2012 Landcorp, Annual Report 2012, HTTP ::WWW - Landcorp.co - Nz:Assets:NEW News Events:Landcorp Annual Report 2012 PDF

Landcorp
ANNUAL REPORT 2012
LANDCORP FARMING LIMITED
WORKING
TOGETHER

CONTENTS
2 PERFORMANCE IN 2011/12

3 FINANCIAL OUTLOOK
4 DIRECTORS REPORT

8 CHIEF EXECUTIVES REVIEW
16 PEOPLE AND CAPABILITY

DEVELOPMENT
19 TEAMWORK TO ANSWER
THEHARD QUESTIONS
20 FROM FOREST TO HIGH
PERFORMANCE DAIRYING
23 LAND MANAGEMENT
TO PROTECT LAKE TAUPO
24 LAMB PRODUCTION FOR

THEVALUE CHAIN
27 FARMING SUCCESS IN
THECOLDAND WET
30 LAND SUPPLY FOR

RURALLIFESTYLES
32 AMONG THE BEST IN FARMING

34 BOARD OF DIRECTORS
36 EXECUTIVE GROUP
37 CORPORATE GOVERNANCE
39 FINANCIAL STATEMENTS AND

DISCLOSURE INFORMATION
88 AUDIT REPORT
89 COMPANIES ACT DISCLOSURES
92 DIRECTORY
LANDCORP FARMING LIMITED

(Landcorp)is a State-Owned
Enterprise. Itis New Zealands
largest farmer, running 1.5million
stock units on 119 properties
with a total land area of 375,681
hectares owned and leased. It has
threeactive subsidiaries.
LANDCORP ESTATES LTD develops

and sells land (normally with joint
venture partners) which is suitable
for higher value use than farming;
and
COVER: Business Manager Kirsty Dickens, Livestock
Marketing Manager Andrew Hall (middle) and

Farm Manager Ian Brown on the Short Rd block,
Cheltenham Downs, March 2012.
ISSN 1175-4206
LANDCORP HOLDINGS LTD owns

Landcorp property protected from
sale under an agreement with the
Crown.
LANDCORP PASTORAL LTD holds

Landcorp's investment in the Focus
Genetics Limited Partnership.
LANDCORP WORKS
WITH OTHERS TO BE
NEW ZEALANDS BEST
LIVESTOCK FARMER.
WORKING TOGETHER
PERFORMANCE
IN2011/12
Dollars in millions
45
30
25
35
27.0
10.0
6.9
10.0
10
11.0
10
14.9
15
13.0
15
20
12.0
25
18.0
20
30
20.0
40
27.5
DIVIDEND DECLARED
Dollars in millions
42.2
NET OPERATING PROFIT
5
0
0
2007 2008 2009 2010 2011 2012
2007 2008 2009 2010 2011 2012
KEY FINANCIAL DATA

Dollars in millions unless otherwise stated
Total revenue
Net operating profit
Total shareholder return
Total shareholder return /
Average shareholders funds*
Dividend declared
Total assets
Shareholders funds*/ Total assets
2011/12
2010/11
2009/10
2008/09
2007/08
215.7
218.5
169.9
174.1
163.8
27.0
42.2
10.0
6.9
11.0
7.8
132.5
(112.5)
(76.0)
275.7
0.5%
9.4%
(8.1%)
(5.9%)
21.1%
20.0
27.5
18.0
10.0
13.0
1,663.0
1,663.0
1,521.9
1,668.7
1,728.8
87.2%
88.4%
87.9%
86.9%
87.5%
2011/12
2010/11
2009/10
2008/09
2007/08
375,681
376,156
374,898
374,948
372,259
1,486,115
1,496,526
1,507,400
1,533,069
1,555,426
573
599
584
599
575
KEY OPERATING DATA
Total hectares farmed (owned and leased)

Total stock units at 30 June
Permanent employees at 30 June
* Includes redeemable preference shares.
FINANCIAL OUTLOOK
FOR2012/13
Landcorp Farming expects product prices in
2012/13 to be more volatile and generally
lower than in the previous year. This will
reflect the continued negative impact of
the Global Financial Crisis on demand
in European, North American and Asia
economies. Longer term, the company
expects continued growth in global demand
for New Zealands high quality food products.
This will support product prices well above
current levels, especially as Landcorp and
other farmers align production more closely
with market requirements.
New Zealand exchange rates will continue
having a major impact on income from
exporting. Throughout 2011/12, New
Zealands trade-weighted index averaged
around 5 per cent higher than the previous

year. Exchange rate depreciation would be of
substantial benefit to all farmers.
The 2012/13 production season has started
with Landcorps capital stock in generally
excellent condition after another relatively
mild, albeit wet, winter. The company
continues to put emphasis on good nutrition
for animals year-round, this being reflected
in higher production volumes of milk, meat
and wool. There is also a strong focus on
controlling costs associated with increased
production. Prices for fertiliser, fuel and
supplementary feed remain a key issue.
On current budgets, and without any
climatic setbacks, Landcorp expects net
operating profit for 2012/13 to be around
$12.7 million. The company will seek to

sell farms and use the released funds for
a special dividend to the shareholder and
for the purchase of properties for further
development. On current prices and provided
land sales are realised, the net operating
profit is expected to support a dividend of
approximately $42.0 million for 2012/13.
This year will see Landcorp take further
strategic initiatives, notably a planned
joint venture with Shanghai Pengxin and
other dairying developments. Landcorp will
increase its capital expenditure in 2012/13
and beyond, with some related growth in
bank borrowing. The company will maintain
conservative debt ratios, consistent with its
established balance sheet policy.
TARGETS FOR 2012/13

As a State-Owned Enterprise, Landcorp Farming
prepares a Statement of Corporate Intent (SCI) each
year, covering its objectives and strategies for the
three years ahead. The 2012 SCI includes targets for
financial performance in the year to 30 June 2013 as
shown in the table (right). These targets are subject
to the following assumptions:
The Global Financial Crisis has a continued
negative impact on demand for farm products,

this reflected in lower global prices;
Economic growth in New Zealand remains

subdued;
New Zealand exchange rates remain volatile

andhigh;
Production input costs, particularly fertiliser and

fuel, remain volatile and high;
Rural land values stabilise at levels lower than in

SHAREHOLDER RETURNS
SCI target
2012/13
$12.7 million
Actual
2011/12
SCI target
2011/12
$27.0 million $16.3 million
Total shareholder return after

tax as a percentage of average
shareholders equity
4.8%
0.5%
6.4%
Dividend yield (Ordinary only)
0.6%
1.4%
1.0%
190.4%
52.8%
90.7%
4.8%*
7.4%
6.6%
5.4%
2.8%
10.3%
19.4%*
23.4%
24.6%
0.01%
(4.6%)
1.7%
Dividend payout (Ordinary and special)

Return on equity adjusted for
IFRS fair value movements and
asset revaluations
PROFITABILITY
Return on capital employed
Operating margin
Economic value added
the recent past, better reflecting economic returns

on productive land use;
Dividends Group (Ordinary and special)
The costs of water management increase, including

those for capturing and reticulating water for
irrigation, and for the discharging of waste water at
higher standards of environmental protection; and
Gearing ratio
10.5%
10.6%
11.6%
Interest cover
3.36 times
4.94 times
3.85 times
1.22 times*
1.22 times
1.94 times
Land owned by Landcorp and likely to be subject
to claims under the Treaty of Waitangi is covered

by a new protocol with the Office of Treaty
Settlements. Furthermore, Landcorp's Protected
Land Agreement with the Crown continues to
govern the operational management of eight farms
under ownership of Landcorp Holdings Limited.
$42.0 million
LEVERAGE
Solvency
CAPITAL
Net capital expenditure
$15.0 million
1 Dividends are for years ending 30 June, payment to the shareholders occurring in October.
2 Net operating profit / Average shareholders equity less revaluation reserves.
3 Earnings before interest and tax / Average shareholders equity less revaluation reserves.
* These are the standardised reporting measures required by the Shareholder for SOEs.
2012 | ANNUAL REPORT
WORKING TOGETHER
DIRECTORS'
REPORT
LANDCORP FARMING IS MAKING SOLID PROGRESS IN ITS MISSION TO BE
NEW ZEALANDS BEST LIVESTOCK FARMER. WE HAVE DELIVERED POSITIVE
FINANCIAL RESULTS FOR THE PAST YEAR, AND WE CONTINUE WITH INITIATIVES
FOR STRENGTHENING THE COMPANYS PERFORMANCE IN ECONOMIC,
ENVIRONMENTAL AND SOCIAL TERMS.
Landcorp strategy for 2012/13 and beyond will build on progress made over the past decade
and it will lead us to work closely with others in joint ventures, supply chain partnerships and
government-led programmes over the years ahead.
In all initiatives, we will remain committed to the highest standards of environmental
protection and animal welfare. Landcorp sees these as fundamental to New Zealands future
growth and prosperity as a food and fibre-producing nation.
Financial Results
Bill Baylis
CHAIRMAN
Landcorp made a net operating profit before tax of $27.0 million for the year ended 30 June
2012. This was down from the 2010/11 record result ($42.2 million) but well ahead of budget
and prior years (see Key Financial Data, page 3). On this basis, Landcorp will pay a $20.0 million
cash dividend to the shareholders for 2011/12, funded entirely from operations. This dividend
is a very pleasing contribution by Landcorp to all New Zealand at a time with continued slow
growth in the economy and in government revenues.
The $27.0 million operating result was reflected in a $7.8 million gain in the companys
shareholder value for the latest year. This figure (also referred to as total comprehensive
income) included a $13.3 million gain on the revaluation of land and improvements, along
with unrealised losses of $39.2 million on the revaluation of livestock, forests and financial
instruments.
Warren Larsen
DEPUTY CHAIRMAN
Landcorp continues to target higher levels of productivity, growth in gross revenue and
satisfactory rates of return on invested funds. Measures for these are included in our Balanced
Scorecard (see right and following pages). Improvements are evident in various areas of the
scorecard, reflecting the progress made within Landcorp and the years generally favourable
growing conditions.
Recent Initiatives
During 2011/12, we began or continued major initiatives for further growth in dairying. We
are delighted to have a joint venture agreement with Shanghai Pengxin of China, buyer of
the 16 so-called Crafar farms under sale by receivers. Landcorp and Shanghai Pengxin intend
forming a joint venture company, Milk New Zealand Farm Management Limited, to operate the
farms and explore other opportunities for growth in dairy production in this country. We will
provide livestock and operational capabilities to achieve substantial improvement in the farms'
economic, environment and social performance. Shanghai Pengxin will be an active investor,
and the two parties will share revenues and operating expenses.
$27.0 MILLION
NET OPERATING
PROFIT
$20.0 MILLION
DIVIDEND
The Balanced Scorecard reports key performance

indicators that are central to Landcorp Farmings
strategic business planning processes, and
that reflects the companys commitment to
sustainability and Corporate Social Responsibility
(CSR). In addition to key financial indicators, the
Scorecard reports on Landcorps performance
in maintaining and improving the productivity of its farms, and in
managing and reducing their environmental impacts. It also reports
performance in relation to employees and customers.
Landcorps strategic planning and reporting (internal and external)
takes full account of requirements under all relevant New Zealand
statutes, most notably the State-Owned Enterprises (SOE) Act 1986,
and the Owner's Expectation Manual, as well as the companys Mission,
Vision and Values, its current Statement of Corporate Intent and the
Global Reporting Initiative (GRI) guidelines of relevance to large-scale
agricultural business. These requirements, philosophies and guidelines
are embedded in Landcorps FarmPride programme for quality
assurance on all farms, its WorkSafe programme and training activities
that encompass all employees.
BALANCED
SCORECARD
2012
TOTAL SHAREHOLDERS RETURN ON AVERAGE

SHAREHOLDERS FUNDS
25%
20%
15%
10%
5%
0%
5%
10%
15%
2008
2009
2010
2011
2012
Financial
5 year average
CUMULATIVE DIVIDENDS
Dollars in millions
500
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Maintain
growth
in gross
revenue
Gross revenue
percentage growth
per annum based
on 2000/01 prices
5.0%
6.3%
2.1%
Landcorp grew revenue through increased production of meat and milk. This is a
result of good growing conditions and sound management practices.
450
400
Maintain
satisfactory
return
on funds
invested
(RoFI)
350
300
250
200
150
100
WACC
+1.0%
WACC
(4.6%)
WACC
+2.6%
This was driven by the decrease in the market value of sheep, beef, dairy cattle
and deer.
50
0
Total Shareholder
Return to exceed
weighted average
cost of capital
(WACC)
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Declared
Improve
productivity
The value of farm

outputs as a
percentage of total
inputs including
operating expenses
and the cost of
invested capital
4.0%
2.6%
1.7%
Productivity is lower than target but well ahead of previous years due to the
increase in production.
WORKING TOGETHER
DIRECTORS'
REPORT
CONTINUED
Other initiatives during 2011/12 included the development of

Cheltenham Downs, our large-scale sheep and beef finishing
property in the Manawatu. The first years production exceeded
expectations, with the property becoming an important part of
Landcorps value chain approach to export lamb marketing (see
pages 2426).
We continue to take initiatives to protect and enhance natural
environments on and near Landcorp farms, with a particular focus
on water quality. The Wairakei Estate development is an excellent
example of how intensive dairying can be accompanied by strong
protection for waterways in many areas throughout NewZealand.
Landcorp is fully supportive of the Lake Taupo Protection Trust
and its mission to reduce nitrite levels in run-off to the lake.
Initiatives during 2011/12 have included agreements with the Trust
to withdraw from livestock farming in the Taupo catchment (see
page23).
Productivity gain remains a core focus for Landcorp. The latest
year has seen further progress on genetic improvement in our
herds and flocks including the formation of Focus Genetics Limited
Partnership (LP); the deployment of efficient irrigation and pasture
management systems; the roll-out of information technology for
more precise and efficient farm management; support for the Farm
IQ initiative in red meat; and the growth of knowledge and skills
among our people. All these programmes contribute to productivity
growth within Landcorp and to the companys higher performance
in future.
| WAIMAKARIRI dairy complex.
Strategy
We have recently reviewed and confirmed Landcorp's strategy
for the medium and longer terms. Further to our objectives and
responsibilities as a State-Owned Enterprise, Landcorp defines its
mission to be New Zealands best livestock farmer, economically,
environmentally and socially.
In broad terms, this means continued strong focus on best practice
farming for each livestock species and on optimising returns from
on-farm forestry. Further, we will create added value in food, fibre
and service-based products. We will identify and meet customer
and consumer needs. Landcorps land use must be efficient,
effectiveand sustainable and alongside this, we will optimise value
for theshareholders by subdividing and selling land where this is the
best option.
The mission confirms Landcorps wider obligations to New Zealand,
including our role as facilitator in the transfer of farming best
practices across the nations pastoral sector. It also confirms our
commitment to developing people, inside and outside the company,
so they acquire and apply best-practice knowledge and skills
agriculture-wide. To facilitate this, Landcorp will strive to have a
company culture of innovation.
Current initiatives support the strategy in many ways. The Chief
Executive will report further on key aspects in his Review (pages
814). As we note above, the strategy is leading Landcorp to work
more with other parties where this better enables us to become
New Zealands best livestock farmer and to create greater value for
the shareholders. Working with others also enables us to share the
benefits of our performance.
The Future
People
We face the future with confidence despite the current softening

of prices for protein and fibre on global markets. Landcorp accepts
the challenge facing all New Zealand primary producers to
develop products, production systems and supply chains that
deliver value beyond the vagaries of commodity pricing.
Landcorp people are in great heart after another successful year

and as they progress the companys various initiatives. The Board
congratulates the winners of awards in this years Dairy Industry
Awards and the Ballance Farm Environment Awards (see pages 32, 33).
We thank Chris Kelly, the management team and all other Landcorp
employees for their commitment and hard work during 2011/12.
In 2011/12 we took further strides in that direction with growth in

lamb supply on fixed price contracts, much of this into the highvalue end of the United Kingdoms retail meat market. Landcorp
will increasingly seek to position itself in the same way on products
where New Zealand accounts for a large share of world trade and
where Landcorp is a New Zealand producer of significant volume
and quality. Our products can achieve greater recognition in the
marketplace. Dairy and venison are other obvious examples.
The joint venture with Shanghai Pengxin is a key strategic
development for Landcorp, giving us unique connection to the
Chinese market. We will implement best practice dairying on the
farms and in the years ahead, look at forming New Zealand-based
joint ventures for agricultural opportunities with Shanghai Pengxin
in China. Landcorp is taking the same vigorous approach in the red
meatindustry, and in the development of its operations acrossthe-board for best performance in economic, environmental and
social terms.
We also thank three retiring directors for huge contributions to

Landcorp over recent years. Previous Chairman Hon. Jim Sutton
has retired after six years Board membership. Marise James and
Jane Mitchell have also retired, having served since 2003 and 2009
respectively. Wewelcome three recently appointed directors: Nikki
Davies-Colley, Chris Day and Pauline Lockett.
At Landcorp, working together is first and foremost about employees
and directors sharing their knowledge, experience and commitment to
achieve great results for the company and for New Zealand. We, along
with our external partners, can have great confidence in the future.
Bill Baylis
Chairman
27 August 2012
Warren Larsen
Deputy Chairman CNZM
WORKING TOGETHER
CHIEF
EXECUTIVE'S
REVIEW
LANDCORP FARMING INCREASED PRODUCTION, CONTROLLED COSTS AND FURTHER
IMPLEMENTED STRATEGIC INITIATIVES DURING 2011/12. THE NET OPERATING PROFIT
OF $27.0 MILLION WAS A VERY PLEASING RESULT, ESPECIALLY IN A YEAR WHERE GLOBAL
TRENDS IN PRODUCT PRICING DECLINED FOR NEW ZEALAND FARMERS.
LANDCORP FARMING LIMITED AND SUBSIDIARIES
FINANCIAL PERFORMANCE
Total operating income
215.7 218.5
27.0 42.2
Total shareholders return

Chris Kelly
CHIEF EXECUTIVE
7.8 132.5
Net profit on equity investment

(share capital and retained earnings)
Total shareholders return on average shareholders funds
(including redeemable preference shares)
Landcorp will hold course through 2012/13, although falling product

prices and a continued strong New Zealand dollar will be significant
challenges. We remain focused on revenues, earnings and shareholder
value and on growth in these through: increased production; higher
productivity; development of integrated value chains for food and fibre
products; optimised use of land and other resources; and protection of
the environment.
We expect substantial developments in dairying in the years ahead
through our planned joint venture with Shanghai Pengxin of China
and through enlargement of established complexes, including
Wairakei Estate in the central North Island. These developments will
encompass every element of Landcorp strategy and their success
will significantly add to the companys future performance.
Performance
The $27.0 million net operating profit before tax for 2011/12 was
down from the previous years $42.2 million record, mainly because
of the revenue impact of significant reductions in milk and timber
prices. Total revenue from farm production during 2011/12 declined 4
per cent to $210.5 million (2010/11: $219.4 million). This was despite
volume growth in all areas of the companys land-based production.
Total operating expenses during 2011/12 increased 7.6 per cent to
$178.5 million (2010/11: $165.8 million), while net finance costs were
slightly lower at $10.2 million.
2011/12 2010/11
10.8% 17.0%
0.5% 9.4%
Landcorp recorded a much reduced shareholder value gain (also

referred to as total comprehensive income) of $7.8 million for
2011/12 under the impact of revaluation losses on livestock, forests
and financial instruments. These losses largely reflected the trend
in product pricing and they were, in turn, offset by 30 June 2012
revaluation gains on land and improvements. Landcorps shareholder
value result for 2011/12 included no profit or loss on the sale of farm
land during the year in contrast to 2010/11 ($10.3 million profit on
land sales).
Production
Most parts of New Zealand saw favourable growing conditions
through 2011/12. This, along with best practice management of
pasture and animals, led to increased production across all Landcorps
livestock types. New Zealand-wide, a generally mild winter in
2011 was followed by a sunny spring and, for a period, unusually
dry conditions in the upper North Island and the lower South. The
situation improved thereafter, with New Zealand experiencing
summer and autumn conditions that were generally wetter, and a
cooler summer than usual. This supported a complete recovery in
Landcorp flocks and herds which had been impacted by the severe
droughts of 2007 and 2008. Reproductive rates were high in 2011, the
companys national lambing rate up to 139 per cent and calving above
89 per cent.
BALANCED
SCORECARD
2012
Operational
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Maintain
effective
farmed area
Total hectares in
farm production
173,396
174,077
172,883
The total includes all land in pasture or crop, and excludes areas of conservation
retirement, riparian strips, forest plantations and service areas with buildings.
Landcorp achieved record milksolids production of 13,400 tonnes

for the year (2010/11:12,500 tonnes). At the seasons peak in
November the company was milking 35,922 cows, a small increase
from the previous year. Lamb and beef cattle numbers increased
significantly. The companys supply of prime-weight Lambs to
processing companies was up 16 per cent during 2011/12, while
supply of steers for beef processing increased 7 per cent. Deer
numbers supplied for processing were up 11 per cent while velvet
sales during 2011/12 lifted 83 per cent. Wool production increased
6 per cent (to 2,924 tonnes) and timber increased 39 per cent
(165,091 tonnes).
Sustainably
improve
pasture
production and
utilisation
Stock units per

effective hectare
at 30 June
8.6
8.5
8.8
The stocking rate per hectare was close to target. Emphasis was placed on
optimising production and returns per animal.
Sustainably
increase total
stock units
Total closing
stock units
1,485,499
1,486,115
1,510,573
Good growing conditions in 2011/12 were a contributing factor to closing stock

units being above target.
Increase
production
volumes
Milksolids
production
(tonnes)
13,030
13,357
11,838
Good growing conditions in the later part of the season

resulted in the target being exceeded.
Revenues
Sheep meat
production
(tonnes)
Growth in production largely offset the impact of some falling

product prices especially during the second half of 2011/12. Milk
revenue was down 12.3% to $83.0 million (2010/11: $94.6 million)
as contraction in dairy company payouts more than offset the gains
from record milk production in the latest year. Landcorp expects
2011/12 total payouts to be significantly down from the previous
year's $7.60 per kilogram of milksolids.
9,956
10,176
10,094
Higher than expected number of carry-over trade lambs

combined with good growing conditions and greater emphasis
on production per animal led to increased production. In
addition, significantly fewer store lambs were sold. South
Island lamb production was adversely affected by dry summer
conditions but this was more than offset by favourable North
Island growing conditions.
Beef production
(tonnes)
REVENUE SOURCES
8,833
9,715
10,481
Higher than expected opening numbers combined with good

growing conditions and greater emphasis on production per
animal led to increased production. Weaning weights in the
2012 autumn were ahead oftarget.
Dollars in millions
100
90
80
Venison production 2,316

(tonnes)
70
60
50
2,258
2,324
Lower than expected opening numbers and lower fawning

resulted in the target not being meet.
40
30
Timber harvested
(tonnes)
20
10
2004
2005
2006
2007
Milk
Cattle
Deer
Other
2008
2009
2010
2011
2012
Sheep
Wool production
(tonnes)
farming. Revenue reductions in milk and beef during 2011/12 were largely
offset by growth in sheepmeat, deer and other products. Overall, Landcorp
Velvet production
(tonnes)
aims for dairying and deer operations to contribute around 50 per cent
of total revenues over the long term. Consistent with this, the company
2,766
2,924
2,855
9.9
12.0
11.6
Improved market prices and delayed stock killing, coupled

higher harvesting rates, led to higher production during
2011/12.
seeks to improve the dollar value of income from sheep and beef farming.
Fluctuation will always be expected in a particular revenue line from one
volumes.
102,801
Higher than expected opening numbers, combined with good

growing conditions and condition of animals, led to increased
production.
Landcorp has a widely diversified revenue base across New Zealand livestock
year to the next, depending on changes in product prices and production
165,091
The 2011/12 harvest included harvest deferred from previous

years.
0
2003
100,000
Reduce labour
utilisation over
time
Opening (1July)
stock units per
permanent
employee
2,514
2,612
2,648
Higher than expected opening numbers contributed to the target being exceeded.
WORKING TOGETHER
CAPITAL STRUCTURE
Total assets
1,663.0
1,663.0
171.3
157.2
1,449.7
1,469.4
87.2%
88.4%
Total bank loans
CHIEF
EXECUTIVE'S
REVIEW
CONTINUED
Shareholders funds
Shareholders funds as % of total assets
1
Includes redeemable preference shares
Lamb prices were up overall for the year, although they decreased
significantly in the second half. Prices received by Landcorp were on
average 5 per cent ahead of 2010/11, this gain partly a reflection
of the companys substantial move into greater supply of Northern
Hemisphere retailers on fixed price contracts. Of approximately
430,000 lambs sold for processing, more than 70 per cent were
covered by supply contracts. Higher prices and volume growth saw
Landcorps sheepmeat revenue climb to $59.4 million in the latest
year (2010/11: $51.3 million).
Conversely wool prices, however, could not hold gains made in the
previous year and Landcorps wool revenue slipped back to $10.2
million (2010/11: $10.9 million). The average of prices received by the
company was down 7.4 per cent, more than offsetting the latest years
increased wool production. Forestry revenue plunged to $1.9 million
(2010/11: $5.2 million) as log prices also fell during 2011/12 to more
than offset a substantial increase in the volume of Landcorps timber
production.
Elsewhere in the livestock sector, beef prices softened in both the
prime and store markets with a resulting slide in the companys beef
revenue to $37.2 million (2010/11: $40.1 million). Venison prices
were up in the latest year, on average 6 per cent, and the rebuilding of
Landcorp herds saw increased venison and velvet production. Overall,
deer revenue rose to $17.7 million (2010/11: $16.7 million).
Expenses
Dairy and livestock production growth drove a 7.6 per cent increase in
operating expenses to $178.5 million for 2011/12 (2010/11: $165.8
million). Higher spending on pasture maintenance and supplementary
feed contributed most to the increase, with farm working expenses up
to $82.5 million (2010/11: $74 million). Cost pressures remain high
across New Zealand agriculture, and Landcorp retains tight control of
budgets and spending at all levels.
10
2011/12 2010/11
Capital expenditure in the latest year was down to $50.7 million

