Full Year Results 2023-24

Market Statement

19 July 2024

LIC ends year with lower profit following challenging conditions
Livestock Improvement Corporation has continued to invest in innovations for its farmer
shareholders, ending the 2023/24 financial year with no debt and a modest profit and dividend for
shareholders.
Summary of financials*:
• Total Revenue: $267.3 million, down 3.3% from $276.5 million last year
• Net Profit After Tax (NPAT): $7.7 million, down 71.7% from $27.4 million last year
• Underlying Earnings: $13.9 million, down 41.6% from $23.7 million last year
• Dividend: $8.3 million – 5.84 cents per share, representing 60% of Underlying Earnings. This
is in addition to the $18.5m Special Dividend paid earlier this year of 13 cents per share.
• Total assets: $358.6 million, down 6.2% from $382.3 million last year
• Strong balance sheet with no debt at year-end

*Refer notes to financial information at end

Livestock Improvement Corporation (NZX: LIC) has released its year-end financial results for the
2023/24 Financial Year and has declared a 5.84 cents per share dividend.

Board Chairman Corrigan Sowman says the 2023/24 financial year has produced some difficult
conditions for the co-operative with a reduced milk price environment, a subsequent reduction in
activity driving a lower bull valuation, ongoing cost inflation, tax changes, and a semen quality issue
that resulted in over $2 million worth of credits paid to farmers.

“Despite some very challenging conditions the Board is pleased to present a positive result to our
farmer shareholders, for the seventh successive year,” he says.

“Our farmer shareholders are the heart of our co-operative and it has been a particularly difficult
year for them with a lower milk price environment alongside continuing high input and debt
servicing costs. The impacts of the lower milk price were felt across New Zealand, which is reflected
in the 3.3% reduction in revenue.

“LIC is committed to its farmer shareholders and we have continued to invest in research and
development, quality improvements in our semen laboratories and technology innovation that will
benefit their businesses and the sector’s needs now and into the future.

“Throughout the 2023/24 financial year we have identified cost savings to offset reduced revenue
and this has allowed the co-operative to still post a profit and pay out a dividend to our
shareholders, which is in addition to the $18.5m Special Dividend paid earlier this year of 13 cents
per share.”

Tax legislation enacted in March 2024 removed the ability to depreciate commercial buildings for tax
purposes from the 2024/25 income tax year. The application of this tax change created a one-off,

non-cash accounting adjustment of approximately $4 million to increase tax expense at year-end,
with a corresponding increase in LIC’s deferred tax liability balance.

Research and development investment increased by 14.2% to $21.2 million, representing 7.9% of
revenue. Investments include a methane research trial focused on investigating the potential to
breed low methane-emitting cows in the future, as well as a heat tolerance research programme
which involves breeding high genetic merit dairy cows with improved heat tolerance.

The proportion of fresh semen straws used for breeding replacement daughters on farm from our
premium bull teams increased to 79.4% and target turnaround times were achieved across
GeneMark®, Johne’s Disease, and milk pregnancy testing. Johne’s Disease testing saw a 10%
increase, with 1.18 million animals tested during 2023/24.

LIC’s herd management system MINDA® saw notable improvements during the period, integrating
with milk processors such as Fonterra and Open Country as well as integrations with wearable
providers and OSPRI. This enables seamless data-sharing and integration across multiple
applications used on farm. MINDA® is now used by 90% of dairy farmers in New Zealand.

Outlook

Sowman said, although the coming year still presents a difficult economic environment with ongoing
cost pressures on farm, LIC will continue to be firmly guided by its primary focus of delivering on our
three commitments to farmer shareholders - operational excellence, faster genetic improvement
and software reliability and performance. The co-operative’s performance against these
commitments during the 2023/24 year will be reported on at its Annual Meeting in September.

The co-operative expects underlying earnings* for 2024/25 to be in the range of $16-22 million,
assuming no significant events, including climate events, or milk price change takes place between
now and then.
ENDS
This statement has been authorised for release by the Board of Directors.

Contact
• For shareholder enquiries, phone 0800 264 632
• For media enquiries, contact Steph Slattery (LIC Communications Manager):
steph.slattery@lic.co.nz, phone 027 256 2057

*Notes to Financial Information
These full-year financial results include the annual non-cash revaluations of LIC’s 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.
These numbers should be all read in conjunction with the financial statements.
• Underlying Earnings: This is LIC’s NPAT excluding bull valuation, nil paid share valuation movements and is considered useful to
investors as it is the basis on which LIC has historically reported and determined 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.
• Nil Paid Ordinary Shares: These were issued to shareholders in 2018 as part of the share simplification process 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. Dividends paid on remaining Nil Paid Shares are automatically retained by LIC
to pay down the remaining unpaid shares. LIC records an estimate of the fair value of the outstanding Nil Paid Ordinary Shares
receivable at balance date.
• Bull team valuation: The annual non-cash revaluation of the co-operative’s largest biological asset was $88.9 million. This is down from
$97.6 million the previous year, mainly due to reduced forecast activity levels in a lower milk price environment. The valuation is based

on an independent model that looks at future revenue streams and costs associated with the current bulls owned, discounted back to
current value.
• Dividend: The fully imputed dividend represents 60% of underlying earnings.

