AGM 2021

Oct 14, 2021

Slides

Good morning, everyone. Welcome to LIC's Annual Meeting. I'm Murray King, Chairman of LIC. Thank you for joining us today virtually. Before we start the proceedings, I have a small number of housekeeping matters to attend to. If you've not already voted, voting has now reopened and will remain open until we close this meeting. To vote, you'll need your shareholder number provided by Link Market Services. You can vote using the online platform. Please click on the Get a Voting Card button and enter your shareholder number. There are 6 resolutions to be considered today, a poll will be held on each one. All shareholders can vote on all resolutions. All resolutions are ordinary resolutions and require 50% approval. Results will be announced soon after the conclusion of the meeting. If anyone has any items of general business or questions they'd like to ask, please send them via the Ask a Question function. There's a button there now or at any time throughout the meeting. These will be collated by the team and answered in the general business section towards the end of the meeting. We may take a few moments to just collate those questions before we conduct general business. Given the uncertainty that COVID-nineteen has created and the need to protect our staff and business, this is a fully virtual meeting. I understand that these meeting formats can cause some complications with voting and asking questions. So before we officially begin the meeting, I'd like to cover a few points regarding using the online platform. If you have any issues during the meeting, please call the number at the top of the screen and someone will be able to help you. To ask questions using the online platform, please click on the Ask a Question button. You will then need to enter your shareholder number. It's worth noting that your questions will only be visible to myself and the team who will be moderating and answering the questions. To vote using the online platform, please click on the Get a Voting Card button. You will then need to enter your shareholder number. Voting remains fully confidential, so no one on the call will see your vote. I would just like to reiterate, if you have any issues asking questions or voting, please call the 800 phone number on the screen now. Welcome again to LIC's Annual Meeting. Welcome to fellow shareholders, the Shareholder Reference Group, Ian Brown and the ordinary committee, LIC's auditors, lawyers, bankers and advisors. I'd like to introduce Wayne McNee and LIC's 8 directors who are joining us today. Those directors from South Taranaki, Ben Dickey Doctor. Allison Waters from Manawatu Gray Baldwin, South Waikato Matt Ross, North Otago our 3 independent directors, Sophie Haslam, Tim Gibson, Candice Kinser and from Northland, Elected Director, Ken Haynes. The notice of meeting has been circulated to all shareholders and is taken as read. The required quorum of 25 as stated in the constitution is present, so the meeting can continue. As Chairman, I hold proxies, uh,506,786. I have apologies from Mark Benz, shareholder reference group Michelle Oldham Smith of the Shareholder Reference Group Shirley Trumper from the Honorary Committee Bruce Murphy from the Shareholder Reference Group David Jensen, Pharma's shareholder. So at this time, I'll call for any further apologies. Are there any further apologies? Okay. I haven't received any further apologies. So I'll move that those apologies be accepted. Can I have a seconder, please? I'm happy to second those apologies, Murray. Thanks, Matt Ross. Look, I realize this is a really busy time for farmers, probably the busiest time of the year, both this time of day and the day. So I really do thank you for your attendance. Okay. So here's the agenda for today's meeting. I will just briefly run through this. So Wayne McNee will speak about our new sustainability report in a moment. I'll cover off the financial overview, the business highlights and our outlook. We'll turn to Wayne who will speak about our refined strategy, research and development and financial details. We'll then move to an update on the Chief Executive recruitment process, the Honorary Report, the voting resolutions and we'll conclude with general business. So this year, LIC has released its 1st sustainability report. We're members of the Climate Leaders Coalition, the ATRAR Circle and the Sustainable Business Council, SBS. When we join the SBS, our members are required to introduce annual reporting practices, which outline progress on environmental, social, governance and economic issues. This report meets those requirements from a business perspective, but it's also an opportunity to demonstrate how we are responding to sustainability challenges facing our farmers and the New Zealand dairy industry. I'll now pass over to Wayne, who will take us through the report. Thank you, Murray, and kia ora tato. As a farmer owned cooperative and world leader in pasture based dairy genetics and herd management, we have a critical role to play in helping New Zealand's dairy farmers meet their sustainability goals. We exist to deliver superior genetics and technological innovation to help our shareholders sustainably farm a profitable animal. So