC provides half-year and annual reporting to the NZX to keep Shareholders informed, and discloses information
to the NZX to meet its continuous disclosure obligations as required. We communicate with Shareholders through
our annual report, half-year financial statements and at Shareholder meetings, as well as through a range of
media channels on topics which we believe will interest Shareholders. We encourage all Shareholders to receive
communications electronically, and provide hard copies of information as and when required.
Shareholders have the right to vote on major decisions which may change the nature of the Company.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2034

Corporate Governance
Statutory Requirements
Entries in the Interests Register
All Elected Directors of the Company are customers and Shareholders of Livestock Improvement Corporation Limited
and purchase products and services for their farming operations on an ongoing basis.
Directorships and Memberships
Gray Baldwin:
Director of Farmlands Co-operative Society Ltd, Trinity Lands Ltd and Longview Trust.
Ben Dickie:
Director of Taranaki Veterinary Centre Limited.

Tim Gibson:
Director of Miraka Ltd, Miraka Holdings Limited, Port Otago Ltd and subsidiaries, Skills International Ltd, Tuhana
Consulting Ltd, The Equanut Company Ltd, Silver Fern Farms Co-Operative Limited and Silver Fern Farms Limited
and subsidiaries.
Ken Hames:
Chair of Extension 350, Auckland Ballance Farm Environment Awards and Duke of Edinburgh Award NZ.
Sophie Haslem:
Director of Centreport Ltd and subsidiaries, Kordia Group Ltd, Meteorological Service of New Zealand Ltd,
Oyster Property Group Ltd and subsidiaries, Rangitira Ltd and subsidiaries. Chair of The Akina Foundation and a
shareholder of CH4 Global Inc.
David Jensen:
Director of Eastpack Ltd, Director and independent Chair of El Dorado Orchard GP Limited, Expressway Orchard
GP Limited, Napoli Orchard GP Limited, Eastern Orchards GP Limited, Awakeri Orchard GP Limited and Riverview
Kiwifruit GP Limited and a Shareholder of Figured Limited.
Murray King:
Director of Appleby Limited, Callura Dairies Management Limited, Dry Steam Irrigation Company Limited, Long
Plantation Investments Limited, and Cawthron Institute. Director and Shareholder of New Zealand Dairy Dessert
Company Limited, Waimea Irrigators Limited and Waimea Community Dam Limited.
Candace Kinser:
Director of EROAD, EROAD LTI Trustee Limited, Regional Facilities Auckland Limited, Ultrafast Fibre Ltd, UFF Holdings
Limited, WEL Networks Limited and National Cancer Society Auckland and Northland. Investment Committee
Member of Return on Science Investment Scheme at the University of Auckland.
Matt Ross:
Director and Shareholder of Bortons Agri Ltd. Director of North Otago Irrigation Company Ltd and Waitaki Irrigators
Collective Limited.
Dr Alison Watters:
Director and Chair of AsureQuality Limited, Director of High-Value Nutrition and Agriculture Resources Limited.
Shareholder (27.66%) of AgInvest Holdings Limited (AgInvest owns MyFarm Limited) and Advisor to the Board of
Totally Vets Limited.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2035