About LIC
LIC is a farmer-owned co-operative and world leader in pasture based dairy genetics and herd
management. LIC exists to deliver superior genetics and technological innovation to help its
shareholders sustainably farm a profitable animal. With origins dating back to 1909, LIC has a long
history of developing and delivering world-leading innovations for the dairy industry. The co-
operative continues to be one of the sector’s biggest private investors in research and development.
Today the New Zealand-based co-operative employs more than 900 permanent staff, swelling to
over 2,000 during the spring 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

---

Distribution Notice

18 July 2024


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 2 August 2024
Ex-Date (one business day before the
Record Date)
1 August 2024
Payment date (and allotment date for
DRP)
16 August 2024
Total monies associated with the
distribution
$8,313,600.00
Source of distribution (for example,
retained earnings)
Profit
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.08111757 per share
Total cash distribution $0.05840465 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
$0.02271292 per share
Resident Withholding Tax per
financial product
$0.00405588 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
19 August 2024
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
5 August 2024
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Marise Winthrop
Contact person for this
announcement
Marise Winthrop
Contact phone number +64 27 488 4615
Contact email address Marise.Winthrop@lic.co.nz
Date of release through MAP

18 July 2024

---

Results announcement
18 July 2024

Results for announcement to the market
Name of issuer Livestock Improvement Corporation Limited
Reporting Period 12 months to 31 May 2024
Previous Reporting Period 12 months to 31 May 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$267,288 -3.33%
Total Revenue $267,288 -3.33%
Net profit/(loss) from
continuing operations
$7,734 -71.72%
Total net profit/(loss) $7,734 -71.72%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.05840465 per share
Imputed amount per Quoted
Equity Security
$0.02271292 per share
Record Date 2 August 2024
Dividend Payment Date 16 August 2024
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.62
$1.88
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
Marise Winthrop
Contact person for this
announcement
Marise Winthrop
Contact phone number +64 27 488 4615
Contact email address Marise.Winthrop@lic.co.nz
Date of release through MAP

18 July 2024

Audited financial statements accompany this announcement.

---

Livestock Improvement
Corporation Limited (LIC)
Financial Statements
For the year ended 31 May 2024
There's always room for improvement

2 Livestock Improvement Corporation Financial Statements 2023/24

Contents
Key metrics 4
Directors' report 5
Key results and position 7
Our results for the year 7
Our position at year end 8
Our cash flows for the year 9
Changes in our position for the year 10
More details 11
Accounting policies 11
Business analysis 12
Our core assets 13
Our funding 17
Risk and Other Assets 18
Tax 19
Other Expenses and Other Liabilities 20
Transactions with Related Parties, Cash flow
reconciliation and Subsequent events 21
Independent auditor's report 22

71.7%
Net Profit After
Tax (NPAT)
$7.7m vs
$27.4m last year
3.3%
Total revenue

$267.3m vs
$276.5m last year
41.6%
Underlying
Earnings*
$13.9m vs
$23.7m last year
6.2%
Total assets



$358.6m vs
$382.3m last year
Key Metrics
Full year
dividend
Return
on equity
Final $8.3m –
5.84 cents per share
and Special $18.5m -
13 cents per share
vs $23.3m - 16.38
cents last year
2.8%
vs 9.2% last year
*Non-GAAP financial information
R&D, IT & capital
investment
$48.9m up 24.8%
(excluding sale of
National Milk Records
plc shares) from
$39.2m last year
Earnings
per share
NPAT 5 cents
and Underlying
Earnings* 10 cents
vs NPAT 19 cents and
Underlying Earnings*
17 cents last year
4 Livestock Improvement Corporation Financial Statements 2023/24

LIC ends the year with lower profit following challenging conditions
The LIC Board announces its financial result
for the 2023-24 financial year, ending the year
with no debt and a modest profit and dividend
for shareholders while continuing to invest in
innovations for shareholders.
The Board has declared a dividend of 5.84 cents
per share, returning $8.3 million to owners of the
co-operative. The dividend will be paid on 16
August 2024.
Summary of financials
• Total Revenue: $267.3 million, down 3.3% from
$276.5 million last year.
• Net Profit After Tax (NPAT): $7.7 million, down
71.7% from $27.4 million last year.
• Underlying Earnings: $13.9 million, down 41.6%
from $23.7 million last year.
• Dividend: $8.3 million – 5.84 cents per share,
representing 60% of Underlying Earnings.
This is in addition to the $18.5 million Special
Dividend paid earlier this year of 13 cents
per share.
• Total assets: $358.6 million, down 6.2% from
$382.3 million last year.
• Strong balance sheet with no debt
at year-end.
The Board notes that the 2023-24 financial year
has produced some difficult conditions for the
co-operative with a reduced milk price
environment, a subsequent reduction in activity
driving a lower bull valuation, ongoing cost
inflation, tax changes, and a semen quality issue
that resulted in over $2 million worth of credits paid
to farmers.
However, despite some very challenging
conditions, the Board is pleased to present a
positive result to our farmer shareholders, for the
seventh successive year.
Farmer shareholders are the heart of our
co-operative and it has been a particularly difficult
year for them with a lower milk price environment
alongside continuing high input and debt servicing
costs. The impacts of the lower milk price were felt
across New Zealand and are reflected in the 3.3%
reduction in revenue.
LIC is committed to our farmer shareholders and
we have continued to invest in research and
development, quality improvements in our semen
laboratories and technology innovation that will
benefit their businesses and the sector’s needs
now and into the future.

Directors' Report 2023 -24
Livestock Improvement Corporation Financial Statements 2023/24 5

Throughout the 2023-24 financial year the
organisation has identified cost savings to offset
reduced revenue and this has allowed the co-op
to still post a profit and pay out a dividend to its
shareholders, which is in addition to the $18.5m
Special Dividend paid earlier this year of 13 cents
per share.
Tax legislation enacted in March 2024 removed
the ability to depreciate commercial buildings for
tax purposes from the 2024-25 income tax year.
The application of this tax change created a
one-off, non-cash accounting adjustment to tax
expense at year end of approximately $4 million,
with a corresponding increase in LIC’s deferred tax
liability balance.
Research and development investments increased
by 14.2% to $21.2 million, representing 7.9% of
revenue. Investments include a methane research
trial focused on investigating the potential to breed
low methane-emitting cows in the future, as well
as a heat tolerance research programme which
involves breeding high genetic merit dairy cows
with improved heat tolerance.
The proportion of fresh semen straws used for
breeding replacement daughters on farm from
the premium bull teams increased to 79.4%
and target turnaround times were achieved
across GeneMark
®
, Johne’s Disease, and milk
pregnancy testing. Johne’s Disease testing saw
a 10% increase, with 1.18 million animals tested
during 2023-24.
LIC’s herd management system MINDA
®
saw
notable improvements during the period,
integrating with milk processors such as Fonterra
and Open Country as well as integrations with
wearable providers and OSPRI. This enables
seamless data-sharing and integration across
multiple applications used on farm. MINDA
®
is now
used by 90% of dairy farmers in New Zealand.