(2010/11: $57.8 million). The figure is expected to increase
significantly in 2012/13 as Landcorp invests in the joint venture with
Shanghai Pengxin and in the further dairying development on Wairakei
Estate. In the latest year, net interest expense eased to $10.2 million
in 2011/12 (2010/11: $10.4 million) due mainly to New Zealands
historically low interest rates. Landcorp increased its bank debt during
the year with continued on-farm investment. At 30 June 2012, the
companys bank debt was $171.3 million (2010/11: $157.2 million).
Balance sheet
Total assets were static at the latest balance date at $1,663.0 million
(2011: $1,663.0 million), due mainly to lower valuations on Landcorp
livestock and forests offset by a small increase in land values. The ratio
of shareholders fundsto-total-assets, at 87.2 per cent, was consistent
with recent years and with Landcorps preferred conservative balance
sheet structure. Higher capital expenditure in the coming three years is
expected to increase bank borrowing. Landcorp planning for this next
period of growth is entirely consistent with current banking covenants,
and with the constant need for borrowing capacity to address any
unforeseen negative developments in the business or product markets.
Subsidiary companies
Landcorp Estates Limited increased its sales activity during 2011/12
as property markets picked up New Zealand-wide. The company
settled eight sales, including sections on the Wakelins Riverfront Estate
(Paihia), Moturau Heights (Lake Manapouri) and Lakeside Terraces
(Taupo) developments. Increased revenue and a reduction in interest
expenses led Landcorp Estates to a much reduced net loss after tax of
$116,000 for the latest year (2010/11: $421,000 loss).
Landcorp Holdings Limited, made a net profit after tax of $536,000
for the latest year (2010/11: $811,000). A third subsidiary, Landcorp
Pastoral, is the vehicle for Landcorps investment in Focus Genetics
Partnership Limited (LP), the joint venture established with Rissington
Breedline in 2011. Landcorp Pastoral recorded a net profit after tax of
$510,000 for 2011/12.
BALANCED
SCORECARD
2012
Operational (CONTINUED)
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Increase
reproductive
efficiency
Lambing
percentage
137.7%
139.2%
133.3%
Strategic Initiatives
Calving percentage
In 2012/13 and beyond Landcorp will seek continuous improvement in

its current operations, and proceed with various strategic initiatives for
increasing production and productivity, for developing value chains, for
optimising land use and for protecting the environment. We will also
continue developing the capabilities of all employees, and promoting
their health and safety. Landcorp has built a culture of workplace
safety. We will maintain that focus through employee training, and the
continued application of new knowledge about health and safety in
farming.
Increased production
Landcorp will expand its farm production within both existing
operations and new developments. The latter includes the Shanghai
Pengxin joint venture and expansion of dairying on Wairakei Estate.
We have comprehensive development plans for the Shanghai Pengxin
farms which encompass a total of 5,689 effective hectares in locations
around the central North Island and Hawkes Bay. The joint venture
partner intends investing $15.5 million over three years to lift
production to around 5 million kg of milksolids per annum. Further
investment of $3.2 million will follow. Landcorp will assume day-today management responsibility for the portfolio. Existing share milkers
will operate through the current season.
Other developments will involve enlargement of established dairying
complexes as opportunities arise. Maronan Pastures, near Ashburton,
will be scaled up in 2012/13, with the conversion of an adjacent
Landcorp property to dairying and the building of a second shed on
the complex: Maronan will milk a further 1,200 cows at the seasons
peak. In North Canterbury, much of the former Eyrewell station
will also be converted for dairy operations as part of the nearby
Waimakariri cluster.
Production increases are sought across our existing dry stock
operations which have now fully recovered from the drought years
of 2007 and 2008. Cheltenham Downs, in the Manawatu, is proving
a valuable addition to sheep and beef finishing in the North Island:
It is part of an integrated lamb production and supply system
encompassing Landcorp properties (see pages 2426).
Higher Productivity
Landcorp continues to lift productivity in dairying operations with
the increased use of new technologies and precision irrigation. The
gains achievable with centre pivots are now well established. On
Waimakariri, for example, annual milksolid production grew 30 per
cent in 2011/12 which was the redeveloped clusters first full year of
operation with four centre pivot units in place of traditional border
dyke irrigation. Precision irrigation is integral to Waimakariri and
Maronan Dairies expansion plans.
Good stock condition, feed supply and favourable spring

weather resulted in higher than expected lambing percentage.
A series of National Sheep Management workshops focused
on continuously improving performance.
90.4%
89.1%
86.9%
The 2011/12 calving percentage was close to target and

higher than previous years. Landcorp is seeking improved beef
cattle performance through Cows for Profit workshops for
farm staff.
Fawning percentage
88.4%
86.8%
85.8%
Landcorp continues to focus on the fawning ability of hinds

in large scale herds. Improvement over previous years is
encouraging and reflects ongoing progress. Landcorp has
confidence that further improvement will be achieved.
Promote
best practice
in all farm
operations
FarmPride audit
ratings annual
average for all
farms.
Landcorps livestock farms are audited bi-annually and dairy farms annually under
the FarmPride quality assurance programme, with a score of 8 out of 10 being
regarded as satisfactory compliance. Landcorp continues to raise its standards and
a programme exists to address non-compliance issues.
Customers
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Produce
animals and
farm products
that are fit for
purpose when
supplied to
processors and
end markets
Average prime lamb

carcass weight (kg)
17.5
17.9
17.2
Ideal growing conditions complemented Landcorp's farming

systems to help deliver a record average weight in 2011/12.
Average prime
cattle carcass
weight (kg)
258.1
275.7
269.2
Cattle production was also a record, due largely to Landcorp's

strong feed position and sound farming systems.
Average prime deer
carcass weight (kg)
53.0
55.0
53.8
Deer production was also a record, due largely to the strong

feed position and farming systems.
Quality
Assurance on
animals and
farm products
FarmPride audit
ratings annual
average for all
farms for assurance
on quality to
customers
As noted above, under the FarmPride quality assurance programme, a score of 8

out of 10 is regarded as satisfactory compliance.
Promote the
Landcorp brand
Investment in rural
sector sponsorships
(dollars)
140,000
129,600
123,718
Landcorp continues to support various programmes of benefit to the rural sector.

In 2011/12 these included scholarships at the Taratahi Ag Training Centre and at
Lincoln University.
2012 | ANNUAL REPORT 11
WORKING TOGETHER
CHIEF
EXECUTIVE'S
REVIEW
CONTINUED
We will continue securing the benefits of the MilkHub technology,

rolled out progressively since 2007. This system is now installed
in 32 of Landcorps 42 dairy sheds and has recently received a
comprehensive software upgrade. MilkHub complements Landcorps
DPR (Dairy Production Reporting) system which holds data for every
farm and herd. DPR records and analyses pasture and milk production,
ratios of financial performance and many other critical variables. Farm
managers are making increasing use of DPR and MilkHub as tools for
management of cows and grass (see page 19).
Landcorps sheep and beef farming will increasingly make use of
Livestock Production Reporting (LPR), an information tool similar
to DPR. LPRs first version was piloted on eight properties during
2011/12, and it will be developed to encompass more types of data
and analysis. Every Landcorp farm will have its own dashboard
of indicators, measures and benchmarks to help managers drive
productivity higher over time.
Gains will be underpinned by ongoing genetic progress in sheep,
cattle and deer, based on the programmes of Focus Genetics. The
joint venture began in July 2011, providing Landcorp and others with
access to a much greater population of breeding animals. Future years
are expected to show productivity gain based on accelerated rates of
genetic progress. Landcorp farm managers work to build and maintain
condition on all animals all-year-round, sometimes reducing flock
or herd size to achieve this. The benefits were reflected again during
2011/12 in reproductive rates much superior to industry averages (see
Balanced Scorecard).
Value Chain Development

Increasing collaboration with processors and among farmers, and
new technology applications are facilitating the growth of integrated
value chains from the New Zealand producer to the export market
consumers. Landcorp took another big step during 2011/12 with lamb
supply to Northern Hemisphere retailers on fixed price contracts.
Increasingly, our production system is geared to meeting specific
product quality and timing requirements in supply contracts entered
with Silver Fern Farms, the Alliance Group and other processors.
Farm IQ Systems Limited, our joint venture with Silver Fern Farms and
the Ministry for Primary Industries, has a key role in developing and
expanding integrated value chains in the red meat industry. The goal is
to create more value by aligning New Zealand production and supply
with the preferences of affluent consumers in Europe, North America
and Asia.
Landcorp is providing leadership on information technology as Farm
IQ builds a farm management system encompassing key variables
in lamb production, with data supplied by more than 300 farmers.
In 2011/12, a pilot of this system tracked 365,000 lambs. Twelve
12
Landcorp farms are active users of Farm IQ at this stage. This is the
third year of a seven-year programme to develop a comprehensive
pasture-to-plate system for red meat. This will increasingly extend
also to beef and venison.
Landcorp is fully engaged with National Animal Identification and
Tracing (NAIT), the system for strengthening traceability in New
Zealand livestock industries. NAIT tagging and data reporting became
mandatory for all cattle in July 2012, with deer the next species to
be included during 2013. We give strong recognition to the value of
traceability for assuring export markets on the quality and health of
New Zealand-sourced red meats. Landcorp continues to support the
trialling of new radio frequency identification (RFID) tags and readers
for deer and sheep.
Optimised Land Use

Landcorp is developing comprehensive plans for each farm towards
optimising land use in both economic and environmental terms. Plans
including decision making on livestock species, stocking rates, pasture
regimes, crop rotation and infrastructure development. There is also a
strong emphasis on synergies between farms, these reflected in land
use decision making across individual farms. Overall, Landcorp has a
one farm, many paddocks approach to managing its land portfolio in
the North and South Islands. Farm plans also strengthen the focus on
environmental management particularly through nutrient monitoring
and control, and the retirement and protection of streams, wetlands
and bush areas.
Plantation forestry is increasingly part of optimised land use, in areas
where livestock farming is uneconomic because of ground conditions
or access. During 2011/12, Landcorp planted an additional 869
hectares of forestry, on 22 farms, which will accrue carbon credits
under the New Zealand Emissions Trading Scheme (NZ ETS) in future
years. By 30 June 2012, the company had approximately 5,600
hectares in plantation forests (mainly pinus radiata and douglas fir)
including replaced forests registered in the NZ ETS. A substantial
increase in planting is expected over the long term, with a further
2,324 hectares planned for 2012/13. Farm managers recognise forestry
as a land use option also because of its wood production over 25-30
years. In the past year, Landcorp harvested 267 hectares of mature
trees.
Wind power generation is another land use option, as demonstrated
by the successful establishment of the Mahinerangi Wind Farm partly
on Thornicroft Farm, North Otago. There are wind monitoring sites
on various Landcorp properties in the North and South Islands, with
further wind farm projects likely to be evaluated in the future.
Landcorp will continue to look at optimising the size and location of
farms to make best use of land and secure economies of scale across
BALANCED
SCORECARD
2012
Environmental
Landcorp is implementing Sustainable Land Management Programmes
on all its properties, in addition to sustainable practices under Farm
Pride. In 2010/11, 28 farms had formal programmes. The following
measures reflect a selection of sustainable practices encompassed by
these programmes.
its operations. There were no significant farm land purchases or sales

during 2011/12, with the emphasis more on developing previouslyacquired land, most notably Cheltenham Downs (Manawatu) and the
extension to Maronan Dairies (mid Canterbury). In the current year, our
focus will be the planned Shanghai Pengxin joint venture and further
development of established dairy complexes including Wairakei Estate.
Landcorp strategy has long included the subdivision and sale of land
that has higher values in lifestyle farming or residential use. Landcorp
Estates continues to be active in that market with five developments
(see pages 30, 31).
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Farm with
environmentally sound
practices
Farms with
nutrient
budgets
prepared and
implemented
100%
100%
100%
Nutrient budgeting involves close assessment of nutrient

use and flows, of fertiliser efficiency and of possible adverse
environmental impacts. Budgeting also facilitates investigation
of options for reducing adverse impacts, if any, on adjoining
land or waterways.
Contractors
with
Spreadmark
accreditation
for fertiliser
application
Environmental Protection
We have a fundamental commitment to environmental protection
and enhancement, integral to all Landcorps planning and use of land
and other resources. Farms are externally audited for compliance with
the FarmPride best practice programme which encompasses: the use
and storage of chemicals; the quality of water, soil and atmospheric
conditions; and animal health and welfare. Dairy farms are audited
annually, and sheep, beef and deer farms are audited biennially.
During 2011/12, Landcorp continued its practice of retiring and
protecting particular areas for their environmental value. A further
371 hectares were fenced and protected by 23 newly-registered
covenants. This involved the retirement of 81 areas of bush, eight
wetlands and 31riparian margins. Landcorp has now established with
Queen Elizabeth II Trust, the Department of Conservation, and/or
the Waiau Fisheries and Wildlife Habitat Enhancement Trust a total
of 221covenants encompassing 5,925 hectares of land nationwide
and 19.8 km of riparian strips. The company is committed to the
environmental protection of these and further areas, alongside
sustainable farming operations and lifestyle developments (see
examples on pages 28 and 31).
Landcorp has a particularly strong focus on water quality long evident,
for example, in our support for the Dairying and Clean Streams Accord
since 2003. In 2011/12 we supported the Government-led initiative
to cleanup Lake Taupo through reduction of nitrogen runoff in the lake
catchment currently New Zealands biggest environmental project.
Landcorp fully recognises the significance of Taupo-nui-a-tia to all New
Zealanders and particularly to Ngati Tuwharetoa, the iwi with mana
whenua in the Lake Taupo catchment. Under three agreements signed
with the Lake Taupo Protection Trust, the company has withdrawal
1,627 hectares from livestock farming. We no longer have any livestock
that might contribute nitrogen leaching in the catchment (see page 23).
100%
100%
100%
The Spreadmark Code of Practice gives assurance that fertiliser

is applied to the highest standards, at an even rate and
distribution pattern. Accreditation requires independent audit.
Landcorps policy is to use only Spreadmark contractors.
FarmPride
audit ratings
annual average
of all farms for
assurance on
environmental
practices
The FarmPride programme puts emphasis on sound

environmental practices in relation to the storage and use of
farm chemicals and fertilisers. These practices involve events
recording, staff training and use of certified contractors.
FarmPride also includes the systematic monitoring of
effluent management on dairy farms.
Protect areas
of special
environmental
value
Additional
covenants on
protected areas
registered in the
year
12
23
25
The 23 additional covenants brought the total at 30 June

2012 to 212.
Percentage
of farms with
fencing around
riparian zones,
wetlands and
waterways
50%
60%
N/A
Landcorp has a programme to progressively fence off more

areas for protection from excess run-off and for water quality
enhancement. Careful attention is paid to protect all sensitive
riparian areas.
Landcorp continues to contribute funding and in-kind support to

thework of the Pastoral Greenhouse Gas (GHG) Research Consortium.
We have an ongoing interest in GHG issues, and we are taking practical
steps to monitor, manage and mitigate emissions. Plantation forestry
on many Landcorp farms is integral to our approach.
WORKING TOGETHER
CHIEF
EXECUTIVE'S
REVIEW
CONTINUED
Employees and Safety
Outlook
I thank all Landcorp people for their efforts and dedication during
2011/12. Employee performance is a major driver of company
performance, and results for the latest year are a tribute to the
knowledge, skills and hard work of our people. Landcorp continues
to improve its programmes for training and development, for
performance management and for promoting excellence among
employees (see pages 1618). During 2011/12, staff turnover rates
increased in some areas, mainly as a result of industry-wide factors.
It is pleasing to see stability among farm and business managers and
senior managers. Their commitment to the company and depth of
experience is a real strength of Landcorp.
Landcorp has a very positive future, based on long-term global

growth in demand for New Zealands high quality food and fibre
products. The shorter term outlook is clouded by the European
financial crisis, by slower growth in Asian and North American
economies, and by the high New Zealand dollar. In 2012/13 we
are seeing these factors impact on international market prices for
milk, red meat and timber. Product price reductions will likely have
a significant impact on Landcorp and New Zealand agriculture
generally. Landcorps forecast net operating profit for 2012/13 of
$12.7 million is predicated on current price trends.
Workplace safety is another of Landcorps strengths, maintained

through employee training and a rigorous safety approach to
farming. Technical skills and accident prevention practices are, of
course, critical but our training will increasingly also put emphasis on
personal attitudes to safe behavior. We began a shift in this direction
during 2011/12, particularly in relation to quad bike use. From the
current year onwards, 100% safety will be promoted as a core value
among Landcorp employees with all encouraged to think more about
their safety on the job. We will shed any old ideas that injuries are,
somehow, inevitable in farming.
Landcorp has the people, strategy and partners to prosper over the
long term. Increasingly, we will work with others in agriculture, in
supply chains and in government to push ahead with new initiatives
that optimise New Zealand agricultural production systems and
add value to everything we do. We face the coming years mindful
of market challenges and cost pressures, and with confidence in our
capabilities and our future performance.
Chris Kelly
Chief Executive
14
| RAFT CREEK.
OPERATIONAL REVIEW
PEOPLE AND
CAPABILITY
DEVELOPMENT
LANDCORP DEVELOPS ITS PEOPLE THROUGH TRAINING AND EDUCATION, PERFORMANCE
MANAGEMENT, AND THE CHAMPIONING OF EXCELLENCE AND SUCCESS. COURSES, POLICIES AND
PRACTICES ARE INTENDED TO STRENGTHEN LEADERSHIP WITHIN THE COMPANY AND EXPAND ITS
CAPABILITIES, AND ALSO TO BUILD A STRONG FOCUS ON SAFETY IN ALL AREAS OF OPERATION.
AT 30 JUNE 2012, Landcorp had 573
full-time permanent employees, compared
with 599 at the previous balance date. The
reduction reflected partly an increase in the
number of roles that were vacant and being
advertised at each date: 18 in June 2012,
up from 11 in June 2011. During the latest
year, a number of roles disappeared through
restructuring moves that included closure
of the Landsys business unit and reductions
on Aratiatia Station, Taupo, after part of this
property was sold. Two Landcorp employees
were transferred to Focus Genetics.
Training
Landcorp stepped up training activity during
2011/12. The number of employees who
undertook internal courses and/or studied
for NZQA-accredited qualifications was the
highest for at least five years. There were 526
individuals enrolled in 823 NZQA-accredited
programmes during the year, including 18
people in modern apprenticeships.
The AgITO programme completion rate
was also higher than in previous years, up
almost 30 per cent compared with 2010/11.
Overall, there is increasing acceptance of
training as an integral part of Landcorp farm
employment. Managers continue to work
16
with team members to identify training

needs and opportunities that will benefit
both the individual and thecompany.
Landcorp is putting particular effort into
the continuing development of managers.
During 2011/12, a one-day training
programme for all farm managers was
aimed at improving staff recruitment
practices and daily management skills.
At senior levels, 11 Landcorp managers
attended courses run by external providers.
These included the second Agricultural
Leadership Programme in November
2011, with three of the participants being
Landcorp people and nine others from a
range of other organisations. Landcorp runs
each programme in association with the
New Zealand Institute of Management
(NZIM), with the aim of developing future
leaders in agriculture who have worldclass knowledge and experience. A third
programme is planned for November 2012.
Landcorp managers and other employees
are encouraged to enter for relevant
industry awards and 2011/12 once again
brought a number of prominent successes
in this regard (see pages 3233).
On-job Performance
All Landcorp employees are set performance
objectives by their managers, and these
help to drive overall performance by teams
and by the company. During 2011/12,
greater attention was paid to determining
objectives that also contribute to individual
development.
Health and Safety
This period saw 100 employees undertake
the Farm Safe theory course as Landcorp
continued to place high importance on
health and safety on-farm and elsewhere.
The company was accepted into the ACC
Partnership Programme which gives us
greater influence on the management
of rehabilitation from work injuries. As
a result, Landcorp people have better
rehabilitation advice and an earlier return
to work, and farm managers have access
to professional intermediaries to deal with
health practitioners. We continue to improve
policies, processes and practices for safety,
this helping with our acceptance into the
ACC programme at secondary level.
In the latest year, the numbers of reported
incidents (231) and injury accidents
(162) were in line with the previous year.
Notably, injuries in the final quarter of

2011/12 were at the same level as in
the corresponding period of the previous
year even though accreditation to the
Partnership Programme is generally
accompanied by increased reporting. In
the 2012/13 year, Landcorp will further
improve its approach to injury prevention
with a focus on the decision making of
managers and staff.
In June 2012, a Coroners hearing was
held into the accidental death of dairy
farm assistant Renee McNelis on the
Cape Foulwind complex in November
2010. Although the Department of Labour
report indicated that Landcorps training
requirements and other actions met
expected standards, we continue to work
on reduction of incidents arising from quad
bike use. Landcorp has rigorously reviewed
its guidelines and training processes. In
2011 the number of reported injuries
from accidents involving quads was less
than half that in 2010 and in 2009. During
September 2012, Landcorp will conduct
further studies on the suitability of quads
for farm work, especially for towing
feeders, spreaders and other implements.
LANDCORPS FUTURE FARMER

COURSE has14students in 2012,
all keen to learn basic knowledge
and skills for a career in farming. The
year-long course combines tuition
and written work in a classroom
on Aratiatia Station, with practical
on-farm experience on Aratiatia and
other Landcorp properties. Subjects
range from livestock and pasture
management, to agrichemicals use and
on-farm safety. Pictured at Aratiatia
are 2012 students (left to right):
Deborah Simon, Henry Eames, Kaitlin
Elliot and Cameron Managh.
OPERATIONAL REVIEW
BALANCED
SCORECARD
2012
Employees
OBJECTIVE
MEASURE
2011/12
TARGET
2011/12
ACTUAL
2008-2012
AVERAGE
Maintain safe and

healthy workplaces
External Accreditation of
Landcorps Work Safe programme
Tertiary
Accreditation
Secondary
Accreditation
N/A
Turnover
On April 1 2012, Landcorp joined the ACC Partnership Programme. This involves a
higher audit standard than the previous Workplace Safety Management Practices
(WSMP). The first Partnership Programme audit gave Landcorp a Secondary
Accreditation. Landcorp aims to meet the Tertiary standard, reflecting the highest
standard of health and safety practices.
Landcorps employee turnover rate for

2011/12 was 30.5 per cent, higher than the
previous year (25.4 per cent). There are many
reasons. A reduced turnover rate among
farm managers (16 per cent) creates fewer
opportunities for internal advancement by
senior dairy managers and senior shepherds:
In 2011/12, we saw well-trained and
experienced people in these roles looking
for opportunities elsewhere after two years
of relatively low turnover in the company at
this level.
Dairy farms had the highest turnover rate.
This can be attributed to New Zealandwide growth in the dairy industry which is
expanding the range of opportunities for
experienced people. There is also a trend for
new entrants, attracted by opportunities
inherent in the industrys growth, to leave
in their first year because they are not
actually suited to dairying. Landcorp has
seen a doubling in the number of dairy farm
workers who leave during their first year of
employment with the company.
Turnover among business managers remains
low, with only two people leaving such a
role during 2011/12. This settled operational
management group is a great strength of
Landcorp, reflecting the importance placed
on people development and mentoring at
this level.
A senior farm manager with 40 years service
will leave early in 2012/13. Barry Hobbs,
who was most recently Thornicroft Station
Farm Manager in Otago, leaves the company
for semi-retirement. Barry will continue to
assist Landcorp in advisory and locum farm
manager roles.
Internal audit of Landcorps Work

Safe programme annual average
compliance rating of all farms
9.0
9.0
8.0
Each Landcorp workplace is subject to a biennial internal audit under the Work Safe
Programme involving external auditors.
Percentage of total workdays lost
due to workplace accidents
0.35%
0.38%
0.34%
Landcorp staff are reducing the incidence of workplace injuries, with the associated
lost-time measure for 2011/12 down from the previous year although still slightly
above target. The ACC Partnership Programme, with Wellnz as the third party provider,
is expected to reduce lost workdays further through earlier rehabilitation intervention.
Maintain
appropriate staffing
through recruitment
Employee turnover rate
<23%
30.5%
28.3%
The turnover rate for 2011/12 remains above target, and is above the 5 year average. A
significant proportion of the turnover comes through a high turnover in dairy staff.
Number of training days per
employee, per year
4.0
3.6
3.9
Landcorp continues to place emphasis on training and development of staff. During