Corporate Governance
The Directors of the Company’s subsidiaries are set out below
• LIC Agritechnology Company Limited: Murray King, Gray Baldwin, Ben Dickie, Tim Gibson, Ken Hames, Sophie
Haslem, David Jensen, Candace Kinser, Matt Ross and Alison Watters.
• Livestock Improvement (New Zealand) Corporation Limited: David Hazlehurst, Murray King and Wayne McNee
• LIC Deer Limited: Geoffrey Corbett and Wayne McNee
• LIC Automation Limited: David Hazlehurst and Wayne McNee
• LIC Johnes Company Limited: Wayne McNee and Richard Spelman (removed from the Company Register on
26 June 2019)
• LIC Ventures No.3 Limited: David Hazlehurst and Wayne McNee
• Livestock Improvement Pty Limited: Geoffrey Corbett and Michael Rose
• Farmkeeper Pty Limited: Geoffrey Corbett and Michael Rose
• Overland Corner Holdings Pty Limited: Geoffrey Corbett and Michael Rose
• Beacon Automation Pty Limited: Geoffrey Corbett, David Hazlehurst and Jock Roberts
• Livestock Improvement Corporation (UK) Limited: David Hazlehurst, Wayne McNee and Mark Ryder
• LIC USA Limited: Wayne McNee
• LIC Automation USA Limited: Geoffrey Corbett and Wayne McNee
• LIC Ireland Limited: David Hazlehurst, Wayne McNee and Mark Ryder
• Livestock Improvement Automation Limited: David Hazlehurst, Wayne McNee and Mark Ryder
• LIC Automation UK Limited: David Hazlehurst, Geoffrey Corbett and Wayne McNee
• NZ Brasil Producao Animal Ltda: David Hazlehurst and Simon O’Connor
Entries in the Interests Register
Participation in the Company’s Contract Mating Scheme could lead to the potential sale of bull calves in the
2020/2021 season. Directors participating in the scheme include:
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2036
DirectorPotential Calf SalesPotential Value
Murray King1$11,000
Matt Ross11$121,000
31 May 202031 May 2019
DirectorOrdinary SharesOrdinary Shares
Gray Baldwin14,27614,276
Ben Dickie10,3609,984
Ken Hames3,204N/A
David Jensen18,42018,420
Murray King135,040*116,704
Matt Ross93,07693,076
Dr Alison Watters42,73242,732
a) Share Dealings by Directors
As at 31 May 2020 the Directors other than the Appointed Directors (either in their own names and/or in the name(s)
of their dairy farming entities) as qualifying users of LIC’s products and services are holders of, or control the exercise
of the right to vote or the acquisition or disposal of, the following shares:
*Includes 18,336 Ordinary Shares held by Callura Dairies Management Limited, of which M King is Chair.
Ordinary Shares include fully paid shares which are quoted on the NZX and Nil Paid Shares, which must be paid up
over time by Shareholders.
b) Loans to Directors of the Parent and Subsidiaries
There have been no loans during the year.

Corporate Governance
c) Directors Indemnity and Insurance
The Company has issued a Deed of Indemnity and insured all its Directors and Senior Managers against liabilities to
third parties for any acts or omissions in their capacity as Directors of the Company and its Related Parties.
d) Use of Company Information
There were no notices from Directors of the Company requesting to use Company Information received in their
capacity as Directors, which would not otherwise have been available to them.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2037

Corporate Governance
RESOLUTION OF DIRECTORS
DATED 22 JULY 2020 CONFIRMING THE CO-OPERATIVE STATUS OF
LIVESTOCK IMPROVEMENT CORPORATION LIMITED
RESOLVED THAT:
Livestock Improvement Corporation Limited (Company) was registered as a Co-operative Company under the
provisions of the Co-operative Companies Act 1996 (Act) on 1 March 2002.
In the opinion of the Board of Directors, the Company has been a Co-operative Company from that date to the end
of the accounting year ended 31 May 2020.
The grounds for this opinion are:
1. The principal activity of the Company involves supplying artificial breeding, herd testing, herd recording and
other services to transacting Shareholders (as that term is defined in section 4 of the Act). Accordingly, the
principal activity of the Company is, and is stated in the Constitution of the Company as being, a co-operative
activity (as the term is defined in section 3 of the Act); and
2. Not less than 60 percent of the voting rights attached to shares in the Company are held by transacting
Shareholders.
Spread of Shareholders as at 31 May 2020
(including treasury stock and nil paid shares)
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2038
Size of ShareholdingNumber of Shareholders* Shares Held% of Total
1 - 999850496,2890.34%
1,000 - 1,9991,1141,684,8641.14%
2,000 - 2,9999082,240,0551.52%
3,000 - 3,9997002,419,7121.64%
4,000 - 4,9996552,918,5831.98%
5,000 - 5,9995182,843,2831.93%
6,000 - 6,9994302,791,8571.89%
7,000 - 7,9993532,639,1671.79%
8,000 - 8,9993613,063,6872.07%
9,000 - 9,9993012,861,3191.94%
10,000 - 14,9991,13013,870,1589.39%
15,000 - 19,99979313,778,1919.33%
20,000 - 24,99947310,579,9237.16%
25,000 - 29,9993539,611,8036.51%
30,000 - 34,9992437,860,3005.32%
35,000 - 39,9991816,739,6564.56%
40,000 - 49,99922610,079,2346.82%
50,000 - 99,99928719,076,59712.92%
100,000 - 199,999567,532,4315.10%
200,000 - 299,999122,895,2491.96%
300,000 - 499,99993,283,4822.22%
500,000 - 999,99932,464,8591.67%
1,000,000 +615,951,72110.80%
9,962147,682,420100%