Outlook
The coming year still presents a difficult economic
environment with ongoing cost pressures on farm,
however LIC will continue to be firmly guided
by its primary focus of delivering on our three
commitments to farmer shareholders - operational
excellence, faster genetic improvement and
software reliability and performance. The
co-operative’s performance against these
commitments during the 2023-24 year will be
reported on at its Annual Meeting in September.
The co-op expects underlying earnings for 2024-25
to be in the range of $16-22 million, assuming no
significant events, including climate events, or milk
price change takes place between now and then.
6 Livestock Improvement Corporation Financial Statements 2023/24

STATEMENT OF RESULTS FOR THE YEAR
For the year ended 31 May 2024
In thousands of New Zealand dollars
Note20242023
Revenue1267,288 276,506
Purchased materials(41,255)(46,585)
People costs(119,758)(118,995)
Depreciation and amortisation3,4,5(24,047)(23,116)
Other expenses10(60,516)(56,855)
Net finance costs647 157
Bull team revaluation2(8,768)4,524
Fair value change in Nil Paid Share receivable6191 363
Profit/(loss) before tax expense13,782 35,999
Tax expense9(6,048)(8,647)
Profit/(loss) for the year7,73427,352
Profit per Ordinary Share (excl. treasury stock) $0.05 $0.19
Hedge revaluations6(251)113
Foreign currency translation movements625 (85)
Investment revaluations68,805 1,711
Land and buildings revaluations3,63,715 2,246
Tax effect of buildings revaluations9(784)(666)
11,510 3,319
Comprehensive income for the year 19,244 30,671
Supplementary non-GAAP note to the results for the year:
Profit/(loss) for the year7,734 27,352
Plus/(less): Bull team revaluation8,768 (4,524)
Tax effect on Bull team revaluation(2,455)1,267
Less: Fair value change in Nil Paid Share receivable(191)(363)
Underlying earnings13,856 23,732
Underlying earnings per Ordinary Share (excl. treasury stock) $0.10 $0.17
Key Results and Position
Livestock Improvement Corporation Financial Statements 2023/24 7

Key results and position
S
TATEMENT OF POSITION FOR THE YEAR
As at 31 May 2024
In thousands of New Zealand dollars
Note20242023
Cash42,341 54,596
Debtors834,952 37,628
Other assets826,557 35,892
Nil Paid Shares receivable6972 4,327
Bull team288,872 97,640
Land, buildings and equipment - owned & leased3,5118,997 113,547
Software, goodwill and other intangible assets445,917 38,661
Total assets358,608 382,291
Creditors723,831 23,505
Borrowings7- -
Deferred tax930,645 27,732
Other liabilities1129,221 33,560
Total liabilities83,697 84,797
Net assets274,911297,494
Share capital676,737 76,737
Retained earnings6150,567 170,742
Other reserves647,607 50,015
Total equity274,911 297,494
Director
Date: 18 July 2024
Director
Date: 18 July 2024
8 Livestock Improvement Corporation Financial Statements 2023/24

Key results and position
STATEMENT OF CASH FLOWS FOR THE YEAR
For the year ended 31 May 2024
In thousands of New Zealand dollars
Note20242023
Customer receipts264,919 276,609
Supplier payments(223,940)(236,542)
Net tax payments(2,189)(3,983)
Other operating cash flows1,262 707
Net operating cash flows1340,052 36,791
Software development(16,097)(9,611)
Net sales/(purchases) of land, buildings and equipment(11,570)(10,966)
Sale / (purchase) of investments819,030 (4)
Net investment cash flows(8,637)(20,581)
Payment of principal portion of lease liabilities(5,408)(4,319)
Drawdown/(repayment) of borrowings- -
Nil Paid Share receipts165 334
Dividends paid(38,446)(21,881)
Net financing cash flows(43,689)(25,866)
Movement in cash for year(12,274)(9,656)
Cash at beginning of the year54,596 64,135
Currency movement on cash holdings19 117
Cash at end of the year42,341 54,596
Director
Date: 18 July 2024
Livestock Improvement Corporation Financial Statements 2023/24 9

In thousands of New Zealand dollarsNoteShare capitalRetained earningsOther reserves Total equity
Balance at 1 June 202376,737 170,742 50,015 297,494
Profit/(loss) for the year- 7,734 - 7,734
Dividends paid- (41,827)- (41,827)
Hedge revaluations- - (251)(251)
Foreign currency translation movements- - 25 25
Investment revaluations- - 8,805 8,805
Land and buildings revaluations3,6- - 2,931 2,931
Reclassification of investment revaluations on
divestment
6- 13,918 (13,918)-
Balance at 31 May 202476,737 150,567 47,607 274,911
Balance at 1 June 202276,737 169,624 46,696 293,057
Profit/(loss) for the year- 27,352 - 27,352
Dividends paid- (26,234)- (26,234)
Hedge revaluations- - 113 113
Foreign currency translation movements- - (85)(85)
Investment revaluations- - 1,711 1,711
Land and buildings revaluations3,6- - 1,580 1,580
Balance at 31 May 202376,737 170,742 50,015 297,494
Key results and position

STATEMENT OF CHANGES IN POSITION FOR THE YEAR
For the year ended 31 May 2024
10 Livestock Improvement Corporation Financial Statements 2023/24

More Details
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 2024.
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 NZX Ltd. 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 IFRS.

ii. Basis of measurement
The financial statements have been prepared on a GST
exclusive basis, with the exception of trade receivables and
trade payables, which are reported inclusive of GST.

