LIC 2024/25 Annual Report and Climate Statements

Livestock Improvement
Corporation Limited (LIC)
Annual Report
For the year ended 31 May 2025
There's always room for improvement

Contents
Key metrics 4
Financial trends 5
Directors' report 6
Key results and position 8
Our results for the year 8
Our position at year end 9
Our cash flows for the year 10
Changes in our position for the year 11
More details 12
Accounting policies 12
Business analysis 13
Our core assets 14
Our funding 18
Risk and Other assets 19
Tax 20
Other expenses and Other liabilities 21
Transactions with Related Parties, Cash flow
reconciliation and Subsequent events 22
Independent auditor's report 23
Corporate Governance Report 27

Key Metrics
Results at a glance
Underlying
earnings*
R&D expense
Operating
cashflow
Dividend
Revenue
Underlying earnings*
Return on equity
*Non-GAAP financial information
$
21.7
m
$
22.5
m
$
56.4
m
12.22c
$
295.1
m
7.3%
Net profit
after tax (NPAT)
Underlying earnings*
per share
$
30.6
m
15c
From $7.7m
From 10 cents
From $267.3m
From 5.0%
From $13.9m
From $21.2m
From $40.1m
From 5.84 cents
4 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Financial Trends
These charts represent the key financial metrics for LIC to provide a
historical summary of our performance.
* Excludes discontinued operations - the Automation business was divested in June 2021.
** Non-GAAP financial information: excludes bull team and nil paid share revaluations and discontinued operations.
*** The full year dividend declared is paid in the subsequent year, while special dividends are paid within the year.
22.9
26.7
27.4
7.7
30.6
20212022202320242025
Net profit after tax ($m)*
0.16
0.18
0.17
0.10
0.15
20212022202320242025
Underlying Earnings** per share (cents)
22.3
25.7
23.7
13.9
21.7
20212022202320242025
Underlying earnings ($m)**
17.1
18.2
18.6
21.2
22.5
20212022202320242025
R&D expense ($m)*
249.0
263.2
276.5
267.3
295.1
20212022202320242025
Revenue ($m)*
7.6%
8.8%
8.0%
5.0%
7.3%
20212022202320242025
Underlying Earnings** Return on equity %
40.5
57.1
36.8
40.1
56.4
20212022202320242025
Operating cashflow ($m)*
12.51
28.43
16.38
18.84
12.22
Total Dividends (cents per share)***
20212022202320242025
Full year dividend declaredSpecial dividend paid
Livestock Improvement Corporation Consolidated Annual Report 2024/25 5

Directors' Report 2024-25
LIC reports positive full year results with increased dividend for shareholders
The LIC Board announces a positive year-
end financial result as it continues to invest in
innovations for its farmer shareholders. The
co-operative ends the 2024-25 financial year
with a solid profit and Directors have declared a
dividend of 12.22 cents per share.
Summary of financials:
• Total Revenue: $295.1 million, up 10.4% from
$267.3 million last year
• Net Profit After Tax (NPAT): $30.6 million, up
significantly from $7.7 million last year
• Underlying Earnings: $21.7 million, up 56.9%
from $13.9 million last year
• Dividend: $17.4 million – 12.22 cents per share,
representing 80% of Underlying Earnings
• Total assets: $392.0 million, up 9.3% from
$358.6 million last year
• Strong balance sheet with no debt at year-end
The Board is pleased to deliver such a positive
result for farmer owners, especially one which
reflects the hard work that has been put in to
deliver value behind the farm gate. In the past
12 months we have seen Non-Return Rates
(NRR) of our fresh sexed semen lift to within
1% of conventional semen, we have had close
to 1.5 million animals genotyped through our
GeneMark™ Genomics programme and we have
continued to work with our industry partners to
increase the number of integrations available
through our MINDA herd improvement platform.
Whether it’s allowing farmers to generate more
replacement heifers from their top performing
cows, increased certainty around parentage
or reducing time spent on paperwork our co-
operative is focused on putting farmers and their
herds at the heart of everything we do.
Revenue has increased by 10.4% as farmer
owners invested further into their herds and the
co-operative achieved a 14.8% improvement
in underlying earnings, excluding the one-off
negative impacts of the semen quality issue and
the tax deductibility on commercial buildings
change included in last year’s financial result.
6 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Recent years’ investments in digital capability
have resulted in a $4.0m increase in depreciation
and amortisation compared to last year and
operating cashflows increased by $16.3m year on
year on the back of improved underlying earnings
and prudent capital management.
The co-operative continued to invest into
Research and Development, representing a 6.3%
increase on last year at $22.5m.
With robust underlying earnings of 15 cents per
share and a strong cash position, the Board
declares an annual dividend of 12.22 cents per
share, which equates to a fully imputed cash
distribution of $17.4m.
Outlook
The co-operative expects underlying earnings
for 2025-26 to be in the range of $18-22 million,
assuming no significant events, including climate
events, or milk price change takes place between
now and then.
From the 2025-26 year, LIC is planning a multi-
year investment into customer facing systems
and process improvements. This is an important
initiative to replace aging systems and improve
customer experience for our farmers, making the
co-operative easier to work with. This investment
is predominantly into Software as a Service (SaaS)
tools, the costs of which are generally expensed
as incurred, rather than amortised over future
financial periods. For the purpose of determining
the underlying earnings of LIC, this expenditure
will be excluded. Reported Net Profit After
Tax (NPAT) will be negatively impacted by the
implementation costs incurred within a given year.
The co-operative will also continue to invest in
R&D with the next stage of its methane research
due to get underway in the last quarter of 2025.
Livestock Improvement Corporation Consolidated Annual Report 2024/25 7

STATEMENT OF RESULTS FOR THE YEAR
For the year ended 31 May 2025
In thousands of New Zealand dollars
Note20252024
Revenue1295,107 267,288
Purchased materials(46,266)(41,255)
People costs(128,559)(119,758)
Depreciation and amortisation3,4,5(28,051)(24,047)
Other expenses10(65,217)(60,516)
Net finance income/(costs)924 647
Bull team revaluation212,292 (8,768)
Fair value change in Nil Paid Share receivable647 191
Profit/(loss) before tax expense40,277 13,782
Tax expense9(9,634)(6,048)
Profit/(loss) for the year30,643 7,734
Profit per Ordinary Share (excl. treasury stock) $0.22 $0.05
Other comprehensive income
Items that will not be reclassified to profit or loss
Investment revaluations6196 8,805
Land and buildings revaluations3,61,482 3,715
Tax effect of building revaluations9(348)(784)
Items that are or may be reclassified subsequently to profit or loss
Hedge revaluations6(208)(251)
Tax effect of hedge revaluations958 -
Foreign currency translation movements6(48)25
1,132 11,510
Comprehensive income for the year 31,775 19,244
Supplementary non-GAAP note to the results for the year:
Profit/(loss) for the year30,643 7,734
Plus/(less): Bull team revaluation(12,292)8,768
Tax effect on Bull team revaluation3,442 (2,455)
Less: Fair value change in Nil Paid Share receivable(47)(191)
Underlying earnings21,746 13,856
Underlying earnings per Ordinary Share (excl. treasury stock) $0.15 $0.10
Key Results and Position
8 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Key results and position
STATEMENT OF POSITION FOR THE YEAR
As at 31 May 2025
In thousands of New Zealand dollars
Note20252024
Cash and cash equivalents57,127 42,341
Debtors836,705 34,952
Other assets822,774 26,557
Nil Paid Shares receivable6722 972
Bull team2101,164 88,872
Land, buildings and equipment - owned & leased3,5125,845 118,997
Software, goodwill and other intangible assets447,697 45,917
Total assets392,034 358,608
Creditors725,187 23,831
Borrowings7- -
Deferred tax933,323 30,645
Other liabilities1135,152 29,221
Total liabilities93,662 83,697
Net assets298,372 274,911
Share capital676,737 76,737
Retained earnings6172,896 150,567
Other reserves648,739 47,607
Total equity298,372 274,911
Director
Date: 17 July 2025
Director
Date: 17 July 2025
Livestock Improvement Corporation Consolidated Annual Report 2024/25 9

Key results and position
STATEMENT OF CASH FLOWS FOR THE YEAR
For the year ended 31 May 2025
In thousands of New Zealand dollars
Note20252024
Customer receipts289,434 264,919
Supplier payments(233,163)(223,940)
Net tax payments(382)(2,189)
Other operating cash flows498 1,262
Net operating cash flows1356,387 40,052
Software development(13,593)(16,097)
Net sales/(purchases) of land, buildings and equipment(14,216)(11,570)
Sale of investments- 19,130
Purchase of investments(8)(100)
Net investment cash flows(27,817)(8,637)
Payment of principal portion of lease liabilities(5,948)(5,408)
Nil Paid Share receipts78 165
Dividends paid(8,095)(38,446)
Net financing cash flows(13,965)(43,689)
Movement in cash for year14,605 (12,274)
Cash and cash equivalents at the beginning of the year42,341 54,596
Currency movement on cash holdings181 19
Cash and cash equivalents at end of the year57,127 42,341
Components of cash and cash equivalents include:
Cash1 1
Bank balances22,126 22,340
Term deposits35,000 20,000
10 Livestock Improvement Corporation Consolidated Annual Report 2024/25

In thousands of New Zealand dollarsNoteShare capitalRetained earningsOther reserves Total equity
Balance at 1 June 202476,737 150,567 47,607 274,911
Profit/(loss) for the year- 30,643 - 30,643
Dividends paid- (8,314)- (8,314)
Hedge revaluations- - (150)(150)
Foreign currency translation movements- - (48)(48)
Investment revaluations- - 196 196
Land and buildings revaluations3,6- - 1,134 1,134
Balance at 31 May 202576,737 172,896 48,739 298,372
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
Key results and position
STATEMENT OF CHANGES IN POSITION FOR THE YEAR
For the year ended 31 May 2025
Livestock Improvement Corporation Consolidated Annual Report 2024/25 11

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 2025.

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
financial statements have been prepared on a historical
cost basis, except for the Bull team, Land & Buildings and
Investments, which are all measured at fair value.
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. No new or amended standards were
adopted in the current year that had a significant impact.
NZ IFRS 18 Presentation and Disclosure in Financial
Statements is effective for the year ending 31 May 2028
and will impact the presentation of the Statement of
Results for the Year, with an allocation of income and
expenses between operating, investing and financing
categories, and new sub-totals such as Operating profit.
Financial performance measures used to explain the
Group financial performance in public communications
outside the financial statements will also be required to
be disclosed, and there is enhanced guidance on the
aggregation and disaggregation of information. The Group
is assessing the effect of applying NZ IFRS 18.
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
12 Livestock Improvement Corporation Consolidated Annual Report 2024/25

(i) Operating segments
The Group operates in four key operating segments, and across four key geographies as set out below. The information below reflects
the 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
• Testing: herd testing, on-farm support and DNA and animal health testing services
• Farm software: data recording, tags and farm management information services
• International: provides bovine genetic breeding material and related services to offshore markets
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
2025
NZ market
genetics
Testing
Farm
software
InternationalOtherEliminationsTotal
External revenue119,933 79,442 61,800 16,037 17,895 - 295,107
Inter-segment revenue- - - - 2,133 (2,133)-
Total revenue119,933 79,442 61,800 16,037 20,028 (2,133)295,107
Depreciation & amortisation(3,476)(10,377)(3,742)(169)(10,287)- (28,051)
Segment gross profit before tax31,138 11,609 33,232 2,963 2,263 - 81,205
Bull team revaluation12,292
Unallocated amounts(53,220)
Profit/(loss) before tax expense40,277
2024
NZ market
genetics
Testing
Farm
software
InternationalOtherEliminationsTotal
External revenue110,784 69,415 56,437 15,050 15,602 - 267,288
Inter-segment revenue- - - - 2,247 (2,247)-
Total revenue110,784 69,415 56,437 15,050 17,849 (2,247)267,288
Depreciation & amortisation(3,465)(9,752)(3,383)(157)(7,290)- (24,047)
Segment gross profit before tax27,966 6,026 31,477 1,901 1,675 - 69,045
Bull team revaluation(8,768)
Unallocated amounts(46,495)
Profit/(loss) before tax expense13,782
The Other operating segment includes research & development and support services. Unallocated amounts include personnel costs,
other expenses and net finance costs. Operating segments have been updated, including comparatives, to more closely align with
LIC's strategy. The changes consolidate LIC's testing services and provide greater insight on the performance of LIC's international
business.
Notes to the Financial Statements
1. Business analysis
Livestock Improvement Corporation Consolidated Annual Report 2024/25 13

Notes to the Financial Statements
1. Business analysis (cont.)
Key drivers of the model:
Forecasted Fonterra Farmgate Milk Price*$9.50$8.85
WACC annualised post tax rate7.25% - 8.74%8.11% - 8.76%
Number of bulls in the team122124
Average % of run-off profile (years 2-5)45%42%
*This is the short term Milk Price outlook.
(ii) Geographic analysis
In thousands of New Zealand dollars
2025
New ZealandAustraliaIrelandUKOtherTotal
Revenues275,211 8,857 4,049 2,961 4,029 295,107
Non-current assets274,888 4,560 1,075 51 - 280,574
2024
Revenues248,420 8,999 3,545 2,337 3,987 267,288
Non-current assets254,087 4,397 1,157 59 - 259,700
2. Bull Team
The bull team is the cornerstone asset of LIC's genetics business. The 826 total bulls (2024: 810 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 correlates to movements in the cow population and Farmgate Milk
Price. 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.
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 $7.685 million (2024: $8.179 million).
In thousands of New Zealand dollars
20252024
Opening balance88,872 97,640
Bull team revaluation12,292(8,768)
Closing balance101,164 88,872
The impact on the fair value of a change to these key drivers is summarised below:
Change in the bull run-off profile $8.4m - average of a 5% shift across years 2-5
Reduction of 5% in sales demand (due to unforeseen reduction in milk price,
cow population or other significant events)
$7.4m$3.1m
WACC moves 100 basis points$3.0m$2.5m
14 Livestock Improvement Corporation Consolidated Annual Report 2024/25

In thousands of New Zealand dollars
20252024
Land BuildingsEquipmentTotalLand BuildingsEquipmentTotal
Opening balance38,733 55,701 24,563 118,997 37,990 51,500 24,057 113,547
Additions- 5,133 9,532 14,665 - 4,852 7,331 12,183
Disposals- (451)(73)(524)- -(126)(126)
Depreciation- (3,362)(7,158)(10,520)- (3,048)(6,906)(9,954)
Revaluation360 1,232 - 1,592 743 2,650 - 3,393
Foreign exchange- - 18 18 - -(2)(2)
Right of use leased assets
movement - note 5
- 2,426 (809)1,617 - (253)209 (44)
Closing balance39,093 60,679 26,073 125,845 38,733 55,701 24,563 118,997
Value if carried at cost11,726 24,456 N/A 11,726 23,135 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 2025 (most recent full valuation as at
April 2024). Fair value is based on comparable sales for land and based on depreciated replacement cost for buildings. Revaluations
are primarily 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
20252024
Software
& IP
GoodwillDatabaseTotal
Software
& IP
GoodwillDatabaseTotal
Opening balance33,046 2,371 10,500 45,917 25,798 2,363 10,500 38,661
Additions13,808 - - 13,808 16,081 - - 16,081
Disposals/impairment(183)- - (183)- - - -
Amortisation(11,813)- - (11,813)(8,842)- - (8,842)
Foreign exchange(20)(12)- (32)9 8 - 17
Closing balance34,838 2,359 10,500 47,697 33,046 2,371 10,500 45,917
Livestock Improvement Corporation Consolidated Annual Report 2024/25 15