2011/12 emphasis was placed on up-skilling managers in management functions.
These numbers do not include the time staff spent studying for AgITO courses such as
Modern Apprenticeships or National Certificates delivered outside work hours.
Train and develop
staff to support
current and future
business needs
Number of employees who

completed Landcorp-internal
courses
350
508
398
Landcorp continues to train at all levels to meet capability requirements and to ensure
succession planning and internal promotion.
NZQA accredited unit standards
achieved for year
2500
2802
2706
Farm employees continue to enrol in AgITO qualifications - the majority of staff

are committed to developing their competencies to improve farm productivity and
enhance their career opportunities. The basic component of learning is measured as
a Unit Standard and in 2011/12 the number of completed Unit Standards is greater
than has been seen over the last three years and well over the 5 year average.
Trainee numbers are up, completed programmes are up and number of abandoned
programmes is down.
Training investment as a percentage
of gross revenue
0.6%
0.4%
0.5%
Landcorp continues to make significant training investment aimed at increasing

production through higher levels of capability among employees. Actual investment in
2011/12 was unchanged but higher-than-expected revenue for the year lowered the
percentage below target.
People Capability, Job Satisfaction
N/A
Landcorp's people capability measure is being aligned with the annual reporting cycle
and talent management process. The next available scores will be for 2012/13. The
company is also moving to a new form of employee job climate and satisfaction
measure that will enable comparison of Landcorp with the wider employment market
and other agricultural organisations. For this, a new survey was trialled with a sample
of staff during 2011/12. Results indicated that Landcorp measures above the New
Zealand average in key areas including certainty around organisational purpose,
organisational communication and development opportunities.
18
WORKING with skilled farmers
TEAMWORK TO ANSWER
THEHARDQUESTIONS
KEEPING THE COWS AT OPTIMAL FEED LEVELS IS THE MAJOR GOAL ON MOUTOA DAIRIES
AND THE NINE FARM MANAGERS IN THIS HOROWHENUA CLUSTER WORK AT THAT
TOGETHER EVERY DAY.
UNDER THE LEADERSHIP of Farm Business
Manager Brian Wilkinson, they have
made Dairy Production Reporting (DPR)
a valuable tool in the daily management
of cows, pasture and milk flow: It is all the
more valuable because of its capacity for
benchmarking performance across the nine
adjacent farms. The online DPR includes
stocking rates, feed consumption, milk flow
statistics, production cost ratios, projected
profit figures and other critical variables.
If we focus on the quantity and quality
of grass being fed to the cows, then milk
production will take care of itself. Thats our
basic rule of thumb, says Brian Wilkinson.
We know cows need 18-20kg of dry matter
a day and our aim is to ensure they get that,
plus a little more for increased production
during the first half of the season. By
monitoring every day we know exactly what
the cows are getting.
The approach has paid off again in 2011/12
with average production across the farms
increasing to 1,385kg of milksolids per

hectare (or 410kg per cow). With ongoing
improvement in herd and feed management,
the Moutoa team is aiming for 1,600kg per
hectare as an average across all farms.
It is an ambitious target even on these
fertile, silty soils alongside the Manawatu
River. Grass growth can be very erratic,
especially at the seasons height in spring
when dry matter production varies
significantly from day-to-day under the
influence of rainfall, sunshine hours and
temperature. The Moutoa farm managers
make careful use of supplements to avoid
any hungry days and to lift per-cow intake
above 18kg in the late spring. Production
performance in 2011/12 reflected betterthan-normal grass growth thanks to a
consistently wet and warm spring and
summer.
Landcorp put in its own farm managers from
the start of 2008/09, replacing sharemilkers
on Moutoas 1,400 effective hectares of milk
production platform. The farms have further

developed since then, with roads, dairy
sheds and other buildings upgraded. Pasture
improvement and management has enabled
stocking rates of up to 3.5 cows per hectare
in the latest season.
Brian Wilkinson is a strong believer in
teamwork among the nine farm managers
and their employees. Each manager is
clearly responsible for performance on their
farm and the best-performing farm sets the
benchmark for others. Information sharing
through the DPR and at team meetings is an
integral part of Moutoas development plan.
With DPR and related software, we keep
asking ourselves the hard questions like
whether a particular way of managing the
production system is as profitable as it
should be, says Brian. We are confident
that Moutoa can rival, even surpass,
performance on the best of dairy farms
anywhere in New Zealand.
| FARM BUSINESS MANAGER Brian Wilkinson and Matt Johnson, Moutoa Dairies.
OPERATIONAL REVIEW
WORKING with private investors
FROM FOREST TO HIGH

PERFORMANCEDAIRYING
LANDCORP IS DEVELOPING NORTH ISLAND PUMICE COUNTRY INTO HIGHLY-PRODUCTIVE DAIRY
FARMS A BOLD VENTURE THAT LINKS OUR EXPERTISE AND SYSTEMS WITH THE ASPIRATIONS OF
PRIVATE INVESTORS.
WAIRAKEI ESTATE has six dairy units
and support grazing land today as part
of the regions biggest conversion from
forestry to dairying. Investment company
Wairakei Pastoral Limited is the owner
and Landcorp is the farmer, holding a
long-term lease on each of the newlycreated farms. The 7,500 hectares now in
pasture include an extensive sheep and
beef operation.
Wairakei Pastoral Chief Executive Chris
Parkinson says his private investors
sought a long-term partner with
strengths in developing and operating
farms, and also in environmental and
social management. With a project of
this scale, we needed the right partner
and one who would also do right by the
land, he says.
20
We have an excellent working relationship

with Landcorp at all levels. Together we have
weathered severe storms in the operating
environment. Were very confident about the
future, including more dairying development
of land that is progressively being converted
from forestry.
Conversion from forestry stopped in

December 2007 under conditions imposed
by New Zealands Emissions Trading Scheme
(ETS). Wairakei Pastoral Limited is addressing
ETS liabilities associated with further
clearance for pasture and development work
resumed in 2011/12.
Landcorp became involved in 2004 before

conversion started. Alan Bullick, one of
Landcorps Farm Business Managers for
Wairakei Estate, says each farm was
meticulously planned in advance of
development work. When the pine trees were
still on and we couldnt see much, we used
contour maps to plan where dairies, roads,
fence lines and everything elsewhere would
go, he says. With the farms developed so far,
we have gone back over their plans but have,
in fact, needed to change very little.
Landcorp has seen steady gains in

productivity over the past six years since
dairying operations began on its first Wairakei
Estate unit, Renown. Pasture has improved
each season with the buildup of soil
composition and applications of cobalt an
element naturally deficit in pumice country.
(This deficiency swayed land use to forestry
before research, in recent decades, showed
how cobalt spreading by farmers could make
this good country for livestock).
Generally, Landcorp sows grass nine-to-12

months after trees and stumps have been
removed from an area. Dairies, housing and
other infrastructure are sited to maximize
natural advantages on each farm.
Rainfall on Wairakei Estate is relatively low:
Weather stations have measured an average
980 millimeters per annum over the past
five years. Ideally the dairy units would
be irrigated with water either drawn from
the Waikato River or deep bores. Wairakei
Estate has been the subject of water consent
processes for several years, and resolution is
expected during 2012/13.
Meantime Landcorp has gone to dry land
farming with reduced stocking rates,
increased reliance on feed crops and a switch
from ryegrass to fescue pasture. The latter
is hardier in a dry climate and its relatively
high dry matter content is good for cow
health. Alan Bullick says fescue does, however,
require closer management and accurate
grazing. Our approach to establishing
pasture and enhancing feed quality is to
slow down, and make sure we do everything
properly.
This is definitely paying off with per-hectare
production rising to 950 kg of milksolids in
2011/12 (per-cow average of 405 kg). With

sufficient irrigation, Alan Bullick believes
Wairakei Estate dairy units could produce up
to 1500 kg of milksolids per hectare. This
area could be the next southern Waikato, due
mainly to its free draining soils and relatively
short winter, and also to the buildup were
seeing in soil organic matter.
The six existing dairy units cover 3,200
hectares, with a further 1,300 hectares of
dairy support land. Further conversion from
forestry in the years ahead will see Landcorp
applying its expertise and systems on a
steadily increasing scale.
FARM MANAGER
IANNELSON AND WIFE
JUDY NELSON constantly
think about nitrite leaching
risks as they work the
Resolution dairy unit. Ian
does no effluent spreading
within 100m of the Waikato
River bank, and fences and silt
traps are carefully maintained
around the propertys streams
and wetlands. Resolution was
developed with a large and
well-located effluent pond
(below).
OPERATIONAL REVIEW
THE WAIKATO RIVER

FLOWS BY IT
BEST PRACTICE FARMING has a major
role in helping protect and restore the
health and well-being of the Waikato River.
Landcorp and Wairakei Pastoral have this
firmly in mind as they develop and farm the
estate, along eight kilometres of river bank.
The dairy units were laid out with wide
riparian strips between the river and
adjacent paddocks. Native vegetation is
gradually overtaking these buffers, and also
fenced wetlands and streams that drain
into the Waikato. Effluent spreading is
muchreduced on pasture that is closest to
the river.
The Waikato Regional Council gives positive

acknowledgement to Landcorp and Wairakei
Pastoral for their commitment to farming
best practice which will limit adverse
impacts on water quality.
In general, the Council says, the river has
been impacted by agriculture over many
decades, and conversion of land along
its banks from forestry to pasture will
inevitably put pressure water quality.
However the existing dairy units are
credited with operating to environmental
best practice as this is currently recognised
in the dairy industry.
| PLANNING for the dairying development of Wairakei Estate included the establishment of a riparian strip
along the Waikato River. Fences are set back 50m, with native vegetation re-appearing along the river bank.
Alan Bullick, one of Landcorps Farm Business Managers for Wairakei Estate, says the riparian strip is a big step
beyond past practices of running pine plantation or pasture virtually to the waters edge.
22
Indeed, Resolution Farm Manager Ian

Nelson has won the Waikato Regional
Council Water Protection Award for 2012
(see page 32).
Crown settlements with five Waikato iwi,
and implementing legislation enacted
in 2010, will lead to new initiatives
for protecting and restoring the rivers
health and well-being. Planning for this is
underway by the Waikato River Authority
and the Waikato Regional Council. Landcorp
and Wairakei Pastoral are well placed
to meet the new water management
challenges that will arise from this process.
WORKING with government bodies
LAND MANAGEMENT
TO PROTECT LAKE TAUPO
LANDCORP IS SUPPORTING THE GOVERNMENT-LED PROTECTION OF

LAKE TAUPO THROUGH THE WITHDRAWAL OF SUBSTANTIAL AREAS
FROM PASTORAL FARMING. REDUCTION IN NITROGEN LEACHING IN
THIS WAY WILL HAVE LONG-TERM BENEFITS FOR LAKE WATER QUALITY,
FOR LOCAL COMMUNITIES AND FOR THE COMPANY.
LANDCORP HAS AGREEMENTS with the
Lake Taupo Protection Trust for withdrawal
of 1,627 hectares in the catchment. Most of
this will become pine plantation, with further
environmental benefit under New Zealands
programme for carbon emissions reduction.
The land is held by Landcorp in threeblocks
part of Wairakei Station (488 hectares), Tauhara
South (1,060 hectares) and Wharewaka East
(79 hectares). They are remnants of the old
Crown Estate that once surrounded Taupo
town, and was cleared of scrub and wilding
pines for pasture in the 1960s.
Like others, Landcorp recognises that past
and current farming in the Taupo catchment
is putting pressure on water quality, says
Forestry Manager Gordon Williams. Retiring
the three blocks in agreement with the Trust
is an excellent opportunity for us to help
address the situation and put the land into
other productive use.
Landcorp has previously acknowledged
nitrogen leaching concerns with stocking
rates on Wairakei, Tauhara South and
Wharewaka East that were generally lower
than average for the region. This fact was

reflected in the agreements signed with the
Trust in June-July 2012.
The Trust a joint venture between the
Government, Taupo District Council, Waikato
Regional Council and Ngati Tuwharetoa will,
in effect, pay Landcorp for keeping livestock
off the land. The annual nitrogen leachate
avoided has been calculated for each of
the three blocks at between 6.6 and 8.8
kilograms per hectare based on past practice.
Landcorp will begin extensive forestry
planting in 2012/13, with an accrual of
carbon credits to follow in future years.
Trust Chief Executive Graeme Fleming says
Landcorp has been very constructive on the
complex issues. The company is good to deal
with because of its ability and willingness
to integrate nitrogen reduction and land use
strategies across the Taupo catchment, he says.
By 30 June 2012, the Trust had entered
nitrogen reduction agreements with over
20 land owners, many of whom will convert
pasture to forest. Some farmers have agreed
to nitrogen management plans involving
| TRUST CHIEF EXECUTIVE

Graeme Fleming and
Landcorp's Forestry Manager
Gordon Williams.
change in the livestock type on their land

and/or stocking reductions. While our
agreements are bringing down nitrogen, it has
become clear that the associated changes in
land use can make farms more efficient and
profitable as input costs decline and, where
new forest is being planted, there are carbon
credits to be earned, says Graeme Fleming.
The Trust, set up in 2007, seeks to reduce
nitrogen leaching into the lake by 20 per
cent by 2018. On current estimates, that
will require avoidance of 183 tonnes of
nitrogen annually. The Trusts work and
agreements with land owners are funded by
the Government and the two councils (total
funding of $81.5 million between 2007 and
2018). To date a total of 131 tonnes have
been contracted for removal.
The Landcorp agreement represents
approximately 11.54 tonnes of nitrogen and
the company now has no pastoral farming
activities in the Taupo catchment. Until
recently, the Wairakei and Tauhara South
blocks were grazed by sheep, cattle and deer.
The remainder of Wairakei Station, outside
the catchment, will still be farmed.
OPERATIONAL REVIEW
WORKING with customers
LAMB PRODUCTION
FORTHEVALUECHAIN
EXPORT LAMB MARKETS ARE DEMANDING ON QUALITY, VOLUME AND TIMING OF SUPPLY.
LANDCORP SEEKS HIGHER VALUE BY CONTINUING TO STRENGTHEN BOTH ITS PRODUCTION
SYSTEM AND NEW ZEALANDS LAMB SUPPLY CHAIN TO THE MOST DEMANDING OF MARKETS.
CHELTENHAM DOWNS is the latest
addition to the system 1,290 hectares of
flat and rolling country in the Manawatu,
central in location to other Landcorp farms
and to meat processors. Cheltenham Downs
is a specialist finishing farm with great
potential for highly cost-efficient supply of
lambs to market specification through 12
months of the year.
Landcorp purchased the farm in mid-2011
for exactly this purpose, attracted by its
location, heavy soils and favourable climate.
The regions consistency of rainfall and
sunshine hours, averaging around 1,000 ml
and 1,700 hours per annum respectively,

make for good year-round growth in pasture
and feed crops. Farm Manager Ian Brown
is confident Cheltenham Downs can finish
at least 30,000 lambs annually once its
current intensive development programme
is completed. The property finished as
many as 20,000 lambs during its first year
with Landcorp, before new fencing was
completed to enable the pasture and stock
management that will become fundamental
from now on.
Cheltenham Downs is being converted from
large-scale arable cropping. Landcorp has
| FARM MANAGER Ian Brown inspects Lambs grazing on plantain pasture.
24
been installing 98km of new fences, and a

network of wide stock lanes and roads. New
shelter belts are being planted, and new
houses and covered yards built. Gullies and
waterways are being fenced and planted in
native species.
The farm has three blocks, including 547
hectares of free-draining terrace near
Colyton on the eastern side of the Oroua
River. The second is higher terraced land to
the north of this home block, and the third
is gently sloping country to the northwest,
on Short Road near Feilding. Each block
also offers excellent land for finishing beef
| LAMBS at final weighing.
| WAGYU ANGUS heifers.
| DAIRY calves.
cattle and rearing pre-production dairy cows,

as secondary activities in support of lamb
finishing.
safety valve when dry conditions hit feed

availability in other regions. This property can
then be called on to accommodate larger
numbers of animals.
exceptionally well as a finishing farm into

the future and become a very valuable
component of Landcorps nationwide farm
system for lamb breeding and finishing.
Cheltenham Downs relies on pasture grasses

and forage crops, with a focus on those
which prove most efficient for short rotation
finishing. Plantain, a perennial forage herb
similar to chicory but with a more robust
growth pattern, was trialed on Cheltenham
Downs during 2011/12. Ian Brown says early
indications of lamb weight gain are very
promising. With electronic ear tagging of
lambs from now on, we can collect more hard
data and learn far more about plantain as a
feed at different stages of finishing, he says.
Continuous productivity gain is critical in

the companys value chain approach to
production and supply for export markets.
Livestock Marketing Manager Andrew
Hall says Cheltenham Downs will help
lift Landcorp to the next level with this
approach by growing the volume of lambs
available for supply under fixed-price
contracts, and by expanding knowledge
on how lambs can be finished to market
specification at lower cost and on time.
In fact, Ian Brown says Cheltenham Downs

adds depth and diversity to all Landcorp
operations in the North Island. Were a
major outlet for the breeding farms
whatever they produce, we can finish, he
says. His major challenge is achieving target
weight gain on lambs bred elsewhere by
Landcorp and also animals bought on
the store market as quickly as possible
or by the dates required to help fill supply
contracts with processing companies.
Generally the goal is to produce lambs
of 40kg live weight or heavier, with some
flexibility around this given Cheltenham
Downs significant potential to become a
Indeed, Cheltenham Downs has given

early indications that it will perform
| NEW YARDS on the Colyton block.
OPERATIONAL REVIEW
SUPPLY FOR
TESCOS FINEST*
LANDCORP-PRODUCED LAMB fills an

important niche in the Finest* food
programme of United Kingdom grocery
group Tesco its a value chain in action
between New Zealand farmers and
export market retailers.
Silver Fern Farms supplies to Tesco, and
both look to Landcorp for lambs of the
consistently high quality demanded at the
premium end of the UK consumer market
between December and March. Tesco wants
New Zealand product as its Finest* lamb at
the height of our supply season (and outside
the seasons of regional lamb producers in
the UK). Silver Fern Farms introduced Tesco
to Landcorp in 2009 and the three-way
relationship has grown ever since. Tescos
rigorous quality assessment process includes
regular lamb taste tests and Landcorp farm
visits.
For Landcorp, the value chain means
forward commitment to supply the types
and volumes of lambs required in certain
weeks under fixed price contracts. This
enables production to be linked far more
closely to market signals and gives far more
certainty to farmgate returns through the
26
year. The contracts replace traditional supply

in response to the weekly price schedules
posted by meat processing companies.
Silver Fern Farms Chief Executive Keith
Cooper says Landcorp has the vision and
capability to make the value chain approach
a success. Silver Fern Farms is absolutely
committed to growing programmes that link
red meat production to the final consumer
market, and this means working in partnership
with farmers and retailers. Landcorp is in
Tescos Finest* lamb programme because it
will consistently supply lambs of the right
age, grade and weight, in the right weeks. This
approach, focused on quality, consistency and
fixed forward pricing, is the best way forward
for us.
Landcorp took another big step during
2011/12 with fixed price contracts covering
70 per cent of all lambs the company sold for
processing and export in the year (330,000).
Tescos Finest* programme represented a
substantial component of this: Landcorp
also had contracts for standard, year-round
supply to Tesco, and for supply to other
retailers through Silver Fern Farms and
otherprocessors.
Livestock Marketing Manager Andrew Hall

says prices received under the contracts
through 2011/12 were, on average, higher
than those offered on traditional schedules.
We are on track to having 80% of all
Landcorps red meat sales covered by fixed
price contracts as we develop both relevant
supply chain relationships and our multi-farm
production system, says Andrew.
As well as greater surety of income, fixed
price contracts provide a valuable tool for
more informed decision making as Landcorp
farm and business managers weigh up
stocking options, use of available feed and all
other variables that go into optimising per
farm return. Landcorp is also working with
private farmers to grow the numbers of lambs
available for finishing at Cheltenham Downs
and elsewhere: Landcorp-bred rams are being
used to source from outside the company
more of the lambs suitable for supply under
fixed price contracts, at the right times. It all
adds up to steady expansion of the value
chain approach.
WORKING with the environment
FARMING SUCCESS
INTHECOLDANDWET
CLIMATE AND TERRAIN POSE SPECIAL CHALLENGES ON RANGEDALE STATION, IN THE WAIRARAPAS
NORTH-EASTERN HILL COUNTRY. WE KNOW HOW TO FARM TO THE ENVIRONMENT UP HERE
AND THAT MEANS, FOR EXAMPLE, TAKING GREAT CARE TO MATCH THE RIGHT STOCK WITH OUR
PARTICULAR TYPES OF LAND, SAYS PAUL EDWARDS, RANGEDALE FARM MANAGER FOR THE PAST
EIGHT YEARS.
PAUL AND HIS TEAM must work with
steep to rolling terrain, a mix of limestone
and papa soils, high rainfall, regular winter
snowfalls, year-round low temperatures
and frequent severe winds. The property,
on the Puketoi Range east of Pahiatua, is
between 300m and 750m above sea level,
and its annual average temperature is only
7 degrees.
Nonetheless, Rangedale is a very successful
sheep and beef farm, and an integral
component of Landcorp operations
across the lower North Island. In 2012, its

6,100 Romney ewes are providing lambs
for finishing at Wairio Station (south
Wairarapa), Cheltenham Downs (Manawatu),
Ahuriri Station (Hawkes Bay) and Edenham
Station (Hawkes Bay). It will also winter
800 yearling and R2 Angus steers sourced
from the Hawkes Bay. With 1,382 effective
hectares, Rangedale is a relatively low inputcost farm that prospers on its grass growing
capacity, and on the astute management of
both livestock and pasture within the tough
parameters set by nature.
Paul Edwards says heavier cattle are always

kept on the easier limestone country in
winter to limit the risks of erosion and
pasture damage. We dont pull the hillsides
down into waterways, he says. Were
a grass farm no crops, hay or silage in
winter. In fact we couldnt feed out hay even
if we wanted because it would blow away.
Lambing is delayed until early October
because cold temperatures generally mean
a late start to spring grass growth. Snow in
October is not uncommon and Rangedales
OPERATIONAL REVIEW
| RANGEDALE provides good

country for growing Angus
weaner steers, tobe finished
either on thisproperty or other
Landcorp farms.
lambing rate varies greatly from year-to-year.

(Ewe pregnancy scanning in 2012 showed a
very promising rate of 176 per cent.)
The climate and ground conditions have
given Rangedale one major advantage: It
never goes dry. Annual rainfall is, on average,
over 2000mls and the propertys hillsides
are blessed with many natural springs. Water
from these is reticulated under pressure to
stock troughs that support 300 hectares of
grazing land.
We are definitely summer safe and that
means we can be a holding farm for other
Landcorp properties, says Paul. Indeed,
reliability of climate and water supply were
major considerations when the company
purchased Rangedale in 2002. Previous
owners had created the station through
amalgamation of four adjacent farms.
28
For Paul, wife Donna and Rangedales head

shepherd, Scott Lasenby, working with the
environment also means protecting water
quality and the propertys remaining stands
of native bush. To date, 50 hectares of bush
and wetland has been fenced and covered
by Queen Elizabeth II Trust covenants. Four
areas have been protected in this way and
work is underway on protecting another five
areas totaling up to 70 hectares. Streams
and drains are gradually being fenced to
exclude stock and enable regeneration of
native species.
Tree planting is major activity on Rangedale.
Thousands of natives have gone onto
hillsides overlooking the propertys
100-year-old homestead and the covered
stock yards nearby: The home block has also
been enhanced with the planting of fine
specimen trees.
Paul Edwards sees pine plantation as another

use, both economic and environmental, for
some of Rangedales hillsides. To date 100
hectares have gone into forestry in two
blocks. Pines help stabilize hills that are
unsuitable for livestock, and they earn carbon
credits for Landcorp under the Emissions
Trading Scheme. In time, they will also
produce timber.
Progress being made in the farming
of Rangedale within its environmental
challenges has been recognised through the
Ballance Farm Environment Awards for 2012
(see page 33.).
| MATURE NATIVE TREES dominate a protected
block on the hillside behind Rangedales historic
homestead. The two-storied house, built of rimu
timber in 1900, enhances the special character of
the property.
RANGEDALE IS DEFINITELY PART OF

A CLOSE FARMING COMMUNITY
evident every day the Makuri School
van winds its way around 60km on the
back roads of this district. Landcorp has
taken a lead in funding the 11-seater van
since the Ministry of Education withdrew
the previous school bus service in 2011.
And members of the Rangedale team are
frequently behind the wheel. Paul and
Donna Edwards, and Scott and Renee
Lasenby, take turns on the driving roster.
The van picks up and returns home seven
Makuri School students, each school
morning and afternoon (a round trip
of around 60km). Having the school
at Makuri enables families to live and
work out here its what helps make us
a strong community, says Donna. This
year, two of the seven students are Cody,
aged 5, and Caleb, 9, Lasenby, the sons of
Scott and Renee (pictured with Scott on
the afternoon drop off at Rangedale).
OPERATIONAL REVIEW
WORKING with lifestylers
LAND SUPPLY
FOR RURAL LIFESTYLES
LANDCORP IS EXPANDING NEW ZEALANDS SUPPLY OF NEW LIFESTYLE BLOCKS FOR PEOPLE
WHO WANT COUNTRY LIVING, PERHAPS WITH A HOBBY FARM OR ORCHARD. ON THE
NORTH CANTERBURY PLAINS, THE KANUKA GROVE COUNTRY ESTATES DEVELOPMENT IS A
WELCOME ADDITION TO THE NEW HOUSE BUILDING OPTIONS OF PEOPLE IMPACTED BY THE
CHRISTCHURCH EARTHQUAKES.
NORTH OF THE WAIMAKARIRI RIVER
in the Eyrewell district, Kanuka Grove
Country Estates is within easy commuting
distance of the city and of nearby Rangiora.
Subsidiary company Landcorp Estates is
bringing onto the market 47 blocks, each
with sealed road access, reticulated water
and electricity supply, and underground
broadband connection. The development
includes preservation of three groves of
old Kanuka trees, protected by a Queen
Elizabeth II Trust covenant. Kanuka was once
the dominant cover in this area. Of course,
the Southern Alps form a magnificent
backdrop to the development.
Kanuka Grove Country Estates is the latest
Landcorp initiative for land conversion into
residential sections or lifestyle blocks where
these uses have higher value than pastoral

farming or forestry. Activity under this
long-established strategy was stepped up
during 2011/12 as the overall New Zealand
property market recovers from three years
of downturn.
The first blocks on Kanuka Grove Country
Estates sold quickly when placed on the
market in July and August 2012. Real
estate agency Harcourts confirms a high
level of interest among Canterbury people
attracted to the option of starting again
in this peaceful rural setting. The 47 blocks,
averaging four hectares in size, will be
marketed in stages as 1.5km of sealed road
is completed and other services are added
progressively.
| ROAD BUILDING on Kanuka Grove Country Estates, May 2012.
30
The development has taken part of