Corporate Governance
* The number of shareholders above is based on the number of separate farms. The table below in relation to the
twenty largest shareholdings, amalgamates shareholders with multiple farms.
Twenty Largest Shareholdings as at 31 May 2020
(including treasury stock and nil paid shares)
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2039
ShareholderShares held% of total shares
Trinity Lands Limited7,368,9134.99%
LIC Treasury Stock5,337,5843.61%
Schmidt Farms Limited2,200,0001.49%
Mark Francis Slee & Devon Mathieson Slee1,106,5000.75%
Sim Brothers Limited991,2070.67%
CIP Nominees No 1 Limited (LIC’s Employee Share Scheme)863,1670.58%
Landcorp Farming Limited732,1760.50%
Christopher John Stark & Graham Carr718,3720.49%
Kodie Farms Limited610,4850.41%
Farnley Tyas (2018) Limited451,9440.31%
J D & R D Wallace General Partnership Limited436,2200.30%
Malrose Properties Limited409,3760.28%
Bishop Farms Oxford Limited374,3520.25%
Laird Farm Limited367,5520.25%
D B Douglas Limited364,4510.25%
Mark Braden Neil Dewdney & Anne Heather Dewdney & Victoria Ann Dewdney348,2120.24%
Brookstead Limited333,2330.23%
Robert Laurentius Johannes Bruin & Annemarie Bruin324,4380.22%
The Grass Market Company Limited309,9240.21%
Mangatarata Farms Limited273,2520.19%
23,921,35816.20%
Credit Rating Status
The Co-operative currently does not have a credit rating.
Substantial product holders
According to notices given under the Financial Markets Conduct Act 2013 to the NZX by the substantial product
holders detailed below, the following were substantial product holders of the Company as at 31 May 2020 (based on
the number of fully paid quoted ordinary shares):
Substantial product
holders
Number of Ordinary Shares
in substantial holding
Percentage of quoted fully paid
ordinary shares held at date of notice
Date of notice
Trinity Lands Ltd7,328,9835.943%19/09/19
Peter James McBride7,329,5775.943%19/09/19
Shareholders are advised that Peter James McBride’s above substantial product holder disclosure is in relation to
financial products held by Trinity Lands Limited and Crocodile Farm Limited. Peter James McBride’s substantial
product holding arises because he has the power to exercise, or to control the exercise of, a right to vote attached to
7,328,983 financial products held by Trinity Lands Ltd and 594 financial products held by Crocodile Farm Limited and
has the power to acquire or dispose of, or to control the acquisition or disposal of, the same financial products held
by Trinity Lands Ltd and Crocodile Farm Limited.
The total number of fully paid ordinary shares in the Company was 123,621,518 as at 31 May 2020.

Corporate Governance
Donations
The Company made donations totalling $12,123 during the year ended 31 May 2020 (2019: $16,393).
Non-Standard Listing
Livestock Improvement Corporation Limited has been classified as a Non-Standard NZX Issuer by the NZX, pursuant
to NZX Listing Rule 1.18, by reason of it being a Co-operative Company having a Constitution which includes
provisions having the following effect:
The acquiring of Ordinary Shares is restricted to New Zealand dairy farmers who purchase qualifying products and
services from Livestock Improvement Corporation Limited.