Notes to the Financial Statements
4. Software and other intangibles (cont.)
In thousands of New Zealand dollars
20252024
NZ Market Genetics,
Farm software and
Testing CGU
International
CGU
Total
NZ Market Genetics,
Farm software and
Testing CGU
International
CGU
Total
LIC database10,500 - 10,500 10,500 - 10,500
Goodwill- 2,359 2,359 - 2,371 2,371
Total10,500 2,359 12,859 10,500 2,371 12,871
At reporting date, software includes $8.024 million (2024: $11.595 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:
International CGU relates to two separate CGU's - LIC Ireland and Beacon Automation. The LIC database and each of the
International CGU Goodwill recoverable amounts have been separately tested using a value in use method.
For the LIC database and International 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% (2024: 1.5%) for the LIC
database and International CGU Goodwill. The discount rate applied is reviewed and updated annually for movements in published
Treasury risk-free rates and is 8.5-10.6% for the LIC database and International CGU Goodwill (2024: 8.7-10.9% for the LIC database
and International CGU Goodwill).
(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 5.2% (2024: 5.1%).
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
16 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Notes to the Financial Statements
5. Leases (cont.)
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 $6.782 million in 2025 ($6.086 million in 2024).
(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
20252024
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Opening Balance12,399 385 7,327 20,111 12,652 180 7,323 20,155
Depreciation(1,591)(166)(3,961)(5,718)(1,471)(142)(3,638)(5,251)
Additions4,010 337 3,216 7,563 1,420 347 3,871 5,638
Disposals/modifications7 (139)(96)(228)(202)- (229)(431)
Closing balance14,825 417 6,486 21,728 12,399 385 7,327 20,111
Lease terms 3-28 years 1-9 years 1-7 years 2-28 years 2-5 years 2-8 years
In thousands of New Zealand dollars
20252024
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Within 1 year1,490 164 3,390 5,044 1,341 72 3,549 4,962
Between 1 to 5 years6,017 262 3,403 9,682 4,612 161 4,301 9,074
More than 5 years8,587 - - 8,587 7,662 - - 7,662
Closing balance16,094 426 6,793 23,313 13,615 233 7,850 21,698
In thousands of New Zealand dollars
20252024
Buildings EquipmentVehiclesTotalBuildings EquipmentVehiclesTotal
Depreciation1,591 166 3,961 5,718 1,471 142 3,638 5,251
Interest expense636 24 489 1,149 621 17 479 1,117
Variable lease payments- - 852 852 - - 980 980
Short-term and low-value leases- 7 - 7 - 1 - 1
Total amount 2,227 197 5,302 7,726 2,092 160 5,097 7,349
Livestock Improvement Corporation Consolidated Annual Report 2024/25 17

Notes to the Financial Statements
6. Funding
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
(2024: 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 $0.722 million (2024: $0.972 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 6.5% (2024: 8.6%).
(iv) Market capitalisation
As at 31 May 2025, the Group's market capitalisation of $134.501 million (2024: $172.365 million) was below the carrying value of net
assets of $298.372 million (2024: $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 as with 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% (2024: 1.5%). The discount rate applied is reviewed and updated annually for movements
in published Treasury risk-free rates and is 8.5% (2024: 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.
(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 2024(80)1,456 46,291 (60)47,607
Revaluations(150)196 1,134 (48)1,132
Balance at 31 May 2025(230)1,652 47,425 (108)48,739
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
*In the 2024 year, LIC sold it's shareholding in National Milk Records Plc for £9.019 million (NZD $18.963 million). Associated accumulated
revaluations were reclassified from Other reserves to Retained earnings on divestment.
18 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Notes to the Financial Statements
7. Liquidity and interest rate risk
(i) Debtors
Bad debts of $0.053 million have been expensed during the year (2024: $0.020 million), and 91.3% of trade receivables are not past
due (2024: 87.8%).
(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 2025 was 6.5% (2024: 7.3%). A 1.0% increase in interest rates would increase interest paid and
reduce profit after tax by approximately $0.018 million (2024: $0.001 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 2026 and expects to be able to meet any obligations which fall due.
In thousands of New Zealand dollars
20252024
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
Creditors25,187 - - 25,187 23,831 - - 23,831
Total25,187 - - 25,187 23,831 - - 23,831
(ii) Other assets
Inventories utilised and expensed during the period amounted to $31.613 million (2024: $29.176 million). Net inventories written
on in 2025 totalled $0.201 million (2024: $0.095 million written off), and comprised of $0.396 million of stock written off and
$0.597 million of previously written off stock written back on into inventory.
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 (2024: $3.358 million).
In thousands of New Zealand dollars
20252024
Inventories16,703 20,808
Investments5,145 4,941
Other livestock926 808
Total22,774 26,557
8. Debtors and other assets
Livestock Improvement Corporation Consolidated Annual Report 2024/25 19

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 decreased the tax base for these assets, giving rise to an increased temporary
difference between the carrying cost and tax base and resulted 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
20252024
Profit/(loss) for the year30,6437,734
Tax expense9,634 6,048
Profit/(loss) before tax expense40,277 13,782
Tax at 28% NZ company tax rate11,278 3,859
Effect of overseas income(93)(34)
Non-deductible items(1,449)(521)
Adjustments from prior periods(102)(899)
Impact of changes to building depreciation- 3,643
Tax expense9,634 6,048
Current tax expense7,2463,919
Deferred tax expense2,388 2,129
Imputation credits available13,1179,468
In thousands of
New Zealand dollars
As at 31 May
2025
Through
Profit/(loss)
Through
Other reserves
As at 31 May
2024
Through
Profit/(loss)
Through
Other reserves
As at
31 May 2023
Bull team & livestock27,741 3,320 - 24,421 (2,414)- 26,835
Buildings & equipment
6,433 235 348 5,850 3,304 784 1,762
Intangible assets
2,940 - - 2,940 1,480 - 1,460
Other
(3,791)(1,167)(58)(2,566)(241)- (2,325)
Total33,323 2,388 290 30,645 2,129 784 27,732
(ii) Deferred tax liability
20 Livestock Improvement Corporation Consolidated Annual Report 2024/25

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 between $0.8 - $1.0 million
due to be paid in each of the next three years, discounted to 31 May 2025.
In thousands of New Zealand dollars
20252024
Provisions for employee entitlements10,194 7,596
Provision for sire proving rebate2,441 2,522
Derivatives used for hedging295 87
Provision for tax(1,712)(3,259)
Lease liabilities - current5,044 4,962
Lease liabilities - non-current18,269 16,736
Other621 577
Total35,15229,221
11. Other liabilities
In thousands of New Zealand dollars
20252024
Research & Development expenses22,549 21,215
As part of business activities, LIC incurs research and development expenses while working on a number of projects.
*Agreed upon procedures relate to the R&D Tax Incentive scheme and disclosure of historical financial data in the sustainability report.
In thousands of New Zealand dollars20252024
Audit and audit related services
Audit of the financial statements232 222
Agreed upon procedures*
26 24
GHG scope 1 & 2 assurance as it relates to year end
25 -
Total audit and audit related services283246
Tax - compliance services78-
Total361 246
Livestock Improvement Corporation Consolidated Annual Report 2024/25 21

In thousands of New Zealand dollars
20252024
Remuneration of key Management and Directors 4,622 4,960
Sale of goods and services to key Management and Directors996 468
Purchases of goods and services from key Management and Directors- 3
Notes to the Financial Statements
12. Transactions with Related Parties - Directors and Management
After 31 May 2025, a dividend of 12.22 cents per Ordinary Share was proposed by the Directors in relation to the 2025 year, or $17.397
million (2024: 5.84 cents per Ordinary Share, or $8.314 million).
14. Subsequent events
Directors of the Company and their related entities hold 617,474 Ordinary Shares, representing 0.42% of shares on issue (2024: 378,001
Ordinary Shares, representing 0.26%).
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:
13. Reconciliation of the Profit/(loss) for the year to Net operating cash flows
In thousands of New Zealand dollars
20252024
Profit/(loss) for the year30,643 7,734
Adjusted for:
Depreciation and amortisation on all assets28,051 24,047
Bull team revaluation(12,292)8,768
Deferred tax expense2,388 2,129
Working capital movements and other non-cash items7,597 (2,626)
Net operating cash flows56,387 40,052
22 Livestock Improvement Corporation Consolidated Annual Report 2024/25

© 2025 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 rights reserved.
Document classification: KPMG Public
Independent Auditor’s Report
To the shareholders of Livestock Improvement Corporation Limited
Report on the audit of the consolidated financial statements
Opinion
We have audited the accompanying consolidated
financial statements which comprise:
­ the consolidated statement of financial
position as at 31 May 2025;
­ the consolidated statements of results,
changes in position and cash flows for the
year then ended; and
­ notes, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated
financial statements of Livestock Improvement
Corporation Limited (the Company) and its
subsidiaries (the Group) on pages 8 to 22 present
fairly in all material respects:
­ the Group’s financial position as at 31 May
2025 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 (NZ IFRS) issued by the New
Zealand Accounting Standards Board and
the International Financial Reporting
Standards issued by the International
Accounting Standards Board.
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 Livestock Improvement Corporation Limited in accordance wit h Professional and Ethical
Standard 1 International Code of E thics for Assurance Practitioners (Including International Independence
Standards) (New Zealand) issued by the New Zealand Auditi ng and Assurance Standards Boar d and the
International Ethics Standards Boar d for Accountants’ International Cod e of E thics for Professional Accountants
(including International Independence Standards) (IESBA Code), as applicable to audits of financial statements
of p ublic interest entities. We hav e als o fulfill ed our other ethical responsibilities in accordance wit h Professional
and Ethical Standards 1 and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for t he audit of the
consolidated financial statements section of our report.
Our firm has provided other services to the Group in relation to assurance services, agreed upon procedures
engagements, and taxation compliance services for the R&D tax incentive scheme. Subject to certain
restrictions, partners and employees of our firm may also deal with the G roup on normal terms within the
ordinary course of t rading activities of t he business of t he Group. These matters have not impaired our
independence as auditor of t he Group. The firm has no other relationship with, or interest in, t he Group.
Livestock Improvement Corporation Financial Statements 2024/25 23
Independent Auditor's Report
Livestock Improvement Corporation Consolidated Annual Report 2024/25 23

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 $1,310,000 determined with reference to a benchmark of the Group’s 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.
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 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 c onsidered 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 a Database intangible asset of
$10.5m with an indefinite useful life.
The significant cash generating unit (CGU)
holding this asset is tested twice a year for
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 the CGU and the
24Livestock Improvement Corporation Financial Statements 2024/25
24 Livestock Improvement Corporation Consolidated Annual Report 2024/25

The key audit matter How the matter was addressed in our
audit
impairment using a discounted cashflow model
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 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 and the Group, including considering
future economic and market conditions.
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 the CGU and the Group; and
‒ Performing sensitivity analysis around the key
assumptions used in the model.
We had no matters to report as a result of our procedures.
Other information
The directors, on behalf of the Group, are responsible for the other information. The other information comprises
the Key Metrics, Financial Trends and the Directors Report (but does not include the consolidated financial
statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the
Annual Report, which is expected to be made available to us after that date.
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 on the other information that we obtained prior to the date of this
auditor’s report, we conclude there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
When we read the Annual Report , if we conclude that there is a material misstatement therein, we are required to
communicate the matter to directors.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders. 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, none of KPMG, any entities
directly or indirectly controlled by KPMG, or any of their respective members or employees, accept or assume
any responsibility and deny all liability to anyone other than the shareholders for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Livestock Improvement Corporation Financial Statements 2024/25 25
Livestock Improvement Corporation Consolidated Annual Report 2024/25 25

Responsibilities of directors for the consolidated financial
statements
The directors, on behalf of the Group, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with NZ
IFRS issued by the New Zealand Accounting Standards Board and the International Financial Reporting
Standards issued by the International Accounting Standards Board;
— i mplementing the 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
— assessing the ability of the Group 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 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 it 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 the
consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at the
External Reporting Board (XRB) website at:
https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-report-1-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor’s report is David Gates.
For and on behalf of:
KPMG
Wellington
17 Jul y 2025
26Livestock Improvement Corporation Financial Statements 2024/25
26 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Corporate Governance Report
Corporate Governance Statement
Livestock Improvement Corporation (“LIC” or
the “Company”) is a New Zealand Co-operative
Company, owned by New Zealand dairy farmers.
Its shares are quoted on the Main Board of the
New Zealand Stock Exchange (NZX) and it is a
Climate Reporting Entity (as defined under The
Financial Sector (Climate-related Disclosures and
Other Matters) Amendment Act 2021). LIC’s Climate
Statements for the year ended 31 May 2025 can be
accessed on LIC’s website at:
lic.co.nz/about/environment-and-sustainability/
climate-disclosure-reporting/
In this section of the Annual Report we report
against the Principles and Recommendations
of the NZX Corporate Governance Code
dated 31 January 2025 (the NZX Code) and the
extent that LIC has followed the NZX Code’s
recommendations. LIC has a high degree of
compliance with the NZX Code. This statement is
current to 31 May 2025 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, diagnostic, animal health
and herd testing services in the New Zealand dairy
sector, as well as research relating to dairy herd
improvement.
On LIC's website (lic.co.nz/shareholders/
corporategovernance) you will find the following
corporate governance documents:
• Constitution of Livestock Improvement
Corporation Limited
Charters
• LIC Board Charter
• Audit, Finance & Risk Committee Charter
• People and Culture Committee Charter
• Disclosure Committee Charter
• LIC Shareholder Reference Group, Board and
Management Engagement Charter
Other Corporate Governance Documents
• Code of Conduct and Ethics
• Share Trading & Continuous Disclosure Policy
• Diversity, Equity and Inclusion Policy
• Dividend Policy
• External Auditor Independence Policy
• Honoraria Committee Terms of Reference
• Terms of Reference Shareholder
Reference Group
• Share Trading and Disclosure Policy
Our latest Sustainability Report can also be
accessed on LIC’s website at:
lic.co.nz/about/environment-and-sustainability/
sustainability
Livestock Improvement Corporation Consolidated Annual Report 2024/25 27