sustainability is baked into our purpose. While many industries only recently began responding to climate challenges, LIC and its farmer shareholders began work over 30 years ago to improve genetic gain within the herd using genomics. The purpose of this report is to demonstrate to our shareholders our commitment to them when it comes to sustainability in addition to meeting our annual reporting requirements as a member of the Sustainable Business Council. I can have the next slide, please. This is LIC's 1st sustainability report and represents information about our environment, social and economic performance for the year ended 31st May 2021. The report features key highlights in these three areas and we've made great progress on our sustainability journey, especially over the last 4 years. So some of the highlights on this slide, there was record milk production in 2019 2020 with decreasing cow numbers. LIC had a 1.87% reduction in its CO2 emissions, which was a further reduction on the year before. We launched our indexes to rank artificial breeding bulls on their environmental efficiency, hoofprint and beefprint indexes and we're working on a world leading methane research program, investigating the link between methane emissions and bulls and their genetics and there's more on that later. Next slide. All aspects of the report are important and measuring our performance from a social perspective is a new feature of our reporting as shown on this slide. Our organizational health index of 70 is just at the top of the 2nd quartile of all the companies McKinsey has surveyed worldwide, almost 1,000 companies, and this has been consistent for the last couple of years despite COVID. Our total reportable incident rate of 3.49 reduced from 4.5 the year before, that's a measure of our health and safety performance and that has continued that's a continued downward trend. And we have 840 full time employees and over 1900 seasonal employees who live and work in their communities and contribute to those communities. The economic section of the sustainability report helps explain how we're delivering value to our farmer shareholders by investing in initiatives to help them breed the most profitable and sustainable animals. And Murray will speak to the economic highlights in the financial review later in this meeting. We know that environmental and regulatory considerations are front of mind for our farmers and we hope this report will become a useful place to find out what LIC is doing each year to help the industry meet new challenges head on. Each year, LIC will report back to you on how it is progressing and going about delivering on that commitment. We're committed to open and transparent reporting on sustainability and LIC will further develop the framework over time. The report is now available on LAC's website and was also emailed to all shareholders on the 6th October. I encourage you to read it. And I will now hand back to you, Murray. Thanks Wayne. I will now give an overview of the full year result and some business highlights from the year. We're proud to present another strong result for the 4th consecutive year. This result is in line with our market guidance and a credit to our shareholders for your support of significant initiatives in the last 5 years to transform LIC into a modern progressive cooperative. These initiatives have delivered the benefits we said they would, including focused investment in the business and a better return for our farmers. There are some specific numbers I'd like to cover. Total revenue was $249,000,000 an increase of 3.4 percent from the $240,900,000 last year. This is from continuing operations only, so excludes the sale of the LICA business. Net profit after tax was $22,900,000 up 31 percent from the previous year. Underlying earnings of $22,300,000 this is down fractionally just under 2% from the $22,700,000 last year after a one off tax benefit. Total assets equaled $382,000,000 a small increase from the prior year and a dividend of $17,800,000 or $0.1251 per share, representing 80% of underlying earnings. We've seen good growth across core business areas this year, but particularly in our premium genetics range where young, genomically selected bulls are used to fast track genetic gain and deliver more value on farm through increased profitability and efficiency, including improved environmental efficiency. That value combined with a solid dividend makes this result a win win for our farmers. It also means we can continue our work to invest in products, services and technology that drive long term and sustainable customer value. LRC's premium genetics range accounted for almost half of the co op's total artificial breeding inseminations, more than doubled 3 years ago. This is predominantly from the Ford Pack and A2 ball teams. It also includes sex semen, which experienced significant growth with triple the number of stores sold on the previous year. The number of dairy cows made at Sextemann is set to double again this year to around 200,000 stores up from 110 last year, 110,000 that is, as farmers look to capitalize on the technology. To meet the increasing demand, LIC now houses the world's largest fresh sext semen sorting facility