Landcorps Eyrewell Station. The remaining
435 hectares of pasture will continue being
used for lamb finishing and dairy support.
Further south, Landcorp Estates is
offering New Zealanders unique
lifestyle opportunities on the shores of
Lake Manapouri. The Moturau Heights
development, previously part of Kepler
Farm, went onto the market in April
2012 and seven sections were sold in the
following four months. Real estate agent
PGG Wrightson says Moturau Heights is
unrivalled in the Manapouri/Te Anau area
and has, therefore, been keenly awaited by
Southlanders.
MOTURAU HEIGHTS
MANAPOURI
| NATIONAL MANAGER Phil Mckenzie (left) and Farm Manager Lindsay Cunningham.
The development has a total of 16

sections, ranging in size from 1.35 to 3.4
hectares. Landcorp has put environmental
considerations very much to the fore. Within
the developments boundaries, a pond and
surrounding land covering 1.5 hectares has
been fenced and protected (see right). The
Moturau Heights sections are all connected
to the local Manapouri sewerage scheme.
The company has been busy in the North
Island as well, with a resumption of section
sales on the Wharewaka development near
Taupo township. Most of the 212 sections in
the two stages developed during 2005 and

2006 have now been sold. At Lakeside, an
earlier development near Taupo, 44 of the
total 66 sections have now been sold.
The Wakelins Riverfront Estate, near Pahia,
began selling again during 2011/12. This
development has 28 sections, ranging from
1.5 28 hectares. To date four sections have
been sold. Buying interest has come mainly
from Northland residents seeking a rural
lifestyle while remaining central to the Bay
of Islands.
Environmental protection can also

be an integral part of lifestyle block
development. At Moturau Heights,
Manapouri, Landcorp has enabled
native vegetation and wildlife
to continue flourishing around a
pond within the boundaries of this
development. The area was fenced
off and covenanted with the Wairau
Fisheries and Wildlife Habitat
Enhancement Trust in 2005. There has
been strong regeneration of native
species ever since and Landcorp
encompassed the pond, and a public
walkway to the Manapouri Lake
edge, in its development planning
for Moturau Heights. Trust Field
Officer Mark Sutton says the ponds
health and regeneration makes it
an extremely good example of
successful environmental protection.
Mark says it reflects a commitment to
conservation that exists throughout
Landcorp, from senior decision makers
to farm managers and staff.
| MOTURAU HEIGHTS from the air, with Lake Manapouri shore to the right.
OPERATIONAL REVIEW
WORKING with winners
AMONG THE BEST IN FARMING

LANDCORPS MATT JOHNSON AND IAN NELSON ARE TWO OF NEW ZEALANDS BEST DAIRY
FARMERS AS CONFIRMED IN THE 2012 DAIRY INDUSTRY AWARDS (DIAS).
MATT JOHNSON, one of Moutoa Dairies nine farm managers

(see page 19), is Dairy Farm Manager of the Year in the Manawatu/
Horowhenua/Rangitikei region.
The DIAs recognise excellence in all areas of farm management, in
human resource management, in financial planning and management,
and in communication.
On Moutoa, Matt Johnson has turned the 68-hectare Tutoko Unit
around over the past three years. He has overseen extensive regrassing,
an upgrade of the water reticulation system and an enlargement of the
herringbone shed.
Matt, with partner Kate, joined Moutoa in 2008, initially as an assistant
farm manager. After his success with Tutoko, Matt has moved up to
managing Tongariro, one of the complexs biggest units with a 650-cow
herd.
He will continue managing this with all the focus required in the Moutoa
approach to feeding cows. We allocate exactly whats needed each day,
just as careful not to over feed as to under feed, says Matt. His regional
DIAs performance this year included the Bell-Booth Grass Roots and the
Westpac Financial Planning & Management Merit Awards.
IAN NELSON, who manages the Resolution Unit on Wairakei Estate

(see pages 2022), is Dairy Farm Manager of the Year for the Central
Plateau region. Ian has a keen eye for detail. His contributions since
arriving on Resolution in 2007 have included refinement, in concert with
others in Landcorp, of the company-standard key indicators in the Dairy
Production Reporting (DPR) maintained for every dairy unit.
Ian and wife Judy have steered the growth of Resolutions productivity
since the first cows were moved on after conversion from forestry in
2006. Pasture on the 410 hectare farm must be carefully managed to
support the buildup of soil and fertility, and to avoid nutrient runoff into
the adjacent Waikato River. At the peak in 2011/12, the Nelsons and
their three staff milked 950 cows.
Resolution has particular complexities and in time, it might be
combined with other areas from forestry conversion into three separate
farms, says Ian Nelson. Were enjoying the challenge of making best
use of the land we have today and farming it with least impact on
natural water quality.
The Nelsons came to Landcorp after five years sharemilking in the South
Waikato. In this years DIAs, Ian also picked up the DairyNZ Human
Resource Management and the RD1 Farm Management Merit Awards.
OTHER AWARDS
Other Landcorp people recognised for excellence through this years DIAs include Tara Fisher (on the Pouarua B Dairy Unit), second runner up
for Dairy Farm Manager of the Year in the Auckland-Hauraki region and winner of that regions RD1 Farm Management Merit Award. Justin Todd
(Ruapehu Dairy Unit) was third placed in the Dairy Farm Manager of the Year for Manawatu/Horowhenua/Rangitikei region and also winner of the
Hobson & Associates Pride and Property Merit Award.
In the West Coast-Top of the South, Rochelle Roberts (Blairs Dairy Unit) was runner up to the Dairy Trainee of the Year and winner of the regions
Farming Knowledge Merit Award for trainees. In this region also, Hayden George (Bell Hill Dairy Unit) won the Westpac Financial Planning and
Management Merit Award for dairy farm managers.
32
PASSION FOR THE ENVIRONMENT

Rangedale Farm Managers Paul and Donna Edwards won the 2012 supreme award in the Horizons region of the Ballance Farm Environment Awards
(BFEAs). Paul and Donna also won the Dalrymple Habitat Improvement Award for integration of trees into a farming operation.
The BFEA judges described Rangedale (see pages 2729) as an excellent example of how a large scale hill country farm can be run in conjunction
with the environment.
Elsewhere in the BFEAs for 2012, the Waikato Regional Council Water Protection Award went to Ian Nelson and Resolution (see left also). The
judges praised the passion and ownership of Ian and wife Judy for all aspects of farming and environmental sustainability. The award recognized,
in particular, Resolutions separation of pasture from river, and the maintenance of silt traps to stop run-off and pumice from entering waterways.
In the Bay of Plenty region, Rangitaiki Station and Farm Business Manager Ross Shepherd won the BFEA Laboratories Harvest and the Beef + Lamb
NZ Livestock awards for this year. The judges said the 9,694-hectare property demonstrates sustainable farming practices within a large farming
enterprise, and a commitment to raising awareness on sustainability issues.
Duncraigen, managed by Matt Canton and wife Rose, was a finalist for the supreme BFEA in the Southland region. The judges highlighted
the productive team work clearly evident on Duncraigen and its 1,284-hectare Wiremu Angus breeding unit. The judges commented: Stock
management was excellent, and Matt has a good team around him who are all on board with the monitoring and recording they do.
GIFTED COMMUNICATOR
Hawkes Bay farmer Steve Wyn-Harris has received the 2012 Landcorp Agricultural Communicator of the Year
Award from the New Zealand Guild of Agricultural Journalists and Communicators.
Steve has long been an active commentator on farming and agricultural science through a local radio show,
contributions to National Radio, conference presentations, and regular columns in the New Zealand Farmers
Weekly and other publications.
Steve and wife Jane farm 350 hectares near Takapau. They run high-performance breeding ewes, a coopworth sheep stud and a bull beef unit.
The property also has significant areas planted in forestry and native vegetation. Steve was a Landcorp director from 2002-2008.
The Landcorp Communicator of the Year Award recognises excellence in communicating agricultural issues, events or information. Steve was
selected by an independent panel of 10 judges. He is widely respected as an excellent farmer, but also has that rare gift of communication that
crosses all areas of rural life, said Guild President Jon Morgan.
BOARD OF
DIRECTORS
2012
| LEFT TO RIGHT; Bill Baylis, Traci Houpapa, Chris Day,

Nikki Davis-Colley, Basil Morrison, Pauline Lockett,
John Brakenridge and Warren Larsen.
34
BILL BAYLIS
CHRIS DAY
Chairman
BBS, CA, CTP, M InstD.
M.Com (Hons), FCA, F NZIM, AF Inst.D.
Mr Baylis was appointed to the Landcorp Board in November 2009. He

is currently Chairman of Blackhead Quarries Ltd, Dairy Holdings Ltd;
and is a director of Port of Tauranga, Dunedin City Holdings Ltd, and
several other companies. He has held a number of appointments in
the agricultural sector and is currently Chairman of the Accreditation
Board of the Institute of Directors in New Zealand. He practiced as
a Chartered Accountant, as a principal in KPMG and its predecessor
firms from 1969, and from 1992 on his own account until 2010.
Mr Day was appointed to the Landcorp Board in May 2012. He

is a Chartered Accountant and most recently was Chief Financial
Officer for AXA New Zealand from 2006 to 2011. He has a range
of international and New Zealand business experience in executive
and governance roles. Mr Day grew up on a sheep and beef farm at
Pahiatua in the North Wairarapa, with his family having farmed in
the Wairarapa since the 1850s. Currently he is the Group Financial
Controller for Contact Energy Limited.
TRACI HOUPAPA
WARREN LARSEN
Deputy Chairman
MNZM, JP, MBA.
Mr Larsen was appointed to the Landcorp Board in May 2006 as

Deputy-Chairman. He is a Principal in Larsen Consulting Ltd, Chairman
of Centreport Ltd, and AZAEL Ltd. He is a director of Air New Zealand,
Alpine Energy Ltd and NetCon Ltd. He was formerly Chief Executive
Officer of, respectively, Bay Milk Products Ltd and the New Zealand
Dairy Board and was closely involved with the creation of Fonterra
Co-operative Group Ltd. He is an alumni of the INSEAD Business
School and has had significant international business and marketing
experience, particularly in the pastoral export industries.
Ms Houpapa was appointed to the Landcorp Board in May 2010.

She is a partner with THS and Associates Ltd, a Hamilton-based
consulting firm providing professional advice in strategic and business
planning and organisational development to public and private sector
clients throughout New Zealand. Her other directorships include
Strada Corporation Ltd, Pemberton Construction Ltd and Nga Pae O
Te Maramamatanga Centre of Research Excellence. She is Chairman
of the Federation of Maori Authorities and holds a number of
appointments on Maori authorities. She is a Crown appointee on the
Rural Broadband Initiative (RBI) and the National Advisory Council on
Employment of Women.
JOHN BRAKENRIDGE
PAULINE LOCKETT
CNZM, BBS, CA, CMA, MAgSc(Hons), F NZIM, AF Inst.D, DSc(Hon).
Dip Hort (Lincoln), MBA.
B.Com, ACA.
Mr Brakenridge was appointed to the Landcorp Board in May 2011.

He is CEO of New Zealand Merino Co Ltd. His experience and passion
spans a number of areas in the primary sector, including horticulture
in both a strategic capacity and in international marketing for
Cedenco Foods in the late 1980s and early 1990s. In 1999 he was
awarded the Marketer of the Year Award at the TVNZ/Marketing
Magazine New Zealand Markets Awards. He has completed executive
education at, and has an ongoing affiliation with, the Stanford
University Graduate School of Business in the USA. In October
2010 he was winner of the Outstanding Leader Category at the
NZTE International Business Awards. He is an active member of the
SynlaitInnovation Advisory Committee and until recently was an
appointed Member of the New Zealand Government Privacy Growth
Partnership Panel.
Ms Lockett was appointed to the Landcorp Board in May 2012. She

is currently a Councillor with the New Plymouth District Council
and a Board member on the Taranaki District Health Board. She was
a partner of PricewaterhouseCoopers for 20 years until retirement
in June 2010. During that time she acted in an advisory capacity
to her many varied clients, a significant number of whom were
farmingclients.
NIKKI DAVIES-COLLEY
BBS, MBA (Dist), A NZIM, AM InstD.
Ms Davies-Colley was appointed to the Landcorp Board in May 2012.

She has farmed cattle, sheep and trees in Titoki, Northland since 1985.
The family farm is now leased to a new generation of farmers. She
has owned and managed companies involved in forest and harvest
management, mainly on farm scale woodlots, as well as large scale
logging, since 1992. She has been involved in governance roles since
1994. Ms Davies-Colley is currently a director of Northpower Ltd,
Whangarei Local Fibre Company Ltd, West Coast Energy Pty Ltd,
Farmlands Ltd and The Tree People Ltd.
BASIL MORRISON
CNZM, JP.
Mr Morrison was appointed to the Landcorp Board in May 2008

and has had significant roles in both central and local Government.
He is Chairman of the Local Government Commission. He has been
President of Local Government New Zealand, is a past Chairman of
the Commonwealth Local Government Forum and was an elected
member of the Ohinemuri County, Hauraki District Council (as
Mayor) and Environment Waikato. Currently he is a director of Civic
Assurance, Chairman of the NZ Local Government Superannuation
Board of Trustees, a member of the Waitangi Tribunal and the NZ
Geographic Board as well as being Honorary Consul for the Republic
of Uganda. He is the Principal of Basil J. Morrison & Associates.
MrMorrison farmed on his own account for 22 years and is a director
and shareholder of Waiuta Farms Ltd.
EXECUTIVE
GROUP
2012
RICHARD
PERRY
PHIL
MCKENZIE
JOHN
KENNEDY-GOOD
CHRIS
KELLY
GRAEME
MULLIGAN
ANDREW
MACPHERSON
ALLAN
STILL
B.Com (Hons),
CA, CTP.
Dip Agr, Dip FM,

Dip VPM, M. Phil,
MBA, SPINZ,
ANZIV, Reg Valuer.
BA, LLB (Hons),

LLM (London),
Barrister & Solicitor.
MVSc, MACVSc,
AFInstD.
B. Ag Com, VFM,
SPINZ, NZIPIM,
RegValuer.
BVSc, MBA (dist),

FNZIM.
B AgCom, SPINZ,
NZIPIM, Reg Valuer.
Chief Financial
Officer
National Manager
Technology &
Property
Company Secretary
Chief Executive
National Business
Manager
National Manager
Strategy &
Performance
National Business
Manager
36
CORPORATE
GOVERNANCE
Landcorp is a State-Owned Enterprise
incorporated under the Companies Act
1993. Its shareholders are the Minister of
Finance and the Minister for State Owned
Enterprises. Landcorps Vision is To be the
worlds most effective pastoral livestock
farmer. Its mission is To be New Zealands
best livestock farmer: environmentally,
socially and economically. Its principle
objective is to operate as a successful
company exemplifying its core values
whichare:
To act honestly and with integrity;

To be environmentally responsible;
To be a fair employer; and
To champion success and excellence.
The Shareholders
To enable shareholding Ministers to make
an informed assessment of the governance,
performance and value of their investment,
meaningful and timely disclosure of relevant
information is presented to them through
quarterly reports, the annual business
plan and through a no surprises policy
including continuous disclosure of material
information.
The Statement of Corporate Intent,
unaudited half yearly accounts and the
Annual Report with audited financial
statements are tabled in Parliament
eachyear and may be viewed on the
Companys website.
The Board
Subsidiary Boards and Committees
In accordance with best practice, the Board

has adopted a Charter which sets out the
authority, responsibilities, membership
and operation of the Board of Directors in
the governance of Landcorp. Specifically it
requires directors to observe high standards
of ethical and moral behaviour, to act in the
best interests of the Shareholders, to ensure
that Landcorp acts as a good corporate
citizen taking into account environmental,
social and economic issues and to recognise
the legitimate interest of all Stakeholders
including staff.
Landcorp has three subsidiary companies.
In addition to the Board Charter, the Code of

Practice for Directors issued by the Institute
of Directors in New Zealand (Inc) provides
guidance to directors to assist them in
carrying out their duties and responsibilities
in accordance with the highest standards.
These values include integrity, enterprise,
fairness, transparency, accountability and
efficiency. They embrace the Principles and
Guidelines for Corporate Governance issued
by the New Zealand Securities Commission
(now the Financial Markets Authority) which
has also been adopted by the Board. These
include adherence to high ethical standards,
effective use of Committees, integrity
and timeliness of financial reporting and
disclosures, risk management, constructive
relationship with shareholders, and public
accountability to stakeholders.
Induction of new directors, continuing
education and annual visits to various
Landcorp farms in the North and South
Islands respectively ensure that directors
remain in touch with Landcorps core
business.
Landcorp Estates Ltd, which develops

and sells land with a value higher than
farming, and Landcorp Holdings Ltd,
which owns property protected from sale
under an agreement with the Crown. Each
have as directors Landcorps Chairman and
Deputy Chairman and two directors from
management.
Landcorp Pastoral Ltd, which holds
shares in Focus Genetics Ltd Partnership
(LP), comprising two directors drawn from
management.
The Board has two committees. The Audit
and Due Diligence Committee deals with
financial matters, risk mitigation, insurance
and major legal contracts. The Employment
Committee deals with remuneration, health
and safety, staff training and development.
Management
The respective roles of the Board and
management are well documented and
understood. Board authority conferred on
management is delegated through the Chief
Executive. Operational and financial policies
and procedures are approved by the Board.
The Treasury Management Committee
comprising executive staff and an external
advisor meets monthly to oversee the
Companys treasury management functions
which are then reported to the Board.
Audit
Deloitte remains the external auditor
appointed by the Office of the Controller
and Auditor General (OAG) for this financial
year. In accordance with its rotation policy,
the OAG has not renewed the appointment
for 2012/13 and has appointed KPMG to the
role. Internal audit services are provided by
PricewaterhouseCoopers.
The table on page 38 sets out the meetings
attended by Directors during the year.
Board and Committee Meetings

Year to 30 June 2012
Director
Hon. J R Sutton
Appointed
30.04.12
Landcorp
Farming
Ltd
(11 meetings)
Audit and Due

Diligence
Committee
(4 meetings)
Employment
Committee
(2 meetings)
Landcorp
Estates
Ltd
(4 meetings)
Chair 4
Chair 5
Chair 8
01.11.09
Chair: 01.05.12
8 - Chair 3
J D Brakenridge
01.05.11
C W Day
01.05.12
A W Baylis
01.08.06
Retired
N P Davies-Colley
01.05.12
01.05.12
T Houpapa
01.05.10
M L James
06.04.03
W A Larsen
01.05.06
J M Mitchell
01.05.09
B J Morrison
01.05.08
C M Kelly
29.10.01
J C Kennedy-Good
24.03.06
A J Still
24.04.07
R R Perry
30.08.10
38
Chair 4
10
30.04.12
8
11
Landcorp
Holdings
Ltd
(5 meetings)
P N Lockett
30.04.12
Landcorp
Pastoral
Ltd
(4 meetings)
Chair 2
4
2
Chair 4
5
4
FINANCIAL
STATEMENTS
ANDDISCLOSURE INFORMATION
| RANGEDALE.
Contents
Statement of Comprehensive Income
41
21
Property Held for Sale
66
Statement of Movements in Equity
42
22
Other Financial Assets and Liabilities
67
Statement of Cash Flows
44
23
Intangible Assets
70
Statement of Financial Position
46
24
Property, Plant & Equipment
71
Notes to the Financial Statements:
48
25
Accounts Payable and Accruals
74
Reporting Entity
48
26
Redeemable Preference Shares
74
Basis of Preparation
48
27
Capital Management
75
Significant Accounting Policies
48
28 Dividends
76
Critical Accounting Judgements,

Estimates and Assumptions
29
Income Tax
76
30
Reconciliation of Profit and

Operating Cash Flow
79
Standards, amendments and

interpretationsissued that are not
yeteffectiveand have not been
early adopted
31
Risk Management
80
56
32
Related Parties
85
Livestock
57
33
Contingent Assets and Liabilities
86
Milk Revenue
58
34 Commitments
Wool Revenue
59
35
Forestry
59
Independent Auditors Report
88
10
Equity Accounted Investments
61
11
Other Gains and Losses
62
Disclosures in Terms of the

Companies Act 1993
89
Interests Register
89
Directors Interests
89
Use of Company Information
90
Share Dealings
90
Directors Remuneration and

Other Benefits
91
12
Other Income
62
13
Farm Working Expenses
63
14 Personnel
63
15
64
Depreciation and Amortisation
Subsidiary Companies
87
87
16 Maintenance
64
17
Other Operating Expenses
65
18
Net Finance Costs
65
Employees Remuneration and

Other Benefits
91
19
Accounts Receivable
66
Indemnity and Insurance
91
66
Directory 92
20 Inventory
40
54
Statement of Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2012
Group Group Parent Parent

Note 2012 2011 2012 2011
$000 $000 $000 $000
Revenue
Livestock
6 114,323 108,093 114,323 108,093
Milk
7 82,989 94,615 82,989 94,615
Wool
8 10,163 10,888 10,163 10,888
Forestry
9 1,908 5,215 1,922 5,086
Other produce 1,158 602 1,158 602

Income from equity accounted investments
Other gains and losses
Other income
10
11
12

Expenses
Farm working expenses
Personnel
Depreciation and amortisation
Maintenance
Other operating expenses
13
14
15
16
17
210,541 219,413
626
27
1,691
(3,551)
2,881 2,558
215,739 218,447
82,526
73,999
45,393 44,203
13,280
12,461
12,913 11,349
24,376
23,794
178,488 165,806
Net Profit before Interest, Property Sales and Revaluations
37,251
52,641
Interest income
Interest expense
7
55
(10,245) (10,459)
210,555 219,284
35
1,064
(4,274)
4,506 2,496
216,160 217,506
82,526
73,999
45,393 44,089
13,143
12,321
12,877 11,293
26,832
25,279
180,771 166,981
35,389
50,525
1,337
1,991
(10,245) (10,459)
Net Finance Costs 18

(10,238) (10,404)
(8,908) (8,468)
Net Operating Profit
27,013
42,237
26,481
(Loss)/profit on sale of land
10,314
(125)
42,057
10,310
Revaluation Gains and Losses

(Loss)/gain due to price changes on forests
9
(Loss)/gain due to price changes on livestock
6
Loss due to price changes on financial instruments
22
Loss on revaluation of property, plant and equipment
(1,313)
(30,349)
(7,513)
(5,564)
2,893
75,640
(2,012)
(1,691)
(1,321)
(30,349)
(7,513)
(5,564)
2,859
75,640
(2,012)
(1,691)
Net (Loss) Profit before Tax

Tax income (expense)
29
(17,726)
8,312
127,381
(12,789)
(18,391)
8,276
127,163
(12,966)
Net (Loss) Profit after Tax
(9,414)
114,592
(10,115)
114,197
Other Comprehensive Income

Gain on revaluation of land and improvements
13,314
17,695
13,562
17,695
Revaluation losses transferred to and recognised
in profit and loss
5,564
1,691
5,564
1,691
Gain on revaluation of available-for-sale
financial assets
22 144 518 144 518
(Loss)/gain due to price changes on intangible assets
(1,092)
5
(1,025)
5
Prior year revaluations transferred to profit or loss on
disposal of available-for-sale financial assets
(6)
(94)
(6)
(94)
Income tax on income and expense recognised in equity
29
(668)
(1,951)
(668)
(1,951)
Total Comprehensive Income
7,842
132,456
7,456
132,061
The accompanying notes form part of these financial statements.