Co-operative Principles
LIC’s co-operative principles are set out in its
Constitution and are:
a) The Company will remain a Co-operative
Company;
b) The Company is “User Controlled” meaning
that eligible Users of the Company’s qualifying
products and services hold 60% or more of its
voting rights;
c) Core products and services are made
available to all Shareholders at fair
commercial prices;
d) 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
e) Shareholders co-operate with the Company
and each other, including the sharing of
information to promote their common
interests.
NZX Code Principle 1, Ethical standards: 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 (the Code)
sets out the ethical and behaviour standards
expected of Directors, members of the Shareholder
Reference Group (SRG), employees and contractors
of LIC. The Code is reviewed biennially (or as
required) to keep it up to date with employee,
shareholder and other stakeholder expectations.
New Directors and employees receive training
on the Code as part of their induction process.
Directors and employees are also expected to
uphold LIC's values of integrity, innovation, being
in-tune with our farmers, passion and spirit of
cooperation.
Avoiding conflicts of interest
The Code of Conduct and Ethics includes direction
on disclosing and managing conflicts of interest.
The Board updates changes in interests and any
potential conflicts at each meeting. LIC’s General
Counsel holds a Directors' interests register and
the Board reviews the register at each meeting.
The register records relevant transactions and
disclosures of interests. The Directors’ interests are
set out on page 45.
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.
Trading in securities
The Company has a Share Trading and Disclosure
Policy for Directors, members of the SRG, Restricted
Persons and other employees wanting to deal in
the securities of the Company.
The Policy outlines:
• when Directors, members of the SRG,
Restricted Persons and other employees
of the Company may deal in the shares of
the Company;
• procedures to reduce the risk of insider
trading; and
• disclosure requirements.
The Policy records the Company's procedures for
compliance with the Financial Markets Conduct
Act 2013 (FMC Act), the NZX Listing Rules 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.
28 Livestock Improvement Corporation Consolidated Annual Report 2024/25

The exemption ensures that LIC Directors and
employees can comply with the Company’s
constitutional and co-operative requirements and
the Rules of its Employee Share Scheme without
technically infringing the insider trading provisions
of the FMC Act.
The Policy aims to protect Directors, members of
the SRG, 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
Company’s Constitution establish the Board's
responsibilities and include provisions for how the
Company 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, which outlines and distinguishes
the Board and Management's respective roles and
responsibilities. The Board is responsible for the
direction and control of LIC's activities. It is also
committed to the guiding values of the Company.
Board responsibilities
The Board is responsible for setting the strategy
of LIC and monitoring delivery against that
strategy, recognising the Company’s economic,
environmental and social responsibilities.
LIC’s strategy is to help farmers breed better cows
for their future herd now, using the best tools,
insights and genetics by focussing on the following:
What's the
herd of the
future?
How we'll
breed it
faster
The role of
our people
Working with farmers to breed for that future herd now - using the best tools,
insights and genetics we can offer
Breeding
better cows
faster with:
Why this
matters
High-preforming herds
through world-class breeding
programmes
Smarter tools that connect data,
insights and systems farmers use
A generational co-operative
that's easy to work with
Our Strategy
Customer
experience
that makes LIC
easy to deal with
Genetics
that continue
to deliver value
on farm
Testing
to predict
performance and
health issues
Farm software
to make herd
and breeding
decisions easier
International
markets
to strengthen our
breeding scheme
With world leading herd improvement
Highly efficient,
producing more
from less
Aligned with the
needs of processors
and global markets
Lower-emitting and
environmentally
fit-for-purpose
Livestock Improvement Corporation Consolidated Annual Report 2024/25 29

The Board is also responsible for approval of
significant expenditures, policy determination,
selection of Appointed Directors, oversight of risk
(including climate-related risks and opportunities
and setting risk appetite for all risk categories) and
stewardship of the Company'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 Authorities Policy, 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.
Notwithstanding the responsibilities of the Board,
the Board and Shareholders will not, except with
the written consent of the Minister for 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.
Board composition
The Board is comprised of six Elected and four
Appointed Directors. The current Board of Directors
is made up as follows:
• Elected Directors: Corrigan Sowman (Chair),
Ben Dickie, Duncan Coull, Tony Coltman,
Victoria Trayner and Mike O’Connor.
• Appointed Directors: Tim Gibson, Sophie
Haslem, Hamish Rumbold and Blair O’Keeffe.
Information about each Director, including
their independence, ownership interests and
attendance at board meetings, is included in this
section. A profile of each Director's experience,
including the length of their service, can be found
on the LIC website. See also page 36 for further
information about the Company’s Diversity, Equity
and Inclusion policy.
30 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Nomination, election and appointment of Directors
The nomination, election and appointment of
Directors to the Board of LIC is also governed by
the LIC Constitution. The relevant NZX Rulings and
waivers to the NZX Listing Rules are set out on
pages 51 and 52.
Elected Directors are nominated and elected
by Shareholders within the region each Director
represents (two regions in total). Once elected they
will hold office for a period of approximately three
years. The term of that director’s tenure will be in
accordance 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
approximately three years, unless a shorter term is
approved by Shareholders.
A retiring Director is eligible for re-election or
re-appointment as a Director of the Company. All
Directors enter into written agreements setting out
the terms of their engagement.
In relation to the nomination and appointment of
Directors, appropriate checks are undertaken by
an external party, Propero Consulting Limited. The
process 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.
In this year’s Director elections, North Island
Director Ben Dickie and South Island Director
Corrigan Sowman are due to retire by rotation
at the Annual Meeting. Ben Dickie has decided,
after eight years on the LIC Board, not to seek
re-election. Ben Dickie will be replaced by
a nominated Shareholder that is elected by
Shareholders. The Election will be held at the 2025
Annual Meeting.
With no nominations received other than Corrigan
Sowman for the South Island Region, Corrigan
Sowman is deemed appointed as a Director for
another term from the 2025 Annual Meeting.
Hamish Rumbold was appointed as a Director on
28 January 2025.
Appointed Director Tim Gibson is due to retire by
rotation at this year’s Annual Meeting. After eight
years on the LIC Board, he has decided not to seek
re-appointment.
On 7 July 2025 the Board appointed Blair O’Keeffe
to replace Tim Gibson.
Meetings
The Board met ten times in 2024/25 with three
additional strategy days.
Livestock Improvement Corporation Consolidated Annual Report 2024/25 31

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 sector. Directors also undertake in-market
and stakeholder visits.
The Chair revises development plans for each of
the Directors annually. These plans specifically
focus on areas that will not only develop the
individual Director but will also enhance overall
Board capability. In addition, budget provision
is in place for Directors who want to undertake
approved specific higher-level study, the cost of
which is shared on a 50:50 basis.
Board, Committee and Director
Performance
The Board uses an external party to assist with
reviewing the performance of the Board, individual
Directors and its committees on a regular basis.
Independent consultants Propero Consulting
Limited were last engaged in 2025 and undertook
a pulse check evaluation of the performance of
the Board. The evaluation provided the Board
with additional support as part of the transition
to a new Chair and also highlighted the continued
improvement in communication between the Board
and Senior Leadership Team to support strong
decision making.
Director Independence
Directors are appointed in accordance with the
Constitution. The current Appointed Directors are
not Shareholders and are appointed to bring their
external expertise to the Board.
For the purposes of the Listing Rules, the Board has
determined all of the Directors to be independent.
While all Elected Directors are Shareholders and
purchase from and sell goods and services to
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.
Board Attendance:
Board MeetingsSpecial Board MeetingsBoard Strategy Days
No of meetingsHeldAttendedHeld AttendedHeldAttended
Current directors
Ben Dickie773333
Tim Gibson763333
Sophie Haslem773333
Corrigan Sowman773333
Duncan Coull773333
Victoria Trayner763332
Mike O’Connor**743132
Tony Coltman**743133
Hamish Rumbold***723-33
Departed directors
Candace Kinser*73323-
Matt Ross*73323-
Alison Watters*73323-
*retired at the 2024 Annual Meeting
**elected at the 2024 Annual Meeting
*** appointed on 28 January 2025
32 Livestock Improvement Corporation Consolidated Annual Report 2024/25

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
LIC 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
Board Chair.
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.

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:
All current members of the Committee are
considered to be independent. Management only
attend Committee meetings at the invitation of the
Committee.
The Committee meets at least four times a year
and met eight times in 2024/25.
As at 1 June 2024Ben Dickie, Victoria Trayner and
Corrigan Sowman
As at 28 January 2025Ben Dickie, Victoria Trayner,
Corrigan Sowman and
Hamish Rumbold
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. For the avoidance
of doubt, the positions of Board Chair and CE are
currently held by two separate individuals.
To ensure appropriate management where
necessary, the LIC Board Charter 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.
Livestock Improvement Corporation Consolidated Annual Report 2024/25 33

People and Culture Committee
A Sub-Committee of the Board, the People and
Culture 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, where 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. The
Committee is chaired by Appointed Director Tim
Gibson with the other members being:
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 2024/25. For completeness,
the Company does not have a nomination
committee as recommendations and decisions
relating to Director appointments are made by the
full Board as outlined on page 31.
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 Disclosure Committee
and, if required, disclosed promptly and without
delay to the NZX. It operates under a written
charter, which is available on the LIC website.
The Disclosure Committee is chaired by Board
Chair Corrigan Sowman with the other members
being AFRC Chair Sophie Haslem, the Chief
Executive, Chief Financial Officer, General Counsel
and Communications and Brand Engagement
Manager. Disclosure Committee meetings are
also attended by other members of management
as required.
The Committee meets as and when required and
met once in 2024/25.
As at 1 June 2024Corrigan Sowman, Matt Ross,
Duncan Coull and Alison Watters
As at 1 October 2024Corrigan Sowman, Tony Coltman,
Duncan Coull and Mike O’Connor
34 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Takeovers
Due to LIC’s co-operative company status, its
Constitution and the Dairy Industry Restructuring
Act 2001 (DIRA) based shareholding restrictions,
LIC considers 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.
Board Committee attendance:
Audit, Finance & Risk
Committee
People and Culture
Committee
Disclosure
Committee
No of meetingsHeldAttendedHeld AttendedHeldAttended
Current directors
Ben Dickie87
Tim Gibson44
Sophie Haslem8811
Corrigan Sowman884411
Duncan Coull44
Victoria Trayner88
Mike O’Connor**42
Tony Coltman**43
Hamish Rumbold***82
Departed directors
Matt Ross*41
Alison Watters*41
*retired at the 2024 Annual Meeting
**elected at the 2024 Annual Meeting
*** appointed on 28 January 2025
Livestock Improvement Corporation Consolidated Annual Report 2024/25 35

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.
Disclosure to the market
LIC has a written disclosure policy: the Continuous
Disclosure Policy can be found on our website. It
sets out requirements for disclosure promptly and
without delay to the market of material information,
so that all stakeholders have equal access to
information. The Board specifically considers with
management at each board meeting whether
there are any issues which might require disclosure
to the market under the NZX continuous disclosure
requirements.
Non-financial reporting
Sustainability
LIC’s annual sustainability report is prepared in
accordance with the core option of the Global
Reporting Initiative (GRI) Standards.
Diversity, Equity and Inclusion
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, Equity and Inclusion Policy is available
on LIC's website at lic.co.nz/shareholders/
corporategovernance.
As at the 2024/25 year-end, members of the
Board and Senior Leadership Team self-identified
as follows:
The Diversity, Equity & Inclusion Committee aims
to foster a workplace culture that values and
promotes diversity, equity and inclusion.
For 2024/25 the Committee focused on
topics such as:
• Te Ao Māori Strategy
• Women in Leadership
• Cultural Celebration
• Neurodiversity
20252024
MFGDMFGD
LIC Board72-54-
LIC Senior
Leadership
Team
62-53-
Key: M = Male / F = Female / GD = Gender Diverse
36 Livestock Improvement Corporation Consolidated Annual Report 2024/25

LIC continues to collect baseline data from its
employees on an opt-in basis, which includes
religion, gender identity and disability, in
addition to age and ethnicity. This information
has highlighted that LIC is a reasonably diverse
company. The aim is to continually update our
baseline data so that targeted initiatives can be
completed.
In support of initiatives that foster an inclusive
working environment, 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, equity and inclusion within our
workplace. Management appointment interviews
are conducted by a panel that represents diversity
of thought. Training for employees is provided on
the benefits of diversity, equity and inclusion and
has been developed and implemented to drive an
understanding of unconscious bias.
Non-financial risks
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.
NZX Code Principle 5, Remuneration: The remuneration of directors and executives
should be transparent, fair and reasonable.
Directors Remuneration
Under LIC's Constitution, LIC has an Honoraria
Committee tasked with considering and
recommending to Shareholders the form and
amount of fees paid to LIC’s Directors. The
Honoraria Committee is made up of between
two and four Shareholders, elected by their
fellow Shareholders. The Honoraria Committee’s
Terms of Reference are on the LIC website. LIC
does not have a directors’ remuneration policy,
relying instead on the Honoraria Committee to
recommend to Shareholders the remuneration to
be paid to the Directors.
The total remuneration for LIC's Directors is
approved by Shareholders at the Annual Meeting
and the current pool of $783,000 for all nine
Directors was approved at the Annual Meeting held
in September 2024.
Directors of the Company received the following
remuneration for the twelve months ending
31 May 2025:
In thousands of New Zealand dollars
BoardAFRCP & C
Total
Fees
Current directors
Corrigan Sowman144144
Ben Dickie6969
Tim Gibson681381
Sophie Haslem682088
Duncan Coull6969
Victoria Trayner6969
Mike O’Connor**5050
Tony Coltman**5050
Hamish Rumbold***2424
Departed directors
Candace Kinser*1717
Matt Ross*2020
Alison Watters*2020
701
*retired at the 2024 Annual Meeting
**elected at the 2024 Annual Meeting
*** appointed on 28 January 2025
Livestock Improvement Corporation Consolidated Annual Report 2024/25 37

In addition to the above remuneration, and in
accordance with the Constitution, Directors
are reimbursed for any actual and reasonable
expenses incurred while on LIC business. This is
paid in the form of a standard annual incidental
allowance with any further actual and reasonable
expenses incurred while on LIC business also
reimbursed. The standard annual incidental
allowance is set at $1,200 for each Director and
$6,000 for the Chair. The payment of a standard
incidental allowance reduces the administrative
effort required in submitting and processing
transactions of a relatively low value.
The Directors receive no other benefits.
No 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 39.
Chief Executive Remuneration
Chief Executive (CE) David Chin’s remuneration
package is made up of a combination of base
salary and annual performance payments. His
performance is assessed based on a range of
factors including:
• Overall financial performance (40%): delivery
of the annual plan and financial budget
• Overall strategic performance (60%), including:
-Improve delivery of products and services
to customers including growing MINDA
integrations and a target to improve the
customer Net Promoter Score;
-Conduct a review of LIC’s strategy; and
-Continue to build a highly motivated
workforce where talent and leadership skills
are developed.
The remuneration paid to LIC’s CE for the year
ending 31 May 2025 is set out below:
The CE’s current remuneration package consists
of $563,000 TPV and short-term incentive
target of achieving both budget goals and other
standard objectives (20% of TPV) as well as stretch
objectives in relation to strategy (20% of TPV)
and does not include any long-term incentives or
share options.
Base Salary (TPV)
563
2023/24 year short-term incentive
payment received
90
Total
653
38 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Employee Remuneration
LIC has a transparent Remuneration Policy for all
employees, which is approved by the People and
Culture Committee. This is an internal policy and is
available to all employees on LIC's intranet.
LIC aims to have a remuneration framework
and policies to attract and retain talented and
motivated people. The Company wants to:
1. Be recognised as a great place to work;
2. Recognise and reward successes, while
encouraging teamwork and a high
performance culture;
3. Be fair and consistent; and
4. 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 and are paid in
the following period. During the period 1 June 2024
to 31 May 2025 the following numbers of employees
(not being Directors) received total remuneration,
including benefits and short-term incentives
relating to the 2023/24 year, of at least $100,000:
Remuneration Range (Gross)Current EmployeesExited EmployeesTotal
100,000 – 109,99980282
110,000 – 119,99961162
120,000 – 129,99948351
130,000 – 139,99929130
140,000 – 149,99939140
150,000 – 159,99926127
160,000 – 169,99916117
170,000 – 179,99913417
180,000 – 189,999718
190,000 – 199,9996-6
200,000 – 209,9994-4
210,000 – 219,9996-6
220,000 – 229,9992-2
230,000 – 239,9995-5
240,000 – 249,9994-4
250,000 – 259,9992-2
260,000 - 269,9991-1
270,000 - 279,9994-4
280,000 - 289,9991-1
290,000 - 299,999112
310,000 - 319,9991-1
390,000 – 399,9991-1
400,000 – 409,9991-1
430,000 – 439,9991-1
480,000 - 489,9991-1
500,000 – 509,9991-1
510,000 – 519,9991-1
650,000 – 659,9991-1
36316379
Livestock Improvement Corporation Consolidated Annual Report 2024/25 39