in partnership with Sexting Technologies at our Hamilton headquarters. This growth will have a significant impact on farm in the spring and deliver a huge amount of value to our farmers with more high quality heifer replacements and fewer Bobby calves. We're expecting this to be even greater next year. Meanwhile, the number of traditionally daughter proven books used for AV continued to decline, now down 40% from 3 years ago. This shift reflects pharma's growing confidence in LRC's proprietary genomic work and a willingness to adopt new tools and solutions to help meet sustainability goals. I want to talk now just about the divestment of LICA. So in June this year, LIC announced that it had entered into an agreement to divest its automation business, LICA, to MSD Animal Health for an amount of $38,100,000 and subject to working capital adjustment. The LSC Automation product portfolio joined All PLEX Livestock Intelligence, a business unit of MSD Animal Health, which has manufacturing facilities in Palmerston North. The transaction included the following: continued migration onto new generation ProTrak systems for customers with legacy technology as well as associated software development LIC to continue providing service and support to customers through the transition. Ongoing interaction between ProTrack operating systems and LIC's herd management system, MINDER. Access to data generated by the automation technology for LIC to continue to support the crops research and development activities. And the data includes any future data generated by online milk meters if these are launched in New Zealand by any of MSD's businesses. The divestment of the automation business is in line with LIC's refined strategy and will allow the Co op to sharpen its focus and play to its strengths, delivering world leading pasture based dairy genetics and herd management for our farmers. Last year, LIC shareholders voted down a proposal from the Board for LIC to purchase a stake in Israeli agrotech company, Affinilc, which included a potential subsequent transaction for Affymilk to purchase LIC Automation. We were aiming to access data from Affymilk as a result of that transaction, but have secured that access through the transaction with MSD from a New Zealand perspective. We know automation delivers a lot of value on farm, but despite significant efforts by our people, the automation business itself has seldom been profitable, partly due to reducing cow numbers in New Zealand and limited traction in the national markets. This divestment will allow us to focus on delivering value to our pharma shareholders with the increased capital it will provide and importantly ongoing access to key data from the automation and sensor technology to support core LHC business in the future. We're pleased that MSD Animal Health has chosen to acquire this technology for their Orplex Livestock Intelligence business unit. We're confident this is the best way forward for the technology for farmers who have invested in the systems and for the wider co op shareholder base. The Board is considering all options for the use of those funds from the divestment of LICA. Next slide, thank you. With respect to the outlook, the cohort will be firmly guided by its primary focus of delivering value for pharma shareholders and delivering on our 3 commitments to farmers, operational excellence, faster genetic improvement and software reliability and performance, which I'll cover in more detail shortly. LIC expects underlying earnings in the 2021, 2022 financial year to be in the range of $19,000,000 to $25,000,000 Of course, that's subject to milk price and climatic volatility or nothing untoward. If we talk or focus on our 3 commitments, when we released our refined strategy in April, we also made 3 commitments to our shareholders. We will be guided by our primary focus of delivering value for our Pharma shareholders and these three commitments are operational excellence, we commit to getting the basics right and delivering for you on time every time faster genetic improvement, we commit to having your back when it comes to helping you meet the environmental challenges you face, in particular, animal efficiency and nitrogen and methane mitigation. Software reliability and performance, we commit to being better at delivering our software to you. We renew our commitment to continuous improvement and transparency around delivery and new features. We'd like to thank shareholders for their constructive engagement and positive feedback on the strategy and in particular for the commitments that we have made in the key areas. We'll be reporting back on how we're delivering against our commitments and we'll be in touch with shareholders shortly to confirm how our performance will be measured. Finally, thank you to our staff and shareholders for their hard work and continued support over the past year. We look forward to working together and delivering another great result next year. I'll now hand back to Wayne, who will speak about our refined strategy, genomics, research and development and cover the finances in detail. Wayne? Thank you, Murray. So in April this year, we announced our refined strategy. Driving value for our farmer shareholders