The Directors note that the Net Profit (Loss) after Tax as reported under NZ IFRS includes significant revaluation gains and losses on livestock,
land and buildings and financial instruments used for interest rate hedging. These gains and losses are valued at a particular time and do not
represent cash flows that are received in the ordinary course of business. Accordingly, Landcorps dividend is based on Net Operating Profit.
Statement of Movements in Equity


Note 2012 2011 2012 2011
$000 $000 $000 $000
Ordinary Shares
Balance beginning of year
125,000
125,000
Balance end of year 27

125,000 125,000
Retained Earnings
Net (loss) profit after tax
Transfers from (to) revenue reserves
Dividends paid
28
157,064
(30,349)
125,000 125,000
(14,644)
(7,513)
248,216 247,969
81,424
75,640

126,715 157,064
Financial assets revaluation reserve
Transfer to retained earnings
156,194
(30,349)
1,714
(6)
144
(39)
(12,632)
(2,012)
1,409
(94)
518
(119)

1,813 1,714
42
80,554
75,640
125,845 156,194

(22,157) (14,644)
Fair Value Reserve
Recognised in profit and loss on disposal
11
Revaluation of available-for-sale financial assets
22
Net tax effect on revaluation
29
125,000
123,256
100,292
247,969
225,400
(9,414)
114,592
(10,115)
114,197
37,862
(73,628)
37,862
(73,628)
(27,500) (18,000) (27,500) (18,000)

124,204 123,256
Revenue Reserves
Biological assets revaluation reserve
Transfer (to) from retained earnings
125,000
(14,644)
(7,513)
(12,632)
(2,012)
(22,157) (14,644)
4,046
(6)
144
(39)
3,741
(94)
518
(119)
4,145 4,046

Note 2012 2011 2012 2011
$000 $000 $000 $000
Asset Revaluation Reserves

Intangible assets
Net value change during year
23
5
(1,092)
5
(1,025)

(1,087) 5
(1,020) 5
Freehold land and improvements
Transfers from (to) other equity on sale
Transfers (to) from property held for sale
Net value change during year
24
Revaluation losses recognised in profit and loss
Tax effect of reserve movements
29
724,751
20
(39,499)
13,562
5,564
(629)
703,258
(7,085)
11,024
17,695
1,691
(1,832)

703,769 724,751
Property held for sale
Transfers to other equity on sale
Transfers from (to) freehold land and improvements
Value change during year
5,282
(233)
39,499
(248)
16,306

(11,024)

617,194
(2,409)
(39,499)
13,562
5,564
(629)
595,701
(7,085)
11,024
17,695
1,691
(1,832)
593,783 617,194

39,499

11,024
(11,024)

44,300 5,282 39,499
Other Equity
Transfers from assets revaluation reserves
229,199
213
222,114
7,085

229,412 229,199
217,840
2,409
210,755
7,085
220,249 217,840
Total Equity
1,351,627
1,237,171
1,353,604
1,239,543
Net profit after tax
(9,414)
114,592
(10,115)
114,197
Other comprehensive income:
Gain on revaluation of land and improvements
13,314
17,695
13,562
17,695
Revaluation losses transferred to and recognised
in profit and loss
5,564
1,691
5,564
1,691
Gain on revaluation of available-for-sale
financial assets 144 518 144 518
Loss/(gain) on revaluation of intangible assets
(1,092)
5
(1,025)
5
Prior year revaluations transferred to profit or loss
on disposal of available-for-sale financial assets
(6)
(94)
(6)
(94)
Income tax on income and expense
recognised in equity
(668)
(1,951)
(668)
(1,951)
Dividends paid (27,500) (18,000) (27,500) (18,000)
Balance end of year
1,331,969
1,351,627
1,333,560
1,353,604
Statement of Cash Flows


Note 2012 2011 2012 2011
$000 $000 $000 $000
Operating Activities
Cash was received from:
Receipts from customers
Livestock 120,363 104,740 120,363 104,740
Milk 88,719 90,717 88,719 90,717
Other receipts from customers
20,215
16,183
20,774
15,080
Interest received
7
79
1,395
2,027
Dividends received from equity accounted joint investments
61
150

Other dividends received

833
54
539
54
Net GST (paid) received
(286)
5,383
(114)
4,651

229,912 217,306
231,676 217,269
Cash was applied to:

Payments to suppliers
125,093
113,478
127,794
113,550
Payments to employees
43,789
41,858
43,789
41,740
Interest paid
9,982 10,133
9,982 10,133
Income tax received
(79)
(6)

178,785 165,463
181,565 165,423
Net Cash Flows from Operating Activities 30

51,127 51,843
50,111 51,846
Investing Activities
Sale of land and improvements
Sale of other property, plant and equipment
Sale of intangible assets
Sale of other investments
Transfer from amalgamated subsidiaries
18,553
978

(8)

18,617
727

(317)

4,535
955
203
60

2,712
903
203
60
10,434
19,027
5,753 19,523
14,312
Purchase and development of land
Purchase of other property, plant and equipment
Purchase of intangible assets
Purchase of investments in associates
Purchase of shares and advances
Net subsidiary investment
36,366
14,308
153
1,098
4,719

56,644 65,007
Net Cash Flows from Investing Activities
44
(37,617)
46,512
11,288

7,207

(59,254)
33,128
14,183
153
1,098
4,719
12,962
44,313
11,144
7,207
341
66,243 63,005
(46,720)
(48,693)

Note 2012 2011 2012 2011
$000 $000 $000 $000
Financing Activities
Net borrowing receipts
14,100
7,800
14,100
7,800
14,100 7,800 14,100 7,800

Dividends paid
28 27,500 653 27,500 653
27,500 653 27,500 653

Net Cash Flows from Financing Activities
(13,400)
7,147
Net Change in Cash and Cash Equivalents

Cash and cash equivalents at beginning of year
(13,400)
110
454
7,147
(264)
718
(10,009)
11,709
10,300
1,409
Cash and Cash Equivalents at End of Year
564
454
1,700
11,709
Cash and cash equivalents comprises cash balances

held with registered New Zealand banks
Cash at bank
564
454
1,700
11,709
Statement of Financial Position

AS AT 30 JUNE 2012

Note 2012 2011 2012 2011
$000 $000 $000 $000
Assets
Cash and Cash Equivalents
564
454
1,700
Accounts Receivable
19
Inventories
20 10,095 9,659 10,095 9,659
21
Biological Assets
Livestock
Forests
22,495 44,501
11,709
87,782
25,419
22,549 44,467
60,146
6 265,793 297,085 265,793 297,085

9 16,225 16,807 15,356 15,964
282,018 313,892
Total Biological Assets
281,149 313,049
10 3,732
2,643 1,098
Deferred Tax Asset
29
10,029
2,387
7,558
Other Financial Assets
22
48,943
45,200
206,179
189,474
Intangible Assets
23
1,706 1,741
1,654 1,637
Property, Plant and Equipment 24

Land and improvements
1,033,557
1,058,426
1,033,557
1,058,426
Protected land
118,596
117,766

Plant 24,033 22,701 24,033 22,701

Motor vehicles 16,789 15,557 16,789 15,557
Furniture and equipment
2,064
2,133
2,064
2,133
Computer equipment 481 494 481 494
46
Total Property, Plant and Equipment
1,195,520 1,217,077
1,076,924 1,099,311
Total Assets
1,662,884 1,662,973
1,669,052 1,669,306

Note 2012 2011 2012 2011
$000 $000 $000 $000
Liabilities
25
18,507
Employee Entitlements
19,591
23,084
8,560 8,337
23,897
8,560 8,337
Deferred Tax Liability
29

50
Other Financial Liabilities
22
186,093
165,663
186,093
165,663
26
117,755
117,755
117,755
117,755
Total Liabilities
330,915 311,346
335,492 315,702
Shareholders Funds
Share capital
Retained earnings
Revenue reserves
Fair value reserve
Asset revaluation reserves
Other equity
125,000 125,000
124,204 123,256
104,558 142,420
1,813
1,714
746,982
730,038
229,412 229,199
125,000 125,000
248,216 247,969
103,688 141,550
4,145
4,046
632,262
617,199
220,249 217,840
Total Shareholders Funds
27
Total Equity and Liabilities
1,331,969 1,351,627
1,333,560 1,353,604
1,662,884
1,669,052
1,662,973
1,669,306
Landcorps Board of Directors authorised the financial statements for issue on 27 August 2012.
Signed on behalf of the Board
Bill Baylis
Chairman
27 August 2012
Pauline Lockett
Chairman of Audit and Due Diligence Committee
Notes to the Financial Statements

Statement of Accounting Policies

Note 1 Reporting Entity
Landcorp Farming Ltd (Landcorp) is a profit-oriented company, incorporated and domiciled in New Zealand. Landcorp is established under the
State-Owned Enterprises Act 1986 and registered under the Companies Act 1993. Landcorps ultimate parent is the Crown, which owns 100% of
Landcorps shares, held beneficially by the Minister of Finance (50%) and the Minister for State-Owned Enterprises (50%).
Landcorp Farming Ltd is primarily involved in pastoral farming and provision of farm management services within New Zealand. Subsidiary
companies are involved in land development, land management, farm technology and developing genetically superior sheep, cattle and deer
breeds. All subsidiaries, associates and jointly controlled entities are incorporated and domiciled in New Zealand.
The address of Landcorps registered office and principal place of business is shown in the directory of the Annual Report.
Consolidated financial statements are presented for the Group, comprising Landcorp Farming Ltd, subsidiaries, associates and jointly-controlled
entities. Financial statements are presented for the Parent, Landcorp Farming Ltd.
The financial statements of Landcorp and the Group are for the year ended 30 June 2012. The financial statements were authorised for issue by
the Board of Directors on 27 August 2012.
Note 2 Basis of Preparation

Statement of compliance
These financial statements have been prepared in accordance with NZ GAAP under the Companies Act 1993 and the Financial Reporting Act 1993.
These financial statements comply with NZ IFRS, and other applicable Financial Reporting Standards, as appropriate for profit-oriented entities.
The financial statements also comply with International Financial Reporting Standards (IFRS).
Measurement base
The financial statements have been prepared using a historic cost basis, modified by the revaluation to fair value of certain assets and liabilities as
disclosed below.
Functional and presentation currency

The financial statements are presented in New Zealand dollars (NZ$) and all values are rounded to the nearest thousand dollars ($000). The
functional currency of Landcorp is NZ$.
Changes in accounting policies

There have been no changes in accounting policies during the financial year.
Comparative information
When presentation or classification of items in the financial statements is amended or accounting policies are changed, comparative figures are
restated to ensure consistency with the current period unless it is impracticable to do so.
Note 3 Significant Accounting Policies

Basis of consolidation
Subsidiaries
Subsidiaries are companies controlled by Landcorp and are included in the consolidated financial statements using the purchase method of
consolidation. In the Parent, subsidiaries are valued at cost.
All significant intercompany balances and transactions are eliminated on consolidation. Unrealised gains arising from transactions with jointly
controlled entities are eliminated to the extent of Landcorps interest in the entity.
48
Note 3 Significant Accounting Policies (continued)

Associates
Landcorps associate investment is accounted for using the equity method. The investment in an associate is initially recognised at cost and
the carrying amount is increased or decreased to recognise the share of the surplus or deficit of the associate after the date of acquisition.
Distributions received from an associate reduce the carrying amount of the investment.
When the Groups share of losses exceeds the Groups investment a liability is recognised to the extent the Group has incurred a constructive or
legal obligation. If the associate subsequently reports surpluses, Landcorp will resume recognising its share of those surpluses after its share of the
surpluses equals the share of deficits not recognised.
Joint ventures
Joint ventures comprise jointly-controlled entities and jointly-controlled operations. Jointly-controlled entities are companies that Landcorp
sharesjoint-control over and are included in the financial statements using the equity method. When the Groups share of losses exceeds the
Groups investment a liability is recognised to the extent the Group has incurred a constructive or legal obligation.
Landcorps assets and liabilities used in jointly-controlled operations, including sharemilking, are accounted for in the same manner as assets
andliabilities used in Landcorps other farming operations. Landcorp does not account for any assets owned by the joint venture partners.
Landcorp recognises its share of revenue (and any expense) under the same revenue recognition policies used in other farming operations.
Revenue
Revenue is measured at the fair value of consideration received or receivable.
Livestock sales
Livestock sales, and sales of other agricultural produce, are recognised upon receipt by the customer when the risks and rewards of ownership
havebeen transferred.
Agricultural produce
Agricultural produce, including milk and wool, is recognised at the point-of-harvest at its fair value less estimated point-of-sale costs.
Services
Revenue from services is recognised as services are provided.
Profit on asset sales

Profit on asset sales is recognised at the point of formal unconditional contract for sale and when the significant risks and rewards of ownership
have been transferred.
Interest and dividends

Interest revenue is recognised using the effective interest method.
Dividends are recognised when the right to receive payment has been established.
Operating leases
Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition of an asset are capitalised as part of the cost of that asset. Other borrowing costs
are recognised as an expense in the Statement of Comprehensive Income in the period in which they are incurred.
Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash held with banks, including bank overdraft.
Accounts receivable
Accounts receivables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method,
less any provision for impairment. An allowance for irrecoverable amounts is recognised in the Statement of Comprehensive Income when there
isobjective evidence that a receivable is impaired.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Inventory
Inventory is stated at lower of cost or net realisable value at balance date. The cost of agricultural produce transferred into inventory is measured
at its fair value less estimated point-of-sale costs at date of harvest. Net realisable value represents the estimated selling price of inventories less
all estimated costs of completion and sale costs.
Property held for sale

Property held for sale comprises property that has been identified for sale and development land. Properties that have been identified for sale are
classified as property held for sale when a sales plan has been implemented and an unconditional sales contract is expected to be signed within a
year. Development land is held for sale to development joint venture entities.
Property held for sale is measured at the lower of the carrying value of the property when it was classified as property held for sale and fair value
less sales costs.
Biological assets
(a) Livestock
Livestock are recorded at fair value less estimated point-of-sale costs.
Changes in the value of livestock are recognised in the Statement of Comprehensive Income. Value changes that form part of Landcorps livestock
management policies, including animal growth and changes in livestock numbers, are recognised in the Statement of Comprehensive Income
within revenue. Changes in value due to general livestock price movements are beyond Landcorps control and do not form part of Landcorps
livestock management policies. These value changes are recognised in the Statement of Comprehensive Income as gain/loss due to price changes
on livestock.
(b) Forests
Forests are recorded at fair value less estimated point-of-sale costs, based on estimated cashflows and using a market discount rate.
Changes in the value of forests are recognised in the Statement of Comprehensive Income. Value changes that form part of Landcorps forest
management policies, including forest growth, are recognised in the Statement of Comprehensive Income within profit before property sales and
revaluations. Changes in value due to movements in general forestry prices are beyond Landcorps control and do not form part of Landcorps
forest management practices. These changes in value due to price movements are recognised as gain/loss due to price changes on forests.
Standing forests are only sold as part of a land sale and do not form part of Landcorps forest management practices. Profits arising from the sale
of standing forests are recognised in the Statement of Comprehensive Income as profit on sale of forests.
Other financial assets

(a) Investments in subsidiaries
Investments in subsidiaries are recorded at cost.
(b) Loans to subsidiaries

Loans to subsidiaries are recorded at amortised cost, using the effective interest method.
(c) Other loans and receivables

Other loans and receivables are recorded at amortised cost, using the effective interest method.
(d) Held-for-trading instruments

Derivative financial instruments are used by Landcorp to hedge interest-rate, foreign currency and commodity risks. Landcorps financial
management policies explicitly prohibit trading in financial instruments. However, the Group has elected not to apply hedge accounting.
Thismeans that all derivative financial instruments must be classified as held-for-trading for the purpose of NZ IFRS.
Held-for-trading instruments are recognised in the Statement of Financial Position as either assets or liabilities at fair value on trade date, with
changes in fair value reported as revaluation gains and losses in the Statement of Comprehensive Income. The cash-flows arising from interest-rate
derivatives are reported as a component of net finance costs in the Statement of Comprehensive Income.
50

(e) Available-for-sale investments
The Group is required to hold certain shares and investments in cooperative processing companies to facilitate farming operations. As such, the
Group is normally unable to sell these investments without disrupting the Groups business operations. Under NZ IFRS, Landcorps portfolio of
shares and other investments in various cooperative and processing companies is classified as available-for-sale.
Available-for-sale investments are valued at fair value. Other changes in value are reported as other comprehensive income in the Statement of
Comprehensive Income. On sale the revaluation component is recognised within operating profit in the Statement of Comprehensive Income.
(f) Impairment of financial assets

All financial assets are reviewed at balance date for indications of impairment. Where objective evidence of impairment exists, an investment is
written down to the present value of expected cash flows, with the reduction in value being reported within operating profit in the Statement of
Comprehensive Income. Subsequently, if the impairment diminishes for non-equity financial instruments, the appreciation in value is reported in
the Statement of Comprehensive Income, to the extent that it reverses previous impairment losses.
Intangible assets
(a) Research and development
Research costs are expensed as incurred. An internally generated intangible asset arising from development costs is recognised when it is
probablethat the asset will be completed and will generate future economic benefits.
(b) Carbon credits

Allocations or entitlements of New Zealand Units (NZU) and/or other carbon credits are initially recognised at fair value where Landcorp
is reasonably certain that they will be received and there is a market determined price. Other changes in the quantity of carbon credits are
recognised as an operating gain or loss based on fair value at time of transaction.
Carbon credits are valued at fair value in the Statement of Financial Position as an intangible asset, with changes in value being recorded as
revaluation gain/loss due to price changes on intangible assets in the Statement of Comprehensive Income.
(c) Other intangible assets

Other intangible assets that are acquired by the Group are recorded at cost, less accumulated amortisation and impairment losses.
(d) Amortisation
Intangible assets are amortised on a straight line basis over the expected useful life of the asset. The estimated useful lives for intangible
assetsare:
Computer software
5 years
(e) Impairment
If the estimated recoverable amount of the asset is less than its carrying amount, the asset is written down to its estimated recoverable amount
and an impairment loss is recognised in the Statement of Comprehensive Income. Recoverable amount is the greater of fair value less costs to sell
and value in use.
Property, plant and equipment

Property, plant and equipment consists of the following asset classes: land and improvements, protected land and improvements, plant, motor
vehicles, furniture and equipment and computer equipment.
Land is measured at fair value and buildings are measured at fair value less accumulated depreciation and impairment losses. Protected land
(including buildings on protected land) is valued at fair value at the time it is classified as protected land. Buildings are stated at this value less
accumulated depreciation.
All other items of property plant and equipment are measured at cost less accumulated depreciation and impairment losses.
(a) Revaluations
Freehold land and improvements (including buildings) are valued annually on 30 June at fair value by independent registered valuers.
Anyaccumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount
restated to the assets revalued amount. Changes in valuation are taken to the freehold land and improvements revaluation reserve using the net
revaluation method. Where an assets downwards revaluation exceeds previous positive revaluations, the amount of the revaluation is reported
within profit or loss in the Statement of Comprehensive Income.

(b) Additions
An item of property, plant and equipment is initially recognised at cost plus directly attributable costs of bringing the item to working condition
for its intended use.
(c) Disposal
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains or losses on
disposal of land are recognised as profit or loss on sale of land and gains and losses on disposal of other items of property, plant and equipment
are recognised as gain or loss on disposal of property, plant and equipment in the Statement of Comprehensive Income. When revalued areas are
sold, the revaluation reserve attributable to that item is transferred from the asset revaluation reserve to other equity.
(d) Depreciation
Depreciation is provided on a straight-line basis on all property, plant and equipment other than land. Depreciation rates are used to allocate the
cost or revalued amount of the assets to their estimated residual values over their useful lives. The useful lives of major classes of property, plant
and equipment have been estimated as follows:
Buildings on freehold land
30 60 years
Buildings on leased land
30 60 years
Buildings on protected land
30 60 years
Plant
3 10 years
Motor vehicles
4 10 years
Furniture and equipment
7 years
Computer equipment
3 years
(e) Impairment
If the estimated recoverable amount of the asset is less than its carrying amount, the asset is written down to its estimated recoverable amount.
For property, plant and equipment that are revalued annually, this difference is accounted for in the same manner as a downwards revaluation.
For property, plant and equipment recorded at depreciated historical cost an impairment loss is recognised in the Statement of Comprehensive
Income. Recoverable amount is the greater of fair value less costs to sell and value in use.
Accounts payable and accruals

Accounts payable and accruals are initially measured at fair value and subsequently measured at amortised cost using the effective
interestmethod.
Employee entitlements
Employee benefits include salaries, wages, annual leave, accrued sick leave and long service leave. A provision for employee entitlements is
recognised for benefits attributable to employees. The provision is the estimated net present value of benefits expected to be paid.
ACC partnership programme

Landcorp belongs to the ACC Partnership Programme whereby it manages and is financially responsible for employee work-related illnesses
andaccidents. Under the programme, Landcorp is liable for all its claims costs for a period of two years up to a specified maximum. At the end
ofthe two year period, Landcorp pays a premium to ACC for the value of residual claims, and from that point the liability for ongoing claims
passes to ACC.
The liability for the ACC Partnership Programme is measured using actuarial valuation of the present value of expected future payments to be
made in respect of employee injuries and claims that occurred up to the balance date. Consideration is given to anticipated future wage and salary
levels and experience of employee claims and injuries. Expected future payments are discounted using market yields on New Zealand government
bonds at balance date with terms to maturity that match, as closely as possible, the estimated future cash outflows.
52

Other financial liabilities
(a) Bank loans
Bank loans are initially recognised at their fair value. After initial recognition, all bank loans are measured at amortised cost using the effective
interest method.
(b) Financial guarantees

Financial guarantees are recognised at the higher of the initial fair value less, where appropriate, accumulated amortisation and the best estimate
of expenditure required under the financial guarantee contract.
Accounting for goods and services tax

All items in the financial statements are stated exclusive of goods and services tax (GST), with the exception of receivables and payables, which
are presented on a GST-inclusive basis.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the
Statement of Financial Position.
The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as net operating cash
flow in the Statement of Cash Flows.
Commitments and contingencies are disclosed exclusive of GST.
Income tax
Income tax reported comprises current and deferred tax. Income tax is recognised in the Statement of Comprehensive Income, except where it
relates to an item recognised directly in equity, where the income tax is recognised directly in equity.
Current tax is the tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and
any adjustments to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying values of assets and liabilities
for financial reporting purposes and the tax base of those assets and liabilities. The amount of deferred tax provided is based on the difference
between the tax base and the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised to the extent it is probable that future taxable benefits will be available against which the asset can be utilised.
Deferred tax assets and liabilities are offset when there is a legal right to offset tax liabilities with tax assets and when the Group intends to settle
on a net basis.
Provision for dividends

Dividends are recognised in the period that they are authorised and declared.
Note 4 Critical Accounting Judgements, Estimates and Assumptions

In preparing these financial statements Landcorp has made estimates and assumptions concerning the future. These estimates and assumptions
may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Management has identified the following critical accounting policies for which significant accounting policy judgements, estimates and
assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect
financial results or the financial position reported in future periods.
(i) Critical accounting estimates and assumptions

Valuation of investments and derivatives
Landcorps share portfolio comprises investments in cooperative companies. These companies commonly have restrictions on share ownership and
limited transferability of shares. Many of these shares may only be sold back to the cooperative company at the cooperatives deemed share price.
The fair value of shares in cooperative companies is based on the lower of the current cost to purchase additional shares or required sale values.
The fair value of listed shares and other investments are based on reported market values at balance date.
Derivative financial instruments are valued based on estimated market values at balance date, given prevailing market interest rates and the terms
of the derivative instruments.
Valuation of freehold land and buildings

The valuation of freehold land and buildings is based on observed market prices for properties of similar location, land use and size. No discount
or premium has been made for the scale of Landcorps land holdings. Factors affecting the valuation of Landcorps freehold land and buildings are
detailed in Note 24.
The valuation of land and buildings takes into account the observed price effects of various legal obligations placed on Landcorps land ownership.
In the North Island deductions of 06% have been made for obligations arising from section 27B of the State Owned Enterprises Act. The South
Island properties include a deduction of up to 5% to reflect the effect of the Right of First Refusal granted to Ngai Tahu under the Ngai Tahu
Claims Settlement Act 1998.
Protected Land (including buildings on Protected Land) is valued at fair value at the time it is classified as Protected Land. Under the Agreement
Concerning Landcorp Land Protected from Sale, 2007 (Protected Land Agreement or PLA), this value is considered to be the ongoing fair value
ofthe land to Landcorp.
Valuation of forests
Forests are valued based on estimated pre-tax cashflows, using a market discount rate of 12% and current log prices. Forested blocks less than
two hectares are not valued as these are not considered economically viable to harvest. The impact of biological transformation on forests under
10 years old is assumed to have minimal effect on their market value, and these are recorded at cost. Factors affecting the valuation of Landcorps
forests are detailed in Note 9.
Valuation of livestock
Landcorp values its livestock using market values provided by PGG Wrightson Ltd. These market values reflect livestock of similar age, breed and
genetic merit throughout New Zealand. Factors affecting the valuation of Landcorps livestock are detailed in Note 6.
Livestock revenue
Livestock income due to growth and change in numbers is calculated based on internally assessed values for each livestock type. These values are
set and reviewed annually by the Board based on year end livestock values.
Estimating the useful lives of property, plant and equipment

The useful lives of property, plant and equipment is based on historical experience. Replacement policies for motor vehicles and the risk of
technological obsolescence for computer equipment are also considered.
54
Note 4 Critical Accounting Judgements, Estimates and Assumptions (continued)

(ii) Critical judgements in applying accounting policies
Classification of revenue
Landcorp considers its revenue to comprise the regular income generated by the ordinary activities of the Group. Landcorp receives various
incidental and irregular income due to items that are not related to Landcorps ordinary activities, and classifies these as other gains and losses or
revaluations. These include price revaluation gains and losses on livestock mainly held for breeding and production, and financial instruments held
for hedging purposes. This is considered to better present the results of Landcorps farming practices and core activities.
Revenue recognition
Livestock sales are recognised when the livestock is received in good order by customers. For the majority of Landcorps livestock sales the risks
and rewards of ownership are retained by Landcorp until the livestock is received by the customer.
Profit on land sales

Farm sales are recognised on settlement and possession as Landcorp remains exposed to climatic and operational risks associated with the farm
until settlement date.
Classification as property held for sale

Landcorp classifies assets and liabilities as held for sale when its carrying amount will be recovered through sale, rather than use. The assets and
liabilities must be available for sale in their current state, which means that property that requires subdivision or other consent processes in order
to sell is not classified as property held for sale.
Development land
Development land is classified as property held for sale and valued at the lower of the carrying amount at the time it was classified as held for
sale and fair value less costs to sell. Under joint venture development arrangements, Landcorp enters into a binding sales contract with the joint
venture company. The joint venture company then develops and markets the land. Unsold developed land will be returned to Landcorp, and the
related proportion of the sales contract cancelled. Consequently, Landcorp considers that the risks and rewards of ownership of the land only fully
pass to the joint venture company when the developed land is on-sold. Transfers of land to joint venture companies are recognised when legal
title (required for subdivision purposes) is transferred to joint venture companies, with a receivable recorded for the value of land. Profit on sale is
recognised when the developed land is on-sold by joint venture companies.
Reimbursement of protected land losses

Under the Protected Land Agreement, any accumulated profit or loss on a protected property will be settled between Landcorp and the Crown
when that property is transferred to the Crown. Reimbursement of accumulated profits or losses on a protected property are recognised when
theproperty has been included in an agreement in principle between the Crown and Iwi to settle a Treaty of Waitangi grievance.
Classification of investments and derivatives