The majority of the Group's business does not follow a
clearly identifiable operating cycle, therefore the balance
sheet is presented in order of liquidity as it is more relevant
to the users of the financial statements.
iii. Functional and presentation currency
The functional currency of the Company and the
presentation currency 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
Accounting policies have been applied consistently
with prior periods.
vi. Climate risk
Climate change and how farmer shareholders, regulators
and others respond may have an impact on the Group’s
future revenue and the recognised amounts of assets
and liabilities. While the effects of climate change are a
continuing source of uncertainty, climate-related risks have
been assessed as not having a material impact on these
financial statements. Reviews of accounting estimates
(including the valuation of the bull team in Note 2, and
the valuation of land and buildings in Note 3), judgements
and impairment testing assumptions (refer to note 4) have
considered potential future impacts of climate change.
Accounting policies
Accounting entity
Livestock Improvement Corporation Financial Statements 2023/24 11

(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 dairy farmers.
• Herd testing: herd testing, animal recording and on-farm support for dairy farmers.
• Farm software: data recording, tags and farm management information services.
• Diagnostics: provides DNA and animal health testing services.
NZ Market Genetics revenue is primarily recognised at a point in time, upon delivery of product to the customer. All other revenue lines
are primarily recognised over time, as the service to the customer is provided.
In thousands of New Zealand dollars
2024
NZ market
genetics
Herd
testing
Farm
software
DiagnosticsOtherEliminationsTotal
External revenue110,689 39,831 54,187 29,314 33,267 - 276,288
Inter-segment revenue- - - - 7,830 (7,830)-
Total revenue110,689 39,831 54,187 29,314 41,097 (7,830)276,288
Depreciation & amortisation(1,922)(5,790)(1,336)(3,548)(11,451)- (24,047)
Segment gross profit before tax70,686 19,877 41,422 13,193 11,164 -156,342
Bull team revaluation(8,768)
Unallocated amounts(133,792)
Profit/(loss) before tax expense13,782
2023
NZ market
genetics
Herd
testing*
Farm
software*
DiagnosticsOther*EliminationsTotal
External revenue113,467 40,009 52,622 29,067 41,251 - 276,506
Inter-segment revenue- - - - 5,706 (5,706)-
Total revenue113,467 40,00952,622 29,067 46,957 (5,706)276,506
Depreciation & amortisation(1,540)(5,835)(1,293)(3,528)(10,920)- (23,116)
Segment gross profit before tax72,815 20,575 39,416 13,208 17,263 - 163,277
Bull team revaluation4,524
Unallocated amounts(131,802)
Profit/(loss) before tax expense35,999
*During the current year an internal reorganisation transferred on-farm support between operating segments, 2023 numbers have been restated to
present comparatives on a consistent basis.
The Other segment includes international operations, research & development and support services. Unallocated amounts include
personnel costs, other expenses and net finance costs and are unallocated because the effort and cost involved to accurately
allocate these amounts to individual business segments would outweigh the benefit.
Notes to the Financial Statements
1. Business analysis
12 Livestock Improvement Corporation Financial Statements 2023/24

Key drivers of the model:
Forecasted Fonterra Farmgate Milk Price*$8.25 - $8.85$8.25 - $9.00
WACC annualised post tax rate8.11% - 8.76%7.75% - 8.78%
Number of bulls in the team124128
Average % of run-off profile (years 2-5)42%43%
*This is the long term to short term Milk Price outlook.
(ii) Geographic analysis
In thousands of New Zealand dollars
2024
New ZealandAustraliaIrelandUKOtherTotal
Revenues248,420 8,999 3,545 2,337 3,987267,288
Non-current assets254,087 4,397 1,157 59 - 259,700
2023
Revenues254,001 10,186 3,605 2,724 5,990 276,506
Non-current assets253,959 4,756 1,060 9,425 - 269,200
2. Bull Team
The bull team is the cornerstone asset of LIC's genetics business. The 810 total bulls (2023: 915 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/(loss) for the year. 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 also sensitive to a change in the WACC rate used to discount future cash flows and the run-
off profile of bulls (revenue attributable) that make up the bull team.
Non-current assets includes the Bull team, Land, buildings & equipment, Software, goodwill and other intangible assets, Nil Paid Share
receivable and investments. During the period, LIC's United Kingdom subsidiary sold it's shareholding in National Milk Records Plc,
which significantly reduced Non-current assets for the United Kingdom region.
The Group's significant subsidiaries are:
• New Zealand: LIC Agritechnology Company Limited (100%)
• Australia: Livestock Improvement Pty Ltd (100%), Beacon Automation Pty Ltd (100%)
• Ireland: LIC Ireland Limited (100%)
• United Kingdom: Livestock Improvement Corporation (UK) Ltd (100%)
The Group is not dependent on any one major customer in any of its reportable segments. New Zealand revenues include government
grants and R&D tax incentive income of $8.179 million (2023: $8.477 million).
In thousands of New Zealand dollars
20242023
Opening balance97,640 93,116
Bull team revaluation(8,768)4,524
Closing balance88,872 97,640
The impact on the fair value of a change to these key drivers is
summarised below:
Genomic run-off profile $5.6m - average of 5% shift across years 2-5
Impact on demand incorporating effect of changing the 2024 forecast Farmgate
Milk Price $2.75 decrease in the long term (2023: Impact on demand incorporating
effect of reducing the 2023 forecast Farmgate Milk Price by $2.00 in the long term)
$14.1m$17.9m
WACC moves 100 basis points$2.5m$2.9m
Notes to the Financial Statements
1. Business analysis (cont.)
Livestock Improvement Corporation Financial Statements 2023/24 13