is at the heart of the strategy. We'll drive value, innovate and deliver a positive impact for customers and shareholders. We're focused on helping farmers optimize value from their livestock by enabling them to produce the most sustainable and efficient animals and the highest value products. We'll drive that value through a focus on 4 key areas: our farmers, animals, data and digital, and innovation. The purpose of genomics moving on to genomics now, the purpose of genomics and animal evaluation is to help predict the future that enables elite young bulls to be used in artificial breeding, effectively fast tracking genetic gain to breed a more sustainable animal. Increasing genetic gain through breeding the best quality heifer calves has become an even more valued aspect of a dairy farmer's seasonal focus and genomics is one of the critical technologies to help farmers breed more productive and climate friendly cows. LRC's investment of more than $78,000,000 over 3 decades into genomic science and genome sequencing technology is now generating markedly increased productivity and health traits for dairy cows and better returns for dairy farmers. Genomic bulls are selected using a combination of DNA and ancestry information to predict their future performance, which enables access to the elite genetics at a younger age. LIC Genomic Science is also about identifying desirable traits of the cow from its genetic code and breeding for them to generate increased productivity and health traits. As Murray said earlier, farmers are adopting genomically selected size now to get ahead of the curve. It shows growing confidence in LIC's proprietary genomic work and farmers' willingness to adopt new tools and solutions to help them meet their sustainability goals. The co op invested $17,100,000 in R and D last year, up 15.4% from the previous year, which reaffirms LIC's position as one of the biggest investors in R and D in the primary sector. We invested $10,000,000 in new GeneMark software and a new Illumina platform. This technology enables LIC to obtain more information from an animal's DNA and do all our own parentage testing and genomic evaluations, providing new and larger scale services to farmer shareholders. We also invested in partnership with DairyNZ and MPI in the resilient dairy program, which is looking for improved ways of identifying health traits into the future and new ways of measuring disease in dairy cows and Next Generation Genomics, a program with MB, which is looking at how we get further advances in our genomic work into the future. Looking at the next slide, please. The methane research project we're working on with CRB is another key area of R and D that has created a lot of interest over the past year. We announced in May a promising pilot trial phase measured the feed intake and methane emissions from 20 young bulls that had just been completed. Let's take a look at that announcement when hosted the Minister of Agriculture, Damian O'Connor. Almost half of New Zealand's carbon emissions come from methane and most of that comes from dairy animals or sheep or beef. And so we're looking at ways we can reduce those emissions by identifying bulls that are low emitters and therefore the cows, their offspring that will be low emitters. And that way we reduce New Zealand's carbon footprint. The genetic variation has been shown in other species. So sheep, we know that genetics actually influences how much methane is produced. So we're quite confident that we can achieve the objective of identifying animals which are more efficient for methane. New Zealand cows eat grass mostly, so we needed a forage based diet. So what we've selected is lucerne. So this is dried lucerne hay that's been put into a queue and they've got ad lab access so they can eat basically as much as they want. The machines read the air tag when they go into the machine and they record how much has disappeared. So we know how much each animal is eating. We bring the animals in for 4 to 5 weeks. So over that 4 to 5 weeks, we know how much they've eaten, we know how much they've grown. But the main thing is we also measure on a daily basis, how much methane they actually produce. As we measure it through attracting animals into the machine with some really nice food, some treat for the animals, they come in, they have a nibble, but we capture their breath for 2 or 3 minutes and most of methane is actually emitted through the breath. It's groundbreaking. The beauty of genetics is that any improvement that we can get in genetics, we can embed in the population and it's cumulative. So it's a gain we get and we can keep building on it and that's really important for the dairy industry. This trial here, what we're hoping to achieve is in 2,050, 5% or 10% less methane is produced from our dairy industry. We've done an amazing job to get better outcomes from the same inputs. Each one of the cows that we have in New Zealand now produces a whole lot more from the same inputs that we put in maybe 20 or 30 years ago. So that kind of progressive development that we've seen in production, we want to now see in methane reduction. Producing while reducing is I think the line used and I'm sure we can do that. We are