WAIVERS AND APPROVALS GRANTED BY NEW ZEALAND EXCHANGE LIMITED (“NZX”) IN
THE PROCESS OF THE APPROVAL OF THE CONSTITUTION OF LIVESTOCK IMPROVEMENT
CORPORATION LIMITED
As at 31 May 2020, waivers, rulings and approvals have been granted, by NZX Regulation (NZXR) in respect of the
following NZX Listing Rules:
1 NZXR has granted a Ruling that treats the “Shareholding Requirement” as defined in LIC’s Constitution as
the “Minimum Holding” requirement for LIC for the purposes of the Listing Rules.
2 NZXR has granted LIC a Ruling to the extent that the definition of “Renounceable” refers to a Right or an
offer of securities by LIC that is transferrable to any person entitled to hold those securities under the
Constitution. This reflects the ownership restrictions on shares, as a result of the co-operative nature of
LIC.
3 Rules 2.3.1 and 2.3.2, to allow for the following aspects of the Company’s corporate governance
structure:
(a) Directors to be nominated by Ordinary Shareholders, by region, pursuant to clause 22.4(b) and
Schedule 3 of the Constitution;
(b) Certain qualifications to be required of Directors as set out in Schedule 3 of the Constitution;
4 Rule 2.7.1 to allow:
(a) Elected Directors appointed on a casual basis by LIC’s Board to stand for re-election on the first day
of June next occurring, as set out in schedule 3 of LIC’s Constitution; and
(b) Elected Directors to retire by rotation on the first day of June each year, four years following their
appointment, as set out in clause 23 and Schedule 3 of LIC’s Constitution;
5 Rules 2.3.1 and 2.7.1 to allow Appointed Directors to be appointed, to have their appointment ratified and to
retire, as set out in schedule 3 of LIC’s Constitution.
6 Rule 3.13.1 to allow LIC to release to the NZX details of the Nil Paid Shares that have been converted into
Fully Paid Shares on a monthly basis, in the form as required under Rule 3.13.1, on the first business day of
each month, aggregating the number of Nil Paid Shares that have been paid up (if any) in the preceding
month.
7 Rule 6.2.4 to allow Nil Paid Ordinary Shares to carry full voting rights. Without this waiver, the Nil Paid Shares
could only carry voting rights in proportion to which the Share is paid up.
8 Rule 6.6.1 to allow the lien provision in clause 18 in the Constitution to be read in place of this Rule.
9 NZXR grants LIC approvals under Listing Rule 8.1.6(b) to include the following restrictions in the Constitution:
(a) LIC is restricted in relation to the voting securities that may be issued, as set out in clause 3.2.2 of the
Constitution, thereby maintaining its co-operative structure;
(b) ordinary shares in LIC may only be held by or transferred to certain persons, as set out in clause 3.2.3
of the Constitution;
(c) ordinary shares in LIC shall not be held or acquired for the benefit of any person who is not a User,
unless an exception is provided, as set out in clause 3.2.3A of the Constitution;
(d) no person shall hold a relevant interest in more than 5% of the total number of ordinary shares in LIC
on issue, as set out in clause 6.3(a) of the Constitution;
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2040

Corporate Governance
(e) LIC may require Users who have spent in excess of the Minimum Purchase Amount to compulsorily
acquire sufficient ordinary shares to meet the Shareholding Requirement, as set out in clause 7.1 of the
Constitution;
(f) LIC may require Users who no longer spend the Minimum Purchase Amount to compulsorily dispose of
their ordinary shares, as set out in clause 7.2 of the Constitution; and
(g) while the Dairy Industry Restructuring Act 2001 restricts voting rights in LIC, no person can exercise, or
control the exercise of, more than 1% of the maximum number of votes exercisable at any meeting of
LIC, as outlined at clause 20.4 of the Constitution.
As at 30 August 2019, the following waiver has been granted in respect of the following NZX Listing Rule:
1. NZXR grants LIC a waiver from Rule 4.15.1 to allow LIC to provide financial assistance to an Approved Holding
Entity, for the purposes of, or in connection with, the acquisition of Equity Securities issued, or to be issued, under the
Voluntary Investment Scheme.
DISCLOSURE OF FINANCIAL ASSISTANCE AS REQUIRED UNDER THE COMPANIES ACT 1993
A. Dividend Reinvestment Plan: LIC proposes to provide financial assistance to those Shareholders who
elect to participate in the Dividend Reinvestment Plan (“Dividend Plan”) by agreeing to pay to the Guardian Trust
Company of New Zealand Limited (“Guardian Trust”) as the Approved Holding Entity the services and administration
fees and brokerage and commission costs incurred for the purposes of the Dividend Plan. Craigs Investment
Partners Limited (“Craigs”) has been appointed as the Broker to purchase the Ordinary Shares on the NZX market
for the purposes of the Dividend Plan, and the moneys paid by LIC to Guardian Trust as Approved Holding Entity will
include the administration fee, brokerage and commission costs of Craigs.
LIC is required to make disclosures to all Shareholders in respect of this financial assistance. The exact amount of
the net costs depends upon the extent to which Shareholders participate in the Dividend Plan. However the total
amount of net costs in the next twelve months is estimated to be in the region of $22,000.
In relation to the financial assistance provided for the Dividend Plan, the LIC Board resolved on 22 July 2020 that
LIC should provide the financial assistance referred to above (“Dividend Plan Financial Assistance”), for the period
of 12 months commencing 10 working days after sending this disclosure to Shareholders, and that the giving of the
Dividend Plan Financial Assistance is in the best interest of LIC and is of benefit to Shareholders not receiving that
financial assistance; and that the terms and conditions under which the Dividend Plan Financial Assistance is given
are fair and reasonable to LIC and to the Shareholders not receiving that financial assistance. The grounds for the
Board’s conclusions are:
a) The Dividend Plan Financial Assistance enables LIC to provide Shareholders with an efficient means of
acquiring additional Shares in LIC without incurring transaction costs which they would otherwise incur;
b) The Dividend Plan Financial Assistance is available to all eligible Shareholders, giving equal opportunity to
participate in the benefits of the Dividend Plan;
c) The additional Shares will be acquired by Craigs Investment Partners Limited (“Craigs”) either through on-
market transactions or the issue of shares by LIC from Treasury Stock.
d) Participating Shareholders will pay no greater than the higher of:
i. the volume-weighted average price of shares trading on the NZX Market during the 20 Business Days
prior to the date that the Board determines to issue shares from treasury stock; and
ii. the average paid by Craigs on behalf of Participants for on-market acquisitions.
e) The Dividend Reinvestment Plan will enhance the liquidity in the market for the Shares, providing a more
liquid market for both participating and non-participating Shareholders wishing to trade in LIC Shares;
f) The Dividend Reinvestment Plan enables LIC to offer Shareholders a mechanism to reinvest dividends in
Shares without resulting in unnecessary new capital being raised through the issue of new shares; and
g) The amount of financial assistance is minimal in comparison to the benefits arising out of the Dividend Plan
for Shareholders and LIC.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2041