In thousands of New Zealand dollars
20242023
Land BuildingsEquipmentTotalLand BuildingsEquipmentTotal
Opening balance37,990 51,500 24,057 113,547 38,092 45,901 22,433 106,426
Additions- 4,852 7,331 12,183 35 4,484 7,574 12,093
Disposals- -(126)(126)- (663)(424)(1,087)
Depreciation- (3,048)(6,906)(9,954)- (2,503)(6,733)(9,236)
Revaluation743 2,650 - 3,393 (137)2,460 - 2,323
Foreign exchange- -(2)(2)- (3)(25)(28)
Leased assets movement - note 5- (253)209 (44)- 1,824 1,232 3,056
Closing balance38,733 55,701 24,563 118,997 37,990 51,500 24,057 113,547
Value if carried at cost11,726 23,135 N/A 11,726 21,331 N/A
Estimated useful lives N/A 10-60 years 3-10 years N/A 10-60 years 3-10 years
Land and buildings are carried at fair value, determined by an independent valuer as at April 2024. Fair value is based on comparable
sales for land and based on depreciated replacement cost for buildings. Revaluations are reflected in the revaluation reserve.
Equipment includes plant, vehicles, furniture and fittings and IT hardware, and is carried at depreciated cost. Buildings and equipment
are depreciated on a straight-line basis over their estimated useful lives, and are reviewed annually for any indications of impairment.
4. Software and other intangibles
(i) Software and other intangible asset balances
Software development expenditure is capitalised only where costs are directly attributable, and once the product or process is
commercially feasible, the benefits are probable, and 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 are reviewed annually for
indicators of impairment.
Intellectual property (IP) assets are amortised over their estimated useful lives of up to 13 years.
The genetic data in the LIC database increases with each successive generation. Both goodwill and the LIC database have indefinite
useful lives. They are recognised at cost and are not amortised, are allocated to a cash generating unit ("CGU") and tested for
impairment annually.
Notes to the Financial Statements
3. Land, buildings and equipment
In thousands of New Zealand dollars
20242023
Software & IP GoodwillDatabaseTotalSoftware & IP GoodwillDatabaseTotal
Opening balance25,798 2,363 10,500 38,661 25,760 2,348 10,500 38,608
Additions16,081 - - 16,081 9,646 - - 9,646
Disposals/impairment- - - - - - - -
Amortisation(8,842)- - (8,842)(9,557)- - (9,557)
Foreign exchange9 8 - 17 (51)15 - (36)
Closing balance33,046 2,371 10,500 45,917 25,798 2,363 10,500 38,661
14 Livestock Improvement Corporation Financial Statements 2023/24

In thousands of New Zealand dollars
20242023
NZ Market Genetics,
Farm software and
herd testing CGU
Other CGUTotal
NZ Market Genetics,
Farm software and
herd testing CGU
Other CGUTotal
LIC database10,500 - 10,500 10,500 - 10,500
Goodwill- 2,371 2,371 - 2,363 2,363
10,500 2,371 12,871 10,500 2,363 12,863
At reporting date, software includes $11.595 million (2023: $8.994 million) of work in progress, which is not being amortised until it is
ready for use.
(ii) Impairment testing of intangible assets
Allocation of Goodwill and the LIC Database to CGUs:
The LIC database and Other CGU Goodwill recoverable amounts have been determined using value in use.
For the LIC database and Other CGU Goodwill, a discounted cash flow model is used for impairment testing based on expected results
and capital expenditure from the current year forecast, Board approved budgets and a projection for further periods using a terminal
growth rate. A five year cash flow projection period is used. The terminal growth rate used is 1.5% (2023: 1.0-2.0%) for the LIC database
and Other CGU Goodwill. The discount rate applied is reviewed and updated annually for movements in published
Treasury risk-free rates and is 8.7-10.9% for the LIC database and Other CGU Goodwill (2023: 8.3-10.4% for the LIC database and
Other CGU Goodwill).
Notes to the Financial Statements
4. Software and other intangibles (cont.)
(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 5.1% (2023: 4.9%).

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.
5. Leases
Livestock Improvement Corporation Financial Statements 2023/24 15

Lease liabilities
Set out below are the carrying amounts of lease liabilities recognised at 31 May (included in Other liabilities):
The Group had total non-variable cash outflows for leases of $6.086 million in 2024 ($4.868 million in 2023).
(iii) Lease related amounts in the Statement of Results
(ii) Lease balances in the Statement of Position
Right of use assets
Set out below are the carrying amounts of right-of-use assets recognised (under Land, buildings and equipment) and the movements
during the period:
In thousands of New Zealand dollars
20242023
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Opening Balance12,652 180 7,323 20,155 10,829 273 5,997 17,099
Depreciation(1,471)(142)(3,638)(5,251)(1,402)(96)(2,825)(4,323)
Additions1,420 347 3,871 5,638 3,322 3 4,389 7,714
Disposals/modifications(202)- (229)(431)(97)- (238)(335)
Closing balance12,399 385 7,327 20,111 12,652 180 7,323 20,155
Lease terms 2-28 years 2-5 years 2-8 years 2-28 years 2-5 years 2-7 years
Notes to the Financial Statements
5. Leases (cont.)
In thousands of New Zealand dollars
20242023
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Within 1 year1,341 72 3,549 4,962 1,208 23 3,013 4,244
Between 1 to 5 years4,612 161 4,301 9,074 4,466 - 4,754 9,220
More than 5 years7,662 - - 7,662 8,004 - - 8,004
Closing balance13,615 233 7,850 21,698 13,678 23 7,767 21,468
In thousands of New Zealand dollars
20242023
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Depreciation1,471 142 3,638 5,251 1,402 96 2,825 4,323
Interest expense621 17 479 1,117 478 4 370 852
Variable lease payments- - 980 980 - - 1,123 1,123
Short-term and low-value leases- 1 - 1 - 9 - 9
Total amount 2,092 160 5,097 7,349 1,880 109 4,318 6,307
16 Livestock Improvement Corporation Financial Statements 2023/24