innovative, we're creative and we're cooperative. The government's target is to reduce methane by 24% to 48% by 2,050 and it's great for us to be part of it, working closely with our major competitors CRV and with government funding. This is a great example of industry collaboration with government support. The research has now progressed to a much larger study where operations have scaled up to collect measurements from 300 young bulls, the full intake from LIC and CRV's SIOP breeding schemes. If this genetic link is confirmed, farmers will ultimately be able to breed low methane emitting cows from low methane emitting bulls. This slide outlines our capital approvals during the year. I'll just run through a few of them for you. Obviously, spending more money on computers, etcetera. Minder projects was a key capital spend and ongoing spend. This is on Minder Live and the app roadmap. There was LICA product development before we divested the business. You can see spending there on software and server upgrades and investment in the wash line for the head testing facility in Christchurch as well as the usual head testing calls, analyzer robot replacements, etcetera. Building improvements, which include quite significant farm improvements, including at Chudleigh Farm where the methane trial was operated vehicles and actually quite a bit of money spent this year on PPE for COVID protections, which I'll come on to a bit more later. And as Murray mentioned, total revenue from continuing operations excluding automation was $249,000,000 and overall revenue continuing and discontinued operations was $266,400,000 for the year. This is another record revenue for LRC and a result that shows pharma confidence in LRC's products and services. This slide is a slide we include in our Annual Meeting each year. I'd like to focus this year on genetic merit at $292,000,000 Improvement of the dairy herd generates the majority of this value based on the increase in breeding worth over time. Hygienic merit is more than just milk production traits. These animals need to be well balanced with good fertility, animal health, confirmation, longevity, as well as their milk fat and protein production relative to their live weight. So, we couldn't have a meeting without talking about COVID-nineteen. It's critical that we continue to deliver our important services to customers despite COVID-nineteen and in the safest possible manner. MBOVUS actually talked about LRC a lot when it comes to protecting our national herd. And throughout this year, we've undertaken ongoing contingency planning to ensure business continuity relating to COVID-nineteen and that we have the correct protections around peak season, which we're coming into right now. We're in the fortunate position where the majority of our services are deemed essential and we can therefore continue to operate during heightened COVID-nineteen alert levels under strict safety protocols. Our key priorities as we head into our peak operational period are keeping you safe, our shareholders, our staff and our business operating, so we can continue to deliver our products and services to you in this critical time on farm. I'd like to thank all of the staff who are working to ensure LIC continues to deliver our essential services to our customers at such a critical time of the season. Next slide, thanks. So this is my 9th and last AGM as Chief Executive of LIC. So I thought I'd take this opportunity to make a few final comments. LIC is a great company, the DNA of the New Zealand dairy industry. I came to LIC from my role as Director General of MPI after I led the merger of MAF, the Ministry of Fisheries and the Food Safety Authority. I wanted to move to the private sector after 18 years in the state sector. I wanted to work in the dairy industry and as in my view, it is the engine room of the New Zealand economy. It was then, it is now and it will be for many years to come. Other sectors come and go. The dairy industry leads the way. I'm proud of the contribution I've made at LIC and the contribution LIC makes to the New Zealand dairy industry. LIC has transformed over the past 10 years into a modern progressive cooperative. I'm particularly proud of the ongoing investment LIC makes into R and D and the benefits that this brings to the sector, over 6% of revenue, the highest percentage of any established company in the New Zealand Food and Fibers sectors. Being a cooperative helps LIC have a long term focus, investing in science which may not pay back for a decade or more, like our research into genomics, low methane emitting cows and heat tolerant cows. We've also invested in our people with significant investments in leadership development and skills training across LIC. I leave LIC with a strong balance sheet and a company in great shape. I'd like to thank the directors I've worked with over the years. We haven't always agreed on everything, but that is as it should be. Directors are appointed by the shareholders to set strategy and management's job is to deliver the strategy and to be held account for that delivery. Thanks also to the whole team at LRC, a great bunch of passionate people who work hard to deliver a complex range of products and services to our