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.
Managing Risk
LIC has a risk management framework in place
to support the identification, quantification and
management of risk. LIC’s risk management
framework fosters improved ownership of risk
identification and management across all levels of
the business and an online risk tool supports this
occurring in real time. Key risk indicators provide
management with early warning of any risks
requiring increased focus. LIC’s risk ratings against
appetite are reported to the Senior Leadership
Team and the Audit, Finance & Risk Committee
on a regular basis, with each risk category and
its associated risk causes and controls reviewed
periodically by the Senior Leadership Team and the
Audit, Finance & Risk Committee.
Biosecurity & Animal Health
A biosecurity or animal health event
impacts LIC’s livestock or its ability
to provide products or services to its
customers.
Information Security
The availability, integrity or confidentiality of
information managed by LIC is compromised
due to a malicious or unintentional
information security incident.
Brand Damage
Continued short-term reputational
damage results in damage to LIC’s brand.
Financial Risk
Failure to manage LIC’s debts and financial
leverage or to identify fraud, internal errors
or money owed results in LIC being unable
to cover operational costs and/or pay back
its debts.
Compliance
Breaches of laws, regulations, licences,
standards, NZX continuous disclosure
requirements or Overseas Market Access
Requirements result in restrictions,
penalties, or loss.
People & Capability
Availability, capability and engagement of
our people and key vendors to effectively
execute LIC's strategic plan.
Disruption to Production or Service
Any disruption caused by processes, people,
equipment, systems, software availability or
external events which affects LIC’s ability to
deliver quality semen or other products and
services to its customers.
Strategic Risk
An inability to deliver LIC’s agreed strategy
due to disruption, planning, risk, resourcing
and other barriers not identified or managed.
Market Disruption
The inability to commercialise innovations
or respond quickly to market disruption or
emerging technologies causes reduced
use by Shareholders of existing products or
services with a resultant reduction in revenue.
Health & Safety
The potential for injury or loss of life for
employees, contractors or visitors engaged
in LIC business activities or on LIC sites or
prosecution of the organisation.
LIC’s risk categories are:
40 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Of particular interest to Shareholders and
stakeholders will be the following updates on LIC’s
key risk categories:
Health and safety
The health and safety of people, our staff,
customers, contractors and anyone we come
into contact with, is of utmost importance to LIC
and remains our highest priority, regardless of
the country they are based in, or which site they
are based at.
Regular reporting to the Senior Leadership Team
and the Board provides assurance that LIC’s health
and safety system is operating effectively. Directors
and senior leaders are required to visit sites to
verify for themselves that critical risk controls are in
place and operating as expected.
LIC has identified ten critical health and safety
risks: high-risk hazards we believe have a high
likelihood of causing death or life-changing injuries
if uncontrolled. These are:
• Adverse customer behaviour
• Bull drafting
• Bull handling in yards/barns
• Driving on national roads
• Farm vehicles (tractors)
• Lone work (working alone/remotely)
• Other animal handling in yards/barns (eg
cows, heifers, calves)
• Psychosocial factors – work design,
interpersonal relationships, work environment
• Quad bikes and side-by-sides
• Working at heights
These hazards are well-controlled and risk reviews
are conducted regularly to ensure the controls
remain in place and are working.
All Business units have elected health and safety
representatives and there is a quarterly formal
governance forum, chaired by LIC’s CE. Each
business unit is also required to develop a bespoke
health and safety plan to continually improve
health and safety management in their area.
Progress against these plans is reviewed at the
Health and Safety Governance Forum meeting.
LIC uses the Lost Time Injury Frequency Rate (LTIFR)
as its main safety metric. The LTIFR is not LIC’s sole
safety measure – it complements a range of other
leading and lagging safety measures, which are
regularly reported to the Senior Leadership Team
and the Board.
LIC reported two notifiable incidents and one
notifiable illness to Worksafe NZ. These incidents
were internally comprehensively investigated and
corrective actions implemented. Worksafe NZ
chose not to investigate the incidents further.
Fewer critical risk related events (including near-
miss and incident reports) were reported this year
when compared to last year. LIC’s lost time injuries
have increased when compared to last year.
Animal handling and driving remain the biggest
source of critical risk-related event reports.
Significant areas of focus during 2024/25 include:
• Improving the management and control of
risks associated with customer violence,
threatening or inappropriate behaviour
towards our staff.
• Improving worker safety on customer facilities
by ceasing the delivery of artificial breeding
services from a herringbone shed platform,
following the earlier cessation of services
from trolleys.
• Improving lone worker safety when working in
remote locations.
• A review of LIC’s health and exposure
monitoring procedures to ensure that hazards
that could adversely impact worker health is
identified, managed and the workers’ health is
monitored, where required.
LIC’s continued focus on health and safety has
seen LIC retain its secondary level status following
the annual ACC audit.
2024/252023/24
LTIFR (200,000 h)4.332.35
Notifiable Events/
Illnesses
32
Livestock Improvement Corporation Consolidated Annual Report 2024/25 41

Disruption to production or service
The Company’s ability to provide sufficient quality
bull semen during a season relies on several
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. A crisis
management framework is in place, supported
by defined key roles and alternates and business
continuance plans, and these are reviewed
and tested regularly including an annual crisis
simulation exercise.
Information security
Reliance on technology, IT systems and services
increases the impact of system outages and
data loss should a significant adverse technology
event occur. LIC’s toolsets and visibility across
the technology environment provide the ability to
detect potential threats. Business continuity and
disaster recovery plans are in place (including for
cyber attacks), reviewed regularly and backups
are performed regularly to support LIC’s recovery
should it be needed. LIC regularly undertakes
phishing simulations and training to assess staff
preparedness and vigilance.
Financial Risk
LIC has stringent processes in place to ensure
budgets, forecasts and financial reporting are
accurate and timely. LIC maintains internal controls
to manage delegated authority and remove the
opportunity for fraudulent activity through the
segregation of duties.
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
Shareholders: 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.
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.
Biosecurity and animal health
Quarantine procedures are in place in all LIC
controlled locations with quarantine bulls
maintained separately to production bulls.
Controls are in place on LIC’s bull farms, including
segregation of bulls and double fencing, for safety
and to reduce the risk of unwanted organisms,
such as Mycoplasma bovis (M.bovis). Bulls are
regularly inspected and undergo health testing.
Business continuity plans are in place and tested.
LIC has veterinary and epidemiological expertise
within the Company.
42 Livestock Improvement Corporation Consolidated Annual Report 2024/25

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 maintains a watching brief on the innovation
and technology landscape and follows 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 strategy, as would the
lack of availability, capability and engagement of
our people and key vendors. LIC regularly reviews
progress against strategic objectives and has
developed key metrics to ensure delivery of the
commitments made to Shareholders.
The Board and Management continue to explore
growth opportunities 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. Off-shore business activity
also provides a buffer for NZ-specific impacts.
Climate
Climate risk is a sub-category risk in LIC’s risk
management tool as it impacts more than one of
LIC's key risk areas. LIC has identified transition
and physical risks related to climate change.
LIC measures and publicly reports our greenhouse
gas emissions, has set emissions reduction targets,
and works with our staff and suppliers to build
sustainability into our purchasing decisions. LIC
continues 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 2024/25 43

NZX Code Principle 7, Auditors: The Board should ensure the quality and independence
of the external audit process.
External Audit
LIC has an External Auditor Independence
Policy that requires the external auditor to be
independent and to be seen as independent.
This policy can be found on the LIC website. The
Board is satisfied that there is no relationship
between the auditor and LIC or any related
person at this time that 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, a
requirement that we are fully compliant with. LIC’s
external auditor attends its Annual Meeting each
year to answer questions from Shareholders in
relation to the audit.
Internal Audit
LIC does not have a separate internal audit
function. The Risk & Assurance Team 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 the Audit, Finance & Risk
Committee on internal 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 Board recognises that, as its Shareholders
are the Company’s owners, customers and
stakeholders, it 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 regarding increased transparency
about LIC’s activities.
The LIC website is the key place for LIC's financial
and operational information, including the
Company's presentations, reports, announcements
and media releases. The website is updated
immediately when any announcement is made
to the NZX. Important corporate governance
documents such as the charters and policies
referred to in this section of the Annual Report can
also be found on the LIC website and the Annual
Report is available in both electronic and hard
copy formats.
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. The Company
communicates with Shareholders through its
Annual Report, half-year financial statements
and at Shareholder meetings, as well as through a
range of media channels on topics which it believes
will be of interest to Shareholders.
LIC encourages all Shareholders to receive
communications electronically but can provide
hard copies of information as and when required.
All Shareholders have the right to vote on
major decisions which may change the nature
of the Company, and the Board encourages
all Shareholders to attend and participate in
Shareholder meetings.
This year the LIC Annual Meeting will be held both
virtually and in person on Wednesday 17 September
at 6pm at LIC Newstead, Hamilton and online (lic.
co.nz/annualmeeting). LIC welcomes Shareholders'
attendance either on-line or in person. A Notice of
Meeting was sent to Shareholders in July 2025.
44 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Statutory Requirements
Entries in the interests register
Directors
All Elected Directors 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
Benjamin John Dickie:
Director of:
• Taranaki Veterinary Centre Limited (Ceased 28
September 2024)
Timothy Dunlop Gibson:
Director of:
• The Equanut Company Limited
• Port Otago Limited and subsidiaries:
• Chalmers Properties Limited
• Fiordland Pilot Services Limited
• Port Chalmers Container Terminal Limited
• Te Rapa Gateway Limited
• Silver Fern Farms Co-Operative Limited
• Silver Fern Farms Limited and subsidiaries:
• Silver Fern Farms Joint Ventures Limited
• Silver Fern Farms Holdings Limited
• The Skills Group Trust (Chair)
• Tūhana Business & Human Rights Limited
• Tūhana Consulting Limited
Sophie Haslem:
Director of:
• Centreport Limited and subsidiaries:
• Centreport Captive Insurance Limited
• Centreport Properties Limited
• Kordia Group Limited and subsidiaries:
• Kordia Limited
• Kordia New Zealand Limited
• nib NZ Limited
• nib NZ Insurance Limited
• nib NZ Holdings Limited
• Payments NZ Limited
• Rangatira Limited
Shareholder of:
• CH4 Global Inc
Blair Albert O’Keeffe
Director of:
• Unison Networks Limited
• Central Air Ambulance Rescue Limited
• Port of Napier Limited (Chair)
• Director of Clarus Group companies, including:
• Rockgas Limited
• First Gas Limited
• First Gas Midco Limited
• First Gas Topco Limited
• First Renewables Power Limited
• First Renewables Power Midco Limited
• First Renewables Power Topco Limited
• Firstlight Network Limited
• First Sunrise Holdco Limited
• First Sunrise Bidco Limited
• First Sunrise Midco Limited
• First Sunrise Topco Limited
• Gas Services NZ Limited, including:
• First Renewables Limited
• Gas Services NZ Midco Limited
Director and Shareholder of:
• Napier Port Holdings Limited (Chair)
Chair of:
• Hawke’s Bay Rescue Helicopter Trust
• Hawke’s Bay Regional Recovery Agency
Hamish John Rumbold
Director of:
• House of Travel Holdings Limited
• Perigee Holdco Limited (Chair) (as of 21 July 2025)
Livestock Improvement Corporation Consolidated Annual Report 2024/25 45

Antony Paul Coltman
Director of
• ATS Fuel Limited (ceased as of 28 February 2025)
• Pro-Active NZ Limited (ceased as of 28 February 2025)
• Ruralco NZ Limited (ceased as of 28 February 2025)
Director and Shareholder of:
• Band 4 Water Limited
• Canlac Holdings 2014 Limited
• Central Plains Water Limited
Shareholder of:
• Global Farming Trust
Advisory roles/member of:
• Rimanui Dairy Advisory Committee
• Fortuna Production Advisory Committee
• Puduhue Advisor (Chile)
Corrigan George Sowman:
Member of:
• Fonterra Sustainability Advisory Panel (Ceased
September 2024)
• Craigmore Sustainables Performance Committee
(Uruwhenua Farms Limited Consultancy)
Michael John O’Connor
Director of:
• Harapepe Dairies Limited
• Spectrum Group Services Limited
Director and Shareholder of:
• Spectrum Dairies GP Limited
• Finbar Farm Limited
Duncan James Bruce Coull
Director and Shareholder of:
• RBS (2015) Limited
• RBS Invest Limited
• Ballance Agri-Nutrients Limited
• Ngutunui Dairies Limited
Director of:
• New Zealand Phosphate Company Limited
Victoria Jean Trayner
Director of:
• Waimakariri Irrigation Limited
• North Canterbury Land Holding Limited
• INZ Accreditation Limited
• Irrigation New Zealand Incorporated Society
Director and Shareholder of:
• Platinum Farming Limited
Senior Staff
In addition to the directorships of LIC subsidiaries
as detailed below, senior members of staff have
recorded the following interests:
David Luk Chin (Chief Executive)
Director of:
• Safer Farms
Paul Ferguson Dunbar (GM International)
Director of:
• Eurogene AI Services (Ireland) Limited (in which LIC has
a shareholding)

Brent Denis Mealings (Chief Financial Officer)
Director of:
• Figured Limited (in which LIC has a shareholding)
Dhaya Paran Sivakumar (Chief Information Officer)
Director of:
• Kordia Group Limited
46 Livestock Improvement Corporation Consolidated Annual Report 2024/25

The Directors of the Company’s subsidiaries as at
31 May 2025 are set out below:
• LIC Agritechnology Company Limited: Ben
Dickie, Tim Gibson, Sophie Haslem, Tony
Coltman, Corrigan Sowman, Duncan Coull,
Victoria Trayner and Mike O’Connor.
• Livestock Improvement (New Zealand)
Corporation Limited: David Chin and
Brent Mealings
• LIC Ventures No. 1 Limited: David Chin and
Brent Mealings
• LIC Ventures No.3 Limited: David Chin and
Brent Mealings
• Agrigate GP Limited: Brent Mealings and
Dhaya Sivakumar
• Livestock Improvement Pty Limited:
Michael Rose
• Beacon Automation Pty Limited: Brent
Mealings and Michael Rose
• Livestock Improvement Corporation (UK)
Limited: Brent Mealings and James Simpson
• LIC Ireland Limited:
Brent Mealings and James Simpson
Emma Blott resigned from the following subsidiaries
of the Company during 2024/25:
• Agrigate GP Limited
• Beacon Automation Pty Limited
• Livestock Improvement Pty Limited
• Livestock Improvement (UK) Limited
• LIC Ireland Limited
Livestock Improvement Corporation Consolidated Annual Report 2024/25 47