The Group's funding comes from Share Capital, Retained earnings, Other reserves and Borrowings.
(i) Ordinary Shares
All Ordinary Shares have voting rights and the right to receive dividends based on the profits of the Company.
At reporting date there were 142,344,836 Ordinary Shares on issue, excluding 5,337,584 shares held as treasury stock
(2023: 142,344,836 Ordinary Shares, excluding 5,337,584 shares held as treasury stock).
(ii) Nil Paid Shares
Ordinary Shares includes both fully paid shares and shares on which full payment has not yet been made. These Nil Paid Shares must
be paid up over time by Shareholders via a combination of dividend 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 $0.972 million (2023: $4.327 million) using a discounted cash flow model. The model uses assumptions on
expected future dividends, voluntary and compulsory payments and applies a discount rate of 8.6% (2023: 8.0%).
(iv) Market capitalisation
As at 31 May 2024, the Group's market capitalisation of $172.365 million was below the carrying value of net assets of $274.911 million.
The share price is not considered an accurate reflection of the fair value of the Group's net assets for a number of reasons, including
the nature of the co-operative and its restricted capital structure. Accounting standards consider market capitalisation below net
assets to be an indicator of possible impairment and an impairment test has therefore been performed. The Group recoverable
amount has been determined using a value in use method similar to the impairment tests in Note 4. A discounted cash flow model has
been used based on Board approved budgets and a projection covering five years using a terminal growth rate of 1.5%. The discount
rate applied is reviewed and updated annually for movements in published Treasury risk-free rates and is 8.7%. The calculated
recoverable amount of the group was higher than the carrying value of the net assets, and therefore no impairment was recognised.
(v) Bank debt
Bank loans for seasonal funding requirements are secured by a Negative Pledge granted to Westpac and Rabobank over certain
New Zealand-based subsidiaries.
Notes to the Financial Statements
6. Funding
(iii) Other reserves and equity


In thousands of New Zealand dollars
Hedge
revaluation
reserve
Investment
revaluation
reserve
Land & building
revaluation reserve
Foreign currency
translation reserve
Other
reserves
Balance at 1 June 2023171 6,569 43,360 (85)50,015
Revaluations(251)8,805 2,931 25 11,510
Reclassification of investment revaluations
on divestment*
- (13,918)- - (13,918)
Balance at 31 May 2024(80)1,456 46,291 (60)47,607
Balance at 1 June 202258 4,858 41,780 - 46,696
Revaluations113 1,711 1,580 (85)3,319
Balance at 31 May 2023171 6,569 43,360 (85)50,015
*During the period, LIC sold it's shareholding in National Milk Records Plc for £9.019 million (NZD $18.963 million). Associated accumulated
revaluations have been reclassified from Other reserves to Retained earnings on divestment
.
Livestock Improvement Corporation Financial Statements 2023/24 17

(i) Debtors
Bad debts of $0.020 million have been expensed during the year (2023: $0.007 million), and 87.8% of trade receivables are not past
due (2023: 90.3%).
(ii) Interest rate risk
Interest rate risk is the risk that changes in interest rates will impact the Group's results or position. The weighted average effective
interest rate paid on borrowings in 2024 was 7.3% (2023: 5.3%). A 1.0% increase in interest rates would increase interest paid and reduce
profit after tax by approximately $0.001 million (2023: $0.003 million).
(i) Liquidity risk
Liquidity risk is the risk of having insufficient liquid assets to pay the Group's debts as they fall due. The Group manages the risk
by monitoring forecast cash flows and holding sufficient bank facilities to meet the Group's needs. The contractual maturity of the
Group's funding is shown below.
The Group has bank funding facilities in place until February 2025 and expects to be able to meet any obligations which fall due.
Notes to the Financial Statements
7. Liquidity and interest rate risk
In thousands of New Zealand dollars
20242023
Demand to
6 months
6 months
to 1 year
1 year
plus
Total
Demand to
6 months
6 months
to 1 year
1 year
plus
Total
Borrowings- - - - - - - -
Creditors23,831 - - 23,831 23,505 - - 23,505
23,831 - - 23,831 23,505 - - 23,505
(ii) Other assets
Inventories utilised and expensed during the period amounted to $29.176 million (2023: $33.113 million). Inventories written off in 2024
totalled $0.095 million (2023: $0.038 million).
Investments are non-current assets and are held at fair values based on available share prices and other market information.
Gains and losses are recognised in other comprehensive income, as investments are not held for trading. Investments include
Figured Limited $3.358 million (2023: $4.207 million) and, in 2023, National Milk Records PLC which was sold during the period
(2023:$9.319 million).
In thousands of New Zealand dollars
20242023
Inventories20,808 19,923
Investments4,941 15,027
Derivatives used for hedging- 164
Other livestock808 778
26,557 35,892
8. Debtors and other assets
18 Livestock Improvement Corporation Financial Statements 2023/24

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 Buildings.
(i) Tax expense
In March 2024, legislation was enacted which removed the deductibility of depreciation on long-life commercial buildings for tax
purposes. At 31 May 2024, the impact of this change decreases the tax base for these assets, giving rise to an increased temporary
difference between the carrying cost and tax base and results in a one-off, non-cash, increase in both deferred tax liability and tax
expense of $3.643 million.
Given the Group's current turnover, and the lack of significant operations in foreign jurisdictions with tax rates below 15%, it does not
expect to be impacted by Pillar II tax reforms and the move towards global minimum tax rates of 15%.
LIC claims credits under the R&D Tax Incentive scheme. Claims include eligible core research expenditure and technology
development, as well as expenses that support R&D, and the credits are recorded as non-taxable revenue.
In thousands of New Zealand dollars
20242023
Profit/(loss) for the year7,734 27,352
Tax expense6,0488,647
Profit/(loss) before tax expense13,78235,999
Tax at 28% NZ company tax rate3,859 10,080
Effect of overseas income(34)(683)
Non-deductible items(521)(774)
Adjustments from prior periods(899)24
Impact of changes to building depreciation3,643 -
Tax expense6,048 8,647
Current tax expense3,919 7,843
Deferred tax expense2,129 804
Imputation credits available9,46819,006
In thousands of
New Zealand dollars
As at
31 May 2024
Through
Profit/(loss)
Through
Other reserves
As at
31 May 2023
Through
Profit/(loss)
Through
Other reserves
As at
31 May 2022
Bull team & livestock24,421 (2,414)- 26,835 1,168 - 25,667
Buildings & equipment
5,850 3,304 784 1,762 (212)666 1,308
Intangible assets
2,940 1,480 - 1,460 - - 1,460
Other
(2,566)(241)- (2,325)(152)- (2,173)
Total30,645 2,129 784 27,732 804 666 26,262
(ii) Deferred tax liability
Livestock Improvement Corporation Financial Statements 2023/24 19