Landcorp is required to classify its shareholding portfolio as available-for-sale and value it at fair value. The share portfolio largely comprises shares
and investments in agricultural cooperative and processing companies, which Landcorp is required to hold to facilitate farming operations. As such,
Landcorp is normally unable to sell these investments without disrupting Landcorps farming operations. Detail on the valuation of Landcorps
shareholding portfolio is shown in Note 22.
As Landcorp does not apply hedge accounting all derivative financial instruments are classified as held-for-trading. Derivative financial instruments
are used by Landcorp to hedge interest-rate, exchange-rate and commodity price risks. Landcorps policies explicitly prohibit trading in financial
instruments. Detail on the valuation of Landcorps derivative portfolio is shown in Note 22.
Note 4 Critical Accounting Judgements, Estimates and Assumptions (continued)

Taxation
Current taxation expense is based on the potential taxation expense that would be filed with the taxation authority given managements intent at
balance date. Under taxation legislation, Landcorp has discretion in the valuation methodology used for assets and liabilities, and in the timing of
claiming expenses. The actual taxation expense may differ from that shown in the financial statements if management subsequently changes any
of these valuation methodologies.
Deferred tax balances result from taxable differences between balance sheet values and taxation values for assets and liabilities. Managements
intention to use or sell, will determine whether a difference is taxable. Deferred tax balances relating to revalued land and livestock are required to
be based on the tax effect if all land and livestock were to be sold at balance date. Management has no intention of selling either affected land or
the entire livestock herd and any deferred tax liability is unlikely to be incurred in Landcorps ordinary course of business.
Note 5 Standards, amendments and interpretations issued that are not yet effective and have not been
earlyadopted
Standards, amendments and interpretations issued by the External Reporting Board (XRB) but not yet effective and are relevant to Landcorp that
have not been early adopted are:

Standard
Effective for annual reporting

periods beginning on or after
Expected to be initially applied

in the financial year ending
NZ IFRS 9 Financial Instruments: Classification and Measurement
1 January 2015
30 June 2016
NZ IFRS 10 Consolidated Financial Statements
1 January 2013
30 June 2014
NZ IAS 27 Separate Financial Statements
1 January 2013
30 June 2014
NZ IAS 28 Investments in Associates and Joint Ventures
1 January 2013
30 June 2014
Except for NZ IFRS 9 Financial Instruments: Classification and Measurement, initial application of the above Standards and Interpretations is not
expected to have any material impact on the financial results of the Parent and Group. The adoption of NZ IFRS 9 will result in the reclassification
of Landcorps financial instruments. Landcorps share portfolio will change from the current available-for-sale classification to either fair-valuethrough-profit-or-loss, or fair-value-through-other-comprehensive-income. Depending on the election made, revaluations of these shares and
associated gains and losses on disposal will be classified as either part of net profit or other comprehensive income. NZ IFRS-9 is the first stage
of a three stage revision of NZ IAS-39 Financial Instruments: Recognition and Measurement. Other effects on Landcorps financial statements are
unknown until the later stages of the revision are known.
56
Note 6 Livestock
A NATURE OF ACTIVITIES
Landcorp is primarily a pastoral farming company, with most of its revenue being derived from livestock. Most livestock classes are primarily grown
for sale to meat processors. These may also provide ancillary income from various agricultural produce, such as wool and velvet. Dairy cattle are
primarily held to produce milk (see Note 7).
B LIVESTOCK REVENUE
Landcorps livestock revenue by species was:
2012 2011 2012 2011
$000 $000 $000 $000
Sheep
Beef
Deer
Other
Total Livestock Revenue
59,380 51,320 59,380 51,320

37,238 40,074 37,238 40,074
17,703 16,697 17,703 16,697
2 2 2 2
114,323
108,093
114,323
108,093

2012 2011 2012 2011
$000 $000 $000 $000
Livestock sales
Birth of animals
Growth of animals
Livestock losses
Book value of livestock sold
119,948 102,925
30,783
26,711
49,262
50,459
(8,478) (8,422)
(77,192)
(63,580)
119,948 102,925
30,783
26,711
49,262
50,459
(8,478) (8,422)
(77,192)
(63,580)
Total Livestock Revenue
114,323
114,323
108,093
108,093
Livestock revenue includes the recognition of net profit or loss arising from changes in livestock numbers due to the birth, growth, death and sales
of livestock. This value change arising from the change in livestock numbers and growth is calculated by assigning an internally assessed annual
value for each livestock class.
Livestock revenues in 2011/12 reflect increased production for all species and increased sales prices for sheep and deer compared with 2010/11.
Deer revenue is up $1.0 million or 6% and is a combination of higher average sales prices of 7% and higher numbers of 4%. The average sales
prices for sheep were up 14% and beef were down 2%. Sheep revenue was up $8.1 million or 16% reflecting higher prices and sales numbers.
Beefrevenues were down $2.8 million or 7% reflecting lower sales prices and higher sales numbers.
C VALUE OF LIVESTOCK
The value of livestock at 30 June was:
2012 2011 2012 2011
$000 $000 $000 $000
Sheep
Beef
Dairy
Deer
Other
Total Value of Livestock
79,361 115,130
79,361 115,130
75,715 75,762 75,715 75,762
68,312 65,120 68,312 65,120
42,374 41,037 42,374 41,037
31 36 31 36
265,793
297,085
265,793
297,085
Livestock valuations at 30 June 2012 were provided by PGG Wrightson Ltd. These market values reflect livestock of similar age, breed and genetic
merit throughout New Zealand as at 30 June 2012.
Note 6 Livestock (continued)

The change in the value of livestock owned by Landcorp during the year was due to:
2012 2011 2012 2011
$000 $000 $000 $000
Livestock value at start of year

Value changes caused by:
Birth and growth of animals
Purchases
Livestock losses
Transfer of livestock from Landcorp Pastoral Ltd
Livestock available for sale or production
Book value of stock sold
Effect of price changes
Livestock Value at End of Year
297,085
211,751
297,085
196,366
80,045
77,170
80,045
77,170
4,682 4,526 4,682 4,526
(8,478) (8,422) (8,478) (8,422)

15,385
373,334
(77,192)
(30,349)
285,025
(63,580)
75,640
373,334
(77,192)
(30,349)
285,025
(63,580)
75,640
265,793
297,085
265,793
297,085
The increase in growth reflects higher value of livestock.

Price changes for the year were due to a decrease in the market value of sheep, beef, dairy cattle and deer. As the majority of these gains arise on
livestock held for breeding and/or production, rather than sale, these gains are stated at a particular time and do not represent cash flows that are
realised in the ordinary course of livestock farming.
Livestock is classified as a current asset if it is likely to be sold within one year. This includes a proportion of the breeding livestock that are likely
to be sold as cull animals.
2012 2011 2012 2011
$000 $000 $000 $000
Current
Non-current
78,761 87,291 78,761 87,291

187,032 209,794 187,032 209,794
Total Value of Livestock
265,793
297,085
265,793
297,085
Note 7 Milk Revenue

Milk revenue during the year was:
2012 2011 2012 2011
$000 $000 $000 $000
Milk Revenue
Total value of milk produced
Sharemilker share of milk production
84,566
(1,577)
96,432
(1,817)
84,566
(1,577)
96,432
(1,817)
Total Milk Revenue
82,989
94,615
82,989
94,615
During 2011/12 two of Landcorps dairy farms were operated by sharemilkers (2011 two farms). All sharemilker farms are milked on a 50/50
sharemilking agreement. Under the agreements, Landcorp provides land, buildings and dairy shares, and the sharemilker provides livestock and
incurs the farm operating expenses. Revenue is shared equally between Landcorp and the sharemilker.
Milk revenue decreased by $11.6 million (12%). This is due to a decrease in milk price offset by an increase in production. Overall milk production
was 7% higher than 2010/11.
58
Note 8 Wool Revenue

2012 2011 2012 2011
$000 $000 $000 $000
Revenue from wool sales

Profit on change of wool inventory
10,105
58
10,570
318
Total Wool Revenue
10,163 10,888
10,105
58
10,570
318
10,163 10,888
Wool is valued at estimated net market value at time of harvest. Wool revenue for 2011/12 is lower than 2010/11 due to a 7.4% decrease in
woolprices.
Note 9 Forestry
A NATURE OF ACTIVITIES
Landcorps exotic forests are managed as an ancillary activity to farming. Land is allocated for forestry use when it is considered better suited to
forestry than for pastoral farming. Factors included in this decision include the viability of pastoral farming and land development activity, soil
types, local climate, erosion control and potential carbon sequestration.
Forests are considered economically viable where the forest stand is at least two hectares in size. Forests over 20 years of age are considered
harvestable, with prime harvest age around 25 years. The age of Landcorps forests are shown below:
2012 2011 2012 2011
Hectares Hectares Hectares Hectares
Forest age
Less than 10 years
10 15 years
15 20 years
20 25 years
Greater than 25 years
3,074
608
987
424
551
Total Forest Area
5,644 5,098
2,569
466
834
641
588
2,539
529
955
423
539
1,994
400
834
640
576
4,985 4,444
The increase in afforestation is consistent with Landcorps strategy of optimising land use.
B FORESTRY REVENUE
Landcorps forestry revenue comprised:
2012 2011 2012 2011

Note $000 $000 $000 $000
Forestry sale proceeds

Book value of forestry sold/harvested
Profit from forestry sales
Forest growth
Allocation of carbon credits
Afforestation grant scheme receipts
Total Forestry Revenue
2,520
(3,403)
23
3,319
(953)
2,520
(3,403)
3,319
(953)
(883)
2,366
882 2,745
1,540
104
369

(883)
2,366
911 2,720
1,525
369
1,908
1,922
5,215
5,086
The decrease in profit from forestry sales largely reflects a sudden drop in market prices.
Note 9 Forestry (continued)

C VALUE OF FORESTS
2012 2011 2012 2011
$000 $000 $000 $000
Forest value at beginning of year

Costs capitalised to the forest crop
Value change due to:
Growth
Valuation change
Book value of forest felled
16,807
3,252
Forest Value at End of Year
16,225
10,746
1,376
15,964
3,205
10,030
1,308
882 2,745
911 2,720
(1,313) 2,893 (1,321) 2,859
(3,403)
(953)
(3,403)
(953)
16,807
15,356
15,964
Forest valuations at 30 June 2012 were provided by P F Olsen Ltd. A before-tax market discount rate of 12% was used, based on the size of
Landcorps forest stands and market prices for timber sales.
Forests are classified as current if they are intended to be harvested within one year.
2012 2011 2012 2011
$000 $000 $000 $000
60
Current
Non-current
2,700 1,400 2,700 1,400

13,525 15,407 12,656 14,564
Forest Value at End of Year
16,225
16,807
15,356
15,964
Note 10 Equity Accounted Investments

The Group has the following interests in jointly controlled entities:

Joint Ventures
Principal activity
Balance
date
Percentage held
2012
2011
Wharewaka (2003) Ltd

Wharewaka East Ltd
Focus Genetics Ltd Partnership
Property development
Development of genetically superior sires
31 March
31 March
30 June
50%
50%
50%
50%
50%
Research and development of an

integrated red meat value chain
30 June
18%
Associates
Farm IQ Systems Ltd

Jointly controlled entities and associates are equity accounted as follows:

2012 2011 2012 2011
$000 $000 $000 $000
Investment in equity accounted investments comprises:

Investment at beginning of year
Investment during the year
Equity accounted earnings
Less dividends received
Investment at End of Year
Balance sheet information for equity accounted investees:
Current assets
Non current assets
Current liabilities
Non current liabilities
Net assets
Equity accounted earnings comprises:
Income
Expenses
2,643
1,295
626
(832)
2,766
1,063
27
(150)
3,732
2,643
35

1,098
1,004
158
248
10,164
9,403
328
(1,053) (484)
(7,389)
(6,918)

2,726
2,643
92
3,426 125 1,015

(2,761) (75) (980)
Surplus before tax

Income tax
665
(39)
50
(23)
35

Net surplus
Other gains and losses
626

27

35

Total Recognised Revenues and Expenses
626
27
35
The information provided by Farm IQ Systems Ltd reflects the eleven months to 31 May 2012.
There are no contingent liabilities relating to the Groups interest in the joint ventures or associates, and no contingent liabilities of the ventures
or associates themselves.
Transactions with jointly controlled entities and associates

Landcorp received income of $693,743 for fees and other goods and services from Focus Genetics Ltd Partnership. The outstanding balance of
$72,435 is included in trade receivables. Landcorp paid $2,071,360 for fees to Focus Genetics Limited Partnership. The outstanding balance of
$194,880 is included in trade creditors.
Landcorp received income of $782,470 for fees and other goods and services from Farm IQ Systems Ltd. The outstanding balance at 30 June 2012
was $nil. During the year Landcorp also made contributions in kind of $121,597 to Farm IQ Systems Ltd.
Note 11 Other Gains and Losses

2012 2011 2012 2011

Note $000 $000 $000 $000
Gain on sale of development land

Loss on disposal of property, plant and equipment
Impairment loss on property, plant and equipment
Gain/(loss) on disposal of available-for-sale
financial instruments:
Revaluation gains previously recognised in equity
Gain/(loss) on disposal of held-for-trading
financial instruments
Reimbursement of protected land losses
Change in harvested feeds on hand
Other gains
Total Other Gains and Losses
658
(165)

723
(5)
(3,534)
33
94

(150)

(5)
(3,534)
94
20 (721)
20 (721)
57
294
57
294
1,112
(402)
1,112
(402)
3 19
1,691
(3,551)
1,064
(4,274)
The gain on sale of development land reflects profits from the sale of land through Landcorp Estates Ltd.
The reimbursement of Protected Land losses arises from the Crowns obligation to reimburse Landcorp for losses arising from the management of
Protected Land, as discussed in Notes 4 and 33.
The $1.5 million increase in harvested feeds on hand reflects the increased quantity of harvested feed (hay, silage and baleage) at 30 June 2012 as
a result of favourable growing conditions.
Note 12 Other Income

2012 2011 2012 2011
$000 $000 $000 $000
62
Dividends received from third parties

Dividends received from subsidiaries
Rent received
Cropping and horticulture
Sundry income
57
59
57
59

478
769 709 710 648

109
177
109
177
1,946 1,613 3,152 1,612
Total Other Revenue
2,881
2,558
4,506
2,496
Note 13 Farm Working Expenses

2012 2011 2012 2011
$000 $000 $000 $000
Pasture maintenance
Shearing
Cropping and feed costs
Animal health
Animal breeding
Livestock and other freight
Grazing charges
Other farm working expenses
25,517 22,162 25,517 22,162

5,329 4,723 5,329 4,723
31,260
28,290
31,260
28,290
6,387 6,350 6,387 6,350
1,674 2,412 1,674 2,412
2,117
2,072
2,117
2,072
3,235 3,459 3,235 3,459
7,007
4,531
7,007
4,531
Total Farm Working Expenses
82,526
73,999
82,526
73,999
Pasture maintenance costs have increased by $3.4 million (15%). During the past few years Landcorp has experienced significant increases in the
cost of fertiliser and has managed its fertiliser application to focus on areas of highest need, resulting in lower fertiliser application. During the
current year the cost of fertiliser reduced resulting in Landcorp applying additional fertiliser than prior years.
Cropping and feed costs have increased by $3.0 million (10%) reflecting additional costs of harvesting feed as a result of the remarkably good
growing season.
Other farm working expenses in the current year include the genetics management fee paid to Focus Genetics Ltd Partnership.
Note 14 Personnel
2012 2011 2012 2011
$000 $000 $000 $000
Staff remuneration
Contributions to defined contribution superannuation schemes
Restructuring and transfer costs
Staff training
Other
42,356 41,509 42,356 41,395

997
899
997
899
155
234
155
234
864 812 864 812
1,021 749 1,021 749
Total Personnel Costs
45,393
44,203
45,393
44,089
Note 15 Depreciation and Amortisation

2012 2011 2012 2011
$000 $000 $000 $000
Depreciation of Property, Plant and Equipment

Depreciation on buildings freehold land

leased land

Protected Land
Depreciation on plant
Depreciation on motor vehicles
Depreciation on furniture and equipment
Depreciation on computer equipment
Total Depreciation
2,353
376
137
4,771
4,006
534
300
2,292
375
140
4,174
3,914
563
388
12,477 11,846
2,353
376

4,771
4,006
534
300
2,292
375
4,174
3,914
563
388
12,340 11,706
Amortisation of Intangible Assets

Amortisation of computer software
636
Amortisation of Intangible Assets
636 615
Amortisation of Land Development
167 167
Total Amortisation
803 615
Total Depreciation and Amortisation
13,280
615
12,461
636
615
636 615
803 615
13,143
12,321
The $0.6 million increase in depreciation on plant reflects increased asset ownership.
Note 16 Maintenance
2012 2011 2012 2011
$000 $000 $000 $000
Maintenance on land improvements

Maintenance on buildings
Maintenance on plant
Maintenance on motor vehicles
Maintenance on furniture and equipment
Maintenance on computer equipment
Total Maintenance
4,977
2,545
1,725
3,487
66
113
4,422
2,021
1,281
3,470
82
73
12,913 11,349
4,977
2,509
1,725
3,487
66
113
4,421
1,966
1,281
3,470
82
73
12,877 11,293
Most categories of maintenance increased in cost during the year. This was both a combination of increased maintenance costs as well as general
maintenance levels.
64
Note 17 Other Operating Expenses

2012 2011 2012 2011
$000 $000 $000 $000
Fees to auditors
statutory audit
non-audit-related services
Change in debtors impairment
Bad debts expense
Directors remuneration
Donations and scholarships
Rent
Licence fees
Research and development
Fuel
Electricity
Rates
Other
Total Other Operating Expenses
146
152
14

18
(211)

69
333 333
130
109
4,966 4,613
1,178 1,619
676
832
3,019 2,611
2,826 2,577
4,223 3,838
6,847 7,252
24,376
23,794
129
135
14
18
(207)

69
333 333
130
109
7,606 7,213
1,178 1,619
676
832
3,019 2,611
2,826 2,577
4,102 3,716
6,801 6,272
26,832
25,279
The prior year comparatives have been restated to reflect current year classifications.
The non-audit related services expense relates to the secondment to Landcorp of a junior accountant from Landcorps auditors during 2011/12.
The accountant is not a member of the audit team.
The licence fee expense represents the Crowns net share of the milk revenue from the Sweetwater dairy complex. This complex was sold to the
Crown during 2009/10 and Landcorp continues to sharemilk the complex in an agreement with the Crown.
Increases in fuel (16%), electricity (10%) and rates (10%) reflect general price pressures experienced by Landcorp.
Note 18 Net Finance Costs

2012 2011 2012 2011
$000 $000 $000 $000
Interest on bank accounts and loans

Interest capitalised on construction of assets
Net cash flows from interest rate derivatives
(7,269)

(2,976)
(7,449)
11
(3,021)
(7,269)

(2,976)
(7,438)
(3,021)
Net interest expense

Interest received
(10,245)
7
(10,459)
55
(10,245)
1,337
(10,459)
1,991
Net Finance Costs
(10,238)
(10,404)
(8,908)
(8,468)
Net cashflows from interest rate derivatives are presented within net interest expense as all interest rate derivatives are held to economically
hedge Landcorps funding costs.
Note 19 Accounts Receivable

2012 2011 2012 2011
$000 $000 $000 $000
Trade debtors
Receivable from subsidiaries
Milk income receivable
Other receivables and prepayments
3,783 4,436 3,735 4,412

257
245
11,582
17,748
11,582
17,748
7,130
22,317
6,975
22,062
Total Accounts Receivable
22,495 44,501
22,549 44,467
See Note 31 (B) for the impairment of accounts receivable.

The decreased milk income receivable mainly reflects the lower milk price this season.
Other receivables and prepayments in 2011 included the outstanding balance for the sale of the Huka and Quarry blocks on Aratiatia Station
nearTaupo.
Note 20 Inventory
Inventory at the end of the year comprised:
2012 2011 2012 2011
$000 $000 $000 $000
Agricultural produce:
Wool
Velvet
Harvested feeds
Consumables
Total Inventory
534 215 534 215

256 22 256 22
7,730 6,300 7,730 6,300
1,575 3,122 1,575 3,122
10,095 9,659 10,095 9,659
The $1.4 million increase in harvested feeds reflects the increased quantity on hand at 30 June 2012 as a result of favourable growing conditions.
Consumables have decreased by $1.5 million due to a decrease in purchased feed (reflecting increased harvested feeds).
Note 21 Property Held for Sale

Property held for sale comprises:
2012 2011 2012 2011
$000 $000 $000 $000
Development land
Farm land
Buildings
8,422
7,851

72,006
16,482
54,103
7,354 1,086 6,043
Total Property Held for Sale
87,782
25,419
60,146
The Parents property held for sale comprises farms that have been identified for sale during 2012/13.
Development land held for sale is land that is being developed by either jointly controlled entities (refer Note 10) or Landcorp Estates Ltd directly.
Land being developed directly by Landcorp Estates Ltd comprises developed residential sections that are currently being marketed.
66
Note 22 Other Financial Assets and Liabilities

2012 2011 2012 2011
$000 $000 $000 $000

External Financial Assets
Available-for-sale financial assets
Share investments
Held-for-trading financial assets
Commodity derivatives
48,936 45,180
48,936 45,180
7 20
7 20
Internal Financial Assets

Shares in subsidiaries
Loans to subsidiaries
137,757
19,479
130,795
13,479
Total Other Financial Assets
48,943
45,200
206,179
189,474

Financial liabilities measured at amortised cost
Bank loans
Held-for-trading financial liabilities
Interest rate derivatives
Financial guarantees
Financial guarantees
Total Other Financial Liabilities
171,300 157,200
14,793
8,463
171,300 157,200
14,793

186,093
165,663
8,463
186,093
165,663
Financial assets and liabilities are classified according to NZ IFRS criteria which may not reflect Landcorps intent for holding the assets
and/or liabilities.
Landcorps external share investments are largely in cooperative and processing companies where shareholding is required to supply that
companyand/or to facilitate normal farming operations. As such, the Group is normally unable to sell these investments and continue the
Groupsbusiness operations.
Derivative financial instruments are used by the Group to hedge interest rate, foreign exchange and commodity risks. Landcorp has elected not to
use hedge accounting, which, under NZ IFRS, requires all derivative financial instruments to be classified as held-for-trading. Landcorps financial
management policies explicitly prohibit trading in financial instruments.
Financial risk management strategies relating to financial assets and liabilities are discussed in Note 31.
A Revaluation of Financial Instruments

2012 2011 2012 2011
$000 $000 $000 $000
Recognised in Profit and Loss

Revaluation of held-for-trading financial instruments
(7,513)
Total Recognised in Profit and Loss
(7,513) (2,012)
(2,012)
(7,513)
(7,513) (2,012)
Recognised directly in equity

Revaluation of available-for-sale financial instruments
144
Total Recognised Directly in Equity
144 518
Total Loss on Revaluation
(7,369)
518
(1,494)
(2,012)
144
518
144 518
(7,369)
(1,494)
B Value of Financial Instruments

The valuation methods used to determine the fair values of those financial assets and liabilities that are measured at fair value in the statement
of financial position are shown below, classified according to the NZ IFRS fair value hierarchy.
Note 22 Other Financial Assets and Liabilities (continued)

Level 1 Fair value determined by quoted prices (unadjusted) in active markets for identical assets or liabilities.
Share Investments
The majority of shares are valued using either quoted prices on a stock exchange or at prices set by cooperative companies that are based on
estimated fair value. A small portion of the share portfolio (less than 10%) are unlisted equities or cooperatives whose share prices are set by the
cooperative at a value other than estimated fair value. For these shares the fair value is estimated at the lower of the current cost to purchase
additional shares, or required sales values in the case of cooperative companies with restricted shareholding requirements.
Level 2 Fair value based on inputs that are observed either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Interest Rate and Commodity Derivatives

The values of interest rate derivatives are based on estimated market values at balance date, given prevailing market interest rates and the terms
of the derivative instruments.
C Current and Non-Current Financial Assets and Liabilities

Financial assets are classified as current if they are expected to be realised within one year. Share investments include shares in dairy cooperatives,
some of which require an annual adjustment in shares owned depending on production levels. This means that while the overall portfolio is not
expected to be realised in the short-term, minor sales of shares may be required once final production levels for the year ahead are known. Share
investments are therefore classified as non-current, unless specific sales of shares have been identified in the Business Plan.
Loans to subsidiaries may be repaid at any time by the subsidiary. These are only classified as current if a subsidiarys Business Plan includes net
repayment of debt within one year.
2012 2011 2012 2011
$000 $000 $000 $000

Current
Held-for-trading financial assets
Commodity derivatives
Non-Current
External Financial Assets
Share investments
Internal Financial Assets
Shares in subsidiaries
Loans to subsidiaries
Total Other Financial Assets
Current
Bank loans
Interest rate and commodity derivatives
Non-Current
Bank loans
Total Other Financial Liabilities
68
7 20
48,936 45,180
7 20
48,936 45,180
137,757
19,479
130,795
13,479
48,943
45,200
206,179
189,474
107,200
107,200
809
809
171,300 50,000 171,300 50,000
14,793
7,654
14,793
7,654
186,093
165,663
186,093
165,663
Note 22 Other Financial Assets and Liabilities (continued)

D Bank Loans
Bank loans are the drawn components of bank cash advance facilities. The facilities may be borrowed against, or repaid, at any time by Landcorp.
The facilities are subject to a negative pledge agreement which means that Landcorp may not grant a security interest over its assets without the
consent of its lenders. Facilities are either on a daily floating interest rate or a short-term fixed rate.
2012 2011 2012 2011
$000 $000 $000 $000
Carrying value
Principal drawn
Fair value
171,300 157,200
171,300 157,200
171,300 157,200
171,300 157,200
171,300 157,200
171,300 157,200
Cash advance facilities have been drawn as follows:

2012 2011 2012 2011
$000 $000 $000 $000
Drawn
Undrawn
171,300 157,200 171,300 157,200

83,700 47,800 83,700 47,800
Total
255,000 205,000
255,000 205,000
Cash advance facilities are committed to:

2012 2011 2012 2011
$000 $000 $000 $000
0 6 months
6 12 months
One to two years
Two to five years
Greater than five years

150,000
105,000

155,000

50,000

Total
255,000 205,000

150,000
105,000

155,000
50,000
255,000 205,000
E Financial Guarantees
The Parent is party to a bank account offset facility with other Group companies. This facility allows more efficient management of Group cash
balances and funding facilities. Under the facility individual company bank accounts are combined for interest payment calculations, and the bank
has the right to offset accounts in the event of default by any Group company. At a Group level the maximum combined total of all overdraft
accounts is $2 million (2011 $2 million).
The fair value of this financial guarantee is considered to be immaterial, as all Group companies are considered solvent and no payments are
expected to be made under the guarantee.
Note 23 Intangible Assets

2012 2011 2012 2011

Note $000 $000 $000 $000
Carbon Credits
Fair Value
Opening balance
Additions
Disposals
Revaluation (decrease)/increase
702 777 598 777

1,540 104 1,525
(184)
(184)
(1,092) 5
(1,025) 5
Net Carrying Amount
1,150 702 1,098 598
Computer Software
Cost
Opening balance
Additions
Disposals
2,993 2,841 2,993 2,841

153 152 153 152

Closing balance
Accumulated Amortisation
Opening balance
Amortisation
Disposals
Closing balance
Net Carrying Amount
Total Intangible Assets
3,146 2,993
15
3,146 2,993
(1,954) (1,339) (1,954) (1,339)

(636) (615) (636) (615)

(2,590) (1,954)
(2,590) (1,954)
556 1,039
556 1,039
1,706 1,741
1,654 1,637
Landcorps intangible assets comprise carbon credits received under the Emissions Trading Scheme and farm management and finance information
systems. Carbon credits are assumed to have an infinite life and are revalued at year end.
During 2011/12 Landcorp earned 108,688 New Zealand Units (NZUs) for sections of its post-1989 forests. In addition, Landcorp earned 22,402
NZUs from pre-1990 forests. During 2010/11 Landcorp earned 5,662 NZUs on post-1989 forests. In the event that these forest areas are
harvested, a liability equivalent to the decrease in carbon will be incurred.
70
Note 24 Property, Plant & Equipment

2012 2011 2012 2011

Note $000 $000 $000 $000
Land and Improvements

Freehold land and buildings
Fair Value
Opening balance
Additions
Disposals
Reversal of depreciation on revaluation
Revaluation increase
Reclassified (to)/from property held for sale
Closing balance
Accumulated Depreciation
Opening balance
Depreciation
Disposals
Reversal on revaluation
1,040,597 976,091 1,040,597 976,091

27,860 44,585 27,860 44,585
(3,852) (7,758) (3,852) (7,758)
(2,003)
(2,216)
(2,003)
(2,216)
13,562 17,695 13,562 17,695
(60,146)
12,200
(60,146)
12,200
1,016,018 1,040,597

(2,353) (2,292) (2,353) (2,292)
350 76 350 76
2,003
2,216
2,003
2,216
15
Closing balance
Net carrying amount

1,016,018
Buildings on leased land

Cost
Opening balance
Transfer from subsidiaries
Additions
Disposals
Closing balance
Opening balance
Depreciation
Closing balance
Net carrying amount
1,040,597
22,620 22,367
(4,538)
(1,151)
(4,538)

(1,151)
15 (376) (375) (376) (375)
15 (167) (167)
(3,012)
(3,012)
(5,081) (4,538)
Net carrying amount
Protected Land and Improvements

Cost
Opening balance
Additions
1,016,018
22,620 22,367
Closing balance
Total Land and Improvements
1,040,597
22,367
22,291
22,367

22,291
253 76 253 76

Closing balance
Accumulated Depreciation and Impairment
Opening balance
Depreciation
Amortisation
Impairment
1,016,018 1,040,597
(5,081) (4,538)
17,539
17,829
17,539
17,829
1,033,557
1,058,426
1,033,557
1,058,426
118,233
117,805
967 428
119,200
(467)
(327)
(137) (140)
(604)
15
118,596
118,233
(467)
117,766
Note 24 Property, Plant & Equipment (continued)

2012 2011 2012 2011

Note $000 $000 $000 $000
Plant
Cost
Opening balance
Additions
Disposals
Closing balance
Opening balance
Depreciation
Impairment
Disposals
Closing balance
54,937 49,534
54,937 49,534
(26,833) (22,877) (26,833) (20,305)

(2,572)
15 (4,771) (4,174) (4,771) (4,174)
(373)
(373)
700 591 700 591
(30,904) (26,833)
(30,904) (26,833)
Net carrying amount
24,033
24,033
Motor Vehicles
Cost
Opening balance
Additions
Disposals
36,310 34,136 36,310 30,408

3,728
6,164 4,660 6,164 4,660
(5,050) (2,486) (5,050) (2,486)
Closing balance
Accumulated Depreciation and Impairment
Opening balance
Depreciation
Impairment
Disposals
Closing balance
Net carrying amount
Furniture and Equipment
Cost
Opening balance
Additions
Disposals
Closing balance
Opening balance
Depreciation
Disposals
Closing balance
Net carrying amount
72
49,534 45,945 49,534 36,863

9,082
6,237 4,446 6,237 4,446
(834) (857) (834) (857)
22,701
37,424 36,310
22,701
37,424 36,310
(20,753) (18,640) (20,753) (17,017)

(1,623)
15 (4,006) (3,914) (4,006) (3,914)
(149)
(149)
4,124 1,950 4,124 1,950
(20,635) (20,753)
(20,635) (20,753)
16,789
16,789
15,557
15,557
6,899 6,583 6,899 6,185

398
471 438 471 438
(66) (122)
(66) (122)
7,304 6,899
7,304 6,899
(4,766) (4,312) (4,766) (4,158)

(154)
15 (534) (563) (534) (563)
60 109
60 109
(5,240) (4,766)
(5,240) (4,766)
2,064
2,064
2,133
2,133

2012 2011 2012 2011

Note $000 $000 $000 $000
Computer Equipment
Cost
Opening balance
Additions
Disposals
2,323 5,212 2,323 4,901

311
288 143 288 143
(29) (3,032)
(29) (3,032)
Closing balance
Opening balance
Depreciation
Disposals
2,582 2,323
2,582 2,323
(1,829) (4,461) (1,829) (4,194)

(267)
15 (300) (388) (300) (388)
28 3,020
28 3,020
Closing balance
Net carrying amount
Total Net Carrying Amount
(2,101) (1,829)
(2,101) (1,829)
481
494
481
494
1,195,520
1,217,077
1,076,924
1,099,311
Valuations of freehold land and buildings at 30 June 2012 were provided by Ian Bunt (FPINZ, FNZIV, MNZIPIM), Registered Valuer, Darroch Limited.
The valuations take into account general factors that influence farm land prices and recent farm sales in the relevant regions. Factors specific to
Landcorp that have been taken into account for valuations include the following factors:
The effects of the Conservation Act 1987 relating to the establishment of marginal strips and conservation management plans
whereapplicable.
The effects of the Treaty of Waitangi (State Enterprises) Act 1988 and the memorials pertaining to section 27B of the State Owned
Enterprises Act 1986, which provides for the resumption of land on recommendation of the Waitangi Tribunal. In the North Island many
section 27B memorials are in place and their effect has been considered resulting in deductions from unencumbered current market value
of0-6%.
South Island properties include a deduction of up to 5%, reflecting the effect of the Right of First Refusal memorial to Ngai Tahu registered
onthe title of those properties.
All freehold land purchased from the Crown on commencement (1 April 1987) had a memorial placed on the title through the Treaty of Waitangi
(State Enterprises) Act 1988. That Act provides for full compensation to the owner of any such land that is the subject of a successful land claim.
Certain land not required for Treaty settlement has since had that memorial replaced with a statutory right of first refusal (in favour of Maori) on
future sale by Landcorp or another Crown body.
Property, plant and equipment under construction at balance date comprised:
2012 2011 2012 2011
$000 $000 $000 $000
Land development
Plant
162 162
1,738
715
1,738
715
367 116 367 116
2,267 831 2,267 831

Had the Groups freehold land and buildings (other than land and buildings classified as held for sale or included in a disposal group) and
Protected Land been measured on a historical cost basis, their carrying amount would have been as follows:
2012 2011 2012 2011
$000 $000 $000 $000
Freehold land
398,894 378,127
50,997
52,842
398,894 378,127
50,997
52,842
Total land and buildings at historical cost
449,891
449,891
430,969
430,969
Note 25 Accounts Payable and Accruals

2012 2011 2012 2011
$000 $000 $000 $000
Trade creditors
Payable to subsidiaries
Other land sales deposits received
Other payables and accruals
Total Accounts Payable and Accruals
9,797 9,367

579
414
8,131
9,810
18,507
19,591
9,715 9,090
4,944
4,922
498
128
7,927
9,757
23,084
23,897
From 1 April 2012 Landcorp became part of the ACC Partnership Programme and has taken on the responsibility of providing full work injury
support to an injured employee. An estimate of the liability has been included in other payables and accruals. This has not been actuarially valued
this year as Landcorp has only recently entered the programme and the liability is not material.
Note 26 Redeemable Preference Shares

Redeemable preference shares are issued under the terms of the Protected Land Agreement (the PLA), signed with the Crown in 2007. They carry
no voting rights and are not eligible for dividends or any share of net assets on wind-up.
Under the PLA certain properties that Landcorp had wished to sell were transferred to subsidiary company Landcorp Holdings Ltd where they are
managed by Landcorp. The Crown invested additional capital in Landcorp through the purchase of redeemable preference shares of an equivalent
value to the protected properties. This capital was paid through a combination of cash and dividend reinvestment, with the final amount paid
through the reinvestment of part of the 2009/10 final dividend in October 2010.
As part of the PLA, Landcorp was prevented from selling any other properties until September 2011, except for some specifically
exemptedorthose under contract at the time of the PLA. This provision, with minor exemptions, was extended to 31 March 2012
andsubsequently lapsed.
When requested, Landcorp will transfer protected properties to the shareholder with an agreed value of redeemable preference shares being
redeemed. As the redeemable preference shares are redeemable on demand by the share owner, under NZ IFRS, they are required to be reported
as a liability. Landcorp considers these as part of its equity, as shown in Note 27.
2012 2011 2012 2011
$000 $000 $000 $000
74
Value at start of period

Issued during period
117,755

100,408
17,347
117,755

100,408
17,347
Value at End of Period
117,755
117,755
117,755
117,755
Note 27 Capital Management

The Group considers its capital as comprising all the components of Shareholders Equity and Redeemable Preference Shares (classified under
NZIFRS as a liability), as follows:
2012 2011 2012 2011

Comment $000 $000 $000 $000
Share capital
Retained earnings
Revenue reserves
Fair value reserve
Asset revaluation reserves
Other equity
A
B
C
D
E
F
125,000 125,000
124,204 123,256
104,558 142,420
1,813
1,714
746,982
730,038
229,412 229,199
125,000 125,000
248,216 247,969
103,688 141,550
4,145
4,046
632,262
617,199
220,249 217,840
Total Shareholders Funds

Redeemable preference shares
G
1,331,969 1,351,627
117,755
117,755
1,333,560 1,353,604
117,755
117,755
Total Managed Capital
1,449,724
1,451,315
1,469,382
1,471,359
Under the State-Owned Enterprises Act 1986, Landcorps ordinary shares may only be owned by the Ministers of Finance and State-Owned
Enterprises. This prevents Landcorp from raising equity capital from other sources.
Landcorp manages its capital such that a debt to equity level is maintained so that banking covenants and fiduciary responsibility are met.
Landcorps target for dividend payments is to pay up to 75% of net operating profit (after tax) subject to ensuring that debt levels will be
maintained at a level that ensures Landcorp meets all fiduciary and legal requirements including banking covenants.
COMPONENTS OF CAPITAL
A Share Capital
The Parents shareholding is held equally by the Minister of Finance and the Minister for State-Owned Enterprises in terms of the State-Owned
Enterprises Act 1986. Ordinary shares carry one vote per share and carry the right to participate in dividends.
All shares are fully paid up. Share capital comprises:
Parent Parent
2012 2011

000 shares
000 shares
Ordinary shares
125,000
125,000
B Retained Earnings
Retained earnings comprises Landcorps accumulated net profits (excluding profits from the revaluations of livestock and financial assets) less
dividends paid. By excluding these price revaluations, and the components of other equity (refer comment F), retained earnings is an approximate
measure of the accumulated cash profits retained by Landcorp.
C Revenue Reserves
Landcorp has chosen to classify the net revaluations of livestock (biological assets revaluation reserve) and derivatives (financial assets revaluation
reserve) separately from retained earnings. Under NZ IFRS the revaluations on these assets are required to be reported in the Statement of
Comprehensive Income and, as a component of net profit after tax, initially form part of retained earnings. However, these revaluations do not
represent cash flows and, especially in the case of livestock, cannot be realised in the ordinary course of livestock farming.
D Fair Value Reserve
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets, until the investment is
derecognised.
E Asset Revaluation Reserves
The asset revaluation reserves are used to record changes in the fair value of individual land and buildings and intangible assets.
F Other Equity
Other equity represents transfers from assets revaluation reserves of asset revaluations, when the associated asset is sold. Given that most of
Landcorps property sales reflect changes in the composition of land holdings, rather than reductions, these transfers are not usually realised on a
portfolio basis. Hence, other equity is not a cashflow realised for distribution and can be considered a form of asset revaluation reserve.
G Redeemable Preference Shares
Redeemable preference shares are used as a capital injection to compensate Landcorp for the land protected from sale under the PLA as described
in Note 26.
Note 28 Dividends
Parent Parent Parent Parent
2012 2011 2012 2011

Cents per share
$000
$000
Ordinary shares
Interim dividend
Final dividend

22.0
14.4
27,500
18,000
Total Dividends for Year
22.0
14.4
27,500
18,000
A final dividend for 2012 of $20 million was declared in August 2012 (2011 $27.5 million). This dividend will be imputed to the value of
$1million.
Redeemable preference shares are not eligible to participate in dividend payments.
Note 29 Income Tax

A INCOME TAX EXPENSE
Tax (income) expense recognised for the year was:
2012 2011 2012 2011
$000 $000 $000 $000
Current tax expense (credit)

Current tax expense (credit) for year
Adjustments to prior year
Effect on recognised tax losses due to change in income tax rate

542
855

(9,423)
5,691
627
1,397 (3,105)
507
872

(9,377)
5,544
625
1,379 (3,208)
Deferred tax (credit) expense

Temporary differences
Adjustments to prior year
Effect on deferred tax balances due to change in income tax rate
(9,667) 15,886
(42)

8
(9,655) 16,174

(9,709) 15,894
(9,655) 16,174
Total Income Tax (Credit) Expense
(8,312)
(8,276)
12,789
12,966
The prima facie income tax (credit) expense on accounting profit reconciles to the recognised tax (credit) expense as follows:
2012 2011 2012 2011
$000 $000 $000 $000
Profit before tax

Income tax (credit) expense calculated at 28% (2011 30%)
Prior year current tax adjustments
Increase/(decrease) in income tax expense due to:
Non-deductible expenses
Donations
Other
Decrease in income tax expense due to:
Land development expenditure
Livestock
Non assessable income
Other
Effect on tax balances due to change in income tax rate
Total Income Tax (Credit) Expense
76
(17,726)
(4,963)
813
127,381
38,214
5,691
(18,391)
(5,149)
872
127,163
38,149
5,544
139
(1)
139
33
33
5,965 3,890 5,879 3,890
(4,155)
(17,765)
(2,806) (4,918)
(550)
55
(2,755) (13,037)

(8,312)
627
12,789
(4,155)
(17,765)
(2,806) (4,918)
(534)
92
(2,522) (12,684)

(8,276)
625
12,966
Note 29 Income Tax (continued)

B DEFERRED INCOME TAX RECOGNISED DIRECTLY IN EQUITY AND OTHER COMPREHENSIVE INCOME
The following deferred amounts were charged/(credited) directly to equity during the period:
2012 2011 2012 2011
$000 $000 $000 $000

Property revaluations
Revaluations of available-for-sale financial assets
Total Deferred Income Tax Recognised Directly In Equity and
Other Comprehensive Income
629 1,832
629 1,832
39
119
39
119
668
1,951
668
1,951
C DEFERRED TAX BALANCES

Deferred tax balances at balance date were:
2012 2011 2012 2011
$000 $000 $000 $000
Deferred tax asset

Tax losses recognised
6,187 5,209 6,156 5,099

53,343
55,177
49,229
51,235
59,530 60,386
55,385 56,334
Deferred tax liability

(49,501) (57,999)
(47,827) (56,384)
(49,501) (57,999)
(47,827) (56,384)
Net deferred tax asset (liability)

Current tax asset (liability)
Net Tax Asset (Liability)
10,029
2,387
7,558
10,029
2,387
7,558
(50)
(50)
The availability of the tax losses recognised is subject to the requirements of the income tax legislation being met.

Taxable and deductible temporary differences arise from the following:

Balance Sheet
Tax (Credit)/Expense
Group Group Group Group
2012 2011 2012 2011
$000 $000 $000 $000
Group
Deferred tax assets
Trade and other receivables
Biological assets
Fair-value-through-profit-and-loss financial assets
Tax bases without a liability carrying amount
Trade and other payables
Provisions
6
1
(5)
58
31
110
(9)
(8)

652
784
(560)
4,140
2,364
(1,776)
625
4
6
2
8
17
82
65
1,179
1,989 1,994
5 (74)
6,187 5,209
Deferred tax liabilities

Biological assets
Intangible assets
1,434
29,842
705
17,520

49,501 57,999
1,424
39,179
666
16,700
30
Deferred Tax (Credit) Expense
(934) 1,228
(140)
(9,363)

698
30
(1,261)
21,776
(5,819)
(30)
(8,775) 14,666
(9,709)
15,894

Balance Sheet
Tax (Credit)/Expense
Parent Parent Parent Parent
2012 2011 2012 2011
$000 $000 $000 $000
Parent
Deferred tax assets
Biological assets
Fair-value-through-profit-and-loss financial assets
Tax bases without a liability carrying amount
Trade and other payables
Provisions
6
1
(5)
58

461

652
652
(560)
4,140
2,364
(1,776)
625
4
6
2
8
17
82
65
1,179
1,989 1,994
5 (74)
6,156 5,099
Deferred tax liabilities

Biological assets
16
29,628
705
17,478
47,827 56,384
82
38,978
666
16,658
Deferred Tax (Credit) Expense
78
(1,057) 1,697
(66)
(9,350)

818
(1,179)
21,795
(6,139)
(8,598) 14,477
(9,655)
16,174

D IMPUTATION CREDIT ACCOUNT BALANCES
Parent Parent
2012 2011
$000 $000
Balance at beginning of the period

Adjustment to prior year balances
Attached to dividends paid
Attached to dividends received
RWT refunded
3,849
(33)
(2,500)
24
(7)
3,822
27
Parent company balance at end of year
1,333
3,849
Available through indirect interests in subsidiaries
Imputation Credits Available Directly and Indirectly to Shareholders of the Parent Company
1,333
3,849
Note 30 Reconciliation of Profit and Operating Cash Flow

2012 2011 2012 2011

Note $000 $000 $000 $000
Net profit after tax

Non cash items
Depreciation and amortisation
Non-cash livestock income
Forest growth
Allocation of carbon credits
Dividends received from equity accounted joint ventures
Non-cash movement in equity accounted investments
(Loss)/gain due to price changes on livestock
(Loss)/gain due to price changes on forests
Loss due to price changes on financial instruments
Loss on revaluation of property, plant and equipment
(Gain)/loss due to price changes on intangible assets
Change in deferred tax asset/liability
Deferred tax on revaluation of assets
Movement in working capital items
Inventories
Accounts receivable
Accounts payable and accruals
Items classified as investing or financing activities
Net loss/(gain) on movement of assets
Change in balances due to subsidiary amalgamation
Change in accounts receivable due to capital items
Change in accounts payable due to capital items
Net Cash Flows from Operating Activities
(9,414)
15
9
10
10
114,592
(10,115)
114,197
13,280
12,461
13,143
12,321
943
(9,694)
943
(9,694)
(882) (2,745)
(911) (2,720)
(1,540)
(104)
(1,525)
832
150

(626)
(27)
(35)
30,349
(75,640)
30,349
(75,640)
1,313
(2,893)
1,321
(2,859)
7,513
2,012
7,513
2,012
5,564
1,691
5,564
1,691
1,092
(5)
1,025
(5)
(7,642)
14,740
(7,558)
11,778
(668)
(1,951)
(668)
(1,045)
(436) 1,259
(436) 105
22,006 (16,333) 21,918 (19,688)
(1,084)
3,127
(813)
3,868
223 508 223 986
3,523

(16,276)
3,057
(5,194)

15,307
582
3,640

(16,498)
3,031
(5,190)
5,829
15,364
536
51,127
51,843
50,111
51,846
Note 31 Risk Management

The Group is exposed to various risks arising in the ordinary course of business. The Board of Directors authorises the use of financial instruments
under approved policy guidelines to manage financial risks. A Treasury Management Committee comprising the executive management team and
an independent treasury advisor meet on a monthly basis to co-ordinate and oversee the operation of the treasury function. Details of these risks
and risk management policies are explained below:
A Risks due to Agricultural Activities

The Group is exposed to many risks relating to agricultural activities:
Environmental and climatic risks

Like all farmers, Landcorp is exposed to climatic and other environmental risks. Landcorps geographic spread of farms usually allows a high
degreeof mitigation against adverse climatic (e.g. drought or flooding) and environmental (e.g. disease outbreaks) effects at a regional level.
Whenadverse climatic events occur livestock is initially accommodated where possible on other Landcorp properties.
The geographic spread of Landcorps forestry assets also provides a high degree of risk mitigation against risks associated with forestry, such as
fireand disease.
Landcorp has strong environmental policies and procedures aimed at supporting the business while ensuring compliance with environmental
and other laws. Environmental policies are designed to be compliant with laws in target export markets in addition to New Zealands
legislativerequirements.
Commodity price risk

Landcorp is exposed to risks arising from fluctuations in the price and sales volume of livestock and forestry. Where possible, Landcorp enters
into supply contracts for livestock to ensure sales volumes can be met by processing companies. Landcorp uses oil-price derivatives to hedge
price movements on approximately 50% of its petrol and diesel usage. Other than this, Landcorp is unable to use financial instruments to hedge
commodity price risk, due to a lack of effective hedging markets.
Landcorp has diversified its main sources of livestock revenue across four main product streams sheep meat, beef, venison and milk which
provide lower levels of exposure to prices of any one commodity.
Financing risk
The nature of livestock farming means that most of Landcorps revenue is received in the second half of the financial year, whereas expenses are
incurred throughout the year. Landcorp manages this financing risk through budgeting and actively managing working capital requirements, as well
as maintaining credit facilities at levels sufficient to meet working capital requirements, as described in Note 22 (d).
B Credit Risk
Credit risk is the risk of loss arising from a counterparty to a contract failing to discharge its obligations. In the normal course of its business,
Landcorp incurs credit risk from trade receivables and transactions with financial institutions. Landcorp has a credit policy, which is used to
manage this exposure to credit risk. As part of this policy, credit evaluations are performed on all customers requiring credit over a certain amount.
Limits on exposures are set and monitored on a regular basis. As at 30 June 2012 Landcorp did not have any significant concentrations of credit
risk except for milk customers. Landcorps maximum credit exposure is shown below. Landcorp does not expect the non-performance of any
obligations at balance date beyond those estimated as impaired.
2012 2011 2012 2011

Note $000 $000 $000 $000
Cash balances
Accounts receivable
Other financial assets
Maximum Credit Exposure
80
19
22
564
454
1,700
11,709
22,495 44,501 22,549 44,467
48,943
45,200
206,179
189,474
72,002
90,155
230,428
245,650
Note 31 Risk Management (continued)

The status of accounts receivable at balance date was:
2012 2011 2012 2011
$000 $000 $000 $000
Not yet due

Past due up to 30 days
Past due 31 to 60 days
Past due 61 to 90 days
Past due more than 90 days
22,331
106
23
2
33
44,143
262
64
14
18
22,495 44,501
22,385
106
23
2
33
44,109
262
64
14
18
22,549 44,467
Accounts receivable are estimated to be impaired as follows:

2012 2011 2012 2011
$000 $000 $000 $000
Gross accounts receivable

Individual impairment
22,515
44,503
22,569
44,469
(20) (2) (20) (2)
22,495 44,501
22,549 44,467
C Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds at short notice to meet financial commitments. The Group has
liquidity headroom available through term borrowing arrangements and specific funding for seasonal fluctuations (see Note 22 (d)).
Every year the Group prepares a three-year Business Plan, which includes a forecast of funding requirements. The Treasury Management
Committee reviews the required funding and assesses the appropriate level and term structure of funding facilities. Intra-year, Landcorps policies
require that committed funding facilities are greater than current quarter peak-funding requirements.

The table below analyses the Groups financial liabilities by period of contractual maturity. Parent numbers are not presented as they are not
materially different from Group. Total amounts do not match to the Statement of Financial Position as contractual flows are the absolute
undiscounted amount of future cashflows, including forecast interest expense on interest-bearing liabilities.