Entries in the interest register
a) Participation in the Company’s Contract
Mating Scheme could lead to the potential
sale of bull calves to LIC in the 2026/27
season. Directors participating in the
scheme include:
b) Share Dealings by Directors
As at 31 May 2025 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 (including
Nil Paid Shares):
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.
c) Loans to Directors of the Parent and
Subsidiaries
There have been no loans during the year.
d) 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.
e) 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.
DirectorPotential Calf
Sales
Potential Value
Corrigan Sowman3$65,550
Tony Coltman2$43,700
31 May 2025
DirectorOrdinary Shares
Ben Dickie*61,190
Mike O'Connor273,144
Corrigan Sowman80,488
Tony Coltman123,820
Duncan Coull**8,100
Victoria Trayner5,600
*Includes shares purchased through participation in the Voluntary
Investment Scheme and shares compulsorily purchased to meet
LIC’s Shareholding Requirements
**Includes shares compulsorily purchased to meet LIC’s
Shareholding Requirements
48 Livestock Improvement Corporation Consolidated Annual Report 2024/25

RESOLUTION OF DIRECTORS
DATED 17 JULY 2025 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 2025.
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.
Size of ShareholdingNumber of Shareholders*Shares Held% of Total
1 - 999552359,6770.24%
1,000 - 1,9997971,247,4640.84%
2,000 - 2,9997971,940,3111.31%
3,000 - 3,9996172,043,2721.38%
4,000 - 4,9998223,611,5922.45%
5,000 - 5,9994092,267,9531.54%
6,000 - 6,9993932,538,1281.72%
7,000 - 7,9993502,594,0221.76%
8,000 - 8,9994303,629,1392.46%
9,000 - 9,9992682,556,5191.73%
10,000 - 14,9991,03712,682,4408.59%
15,000 - 19,99964611,180,8497.57%
20,000 - 24,9993958,810,0845.97%
25,000 - 29,9992777,540,0425.11%
30,000 - 34,9991956,294,6214.26%
35,000 - 39,9991314,862,3393.29%
40,000 - 49,9991948,666,9175.87%
50,000 - 99,99928018,488,57812.52%
100,000 - 199,999618,364,0135.66%
200,000 - 299,999153,627,5712.46%
300,000 - 499,99972,636,8741.79%
500,000 - 999,99964,531,3943.07%
1,000,000 +1227,208,62118.42%
*The number of Shareholders above is based on the number of separate/individual farms. The table below setting out the twenty largest shareholdings
amalgamates Shareholders with multiple farms.
Spread of Shareholders as at 30 June 2025
(including treasury stock and nil paid shares)
Livestock Improvement Corporation Consolidated Annual Report 2024/25 49

Twenty Largest Shareholdings as at 30 June 2025
(including treasury stock and nil paid shares)
ShareholderShares held% of total shares
Trinity Lands Limited7,315,625 4.95%
LIC Treasury Stock5,337,584 3.61%
Kotare Futures Limited3,025,000 2.05%
Sim Brothers Limited2,937,218 1.99%
David Lockhart Easton & Anthea Clare Easton & RFH Trustees2,233,014 1.51%
Melrose Dairy Limited1,600,087 1.08%
Anglesea Agriculture Limited1,517,203 1.03%
Cayuga Limited1,220,443 0.83%
Robert Laurentius Johannes Bruin & Annemarie Bruin1,154,651 0.78%
Kotare Pastoral Limited1,063,942 0.72%
CIP Nominees No 1 Limited (Employee Share Scheme)1,038,072 0.70%
Mangatarata Farms Limited850,000 0.58%
DB Douglas Limited816,956 0.55%
Mark Braden Neil Dewdney & Anne Heather Dewdney & Victoria Ann Dewdney785,471 0.53%
Christopher John Stark & Graham Carr718,372 0.49%
Pilsen 2021 Limited616,944 0.42%
Malrose Properties Limited575,2410.39%
J D & R D Wallace General Partnership Limited566,288 0.38%
Bishop Farms Oxford Limited 474,572 0.32%
Kaimanawa Farms Limited443,502 0.30%
Noremac Developments Limited437,7720.30%
Landcorp Farming Limited419,540 0.28%
Credit Rating Status
LIC currently does not have a credit rating.
Substantial product holders
Based on substantial product holder notices
received by the Company from shareholders, as at
31 May 2025, the following parties were substantial
product holders of the Company:
LIC understands that David Gregory Turner’s
substantial product holder disclosure is in relation
to financial products held by Trinity Lands Limited,
also disclosed here. David Gregory Turner’s
substantial product holding notice states his
interest arises because he has the power to
exercise, or to control the exercise of, a right to vote
attached to the financial products held by Trinity
Lands 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 Limited.
As noted above, these substantial product holder
notices were disclosed on 17 September 2024. The
Company has not received any other substantial
product holder notices since that date.
Substantial
product holders
Number of
shares
Percentage
of shares
Date of
notice
Trinity Lands
Limited
7,313,0735.168%17/09/2024
David Gregory
Turner
7,313,0735.168%17/09/2024
Key:
Number of shares = Number of quoted fully paid ordinary shares in substantial
holding at date of notice
Percentage of shares = Percentage of quoted fully paid ordinary shares in
substantial holding at date of notice
50 Livestock Improvement Corporation Consolidated Annual Report 2024/25

Based on the Company’s records, as at 31 May
2025, no shareholder holds more than 5% of the
total shares in the Company (comprising the only
class of quoted voting products of the Company).
Where a person holds a relevant interest in shares
other than by virtue of being the legal holder of
shares, the Company may not be aware of that
person’s relevant interest and would be reliant
on their lodgement of a substantial product
holder notice.
LIC notes that the disclosures made at the date of
the original notice are also available on nzx.com
under LIC’s announcements.
Donations
The Company made donations totalling $11,126
during the year ended 31 May 2025.
No political contributions are made by
the Company.
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 with the
following effect:
The acquiring of Ordinary Shares is restricted
to New Zealand dairy farmers who derive
an income from the farming of dairy cows in
New Zealand, whose milk is supplied to a New
Zealand milk processor and who purchase
qualifying products and services from
Livestock Improvement Corporation Limited.
WAIVERS AND APPROVALS GRANTED BY NZX REGULATION LIMITED
On 29 August 2023, NZX Regulation Limited (NZ RegCo) released an Amended and restated waivers,
approvals and Rulings decision in relation to the Company in respect of the following NZX Listing Rules:
1. 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. 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, resulting from the co-
operative nature of LIC.
3. A waiver in respect of Rules 2.3.1 and 2.3.2,
to allow for the following aspects of the
Company’s corporate governance structure:
a) Director nominations for Elected Directors
by Ordinary Shareholders to be restricted
by region, as set out in clause 22.4(b) of the
Constitution and qualification, as set out in
Schedule 3 of the Constitution;
b) the nomination procedures for Appointed
and Elected Directors (including casually
appointed directors) as set out in Schedule
3 of the Constitution;
4. A waiver in respect of 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.
Livestock Improvement Corporation Consolidated Annual Report 2024/25 51

5. 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.
6. A waiver in respect of 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.
7. A waiver in respect of Rule 6.6.1 to allow the
lien provision in clause 18 in the Constitution to
be read in place of this Rule.
8. An approval under 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(b) 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(c) 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(d) 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;
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.
52 Livestock Improvement Corporation Consolidated Annual Report 2024/25

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 (DRP) 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 DRP. Craigs Investment
Partners Limited (Craigs) has been appointed as
the Broker to purchase Ordinary Shares on the
NZX market for the purposes of the DRP, 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 Share-
holders in respect of this financial assistance. The
exact amount of the net costs depends upon the
extent to which Shareholders participate in the
DRP. However, the total amount of net costs in the
next twelve months is estimated to be in the region
of $15,000.
In relation to the financial assistance provided for
the DRP, the LIC Board resolved on 17 July 2025 that
LIC should provide the financial assistance referred
to above (DRP Financial Assistance), for the period
of 12 months commencing 10 working days after
sending its Notice of Meeting to Shareholders
on 31 July 2025, and that the giving of the DRP
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 DRP 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 DRP 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 DRP Financial Assistance is available to all
eligible Shareholders, giving equal opportunity
to participate in the benefits of the DRP;
c) The additional Shares will be acquired by
Craigs through on-market transactions, or the
issue of Shares from treasury stock.
d) Shareholders who do not participate will not
be diluted or otherwise disadvantaged as no
new Shares are being issued under the DRP;
e) 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;
ii) the average price paid by Craigs on behalf
of Participants for on-market acquisitions;
f) The DRP 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;
g) The DRP 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
h) The amount of DRP Financial Assistance is
minimal in comparison to the benefits arising
out of the DRP for Shareholders and LIC.
B) Voluntary Investment Scheme:
LIC proposes to provide financial assistance to
those Directors and Senior Managers who are
eligible and elect to participate in the Voluntary
Investment Scheme (VIS) by agreeing to pay to the
Guardian Trust, as the Approved Holding Entity, the
services and administration fees and brokerage
and commission costs incurred for the purposes of
the VIS. Craigs has been appointed as the Broker
to purchase Ordinary Shares on the NZX market for
the purposes of the VIS, 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 Share-
holders in respect of this financial assistance. The
exact costs depends upon the extent to which
eligible Directors and Senior Managers participate
in the VIS. However, the total costs in the next
twelve months is estimated to be in the region
of $7,000.
Livestock Improvement Corporation Consolidated Annual Report 2024/25 53

In relation to the financial assistance provided
for the VIS, the LIC Board resolved on 17 July 2025
that LIC should provide the financial assistance
referred to above (“VIS Assistance”), for the period
of 12 months commencing 10 working days after
sending its Notice of Meeting to Shareholders
on 31 July 2025, 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 Directors and Senior Managers a
means of acquiring additional shares in LIC
through a fixed trading plan, given the risk
they will often be information insiders, and
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. Participating Directors and Senior
Managers will pay the average NZX
market price paid by Craigs on market for
those Shares;
c) Participating Directors and Senior Managers
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 Directors and
Senior Managers and non- participating
Shareholders wishing to trade in LIC shares;
e) The VIS enables LIC to offer eligible Directors
and Senior Managers 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 for participating Directors
and Senior Managers, non-participating
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 (ESS) which from 1
April 2011 has been managed by Craigs, with CIP
Nominees No. 1 Limited acting as custodian. LIC
proposes to pay the Manager's and Custodian's
fees and expenses (including brokerage). The
amount of the fees will depend on how many
employees participate in the ESS and the level of
their contributions. However, it is estimated that
the total fees in the next twelve months will be in
the region of $22,000.
In relation to the financial assistance provided
for the ESS, the Board of LIC resolved on 17
July 2025 that LIC should provide the financial
assistance referred to above (ESS Assistance)
for the period of 12 months commencing 10
working days after the date of sending its Notice
of Meeting to Shareholders on 31 July 2025, and
that the giving of the ESS 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 ESS
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 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 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 Shares are being
issued under the Employee Scheme;
d) The additional shares will be purchased
through Craigs at the market price;
e) The Employee Scheme will enhance the
liquidity in the market for the Shares, providing
a more liquid market for Shareholders wishing
to trade in LIC Shares; and
f) The amount of financial assistance is minimal
in comparison to the benefits arising out of the
Employee Scheme for Shareholders and LIC.
54 Livestock Improvement Corporation Consolidated Annual Report 2024/25

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

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There's always room for improvement
Livestock Improvement Corporation Limited (LIC or the Co-operative)
Climate Statements
For the year ended 31 May 2025

About these Climate Statements
As a large, listed issuer on the New Zealand Stock Exchange (NZX), LIC is a
Climate Reporting Entity (CRE). The scope of the LIC reporting entity includes
all subsidiaries and aligns to the scope used for LIC’s consolidated financial
statements included in LIC’s Annual Report 2025, available here www.lic.co.nz/
shareholders/financial-results-announcements. This is LIC’s second set of Climate
Statements prepared under the Aotearoa New Zealand Climate Standards
published by the External Reporting Board (XRB). The Climate Statements are for
the year ended 31 May 2025 and have been reviewed by LIC’s Board of Directors.
This is still early in LIC’s climate reporting journey as we continue to integrate
climate change considerations into governance, strategy and risk management
processes. The disclosures comprising these Climate Statements comply in
all respects with Aotearoa New Zealand Climate Standard 1, Climate-related
Disclosures (NZ CS 1), in conjunction with adoption exemptions (and applicable
conditions for relying on those adoption exemptions) available under Aotearoa
New Zealand Climate Standard 2, Adoption of Aotearoa New Zealand Climate
Standards (NZ CS 2), and are presented in accordance with Aotearoa New
Zealand Climate Standard 3 (NZ CS 3), General Requirements for Climate-related
Disclosures (together the NZ CS). For example, information is disclosed in these
Climate Statements where it is considered to be material, as defined in NZ CS 3,
namely that “information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that primary users make on the
basis of an entity’s climate-related disclosures”. Primary users are defined as
LIC’s current and future farmer shareholders, lenders and other creditors. Given
the nature of climate-related information, we recognise that a single uniform
quantitative threshold for determining materiality is not appropriate and therefore
have applied judgment using qualitative and quantitative factors to identify,
assess, organise and review whether climate-related information is material to our
primary users.
NZ CS 2 recognises that it may take time to develop capability to produce high-
quality climate-related disclosures. LIC has adopted certain exemptions available
under NZ CS 2 for these second Climate Statements:
• Adoption provision 2, paragraph 12: Anticipated financial impacts of climate-
related risks and opportunities reasonably expected by the entity, NZ CS 1
paragraphs 15(b), 15(c) and 15(d);
• Adoption provision 4, paragraph 17: Scope 3 greenhouse gas (GHG) emissions, NZ
CS 1 paragraph 22(a)(iii);
• Adoption provision 5, paragraph 18: Comparatives for Scope 3 GHG emissions, NZ
CS 3 paragraph 40;
• Adoption provision 6, paragraph 21: Comparatives for metrics in an entity’s
second reporting period, NZ CS 3 paragraph 40;
• Adoption provision 7, paragraph 22: Analysis of trends in an entity’s second
reporting period, NZ CS 3 paragraph 42; and
• Adoption provision 8, paragraph 24: Scope 3 GHG emissions assurance, NZ CS 1
paragraphs 25, 26(a)(iii) and 26(c).
Approved on behalf of the Board on 20 August 2025
DirectorDirector
LIC Climate Statements