Corporate Governance
B. Voluntary Investment Scheme: LIC proposes to provide financial assistance to those Shareholders who
elect to participate in the Voluntary Investment Scheme (“Investment Plan”) by agreeing to pay to the Guardian Trust
Company of New Zealand Limited (“Guardian Trust”) as the Approved Holding Entity the services and administration
fees and brokerage and commission costs incurred for the purposes of the Investment Plan. Craigs Investment
Partners Limited (“Craigs”) has been appointed as the Broker to purchase the Ordinary Shares on the NZX market for
the purposes of the Investment Plan, and the moneys paid by LIC to Guardian Trust as Approved Holding Entity will
include the administration fee, brokerage and commission costs of Craigs.
LIC is required to make disclosures to all Shareholders in respect of this financial assistance. The exact amount of
the net costs depends upon the extent to which Shareholders participate in the Investment Plan. However the total
amount of net costs in the next twelve months is estimated to be in the region of $12,000.
In relation to the financial assistance provided for the Investment Plan, the LIC Board resolved on 22 July 2020
that LIC should provide the financial assistance referred to above (“VIS Assistance”), for the period of 12 months
commencing 10 working days after sending this disclosure to Shareholders, and that the giving of the VIS Assistance
is in the best interest of LIC and is of benefit to Shareholders not receiving that financial assistance; and that the
terms and conditions under which the VIS Assistance is given are fair and reasonable to LIC and to the Shareholders
not receiving that financial assistance. The grounds for the Board’s conclusions are:
a) The VIS Assistance enables LIC to provide eligible shareholders with a means of acquiring additional shares
in LIC without incurring transaction costs which they would otherwise incur;
b) The additional shares will be acquired by Craigs either through on-market transactions or the issue of
shares by LIC from Treasury Stock.
c) Participating Shareholders will pay a uniform price in relation to a season.
d) The VIS will enhance the liquidity in the market for the shares, providing a more liquid market for both
participating and non-participating Shareholders wishing to trade in LIC shares;
e) The VIS enables LIC to offer eligible shareholders a mechanism to invest in LIC shares without resulting in
unnecessary new capital being raised through the issue of new shares; and
f) The amount of financial assistance is minimal in comparison to the benefits arising out of the VIS Scheme
for eligible shareholders and LIC.
C. LIC Employee Share Scheme: LIC proposes to provide financial assistance to those employees who elect to
participate in the LIC Employee Share Scheme (“Employee Scheme”) which from the 1 April 2011 has been managed
by Craig Investment Partners Limited (“Craigs”), with Custodial Services Limited acting as custodian. LIC proposes
to pay the Manager’s and Custodian’s fees and expenses (including brokerage). The amount of the Manager’s fee
will depend on how many employees participate in the Employee Scheme and the level of their contribution. An
estimate of the amount of the financial assistance is $15,000.
The Board of LIC resolved on 22 July 2020 that LIC should provide the financial assistance referred to above
(“Employee Scheme Assistance”) for the period of 12 months commencing 10 working days after the date of sending
this disclosure to Shareholders, and that the giving of the Employee Scheme Assistance is in the best interests of
LIC, and is of benefit to Shareholders not receiving that financial assistance; and that the terms and conditions
under which the Employee Scheme Assistance is given are fair and reasonable, to LIC, and to the Shareholders not
receiving that financial assistance. The grounds for the Board’s conclusions are:
a) The Employee Share Scheme is a valuable addition to the benefits available to the employees of LIC and
will assist in retaining them as valuable staff;
b) The Employee Share Scheme is a method of aligning the interests of employees with the interests of
Shareholders and is an effective means of motivating future performance of the employees;
c) Shareholders will not be diluted or otherwise disadvantaged as no new Ordinary Shares are being issued
under the Employee Share Scheme;
d) The additional Shares will be purchased through Craigs at the NZX market price;
e) The Employee Share Scheme will enhance the liquidity in the market for the Shares, providing a more liquid
market for Shareholders wishing to trade in LIC Shares;
f) The amount of financial assistance is minimal in comparison to the benefits arising out of the Employee
Scheme for Shareholders and LIC.
LIVESTOCK IMPROVEMENT CORPORATION - CONSOLIDATED ANNUAL REPORT 2019/2042