Notes to the Financial Statements
10. Other expenses
Other expenses includes the following amounts paid to the Group's auditors, KPMG:
The provision for sire proving rebate represents a rolling three years of expected rebate payments, with approximately $1 million due
to be paid in each of the next three years, discounted to 31 May 2024.
In thousands of New Zealand dollars
20242023
Provisions for employee entitlements7,596 9,340
Provision for sire proving rebate2,522 2,547
Derivatives used for hedging87 -
Provision for tax(3,259)(327)
Lease liabilities - current4,962 4,244
Lease liabilities - non-current16,736 17,224
Other577 532
29,221 33,560
11. Other liabilities
In thousands of New Zealand dollars
20242023
Research & Development Expenses21,215 18,577
As part of business activities, LIC incurs research and development expenses while working on a number of projects. Research
and Development expenses were previously disclosed separately on the face of the 'Statement of Results', however are now
presented here.
*Agreed upon procedures related to the R & D Tax Incentive scheme and disclosure of historical financial data in a sustainability report.
In thousands of New Zealand dollars20242023
Audit of the financial statements
222 210
Tax - compliance services for R&D Tax Incentive scheme
- 17
Agreed upon procedures*
24 24
Compilation of dataset of metrics
- 11
Total246 262
20 Livestock Improvement Corporation Financial Statements 2023/24

Notes to the Financial Statements
12. Transactions with Related Parties - Directors and Management
After 31 May 2024, a dividend of 5.84 cents per Ordinary Share was proposed by the Directors in relation to the 2024 year, or
$8.314 million (2023: 16.38 cents per Ordinary Share, or $23.323 million).
14. Subsequent events
Directors of the Company and their related entities hold 378,001 Ordinary Shares, representing 0.26% of shares on issue (2023: 375,359
Ordinary Shares, representing 0.25%).
There are no loans or deposits with related entities outside of the consolidated Group.
The Group has had the following short-term transactions with key Management and Directors during the year:
In thousands of New Zealand dollars
20242023
Remuneration of key Management and Directors 4,960 4,197
Sale of goods and services to key Management and Directors468597
Purchases of goods and services from key Management and Directors3 166
13. Reconciliation of the Profit/(loss) for the year to Net operating cash flows
In thousands of New Zealand dollars
20242023
Profit/(loss) for the year7,734 27,352
Adjusted for:
Depreciation and amortisation on all assets24,047 23,116
Bull team revaluation8,768 (4,524)
Deferred tax expense2,129 804
Working capital movements and other non-cash items(2,626)(9,957)
Net operating cash flows40,05236,791
Livestock Improvement Corporation Financial Statements 2023/24 21

Independent Auditor’s Report
To the shareholders of Livestock Improvement Corporation
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the consolidated financial statements
of Livestock Improvement Corporation Limited
(the ’company’) and its subsidiaries (the 'group') on
pages 7 to 21 present fairly, in all material respects:
i.the Group’s financial position as at 31 May 2024
and its financial performance and cash flows for
the year ended on that date;
in accordance with New Zealand Equivalents to
International Financial Reporting Standards issued
by the New Zealand Accounting Standards Board
and International Financial Reporting Standards
issued by the International Accounting Standards
Board.
We have audited the accompanying consolidated
financial statements which comprise:
— the consolidated statement of position as at 31
May 2024;
— the consolidated statements of results, changes
in position and cash flows for the year ended;
and
— notes, including material accounting policy
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 International Code of
Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by
the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards) (‘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 services to the Group comprising agreed upon procedure engagements over the
research and development tax credit and the disclosure of historical financial data in a sustainability report.
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 was set at $1,490,000 determined with reference to a benchmark of profit/(loss) for the year before
tax (excluding bull team revaluation movements). We chose the benchmark because, in our view, this is a key
measure of the Group’s performance.
© 2024
KPMG, a New Zealand Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All r ights reserved.

22 LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24
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 to 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 judgemental and complex
area. Management prepares a model
that projects the number and types of
straws that the current team can
produce and will be sold over the
useful 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 challenge of management’s significant
assumptions such as:
‒ Projected sales volumes and pricing;
‒ Discount rates applied; and
‒ Runoff Profile of the bulls.
We compared sales and costs growth, and inflation rates to historical
data and published market forecast data where available.
We utilised our valuation specialists to review market and industry data
to assess management’s discount rate applied to the valuation model.
We assessed the runoff profile of the bulls against historical data and
found the inputs to be comparable.
We considered the adequacy of the related financial statement
disclosures.
We had no matters to report as a result of our procedures
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 $2.3m, arising from
a number of acquisitions; and
‒ The LIC Animal Database of
$10.5m.
The two significant cash generating
units (CGUs) holding these assets
are tested twice a year for
impairment using discounted
cashflow models to determine the
recoverable amount.
The market capitalisation deficit that
exists at balance date is an indicator
of impairment at a Group level and
has therefore been tested for
impairment using a discounted
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 CGU’s and the Group. We used our
own valuation specialists to assist us with the consideration of the
discount rates;
‒ Comparing management’s previous forecasts to actual results
achieved in each CGU and the Group; and
‒ Performing sensitivity analysis around the key assumptions used in
the model.
Our testing supported management’s conclusion that there is no
impairment.
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 23