2012
0 6
6 12
One to
Two to Greater than
No fixed

Total
months
months
two years
five years
five years
maturity

Note $000 $000 $000 $000 $000 $000 $000
Group 2012
Liabilities
Land sales deposits
25 579
579
Other accounts payable and accruals
25
17,928
17,928
8,560
4,393
4,167
22
Bank loans 183,099 3,459 3,459
132,921
43,260


14,793
779
945
13,069
Redeemable preference shares 26
117,755
117,755
Total Contractual Maturity 342,714 25,780 3,459
133,700 44,205 13,069
122,501

2011
0 6
6 12
One to
Two to Greater than
No fixed

Total
months
months
two years
five years
five years
maturity

Note $000 $000 $000 $000 $000 $000 $000
Group 2011
Liabilities
Land sales deposits
25 414
414
Other accounts payable and accruals
25
19,177
19,177
8,337
4,173
4,164
22
Bank loans
162,328
110,303
1,313
50,712
Interest rate derivatives 8,463 1,398 1,398 3,406 2,346 (85)
Redeemable preference shares 26
117,755
117,755
Total Contractual Maturity
316,474
135,051
2,711
54,118
2,346
(85)
122,333
Land sales deposits are the receipt of deposit monies for land sales that have not yet been recognised. Landcorp will only need to settle these
liabilities in cash if the sales contracts are cancelled.
Redeemable preference shares arise from the PLA (refer Note 26). These shares are likely to be redeemed by the transfer of protected land to the
redeemable preference shareholder (the New Zealand Government).
D Foreign Currency Risk

Foreign currency risk is the risk that Landcorps sales revenue will be impacted by fluctuations in foreign exchange rates. Landcorp is exposed to
indirect foreign currency risk through the sale of products by processing companies to overseas markets. Landcorp has a foreign currency policy
designed to limit the negative impact of exchange rate movements on revenue. Foreign currency risk is quantified and managed and the policy is
to fix, either directly or indirectly, a minimum of 20 percent of sales revenue to mitigate the level of foreign currency risk. Sales revenue is fixed
indirectly through the hedging activities of processing companies (such as milk processors) and sales contracts fixed in New Zealand dollars. Sales
revenue is fixed directly with foreign currency derivatives, such as forward foreign exchange contracts and foreign currency options. At 30June
2012, approximately 63% of 2012/13 revenue (2011 53%) was estimated to be fixed indirectly through the hedging activities of processing
companies. No direct foreign currency hedging was in place at 30 June 2012 (2011 none).
82

E Interest Rate Risk
Interest rate risk is the risk of loss arising from changes in interest rates. Landcorp is exposed to interest rate risk on borrowings used to fund
investment and ongoing operations. Landcorp has an interest rate risk management policy designed to identify and manage interest rate risk
to ensure funding is obtained in a cost effective manner, to minimise the cost of borrowing and to provide greater certainty of funding costs.
Management monitors the level of interest rates on an ongoing basis, and from time-to-time, will fix the rates of interest payable using derivative
financial instruments. Forward rate agreements, interest rate swaps and interest rate options may be used for risk management purposes. Assets
and liabilities will mature or re-price within the periods shown in the table below. Parent numbers are not presented as they are not materially
different from Group, except for shares in subsidiaries, which are not interest rate sensitive, and loans to subsidiaries, which are at daily floating
interest rates (refer Note 22 (d)).
Re-pricing Analysis
2012 Non-interest
0 6
6 12
One to
Two to Greater than

Effective
Total
sensitive
months
months
two years
five years
five years

interest rate $000 $000 $000 $000 $000 $000 $000
Group 2012
Assets
Cash and Cash Equivalents 2.00% 564
564
Accounts Receivable
22,495
22,495
Inventories
10,095
10,095
87,782
87,782
Biological Assets
Livestock
265,793
265,793
Forests
16,225
16,225
3,732
3,732
Deferred Tax Asset
10,029
10,029
Share investments
48,936
48,936
Commodity derivatives 7 7
Intangible Assets
1,706
1,706
Property, Plant and Equipment
1,195,520
1,195,520
Liabilities
(18,507)
(18,507)
2.43%
(8,560)
(8,560)
Bank loans
3.28%
(171,300)
(171,300)
(14,793)

72,959
9,988
(15,535)
7,795
(90,000)
(117,755)
(117,755)
Shareholders Funds
(1,331,969)
(1,331,969)
Re-pricing Profile
185,529 (97,777) 9,988 (15,535) 7,795 (90,000)
The interest rate on term borrowing as amended by off balance sheet financial instruments was 5.38% per cent.

Re-pricing Analysis
2011 Non-interest
0 6
6 12
One to
Two to Greater than

Effective
Total
sensitive
months
months
two years
five years
five years

interest rate $000 $000 $000 $000 $000 $000 $000
Group 2011
Assets
Cash and Cash Equivalents 2.00% 454
454
Accounts Receivable
44,501
44,501
Inventories
9,659
9,659
25,419
25,419
Biological Assets
Livestock
297,085
297,085
Forests
16,807
16,807
2,643
2,643
Deferred Tax Asset
2,387
2,387
Share investments
45,180
45,180
Commodity derivatives 20
20
Intangible Assets
1,741
1,741
Property, Plant and Equipment
1,217,077
1,217,077
Liabilities
(19,591)
(19,591)
6.47%
(8,337)
(7,784)
(553)
Bank loans
3.32%
(157,200)
(157,200)
(8,463)

109,903

(617)
(17,749) (100,000)
(117,755)
(117,755)
Shareholders Funds
(1,351,627)
(1,351,627)
Re-pricing Profile
165,762 (47,396)
The interest rate on term borrowing as amended by off balance sheet financial instruments was 6.08% per cent.
84
(617) (17,749) (100,000)

F Sensitivity Analysis
For the 2012 year, it is estimated that the following movements in risk factors would have resulted in the following effects on net profit before
tax. The effects are all estimated after the effect of any hedging instruments used in the year, but do not include any potential price changes in
financial instruments, market values of livestock, or commodity prices for milk at balance date.
The sensitivity analysis is based on exposures arising over the 2011/12 year, rather than exposures at balance date, as Landcorps operations are
highly seasonal and the effect of risk exposures and hedging instruments at balance date do not reflect those experienced during the year.
2012 2011 2012 2011
$000 $000 $000 $000
Interest rate risk

Net finance costs would have changed by:
OCR higher/lower by 1%
(603) / +603
(525) / +525
(603) / +603
(525) / +525
Foreign currency risk

Revenue would have changed by:
NZD 1% higher/lower against USD
NZD 1% higher/lower against EUR
NZD 1% higher/lower against GBP
NZD 1% higher/lower against all currencies
(704) / +718
(473) / +483
(189) / +192
(1,366) / +1,393
(654) / +668
(401) / +409
(157) / +161
(1,213) / +1,238
(704) / +718
(473) / +483
(189) / +192
(1,366) / +1,393
(654) / +668
(401) / +409
(157) / +161
(1,213) / +1,238
Commodity price risk

Revenue would have changed by:
1% increase/decrease in all commodity prices
(1,379) / +1,379
+1,462 / (1,462)
(1,379) / +1,379
+1,462 / (1,462)
Note 32 Related Parties

Ultimate Controlling Party
The ultimate controlling party of Landcorp is the New Zealand Government.
Key Management Personnel Compensation
Key management personnel comprise directors and executive management personnel who have responsibility for planning, directing and
controlling the activities of Landcorp.
Key management personnel compensation comprised:
Group Group
2012 2011
$000 $000
Short-term employee benefits

Post-employment benefits
2,565
97
2,304
97
2,662 2,401
Short term employee benefits include salary, Directors remuneration, medical and life insurance and the cost of any other fringe benefits incurred
during the year as well as any accrued performance payments due within one year.
Post-employment benefits are contributions to defined contribution superannuation schemes, including employer KiwiSaver contributions.
Note 32 Related Parties (continued)

Other Related Party Transactions
The Group undertakes many transactions with other Crown owned entities which are carried out on an arms length basis and in the normal
course of business, as are all transactions within the Group.
There were no material transactions with the Crown during 2012 or 2011.
Landcorp Farming Ltd holds shares in a number of cooperative suppliers and customers. These shareholdings are required to enable the Group to
transact business with them. All transactions with these entities are on an arms length basis.
No related party debts were written off during the year, and other than loans to subsidiaries, amounts owing at balance date were not material
tothe Group.
Transactions with jointly controlled entities are described in Note 10 Equity Accounted Investments.
Transactions with subsidiary companies are described in Note 35 Subsidiary Companies.
Transactions between the Group and entities in which Directors were associated, were undertaken at arms length. A list of entities in which
theDirectors have an interest are listed in the section entitled Disclosures in Terms of the Companies Act 1993 in the Annual Report (see
pages89 to91).
Note 33 Contingent Assets and Liabilities

At 30 June 2012 Landcorp had the following contingent assets and liabilities:
(a) The Emissions Trading Scheme (ETS) was passed into law in late-2009. As a pastoral farmer and forester, Landcorp has directly gained
emission credits (New Zealand Units or NZUs) and will incur liabilities through the ETS. Landcorp is in the process of applying for credits
on pre-1990 forestry plantations. These are estimated to be around 136,000 NZUs. In the event that pre-1990 forests are deforested, a
deforestation liability would be incurred. During 2012 22,402 NZUs were allocated to Landcorp.
Landcorp can claim credits on its post-1989 forest carbon sequestration. During 2011/12 Landcorp received 108,688 NZUs for post-1989
forest carbon sequestration. Landcorp is expecting to receive additional NZUs for areas currently in the process of registration and for
additional carbon sequestration on areas already registered. Should these plantations be harvested and/or deforested, a liability would be
incurred up to a maximum of the credits received.
(b) Under the PLA (refer Note 26), any accumulated gains (losses) on the protected property will be paid to the Crown (reimbursed by the
Crown) when that property is transferred to Crown ownership. During 2009/10 the Crown signed an Agreement in principle to settle a
Treaty of Waitangi claim. This Agreement in principle included the transfer of three Landcorp properties to Iwi, which were purchased from
Landcorp Farming by the Crown during the year and one property held by Landcorp Holdings Ltd under the PLA. Landcorp has recognised
thereimbursement receivable to date from the Crown for the affected protected property (refer Note 11). The reimbursement for losses
incurred on the other protected properties has not been recognised by Landcorp. At 30 June 2012, this unrecognised reimbursement totalled
$4.1 million (2011 $5.0 million).
86
Note 34 Commitments
2012 2011 2012 2011
$000 $000 $000 $000
Contracted capital commitments

Operating lease commitments:
Within one year
One to two years
Two to five years
Later than five years
2,546
1,749
780
1,198
4,699
4,360
10,440
102,817
4,409
4,604
12,782
110,241
4,699
4,360
10,440
102,817
4,409
4,604
12,782
110,241
Operating lease commitments relate to the lease of farmland.

Landcorp has entered into an agreement with Shanghai Pengxin Group (SPG) to manage 16 farms that SPG is in the process of acquiring. Ifthis
agreement proceeds, Landcorp will have a commitment to acquire cows valued at around $26.7 million and plant and equipment valued at
$4.8million over the next two years.
Note 35 Subsidiary Companies

Subsidiaries
Principal activity
Landcorp Estates Ltd

Landcorp Pastoral Ltd
Landcorp Holdings Ltd
Limited Partner in genetics joint venture
Holding Protected Land
Balance
date
30 June
30 June
30 June
Percentage held
2012
2011
100%
100%
100%
100%
100%
100%
Transactions with subsidiary companies:

During the year Landcorp Farming Ltd provided management and support services to its subsidiaries at a cost of $1.2 million (2011 $0.9 million).
All inter-group transactions are undertaken upon an arms length commercial basis. At 30 June 2012, Landcorp Farming Ltds accounts receivable
balance included $0.3 million (2011 $0.2 million) owing from subsidiary companies and accounts payable had $4.9 million (2011 $4.9 million)
owing to subsidiary companies. The accounts payable balance includes the pass-through of the Crowns reimbursement of Protected Land losses
through Landcorp Farming Ltd to Landcorp Holdings Ltd.
Loans to subsidiaries at 30 June 2012 are mainly for the purchase of capital assets and working capital.
The balance of loans at 30 June 2012 was $19.5 million (2011 $13.5 million) and is subject to interest charged at market rates. Total interest
paidby subsidiaries to Landcorp Farming Ltd during the year amounted to $1.3 million (2011 $2.0 million).
No subsidiary company debts were written off during the year.
During the year Landcorp Pastoral Ltd paid a $0.5 million dividend to Landcorp Farming Ltd.
During the year Landcorp Estates purchased land and buildings valued from Landcorp Farming Ltd at $2.7 million (2011: $nil).
Independent Auditors Report

TO THE READERS OF LANDCORP FARMING LIMITED AND GROUPS
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012
The Auditor-General is the auditor of Landcorp Farming Limited (the Company) and Group. The Auditor-General has appointed me, Trevor Deed, using the staff
andresources of Deloitte, to carry out the audit of the financial statements of the company and group, on her behalf.
We have audited the financial statements of the company and group on pages 41 to 87, that comprise the Statement of Comprehensive Income, Statement of
Movements in Equity and Statement of Cash Flows and the Statement of Financial Position as at 30 June 2012 for the year ended on that date and the notes
tothefinancial statements that include accounting policies and other explanatory information.
Opinion on the financial statements

In our opinion the financial statements of the Company and Group on pages 41 to 87:
comply with generally accepted accounting practice in New Zealand;
comply with International Financial Reporting Standards; and
give a true and fair view of the Company and Groups:
financial position as at 30 June 2012; and
financial performance and cash flows for the year ended on that date.
Opinion on other legal requirements

In accordance with the Financial Reporting Act 1993 we report that, in our opinion, proper accounting records have been kept by the company and group as far
asappearsfrom an examination of those records.
Our audit was completed on 27 August 2012. This is the date at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and our responsibilities, and explain ourindependence.
Basis of opinion
We carried out our audit in accordance with the Auditor-Generals Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those
standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
Material misstatements are differences or omissions of amounts and disclosures that would affect a readers overall understanding of the financial statements. Ifwe had
found material misstatements that were not corrected, we would have referred to them in our opinion.
An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on
our judgement, including our assessment of risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments;
we consider internal control relevant to the preparation of the company and groups financial statements that give a true and fair view of the matters to which they
relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on
theeffectiveness of the Company and Groups internal control.
An audit also involves evaluating:
the appropriateness of accounting policies used and whether they have been consistently applied;
the reasonableness of the significant accounting estimates and judgements made by the Board of Directors;
the adequacy of all disclosures in the financial statements; and
the overall presentation of the financial statements.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements. In accordance with the Financial Reporting Act 1993, we
report that we have obtained all the information and explanations we have required. We believe we have obtained sufficient and appropriate audit evidence to provide
abasis for our audit opinion.
Responsibilities of the Board of Directors

The Board of Directors is responsible for preparing financial statements that:
comply with generally accepted accounting practice in New Zealand; and
give a true and fair view of the company and groups financial position, financial performance and cash flows.
The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
The Board of Directors responsibilities arise from the State-Owned Enterprises Act 1986 and the Financial Reporting Act 1993.
Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on our audit. Our responsibility arises
fromsection 15 of the Public Audit Act 2001 and section 19(1) of the State-Owned Enterprises Act 1986.
Independence
When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the NewZealand
Institute of Chartered Accountants.
In addition to the audit during 2012, we provided a graduate secondment as accounting support which was compatible with those independence requirements.
Other than the audit and secondment, we have no relationship with or interests in the company or any of its subsidiaries.
Trevor Deed
Deloitte
On behalf of the Auditor-General
Wellington, New Zealand
Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of Landcorp Farming Limited (the company) and group for the year ended 30 June 2012 included on the companys
website. The Board of Directors is responsible for the maintenance and integrity of the companys website. We have not been engaged to report on the integrity of the
companys website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to
or fromthefinancial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the
published hardcopy of the audited financial statements and related audit report dated 27 August 2012 to confirm the information included in the audited financial
statements presented on this website.
Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.
88
Disclosures in Terms of the Companies Act 1993

Interests register (Section 211(1)(e))
Entries made in the interests register during the year covered particulars of directors interests, directors remuneration and directors and
officers liability insurance. Details are recorded under the separate headings below.
Directors interests (Section 140)

The following are particulars of general notices of disclosure of interest given by Landcorp directors during the year
Director Organisation
Position
Hon. J R Sutton CNZM

(Retired 30.04.2012)
Stone Hut Forest Investments Ltd
Chairman and Shareholder
A W Baylis

Blackhead Quarries Ltd

Dairy Holdings Ltd
Edincorp Business Services Ltd
Institute of Directors Accreditation Board
Port of Tauranga Ltd
Dunedin City Holdings Ltd
Chairman
Chairman
Director
Chairman
Director and Shareholder
Director
W A Larsen CNZM

Air New Zealand Ltd

Alpine Energy Ltd
Centreport Ltd
Larsen Consulting Ltd
NetCon Ltd
NZAEL Ltd

Director
Chairman
Principal
Director
Chairman
N P Davies-Colley

Northpower Ltd
West Coast Energy Pty Ltd
Farmlands Trading Society Ltd
Whangarei Local Fibre Company Ltd
The Tree People Ltd
Ngarakau Family Trust
Director
Director
Director
Director
Trustee
C W Day

Contact Energy Ltd

Hill End Investments Ltd
C W & CR Day Trust
Group Financial Controller

Trustee
P N Lockett

New Plymouth District Council

Taranaki District Health Board
Councillor
Ministerial Appointment
J D Brakenridge

The New Zealand Merino Company Ltd

Medbury School Trust Board
Synlait Innovations Advisory Committee
CEO
Member
Member
T Houpapa
MNZM, JP

Rural Broadband Initiative (RBI) National Advisory Committee

National Advisory Council on Employment of Woman
Hamilton Sculpture Trust
Pemberton Construction Ltd
Federation of Maori Authorities Inc.
Te Uranga B2 Incorporation
Maori Womens Welfare League
Global Agribusiness PWC/Advisory Group
Strada Corporation Ltd
Nga Pae O Te Maramamatanga Centre of Research Excellence
Trustee
Director
Chairman, Tainui Delegate
Committee of Management
Regional Executive Member
Member
Director
Director
DISCLOSURES IN TERMS OF THE COMPANIES ACT 1993 CONTINUED
Director Organisation
Position
M L James
(Retired 30.04.2012)

Ikan Property Ltd

Farmers Mutual Group Ltd
Staples Rodway (Taranaki) Ltd
TSB Community Trust
New Zealand Institute of Highway Technology
TSB Bank Ltd

Director
Director
Trustee
Director
Director
J M Mitchell
(Retired 30.04.2012)

Loganburn Station Ltd

Te Hau Farm (Marlborough) Ltd
Okiwa Holdings Ltd
Clifford Bay Marine Farms Ltd
Sport Otago
Director & Shareholder

Shareholder
Trustee
B J Morrison
CNZM, JP

Basil J Morrison & Associates

Waiuta Farms Limited
NZ Geographic Board
Local Government Superannuation Trust Ltd
Waitangi Tribunal
Civic Assurance (NZ Local Government Insurance Corporation Ltd)
Local Government Commission
Republic of Uganda
Principal
Member
Chairman
Member
Director
Chairman
Honorary Consul
Use of company information (Section 145)

No requests were received from directors to use company information which they obtained in their capacity as directors and which would
nototherwise have been available to them.
Share dealings (Section 148)

No director owned, acquired or disposed of equity securities in Landcorp Farming Ltd or its subsidiaries, Landcorp Pastoral Ltd, Landcorp
Developments Ltd, Landcorp Estates Ltd and Landcorp Holdings Ltd, during the year.
90
Directors remuneration and other benefits (Sections 161 and 211(1)(f))

Directors of Landcorp Farming Ltd received remuneration as recorded below. No remuneration or other benefits were paid to the directors
ofLandcorp Estates Ltd, Landcorp Pastoral Ltd or Landcorp Holdings Ltd.
Dollars in thousands
2012
2011
41
59
47
35
6
6
0
35
33
7
29
35
35
71
47
6
0
0
29
35
40
0
35
35
Landcorp Farming Ltd

Baylis AW (appointed Chairman May 2012)
Sutton JR (former Chairman retired April 2012)
Larsen WA (Deputy Chairman)
Brakenridge JD (appointed May 2011)
Davies-Colley NP (appointed May 2012)
Day CW (appointed May 2012)
Clouston FRL (retired April 2011)
Houpapa T
James ML (retired April 2012)
Lockett PN
Mitchell JM (retired April 2012)
Morrison BJ
The only other benefit received by directors during the year was the provision of an insurance cover for directors and officersliability.
Employees remuneration and other benefits (Section 211(1)(g))

Set out below are the numbers of employees and former employees whose total remuneration (including non-cash benefits and fringe benefit
tax) was within the specified bands

Dollars in thousands
100 109
110 119
120 129
130 139
140 149
150 159
160 169
170 179
200 209
220 229
230 239
240 249
250 259
260 269
280 289
580 589
610 619
Group
2012
14
10
13
7
9
5

2

3

1
1
1
1

1
Group
2011
11
14
4
7
10
4
3
2
1
1
1
1
1
1
Redundancy and leave payments are excluded from these figures.
Indemnity and insurance (Sections 162 and 211(1)(f))

During the year the Board resolved to continue with an insurance cover of $20 million to provide indemnity for directors and officers liability.
An additional $5 million insurance cover was added to meet any defence costs. The total premium costs are met by Landcorp.
Directory
Board of Directors
Bill Baylis
Chairman
Warren Larsen CNZM
Deputy Chairman
John Brakenridge
Nikki Davies-Colley
Chris Day
Pauline Lockett
Traci Houpapa JP
Basil Morrison CNZM, JP
Auditor
Corporate and
RegisteredOffice
15 Allen Street
PO Box 5349
Wellington
Tel: (04) 381 4050
Fax: (04) 384 1194
Executive Team
Wellington Office
Chief Executive:
Chris Kelly
Livestock Farms
Chief Financial Officer:

Richard Perry
Trevor Deed
(under appointment by the
Controller and Auditor-General)
Deloitte
Wellington
Company Secretary:
John Kennedy-Good
Solicitors
National Business Managers:

Graeme Mulligan
Allan Still
Buddle Findlay
Wellington
Rickit Law
Wellington
National Manager Strategy and

Performance:
Andrew MacPherson
National Manager Technology

and Property:
Phil McKenzie
Bankers
Westpac Banking Corporation
ANZ National Bank Ltd
ASB Institutional Bank
92
Website
www.landcorp.co.nz
Dairy Units
Livestock numbers
AT 30 JUNE 2012
Total animals
825,060
Sheep
575,629
Beef cattle
88,867
Dairy cattle*
50,352
Deer
110,212
* includes sharemilker cows
Production in 2011/12
TONNES
Milksolids
13,357
Venison
2,258
Sheep meat
QUICK FACTS
2011/12
10,176
Beef
9,715
Shorn wool
2,924
Velvet
12.0
Hectares owned and leased

AS AT 30 JUNE 2012
Owned Leased
North Island
79,686
32,291
South Island
81,144
182,560
Total
160,830 214,851
Landcorp operates
Farms over 3,000 ha
19
Farms with over 10,000 ewes
Dairy farms producing over 300,000 kg

ofmilksolids
22
Farms carrying over 20,000 stock units
17
Permanent staff
People
573

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2012 Landcorp, Annual Report 2012, HTTP ::WWW - Landcorp.co - Nz:Assets:NEW News Events:Landcorp Annual Report 2012 PDF

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Landcorp

ANNUAL REPORT 2012

LANDCORP FARMING LIMITED

8 CHIEF EXECUTIVES REVIEW

16 PEOPLE AND CAPABILITY

20 FROM FOREST TO HIGH

TO PROTECT LAKE TAUPO

24 LAMB PRODUCTION FOR

30 LAND SUPPLY FOR

32 AMONG THE BEST IN FARMING

39 FINANCIAL STATEMENTS AND

LANDCORP FARMING LIMITED

LANDCORP ESTATES LTD develops

COVER: Business Manager Kirsty Dickens, Livestock

Marketing Manager Andrew Hall (middle) and

LANDCORP HOLDINGS LTD owns

LANDCORP PASTORAL LTD holds

NET OPERATING PROFIT

2007 2008 2009 2010 2011 2012

KEY FINANCIAL DATA

KEY OPERATING DATA

Total hectares farmed (owned and leased)

around 5 per cent higher than the previous

$12.7 million. The company will seek to

TARGETS FOR 2012/13

The Global Financial Crisis has a continued

negative impact on demand for farm products,

Economic growth in New Zealand remains

New Zealand exchange rates remain volatile

Production input costs, particularly fertiliser and

Rural land values stabilise at levels lower than in

$27.0 million $16.3 million

Total shareholder return after

Dividend yield (Ordinary only)

Dividend payout (Ordinary and special)

the recent past, better reflecting economic returns

Dividends Group (Ordinary and special)

The costs of water management increase, including

Land owned by Landcorp and likely to be subject

to claims under the Treaty of Waitangi is covered

$20.0 million $15.0 million

$32.4 million $22.0 million

2012 | ANNUAL REPORT

The Balanced Scorecard reports key performance

TOTAL SHAREHOLDERS RETURN ON AVERAGE

The value of farm

2012 | ANNUAL REPORT

Other initiatives during 2011/12 included the development of

| WAIMAKARIRI dairy complex.

We face the future with confidence despite the current softening

Landcorp people are in great heart after another successful year

In 2011/12 we took further strides in that direction with growth in

We also thank three retiring directors for huge contributions to

2012 | ANNUAL REPORT

Total operating income

Net operating profit

Total shareholders return

Net profit on equity investment

Landcorp will hold course through 2012/13, although falling product

Landcorp recorded a much reduced shareholder value gain (also

Landcorp achieved record milksolids production of 13,400 tonnes

Stock units per

Good growing conditions in 2011/12 were a contributing factor to closing stock