Important notice
These Climate Statements contain forward-looking statements, including climate-
related metrics, climate scenarios, climate-related risks and opportunities,
estimated climate projections, targets, assumptions, forecasts, and statements of
LIC’s future intentions.
The information within these Climate Statements reflects LIC’s best estimate
and current understanding of future climate-related events, risks, opportunities,
impacts and strategies as at 20 August 2025. LIC has sought to provide accurate
disclosures as at publication. Given the novel and developing nature of the
information contained in these Climate Statements, as well as the inherent
uncertainty of the subject matter, “accurate” does not entail certainty of outcome.
It means that LIC has undertaken appropriate measures and implemented
adequate controls such that the information presented is believed to be free from
material error or misstatement and is otherwise fairly presented.
LIC cautions that forward-looking statements are not facts but rather estimates
and judgements regarding future results that are based on current estimates,
and on current views of LIC which may be subject to change, and are necessarily
subject to risks, uncertainties and/or assumptions. Estimates may prove to be
incorrect due to unforeseen risks and general uncertainties of the business and
environment we operate in, as well as due to the inherent uncertainty in the future
impacts of climate change on our business and the dairy sector. LIC has used its
best efforts to provide a reasonable basis for forward-looking statements but is
constrained by the novel and developing nature of this subject matter. Climate-
related forward-looking statements may therefore be less reliable than other
statements LIC may make in its external reporting.
Descriptions of the qualitative and quantitative current and anticipated impacts
and current financial impacts of climate change draw on and/or represent
estimated figures only and have been developed using methodologies currently
considered by LIC to be the most suitable. They are necessarily subject to risks,
limitations, uncertainties and/or assumptions and change. In particular, the risks
and opportunities described in this document, and the target emissions reductions,
may not eventuate or may be more or less significant than anticipated. There are
many factors that could cause LIC’s actual results, performance, or achievement of
climate-related metrics (including targets) to differ materially from that described,
including economic and technological viability, as well as climate, government, and
market factors outside of LIC’s control.
Other than as provided in the limited assurance report that has been provided
with these Climate Statements, these Climate Statements, including any financial
information included, have not been subject to an external audit.
Nothing in these Climate Statements should be interpreted as an offer of interests
in financial products or earnings, capital growth, or any other legal, financial, tax,
or other advice or guidance.
Unless otherwise expressly stated, where external documents are referred to in
these Climate Statements, these do not form part of the disclosures but are simply
general and/or contextual information to direct the reader to further information,
should they wish to read more.
To the greatest extent possible under New Zealand law, LIC expressly disclaims all
liability for any direct, indirect or consequential loss or damage arising directly or
indirectly out of the use of or inability to use, or the information contained within,
these Climate Statements.
For the year ended 31 May 2025

LIC Climate Statements
4

Contents
Introduction 6
Governance 7
Strategy 12
Business model and strategy 12
Climate-related risks and opportunities and decision making 15
Current climate-related impacts 16
Scenario analysis 18
Climate-related risks and opportunities 24
Transition planning 28
Risk Management 30
Metrics and Targets 32
Independent Assurance 40
Appendices 41
One - Scenario analysis archetypes 41
Two - GHG emissions methods, assumptions and estimation uncertainty 43
Three - Independent assurance report
relating to 2024/25 Scope 1 & 2 GHG emissions 46
For the year ended 31 May 2025
5

Introduction
LIC is a New Zealand dairy farmer-owned co-
operative and a leader in pasture-based dairy
genetics and herd management. We exist to deliver
superior genetics and technological innovation to
help our shareholders sustainably farm profitable
animals and this is even more relevant to farmers
today given the growing climate challenges we’re
facing. Who we are and what we do has never been
more important for Kiwi farmers, our sector and
New Zealand as our future depends on protecting
the natural environment. The dairy sector needs to
continue to evolve, for climate change and because of
it, to retain ongoing market access.
At LIC, we are committed to reducing the emissions of
our business. LIC previously set emissions reduction
targets based on methodologies using SBTi (Science
Based Target initiatives) tools and guided by the
biogenic methane emissions reduction target in the
Climate Change Response Act 2002, with the intention
of reducing our greenhouse gas (GHG) emissions and
contributing proportionately to the efforts to limit the
global average temperature increase to 1.5°C above
pre-industrial levels. While we have been working
hard on reducing emissions, the organisation has
now reviewed and revised our emissions reduction
targets to ensure that they are achievable given the
challenges the sector is currently facing with novel
technology that is being developed to mitigate
emissions not yet being feasible or available to
achieve targeted emissions reduction. Please see the
Metrics and Targets section for the updated targets.
The physical effects of climate change are
already intensifying and becoming more common,
demonstrating the need for our business to be flexible
and resilient in providing critical on-farm services to
our farmer shareholders. Climate-related transition
risks also present a potential challenge, including the
risk of regulation and legislation change, impacts of
innovation and maintaining dairy sector reputation
and market access. LIC’s business is largely driven
by the size of the national dairy herd, which has been
reducing over time and may continue to reduce in
response to climate-related transition risk pressures.
If the dairy sector is milking fewer cows, those cows
need to be better ones. This creates a climate-related
opportunity for LIC to more widely help farmers
identify and breed from their more emissions-efficient
and profitable cows. Using our genomic breeding
worth data relating to the national dairy herd, LIC
has been able to model the genetic potential enteric
methane emissions relative to milk solids
production, indicating an improved trend over more
than ten years.
LIC recognises the importance of identifying climate-
related scenarios in a consistent and comparable
way within the dairy sector. To this end, Fonterra,
LIC and Silver Fern Farms collaborated during the
reporting period to develop core scenario elements
that were common across our businesses, such as
driving forces, temperature outcomes, emissions
pathways, and high-level narratives. This joint output
was then iterated by LIC to make it more specific to
our strategy and business model. These scenarios are
not predictions of the future, rather they challenge
us to consider our strategy and business model using
plausible political, economic, social, technological,
and environmental drivers of change. These insights
can help us build resilience, prepare for potential risks
and uncertainties, and identify opportunities to lead
the way in innovation and herd improvement.
LIC Climate Statements
6

Governance
Figure 1
Governance Body
LIC Board of Directors (the Board)
Audit Finance & Risk
Committee
People & Culture
Committee
Climate governance and reporting
structure at LIC
LIC Board of Directors
The primary responsibility of the Board in relation to risk management is to ensure
that it develops a clear understanding of the fundamental risks inherent under LIC’s
business model and strategy, overseeing and holding management accountable and
setting appropriate risk appetite levels for LIC. As part of their governance duties,
our Board has visibility and oversight of sustainability and climate-related risks
and opportunities. The Board approves and is ultimately responsible for our overall
climate strategy, material initiatives, frameworks, targets, metrics, and policies.
The Board monitors progress against and oversees achievement of climate-related
metrics and targets. Governance responsibility in relation to climate has been kept at
the full Board level, although the Audit, Finance and Risk Committee (AFRC) oversees
elements of climate-related risk, and the People & Culture Committee has the
responsibility for the remuneration terms of the Chief Executive and oversees People
policies (for more information in relation to how metrics and targets are included
in remuneration policies, refer to the Metrics and Targets section of these Climate
Statements).
LIC’s commitment to managing the environmental impact of our products,
services, and work activities, enhancing our environmental performance and
achieving continual improvement, including in relation to our farmer shareholders,
is documented in an Environmental Policy, which is approved by the Board every
two years.
More information on our Board and Board committees can be found in our Annual
Report 2025
1
.
1
LIC’s Annual Reports are available at www.lic.co.nz/shareholders/financial-results-announcements
Management
LIC Senior Leadership Team (SLT) members with specific climate responsibilities
(refer to Table 2 for further detail). The Chief Executive reports to the Board, and
the other SLT members report to the Chief Executive.
Chief
Executive
Officer
Chief People
Officer (CPO)
Chief
Scientist
Chief Financial
Officer (CFO)
Other management roles with specific climate-related responsibility:
General
Counsel
(reports to
CFO)
Health, Safety
& Environment
Manager (reports
to CPO)
Senior
Environmental
Advisor (reports
to Health, Safety
& Environment
Manager)
Group Financial
Controller
(reports to CFO)
Representatives
from each LIC
business unit
(reporting lines
vary)
Environment & Sustainability Management Committee (ESMC),
also includes CPO & Chief Scientist (ESMC reports to the CPO)
For the year ended 31 May 2025
7

The Board’s oversight of climate-related risks and opportunities (Table 1):
Processes and frequency by which the Board
is informed about climate-related risks and
opportunities
During the reporting period, the Board met ten times, with three additional strategy days. Climate-related risks,
opportunities and/or reporting requirements were discussed at all of those meetings. The AFRC met eight times during
the reporting period. Climate-related risks and/or reporting requirements were discussed at seven of those meetings.
The Board has previously endorsed the approach of climate risk being a sub-category risk in LIC’s risk management tool
as it impacts more than one of LIC’s key risk areas. Updates on LIC’s key risk categories (including, where identified,
climate-related risks) are presented to at least three meetings per year of the Audit, Finance and Risk Committee. The
status (red/amber/green and a description of any issues) of material climate-related risks or opportunity initiatives
being focussed on during the reporting period is reported by management to the Board at every regular Board meeting
through an Environmental Management report and Enterprise Annual Plan report. Individual papers with project
proposals and funding requests are presented to Board as required under LIC’s Delegated Authority Policy. The
Environmental Management Report annually includes GHG metrics.
How the Board ensures that appropriate skills and
competencies are available to provide oversight
As part of the Director election process, skills are considered such as Sustainability on Farm, which includes climate
change expertise related to the dairy sector. Some Directors and members of management have also taken individual
responsibility for increasing their understanding of climate risk through attending relevant conferences and courses and
climate-related matters are being considered in planning Director development. New Directors during the reporting
period have been provided with separate induction sessions on climate risk management and disclosure reporting
requirements. Management have worked with the Board on ensuring that skills within the team and compliance
requirements are well understood.
The Board Chair and Chair of the People & Culture Committee work with the Chief People Officer on a forward program
of development for the Board and individual directors.
How the Board considers climate-related risks and
opportunities when developing and overseeing
implementation of strategy
LIC’s strategy is centred on breeding for a highly efficient, lower-emitting national dairy herd. Material climate-related
risk and opportunity initiatives are considered as part of the annual planning and budgeting process, including
Transition Plan initiatives (refer to page 28). Material climate-related risks and opportunities that have been identified
during the course of the year are discussed by the Board and the Board incorporates these discussions into strategic
planning by evaluating how climate-related risks and opportunities may impact LIC’s long-term business model,
financial performance and operational resilience. The Board engages with management to assess proposed mitigation
and adaptation strategies and to ensure that climate considerations are embedded into investment decisions, capital
allocation and enterprise risk management frameworks.
For example, this year’s capital spend included installation of a barn for measuring methane of lactating cows and
the Research and Development (R&D) operational budget included planned spend on climate-related opportunity
initiatives.
For further information in relation to LIC’s climate-related risk and opportunity initiatives, refer to section titled “climate-
related risks and decision making” in the strategy section of this climate statement.
LIC Climate Statements
8

How the Board sets, monitors progress and oversees
achievement of metrics and targets
LIC’s board sets the GHG emissions reduction targets and climate-related metrics for the company based on
recommendations made by management on what is considered achievable and what is useful to measure. Management
forecasts GHG emissions reductions based on initiatives underway and planned where it is known that reductions are
achievable and cost effective. Management identifies appropriate metrics by considering what is relevant to the dairy
sector and useful to measure.
GHG emissions target results and progress relative to the baseline year are presented to the Board annually by the Chief
People Officer and Health, Safety & Environment Manager and the Board discusses and sets further initiatives, metrics,
or targets that may be required based on those results and progress. Environmental Strategy, Transition Plan and
Energy Strategy documents, which are all foundation documents used for documenting and managing climate-related
risk and capitalising on climate-related opportunities, are also reviewed by the Board.
Progress on material climate-related risk and opportunity initiatives is reported to the Board at every regular meeting
by the Chief People Officer and Health, Safety & Environment Manager as part of an Environmental Management
Report and Enterprise Annual Plan traffic light report by the Chief Executive, giving the Board the opportunity to provide
feedback or request a change in approach.
During the reporting period the Board reviewed GHG emissions targets, approved updated GHG emissions targets and
discussed transition planning. Our metrics were reviewed and it was concluded that they remain fit for purpose.
For further information in relation to the metrics and targets that LIC currently has in place (including the results of the
review noted above) and whether these are incorporated into remuneration policies, refer to the metrics and targets
section of this climate statement.
For the year ended 31 May 2025
9

LIC Senior Leadership Team
Day-to-day management of risks and opportunities (including climate-related risks
and opportunities) within the Co-operative is delegated to members of LIC’s Senior
Leadership Team (SLT) and other senior leaders, as shown in Table 2 and Figure 2.
While the wider SLT monitors and discusses climate-related risks and opportunities
and endorses content to go to Board meetings, the members identified in Table 2
have specific responsibilities related to climate-related risks and opportunities.
The SLT meets fortnightly, with quarterly strategy offsites, and those meetings have
included consideration of a range of environmental topics throughout the reporting
period, including updates on climate-related risks and opportunities and related
initiatives, climate scenarios, climate statements, transition planning and review of
GHG emissions targets.
Management
The Environment and Sustainability Management Committee (ESMC) includes
two SLT representatives, meets quarterly and focusses on identifying and driving
environmental risks and opportunities for improvement across the business.
Any new climate-related risks identified within any business unit by management
can be integrated into LIC’s enterprise risk register after assessment and
endorsement by the Risk & Assurance Manager. Controls and/or mitigation
identification and material risks would then form part of management discussions,
with material risks included in AFRC reporting.
SLT members with specific climate-related responsibilities (Table 2):
Chief Executive• Responsible for managing and delivering the Co-op’s
strategy and performance
• Responsible for management of climate-related risks
and opportunities
• Attends all Board and sub-committee meetings
• Reports directly to the Board Chair – informal
discussions as frequently as needed
Chief People Officer• Oversees Environmental Policy, environment and
energy strategic plans, transition planning, GHG
data management
• Regular environment reporting to Board, including
the annual GHG emissions results, presenting any
proposed changes in the policy, strategy or GHG
emissions targets for approval
• Attends ESMC
• Attends People & Culture Committee
• Attend Board and AFRC meetings as required
Chief Scientist• Oversees climate-related R&D initiatives, presents to
the SLT and Board on material initiatives as required
• Attends ESMC
Chief Financial Officer• Oversees climate disclosure reporting and
sustainability reporting
• Considers financial implications of climate-related
risks and opportunities in financial planning, capital
allocation and financial reporting, including funding
requests raised by business units
• Oversees risk management, including climate-
related risks captured as recommended by Risk &
Assurance Manager and Group Financial Controller
• Attends all Board and AFRC meetings, including
presenting interim and full year financial statements
and climate statements for review and approval
LIC Climate Statements
10