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 to 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 judgemental and complex
area. Management prepares a model
that projects the number and types of
straws that the current team can
produce and will be sold over the
useful 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 challenge of management’s significant
assumptions such as:
‒ Projected sales volumes and pricing;
‒ Discount rates applied; and
‒ Runoff Profile of the bulls.
We compared sales and costs growth, and inflation rates to historical
data and published market forecast data where available.
We utilised our valuation specialists to review market and industry data
to assess management’s discount rate applied to the valuation model.
We assessed the runoff profile of the bulls against historical data and
found the inputs to be comparable.
We considered the adequacy of the related financial statement
disclosures.
We had no matters to report as a result of our procedures
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 $2.3m, arising from
a number of acquisitions; and
‒ The LIC Animal Database of
$10.5m.
The two significant cash generating
units (CGUs) holding these assets
are tested twice a year for
impairment using discounted
cashflow models to determine the
recoverable amount.
The market capitalisation deficit that
exists at balance date is an indicator
of impairment at a Group level and
has therefore been tested for
impairment using a discounted
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 CGU’s and the Group. We used our
own valuation specialists to assist us with the consideration of the
discount rates;
‒ Comparing management’s previous forecasts to actual results
achieved in each CGU and the Group; and
‒ Performing sensitivity analysis around the key assumptions used in
the model.
Our testing supported management’s conclusion that there is no
impairment.
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 23
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 to 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 judgemental and complex
area. Management prepares a model
that projects the number and types of
straws that the current team can
produce and will be sold over the
useful 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 challenge of management’s significant
assumptions such as:
‒ Projected sales volumes and pricing;
‒ Discount rates applied; and
‒ Runoff Profile of the bulls.
We compared sales and costs growth, and inflation rates to historical
data and published market forecast data where available.
We utilised our valuation specialists to review market and industry data
to assess management’s discount rate applied to the valuation model.
We assessed the runoff profile of the bulls against historical data and
found the inputs to be comparable.
We considered the adequacy of the related financial statement
disclosures.
We had no matters to report as a result of our procedures
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 $2.3m, arising from
a number of acquisitions; and
‒ The LIC Animal Database of
$10.5m.
The two significant cash generating
units (CGUs) holding these assets
are tested twice a year for
impairment using discounted
cashflow models to determine the
recoverable amount.
The market capitalisation deficit that
exists at balance date is an indicator
of impairment at a Group level and
has therefore been tested for
impairment using a discounted
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 CGU’s and the Group. We used our
own valuation specialists to assist us with the consideration of the
discount rates;
‒ Comparing management’s previous forecasts to actual results
achieved in each CGU and the Group; and
‒ Performing sensitivity analysis around the key assumptions used in
the model.
Our testing supported management’s conclusion that there is no
impairment.
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 23
Livestock Improvement Corporation Financial Statements 2023/24 23

The key audit matter How the matter was addressed in our audit
cashflow model to determine the
recoverable amount of the Group.
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 judgement
about the future performance of the
CGU’s and the Group, including
considering future economic and
market conditions.
Other information
The Directors, on behalf of the Group, are responsible for the other information included in the entity’s Financial
statements. Other information includes the Key Metrics and the Directors 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 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 issued by the New Zealand
Accounting Standards Board;
— implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is free from material misstatement, whether due to fraud or error; and
24

LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24
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 to 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 judgemental and complex
area. Management prepares a model
that projects the number and types of
straws that the current team can
produce and will be sold over the
useful 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 challenge of management’s significant
assumptions such as:
‒ Projected sales volumes and pricing;
‒ Discount rates applied; and
‒ Runoff Profile of the bulls.
We compared sales and costs growth, and inflation rates to historical
data and published market forecast data where available.
We utilised our valuation specialists to review market and industry data
to assess management’s discount rate applied to the valuation model.
We assessed the runoff profile of the bulls against historical data and
found the inputs to be comparable.
We considered the adequacy of the related financial statement
disclosures.
We had no matters to report as a result of our procedures
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 $2.3m, arising from
a number of acquisitions; and
‒ The LIC Animal Database of
$10.5m.
The two significant cash generating
units (CGUs) holding these assets
are tested twice a year for
impairment using discounted
cashflow models to determine the
recoverable amount.
The market capitalisation deficit that
exists at balance date is an indicator
of impairment at a Group level and
has therefore been tested for
impairment using a discounted
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 CGU’s and the Group. We used our
own valuation specialists to assist us with the consideration of the
discount rates;
‒ Comparing management’s previous forecasts to actual results
achieved in each CGU and the Group; and
‒ Performing sensitivity analysis around the key assumptions used in
the model.
Our testing supported management’s conclusion that there is no
impairment.
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 23
24 Livestock Improvement Corporation Financial Statements 2023/24

— 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 company
and group financial statements
Our objective is:
— to obtain reasonable assurance about whether the 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.
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 Trevor Newland
For and on behalf of
KPMG
Hamilton
18
th
July 2024
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 25
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 to 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 judgemental and complex
area. Management prepares a model
that projects the number and types of
straws that the current team can
produce and will be sold over the
useful 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 challenge of management’s significant
assumptions such as:
‒ Projected sales volumes and pricing;
‒ Discount rates applied; and
‒ Runoff Profile of the bulls.
We compared sales and costs growth, and inflation rates to historical
data and published market forecast data where available.
We utilised our valuation specialists to review market and industry data
to assess management’s discount rate applied to the valuation model.
We assessed the runoff profile of the bulls against historical data and
found the inputs to be comparable.
We considered the adequacy of the related financial statement
disclosures.
We had no matters to report as a result of our procedures
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 $2.3m, arising from
a number of acquisitions; and
‒ The LIC Animal Database of
$10.5m.
The two significant cash generating
units (CGUs) holding these assets
are tested twice a year for
impairment using discounted
cashflow models to determine the
recoverable amount.
The market capitalisation deficit that
exists at balance date is an indicator
of impairment at a Group level and
has therefore been tested for
impairment using a discounted
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 CGU’s and the Group. We used our
own valuation specialists to assist us with the consideration of the
discount rates;
‒ Comparing management’s previous forecasts to actual results
achieved in each CGU and the Group; and
‒ Performing sensitivity analysis around the key assumptions used in
the model.
Our testing supported management’s conclusion that there is no
impairment.
LLiivveessttoocckk IImmpprroovveemmeenntt CCoorrppoorraattiioonn Financial Statements 2023/24 23
Livestock Improvement Corporation Financial Statements 2023/24 25

605 Ruakura Road
Newstead 3286
Hamilton
New Zealand
07 856 0700 | lic.co.nz