---

Results announcement
22 July 2020

Results for announcement to the market
Name of issuer Livestock Improvement Corporation Limited
Reporting Period 12 months to 31 May 2020
Previous Reporting Period 12 months to 31 May 2019
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$253,986 +3.02%
Total Revenue $253,986 +3.02%
Net profit/(loss) from
continuing operations
$17,487 -21.12%
Total net profit/(loss) $17,487 -21.12%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.12749321 per share
Imputed amount per Quoted
Equity Security
$0.04958069 per share
Record Date 7 August 2020
Dividend Payment Date 21 August 2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.80 $1.80
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
The Net Tangible Assets per Quoted Equity Security excludes LIC ordinary
shares held as treasury stock and unquoted LIC Nil Paid shares which have
the same voting and dividend rights as LIC’s quoted ordinary shares.

Any dividends paid on LIC Nil Paid Shares and on any ordinary shares
required to be held to satisfy LIC’s share standard will be applied to repay
outstanding commitments on LIC Nil Paid Shares.
Authority for this announcement
Name of person

authorised
to make this announcement
Gillian Brennan
Contact person for this
announcement
Gillian Brennan
Contact phone number +64 7 856 0838
Contact email address Gillian.Brennan@lic.co.nz
Date of release through MAP

22 July 2020

Audited financial statements accompany this announcement.

---

Distribution Notice

22 July 2020


Section 1: Issuer information
Name of issuer Livestock Improvement Corporation Limited
Financial product name/description Final Dividend
NZX ticker code LIC
ISIN (If unknown, check on NZX
website)
NZLICE0001S1
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies X
Record date 7 August 2020
Ex-Date (one business day before the
Record Date)
6 August 2020
Payment date (and allotment date for
DRP)
21 August 2020
Total monies associated with the
distribution
$18,148,000.00
Source of distribution (for example,
retained earnings)
Profit
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.17707390 per share
Total cash distribution $0.12749321 per share
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount N/A
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Fully imputed
If fully or partially imputed, please
state imputation rate as % applied
100%
Imputation tax credits per financial
product
$0.04958069 per share
Resident Withholding Tax per
financial product
$0.00885370 per share

Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
24/08/2020
Not known – dependent on
the time it takes to acquire
the shares on market.
Date strike price to be announced (if
not available at this time)
Not known at this stage. The price of the share will be
determined when all shares have been acquired. The
strike price under the DRP is the volume-weighted
average price per share paid on-market in acquiring
shares to fulfil demand under the DRP for the relevant
period. The period for acquisitions to fulfil demand under
the DRP is from the date noted above until the date that
is 20 Business Days before the next Record Date
(“Acquisition Period”).
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
Shares to be purchased on market
DRP strike price per financial product
The strike price under the DRP is the volume-weighted
average price per share paid on-market in acquiring
shares to fulfil demand under the DRP within the
Acquisition Period.
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
10/08/2020
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Gillian Brennan
Contact person for this
announcement
Gillian Brennan
Contact phone number +64 7 856 0838
Contact email address Gillian.Brennan@lic.co.nz
Date of release through MAP

22 July 2020