Other management roles with climate-related responsibility (Figure 2):
Environment & Sustainability Management Committee (ESMC), also includes the Chief People Officer & Chief Scientist
General Counsel
Health, Safety &
Environment Manager
Senior Environmental AdvisorGroup Financial Controller
Representatives from each LIC
business unit
Oversees sustainability and
climate-related legal risk.
Attends all Board meetings and,
where required, attends sub-
committee meetings. Monitors
upcoming legislative change
and reports potential impacts to
AFRC.
Drives compliance with
environment legislation,
development and execution of
environment policy and strategy
to provide a framework for
managing climate-related risk,
oversees GHG reporting, Chairs
ESMC. Attends Board with CPO
to present any climate-related
environment papers.
Drafts, implements and
maintains environment policy,
transition planning, systems
and strategy, manages GHG
data gathering and reporting,
facilitates ESMC and works
with business unit members on
initiatives.
Oversees climate and
sustainability reporting,
considers financial implications
of climate-related risks and
opportunities in budgeting and
financial reporting. Together
with CFO, presents climate
statements to AFRC and Board.
Employees passionate about
driving continuous improvement
to reduce waste and reduce our
environmental impact, including
GHG emissions.
• LIC’s Transformation Office reporting tool enables centralised oversight of all relevant
environmental or sustainability initiatives, including key project milestones.
• LIC’s Investment Committee considers requests for funding and approves the internal emissions
price: business cases for initiatives are required to include any environmental considerations
and a monetary impact using the internal emissions price if GHG emissions are estimated to be
impacted by more than 10 tCO
2
-equivalent emissions per year.
• LIC’s R&D team includes scientists with relevant skills and experience working on climate-related
opportunities.
For the year ended 31 May 2025
11

Business Model
LIC is a New Zealand dairy farmer-owned co-
operative and LIC shares are listed on the NZX. To
be a shareholder in LIC, you must farm dairy cows in
New Zealand, supply a New Zealand milk processor
and buy a minimum amount of qualifying products
and services from LIC in any one year. As a farmer-
owned co-operative, all profit is returned to our farmer
shareholders in dividends or reinvested into new
solutions and research and development (R&D).
LIC’s headquarters are in the Waikato, along with
laboratories, herd testing facilities, a dairy farm and
bull farms. Additional bull farms are in the Central
North Island. Herd testing and Artificial Breeding
depots are located throughout the North and
South Islands, as well as herd testing facilities in
Christchurch.
LIC’s principal activities are carried out in New
Zealand, including artificial breeding products and
services, herd testing of milk samples, DNA testing,
animal health testing, herd management software,
on-farm support, sale of heat detection and animal
tag products and research and development (R&D).
The majority of LIC’s customers are dairy farmers,
or professionals such as vets providing our services
to dairy farmers. LIC is structured to best support
farmers and our operational teams to effectively
supply products and services to customers, which
results in a significant volume of vehicle travel to dairy
farms in rural areas. For semen production and R&D
purposes, LIC owns or utilises a large volume of bulls,
a dairy herd and trial animals.
LIC has smaller business operations in Australia, UK
and Ireland, mainly for the purpose of selling artificial
breeding products produced in New Zealand and
owns a small business that manufactures bovine heat
detection products in Australia.
Strategy
LIC Climate Statements
12

Strategy
The Board is responsible for setting the strategy of
LIC and monitoring delivery against that strategy,
recognising the Company’s economic, environmental
and social responsibilities. During the reporting period
the Board completed a check-in on LIC’s strategy
and emphasised the importance of our focus on herd
improvement, with five priority areas being focussed
on as key enablers of herd improvement (refer
Figure 3).
In terms of climate-related opportunities specifically,
herd improvement is at the heart of LIC’s strategy
and is LIC’s most significant opportunity for emissions
reduction, which will benefit the whole of the dairy
sector and New Zealand by enabling reduction in
emissions intensity.
Our three-year plan (which runs to 31 May 2028)
includes climate-related initiatives, some of which will
bring long-term genetic benefit, such as breeding
lower methane emitting dairy animals. Working with
dairy farmers, including via milk processors such
as Fonterra, to help farmers accelerate their herd
improvement to breed better cows faster is important
to help the sector to reduce its overall emissions
intensity. This can include using LIC services to
identify the best cows to breed from (eg herd testing
and DNA testing), using sexed semen to produce more
replacement cows from the best cows and, in the
future, being able to select lower methane-emitting
bulls for breeding decisions.
What's the
herd of the
future?
How we'll
breed it
faster
The role of
our people
Working with farmers to breed for that future herd now - using the best tools,
insights and genetics we can offer
Breeding
better cows
faster with:
Why this
matters
High-preforming herds
through world-class breeding
programmes
Smarter tools that connect data,
insights and systems farmers use
A generational co-operative
that's easy to work with
Our Strategy
Customer
experience
that makes LIC
easy to deal with
Genetics
that continue
to deliver value
on farm
Testing
to predict
performance and
health issues
Farm software
to make herd
and breeding
decisions easier
International
markets
to strengthen our
breeding scheme
With world leading herd improvement
Highly efficient,
producing more
from less
Aligned with the
needs of processors
and global markets
Lower-emitting and
environmentally
fit-for-purpose
LIC’s strategy on a page (Figure 3):
For the year ended 31 May 2025
13

LIC is running a number of long-term research trials, resulting in a significantly
higher volume of trial animals included in our biogenic emissions results compared
to our 2018/19 emissions base year. This will likely continue while there are still
opportunities identified to reduce emissions intensity through genetic improvement
requiring a R&D focus, or other areas of genetic improvement needed within the
dairy sector. As a result, it is uncertain if LIC’s own Scope 1 biogenic and farm-
related emissions will reduce while there remains a high need to hold additional
research animals, which in turn produce more emissions. LIC’s GHG emissions
reduction targets therefore exclude those emissions related to animals owned or
used, including for research purposes, by LIC. Improving genetics is a long game,
but we are confident that our initiatives will result in benefits to the sector and
New Zealand through cows that produce more milk solids with either the same or
less methane emissions, resulting in lower emissions-intensity, as well as breeding
options for animals that are more heat tolerant.
The Board has endorsed our climate-related strategic intent to transition
towards a low-GHG emission, climate-resilient economy, along with contributing
to decreasing methane emissions intensity from the national dairy herd. We are
committed to achieving this through the following objectives and priorities:
1. Reducing GHG emissions: reduce our carbon footprint by implementing
innovative technologies and sustainable practices across our operations.
2. Enhancing climate resilience: building resilience to climate impacts by
integrating climate risk assessments into our decision-making processes and
investing in adaptive infrastructure.
3. Driving innovation through R&D: enable enhancement of the genetic potential
and sustainability of the national dairy herd.
4. Capturing opportunities: leverage opportunities arising from the transition to a
low-carbon economy.
5. Avoiding adverse impacts: maintain transparent communication and engaging
with farmers to address their concerns.
6. Safeguarding the natural environment: protect and preserve natural
ecosystems on LIC properties by adopting sustainable resource management
practices and supporting biodiversity conservation initiatives.
By pursuing these objectives and priorities, we aim to contribute positively to New
Zealand’s climate goals while fostering sustainable growth and creating long-term
value for our farmer shareholders.
While LIC is committed to ongoing reduction of emissions, we recognise that new
technologies will be required to fully reduce our emissions based on methodologies
using SBTi (Science Based Target initiatives) tools, creating uncertainty around
how we will continue to reduce emissions by way of reduction or removal activities
without using some form of carbon credit offset in future. For example, much of
LIC’s vehicle travel is over long distances in rural areas; cost-effective feasible
alternatives to diesel-fuelled light trucks being made widely available across New
Zealand will be important.
LIC Climate Statements
14

Climate-related risks and opportunities and decision making
Climate-related risks fall into two main categories: physical and transition risks.
These have the potential to affect LIC’s entire business, including through the
impacts of those risks on our dairy farmer customers, and are taken into account
as an input to LIC’s internal capital deployment and funding decision-making
processes, along with climate-related opportunities, as described below.
Climate-related opportunities that result from the dairy sector needing to reduce
emissions intensity have been identified by the Board, SLT and other senior leaders
within the business through discussions with our farmer shareholders and milk
processors, strategic analysis and R&D.
LIC’s budget and annual plan for the following three years is coordinated annually
by the CFO. Each business unit has the opportunity to put forward funding requests
to be included in the three-year plan, which is then prioritised and agreed by the
SLT before being presented to the Board by the CFO and CE for approval. Any
funding requests for climate-related risk and opportunity initiatives is part of this
process. LIC has a Delegated Authority Policy which also outlines approval levels
required for unbudgeted funding requests outside of the annual plan process in the
event that a new or unforeseen climate-related risk or opportunity emerges.
Physical risk
Physical risk factors are those related to the impacts of the changing climate and
environment and can be further categorised as acute or chronic:
• Acute risk factors are those related to more frequent and intense extreme climate
events such as heatwaves, droughts, bushfires, floods and storms; and
• Chronic risk factors are those related to gradual changes in climatic conditions
such as increasing temperatures, changes in precipitation patterns and sea-
level rises.
Transition risk
Transition risk factors are those related to the process of transitioning towards a
climate-resilient and lower emissions society where transition pathways may vary
and can be further categorised as arising from these changes:
• Political changes, including policies and regulations, access to land, geopolitics
and food security changes impacting both the broad economy as well as those
impacting the dairy sector
• Economic changes, including access to banking and insurance services,
customer demand, energy security and carbon pricing
• Social changes, including labour force and consumer behaviour and preferences
• Technological changes, including developments in farming practices, food
production and energy/distribution; and
• Legal changes, including sustainability litigation.
The number of cows in the national herd is a key assumption considered as part of
LIC’s strategic planning process and underpins our expected five-year activity level
in relation to product sales. In addition, the biggest asset on LIC’s balance sheet is
our bull team. There is a complex, inter-related mix of factors impacting the number
of cows (including climate-related risks and opportunities), such as volatility of milk
price, farmers seeking to diversify their operations, changing land use, the high
cost of capital for new entrants and challenges with succession planning on farm.
Seasonal milk prices are a key assumption: a low milk price can generally result in
lower levels of activity with farmers seeking to reduce costs. The risk of low milk
price could be increased by climate-related factors, such as market or reputation
transition risk, but can also have an inverse relationship. Where weather conditions
contribute to global supply being lower than demand, milk price could be stronger.
LIC’s Investment Committee has also set an internal emissions price to be used as
a tool to calculate a financial impact when considering climate-related opportunity
or risk initiatives. The results factor into capital investment and funding decisions
to ensure that decarbonisation opportunities are considered in a similar way to any
other initiative. The financial analysis template LIC uses for considering costs and
benefits of proposed initiatives, including climate-related risks or opportunities,
has been updated to include a financial impact of GHG emissions reduction using
the internal emissions price. Where an initiative will change LIC’s Scope 1 or Scope 2
GHG emissions by more than 10 tCO
2
-equivalent per year, the business is required
to include a GHG monetary impact factor in the financial analysis calculated by
multiplying the change in emissions by the internal emissions price.
Previously LIC went through a process to identify the most material physical and
transition climate-related risks relevant to LIC and ensured that those risks were
included in LIC’s enterprise risk register, and the Board endorsed that climate-
related risk should be represented as a sub-category risk in LIC’s risk management
tool. This was on the basis that there are a range of different climate-related risks
that impact more than one of LIC’s key risk areas, enabling risk appetite for the
different types of climate risk to continue to be set for those overarching key risk
categories.
LIC’s material climate-related risks and opportunities are detailed on page 24.
For the year ended 31 May 2025
15

Current climate-related impacts
Current material climate-related physical impacts
While the effects of climate change are expected to intensify over the coming decades, a number of impacts are already being observed.
Impacts over and above historical seasonal weather variations are becoming more frequent, although not all climate events or impacts
experienced translate into material impacts for LIC.
ImpactDescription of impactCurrent financial impacts
Drought or dry summer
conditions
Early dry-off of cows assessed as being
likely in part due to dry conditions in some
areas. Early dry-off impacts LIC’s activity
levels, for example re-booking pressure or
cancelled herd testing of milk.
Cannot be quantified / no material financial impact.
It is not possible to identify lost revenue in the reporting period that is
specifically attributable to drought or summer conditions exacerbated by
climate change as farmers may have had multiple reasons for cancelling
a product or service, including the stock of additional feed on hand or the
cost of feed outweighing the benefits of extra days in milk. Overall, there
has not been a material financial impact as herd test revenue is higher
than the budget for the year.
Weather eventsExtreme weather events caused minor
disruption to LIC production and services
due to disrupted farmer operations,
resulting in some reorganisation of LIC
services. For example, South Island
flooding impacted some farmers during
the reporting period.
No material financial impact.
Weather events during the period were sufficiently temporary to not
materially impact LIC services provided on farm or result in a material
financial impact for LIC but are nevertheless material impacts in that they
indicate a trend of increasing volatility in weather and therefore have
an influence on LIC’s planning for its exposure to this risk on an ongoing
basis.
LIC has not made any material weather-related insurance claims during
the reporting period.
LIC Climate Statements
16

Current material climate-related transition impacts
ImpactDescription of impactCurrent financial impacts
Legislation and
regulation
• LIC is impacted by regulatory change and uncertainty in NZ relating to
climate policy, as well as general emissions reduction policies.
• Resources allocated to collate data, perform analysis, prepare and
review Climate Statements.
No material financial impact.
Efforts to reduce
LIC’s emissions or
reduce environmental
impact risk
• Ongoing transition of vehicles to electric vehicles (EVs) and hybrids to
further reduce LIC’s fuel emissions.
• Further additions to LIC EV charging station network.
• Ongoing discussions with suppliers to reduce waste, increase
recycling, improve efficiency and access to emissions data.
• Other asset replacements to reduce climate impacts.
• Resources allocated to prepare Transition Plan.
No material financial impact.
Not all costs are able to be separately
identified, such as electricity supply for EV
charging stations, change in costs solely
due to increased electrification of vehicle
fleet, employee time, which have been
partially offset by lower fuel costs and
power costs.
Investments in climate-
related research
Continued investment in climate-related opportunity research projects
to assist farmers to reduce emissions or adapt to climate change through
improved genetics in future, including methane validation trials, a new
barn and associated equipment for measuring methane from lactating
cows, and a heat tolerance breeding programme.
$3.4 million cost (excludes external funding,
includes both operational and capital
expenditure, does not include all employee
time).
For the year ended 31 May 2025
17

Scenario analysis
Scenario analysis is the process of exploring how an entity might perform under
a range of plausible futures. In a world of uncertainty, scenario analysis is meant
to challenge ‘business as usual’ assumptions. Climate-related scenario analysis
does not predict the future but rather provides a range of hypothetical outcomes
to enable an entity to better assess how physical and transition risks and
opportunities associated with climate change could impact its operations.
The Aotearoa Circle Agriculture Sector Scenarios
2
were previously used as LIC’s
foundation for developing climate-related scenarios. The sector scenario work
programmes led by the Aotearoa Circle were influential in bringing together sectors
across New Zealand to support climate reporting entities and encourage greater
comparability of reporting and key members of LIC’s executive team participated in
that process.
In the current reporting period we collaborated with Fonterra and Silver Fern
Farms to develop core scenario elements that were more specific to the dairy
and beef sectors and common across the three cooperatives, such as driving
forces, temperature outcomes, emissions pathways, and high-level narratives. In
particular, we moved away from using the description of ‘orderly’ transition in our
1.5°C scenario, noting that an orderly transition to limiting warming to 1.5°C above
pre-industrial levels seems increasingly unlikely. This joint output was then refined
by LIC to make it more specific to our strategy and business model.
LIC’s scenario analysis process involved engagement and governance at a number
of levels of the organisation:
• Delegation by the Board and SLT to the Group Financial Controller and Senior
Environmental Advisor to work with Fonterra and Silver Fern Farms to collaborate
on developing scenarios;
• Analysis and input by management to the collaboration with Fonterra and Silver
Fern Farms;
• Updates to impact pathways and analysis of them to identify potential
climate related risks and impacts on LIC, as well as to identify climate-related
opportunities (noting that SLT and the Board were involved in developing the
previous impact pathways);
• Review and feedback of the scenarios and impact pathways by other
management representatives across the business, including the Senior
Environmental Advisor and the Risk & Assurance Manager;
• Presentation of the draft scenarios, climate related risks and opportunities
identified to both SLT and the Board for review and discussion; and
• Final endorsement of outputs by the Board.
Other than the collaboration with Fonterra and Silver Fern Farms, LIC did not enlist
the help of external partners, and no external stakeholders were involved, with
the exception of elected directors, who are farmer shareholders in LIC. No specific
modelling was undertaken as part of the scenario analysis.
LIC determined that the scenario results (ie our chosen scenarios below) following
adaptation of the collaboration with Fonterra and Silver Fern Farms was the most
relevant and appropriate scenarios because they have been created specifically
for the dairy sector within New Zealand’s agricultural sector and therefore will be
most useful for identifying and assessing the most material risks and opportunities
relevant to LIC, its operations, business model, and strategy and have been further
adapted to be specific to our strategy and business model. The scenarios were also
aligned to the temperature requirements in NZ CS 1, including to have a 1.5 degree
scenario, a 3 degree or greater scenario, and a third climate-related scenario:
• Sharp Corrections, temperature rise limited to 1.5°C (mandated)
• Slow Followers, temperature rise over 2.5°C
• Hothouse, temperature rise increases past 3°C (mandated)
Scenario narratives
Climate-related scenario narratives are plausible, challenging descriptions of
how the future may unfold and provide the parameters in which an entity conducts
scenario analysis to test overall strategic resilience based on a coherent and
internally consistent set of assumptions about key driving forces and relationships
covering both physical and transition risks in an integrated manner. Climate-
related scenarios are not intended to be probabilistic or predictive, or to identify
the ‘most likely’ outcome(s) of climate change. They are intended to provide an
opportunity for entities to develop their internal capacity to better understand
and prepare for the uncertain future impacts of climate change. Accordingly, all
outcomes described in our climate-related scenarios are only insights to assist
in resilience testing and strategy development and are not predictions of actual
future outcomes.
2
The Aotearoa Circle Agriculture Sector Scenarios
LIC Climate Statements
18

Scenario narratives are determined by the interaction of key political, economic,
social, technological, legal and environmental ‘drivers of change’ (collectively
referred to as the PESTLE framework) that may influence an entity’s operating
environment. These narratives include assumptions and logical relationships to
help identify potential impacts and severity of the impacts, on operations, strategy,
and financial planning.
LIC has adapted the narratives developed with Fonterra and Silver Fern Farms
to reflect LIC’s role in the dairy sector specifically, which was completed by
management and reviewed and endorsed by both SLT and the Board. This has
been a standalone process, although the LIC strategy check-in was completed
at the same time and LIC’s most material climate-related risk and opportunity is
at the heart of the updated strategy: enabling dairy farmers to reduce emissions
intensity within the national dairy herd in the face of a decreasing cow population.
Table 3 summarises the three scenario narratives and the key assumptions
underlying each.
These scenarios are designed intentionally to be challenging and are not meant to
be perceived as ‘most likely’ outcomes, nor do they reflect LIC’s strategic beliefs or
anticipated views of the future.
Scenario assumptions and narratives – Table 3
Sharp CorrectionsSlow FollowersHothouse
SummaryThe Sharp Corrections scenario depicts a world
where policy action on climate is delayed until a
severe natural disaster near 2030 shifts public
opinion, leading to a swift and robust response
to limit global warming to 1.5°C by 2100. Co-
ordinated global efforts drive technological
advances however the abrupt policy changes are
a strain on emissions-intensive sectors. This is a
costly, disruptive transition.
The Slow Followers scenario is a future where the
world is divided on climate policy, with varying
levels of ambition among countries. Global efforts
are insufficient to limit warming to 1.5°C, with
temperatures set to rise over 2.5°C by century’s
end. The EU and China adopt aggressive policies,
while New Zealand lags, making slower progress,
leading to reputational damage. New Zealand’s
transition is ultimately driven by economic factors
that favour positive climate action.
The Hothouse scenario depicts a world where
unchecked emissions and lack of climate
policies lead to a rise in global temperatures of
3.6°C above pre-industrial levels by 2100. The
physical impacts of climate change are severe
and irreversible. Paris Agreement targets are
abandoned by 2035, leading to protectionism
and mass food production. Adaptation to climate
change is the priority, not mitigation.
Key climate
scenarios
architecture
pathways used
3
• IPCC SSP1 ‘Taking the Green Road’, RCP 1.9
• NGFS ‘Sudden Wake Up Call’ & ‘Net Zero
Emissions’
• SPANZ ‘100% Smart’
• Climate Change Commission 2021 dataset
(CCC) ‘Further Behaviour Change’ and
‘Tailwinds’
• IPCC SSP2 ‘Middle of the Road’, RCP 4.5
• NGFS ‘Low Policy Ambition’ & ‘Fragmented
World’
• SPANZ ‘Kicking & Screaming’
• CCC ‘Headwinds’
• IPCC SSP3 ‘Regional Rivalry’, RCP 7.0
• NGFS ‘Diverging Realities’ & ‘Current Policies’
• SPANZ ‘Unspecific Pacific’
• CCC ‘Current Policy Reference’
Temperature
outcome by 2100
1.5°C2.7°C3.6°C
3
Refer to Appendix One for further detail
For the year ended 31 May 2025
19

Sharp CorrectionsSlow FollowersHothouse
Time horizonShort (to 2027/28), medium (2027-2035), long (2036-2050) and very long (2051-2100) term, with 2100 being the endpoint for each scenario
Physical risk
severity compared
to today
Low to moderateModerate to high Extreme
Transition risk
severity compared
to today
Low then highModerateLow
• Policy
reaction
• Delayed then blunt• Slow and lagging in NZ, varied globally• No new policies to drive emissions reductions
• Technology
advancements
• Slow then fast changes• Moderate• Slow changes
• Consumer
behaviour change
• Slow then fast changes• Regionally differentiated (maintains
momentum in EU, rapid in China, slow in US)
• Slow changes
• Demand for dairy• Increased demand for alternatives to bridge
gap left by dairy destocking
• Similar to today; locally produced dairy
alongside alternatives
• High demand for low-cost nutrition, with dairy
out of reach of many budgets
Scope of operations The climate scenario analysis was focused on LIC’s New Zealand operations. International factors were considered where material, such as consumables
manufactured offshore or shipping of product sold to international markets.
Dairy herd impact –
critical assumption/
uncertainty
• 30% smaller dairy herd than 2020 by 2050• 17% smaller dairy herd than 2020 by 2050• 13% smaller dairy herd than 2020 by 2050
LIC Climate Statements
20

Sharp CorrectionsSlow FollowersHothouse
Policy &
Socioeconomic
assumptions
• As the physical impacts of climate change
become apparent, from 2030 governments
around the world, including NZ, implement
aggressive policies to curb emissions.
• Dairy farmers are required to adopt methane-
reducing technologies, and dairy herd sizes
are required to reduce to meet methane caps.
• From the 2030s stricter environmental policies
on nitrogen limits, supplementary feeds,
and fertilisers are enforced, while genetic
modification regulations relax to allow novel
climate solutions.
• There is a significant shift in diets away
from animal-based proteins toward readily
available plant-based and lab-grown
alternative proteins from the early 2030s
and consumers are unable to access scale,
affordable animal proteins following sharp
action on methane.
• There is moderate ambition to decarbonise
globally, with emissions peaking around 2040.
The world is not on track to reach net zero this
century and many countries remain reliant on
fossil fuels to power their development. As it
becomes clear that Paris Agreement targets
will not be met, global policies diverge.
• NZ climate policy lags global peers and NZ
is perceived as a slow follower in the global
fight against climate change. From 2050,
international pressure gradually pushes NZ to
prioritise emissions reductions.
• Trade agreements are established between
countries that are committed to transitioning
to low-carbon economies and trade
relationships are dominated by power blocs.
• Dairy remains a key part of most global diets,
albeit with plant-based and insect protein
alternatives also available and by 2040 some
novel alternatives emerging.
• Global government priorities change from
sustainability to food and energy security,
with Paris Agreement targets largely
abandoned by 2035. While existing policies
remain in place, at least in the near term,
limited additional measures are enacted
and proposed policies are placed on hold or
substantially weakened.
• Certain sustainability-related regulations
are relaxed as a means of the government
reducing pressures on farming communities.
• Significant dietary change occurs as people
become open to cheaper, new proteins
(e.g. lab-grown dairy, insects, plant-based).
Traditional dairy becomes a luxury.
• From late 2030s, geopolitical tensions
and hostilities rise in response to resource
scarcity, leading to greater border controls
and trade barriers. Heightened civil unrest
and widespread conflicts occur in relation to
immigration, resource allocation and water
availability, disrupting supply chains.
Macro-
economic trends
• Insurance and financing is increasingly only
easily accessible for organisations that show
strong sustainability credentials and climate
resilience.
• From 2030, there is strong demand from
customers for dairy suppliers with aggressive
emissions reductions targets and credible
transition plans.
• Agricultural emissions are now priced, leading
to large-scale destocking as farmers struggle
with the cost of capital and continuing
operations.
• Financing and insurance are increasingly
expensive and sometimes impossible to
access for those exposed to high climate risks
(like many dairy farms and companies) and/or
not reducing emissions.
• Customer demand is divided, with some
developed country customers demanding
dairy products with sustainability credentials
while others prioritise functionality and cost.
• Insurance premiums continue to rise or
insurance is increasingly hard to access;
for some hard-hit areas, insurance is not
available. Self-insurance becomes common.
• While the demand for dairy protein continues
to grow, there is a noticeable shift in focus
from quality, sustainability, and traceability to
quantity.
For the year ended 31 May 2025
21

Sharp CorrectionsSlow FollowersHothouse
Energy pathways• Energy availability remains stable in NZ, with
hydroelectric power levels adequate and
increased investment in new technology.
• The NZ Government disincentivises and in
some cases prohibits the use of fossil fuels and
accelerates policy to phase-out natural gas.
• In NZ, companies that chose to transition
early despite little upfront incentive retain a
relatively stable energy supply while those
that did not face high costs and limited supply.
• There is a lack of coordinated international
policy to support a net-zero transition, with
fossil fuel resources continuing to be exploited.
• Energy sector supply chains suffer disruption
due to climate impacts and energy prices
surge due to the continued global demand for
fossil fuels and increasing capacity concerns
at NZ’s hydro stations, which are frequently
affected by drought.
Carbon
sequestration
and afforestation
• The government prioritises carbon reduction
through afforestation initiatives.
• Focus on emissions reductions leads to large
areas of pine monocultures. Rushed and costly
global push for more carbon capture and
storage tech, though not really seen in NZ.
• Little use of carbon capture and storage
globally due to cost. Pines continue to be
planted for timber in New Zealand, but native
forestry is not incentivised.
Nature
based solutions
• Tougher resource consents for water, land,
and farming on peatland were introduced,
placing severe limits on dairying in some
regions.
• There is increased demand for nature-related
credentials, biodiversity and nature-related
reporting from the 2030s.
• There is limited emphasis on nature-based
solutions in the dairy sector due to the
reliance on fossil fuels and slower transition to
sustainable development.
• Adaptation is the priority.
• Tighter biosecurity controls are implemented
to limit the influx of pests and diseases
associated with warming.
Technology
assumptions,
including negative
emissions
technology
• Technology innovation to help dairy
farmers optimise resource use and improve
productivity are subsidised and supported
by large food companies and public sector
investment by 2030s, aiming to reduce
on-farm emissions and keep dairy farms
profitable at lower stocking rates.
• Government and private sector investment
in methane inhibitor development is limited in
the 2020s, then increases rapidly from 2030
as the world’s focus turns to methane. By 2040
methane inhibitors are cost effective and
accessible to most farmers.
• The government unlocks gene-editing policy
and invests in R&D to develop climate-resilient
crops and livestock, to be deployed on farm in
the 2030s.
• From the 2030s food companies invest in
precision agriculture technologies to help
farmers optimise resource use and improve
productivity in the face of increasingly
challenging climactic conditions. There is
limited government funding available for
these technologies.
• NZ R&D includes gene editing/modification
and is focussed on breeding more resilient,
regenerative pasture and dairy animals,
particularly from the 2040s as climate impacts
become more severe.
• New interest and investment in sustainable
dairy farming dries up. Capital and resources
are redirected into adaptation.
• There is an increased focus on breeding to
encourage growth and improve the climate
resiliency of the national dairy herd, with
a heavier use of steroids, antibiotics and
genetic modification considered acceptable
to maintain milk production.
• Investments in on-farm research and
technology continue, shifting from emissions
reduction tools to climate resilience and
adaptation interventions.
LIC Climate Statements
22

Scenario analysis insights
LIC’s analysis of climate-related risks and opportunities through building out
impact pathways using drivers of change found varying degrees of impact on the
co-op across the three scenarios and time horizons. The above narratives are
intended to bring to life the critical uncertainties in how LIC’s operating context
could evolve over time under possible futures, by describing relevant narratives
and comparing them across scenarios, with the most significant factor being the
potential impact of climate change on the size of the national dairy herd.
While the scenarios are shaped by global and New Zealand scenario methods
and assumptions, which make specific assumptions about how the context will
evolve, they are still qualitative and exploratory in nature. Climate scenarios are
not predictive, they are not forecasts, nor do they represent any preferred options.
Rather, they test a broad range of plausible and challenging outcomes to generate
useful insights on potential climate risks, threats and opportunities.
Our key findings in each scenario are as follows:
• In a Sharp Corrections scenario, LIC would be particularly exposed to transition
risks given the scale and pace of change required to reduce emissions in the
short to medium term, with the most significant outcome explored in the narrative
for LIC being a 30% smaller dairy herd than 2020 by 2050.
• A Slow Followers scenario represents a more volatile and uncertain operating
context for LIC, with a potential reduction in the dairy herd of 17% by 2050
(as compared to 2020). In this scenario, a slow approach by others to reduce
emissions would mean the Co-operative’s ability to maintain profitability in
the face of transition changes would be challenging due to rapidly increased
operating and capital costs, particularly as greater exposure to physical risks
are experienced with higher global temperature increases by this point and
beyond to 2100.
• In a Hothouse scenario, although the dairy herd may have had a smaller
reduction by 2050 of 13% (as compared to 2020), LIC and dairy farmers would
be particularly exposed to the physical risks of climate change by this point and
beyond to 2100 given New Zealand’s reliance on a stable, temperate climate
for dairy farming. Unfavourable climate conditions under this scenario could
challenge the productivity of our pasture-based system without significant
farmer adaptation and our ability to access farms to provide critical services
could be severely disrupted by major weather events.
We will continue to develop our climate scenario analysis to help inform strategy
over time.
Sharp CorrectionsSlow FollowersHothouse
Data sources for
each scenario
Data sources for each scenario can be found at Appendix One
For the year ended 31 May 2025
23