pharma shareholders. And lastly, thanks to Murray, who's been my chair throughout. It's been a pleasure working with you. And on that note, I will hand back to you. Thanks, Wayne. So as Wayne said, he finishes his term with LIC at the end of November. So the Board is progressing with a selection of a successor and is in the final stages of that selection. An announcement will be made shortly, but a note should be made that the restrictions imposed by COVID have meant that this has become a more protracted process. At this time, I really want to acknowledge formally Wayne's significant contribution to LIC over the last 8.5 years and highlight some significant achievements. Anyone visiting Newstead headquarters will notice it's quite different to when Wayne arrived. It has been fully refurbished to a modern, efficient and user friendly workspace. In addition to this, there's been significant investment in the farms and the facilities around the country. There's been refinement, stability and improvement to the technology components of LIC with significant investment having been made. Wayne's helped progress the genomic selection and its accuracy of that technology. He's helped develop and cultured strong relationships with our business sorry, with other businesses critical to LSE, both nationally and internationally. He's managed to open doors and strike up relationships with organizations, which previously had been very difficult for us. He's led the business transformation known as PACE, the PACE project and the impressive organizational health index, as mentioned before, in the top of the second quartile, which is world class. Wayne has assisted with the share structure refinement as part of the capital structure work we did a number of years ago, and he's represented LIC and helped elevate awareness of the business and its unique role in the New Zealand dairy industry for involvement in such things as the New Zealand Sustainability Business Council and Agricultural Leaders Health and Safety Action Group. Most importantly, he's raised the level of risk management and awareness to a new level, which has assisted in the recent management of the Embobus and COVID-nineteen incursions. And make no mistake, there's a significant amount of leadership required to make sure that we are able to achieve seamless delivery of our products and services through the busy period we're in now. Throughout this time, Wayne has executed his duties to a high standard, setting strong expectations and operating to a level of extreme professionalism. In turn, that level of expectation is disseminated throughout the business and the financial results. We wish Wayne all the very best in his future endeavors. I'll now invite Ian Brown to present the Honor Area Report. Welcome, Ian. Thank you and apologies for the delay. Thank you, Mr. Chairman, and good morning, ladies and gentlemen. In accordance with clause 21.2 of the LSE constitution, the Honorary Committee is made up of between 24 Farmers shareholders who are elected by shareholders. The current committee members are Shirley Trumper, Paul Todd, Scott Montgomery and myself. The role of the committee is to consider and recommend to shareholders the form and amount of the remuneration of Directors and Shareholder Reference Group members. The committee met formally on 3 occasions in order to perform its role this year. And in addition to its normal role, particular focus was placed on how the newly formed Shareholder Reference Group would implement its function. In arriving at its recommendation, the Honorary Committee takes into consideration analysis of data sourced from annual reports and director fee surveys compiled by both Strategic Pay and the New Zealand Institute of Directors, consultation with the Board and shareholder reference groups as well as the committee's own knowledge and judgment of the wider LRC operating environment. The Honorary Committee acknowledges the importance of LIC maintaining a high caliber of directors on its Board and members of its shareholder reference group. The Committee acknowledges that last year, an increase of 5.18 percent for the Board Chair and 4.6 percent for Directors would have been recommended to shareholders had it not been for the uncertainty of the impact of COVID-nineteen on the company at that time. The Honorary Committee felt it appropriate to include in this year's recommendation to shareholders the increase that was put on hold last year for both the Board and the Shareholder Reference Group. Prior to last year, for the previous 2 years, the Honoraria Committee have recommended that the Honoraria for the Board increase slightly each year, recognizing the time and commitment required as a Director of LIC and to maintain relative parity with similar organizations. Last year's governance review resulted in the size of the Board reducing by 1 elected member and the Board being given the flexibility to appoint an extra appointed director should the need arise. The recommended remuneration pool reflects provision for that appointed director position if required. The committee has continued its recommendation of a maximum $60,000 pool be made available to the Board specifically to compensate directors for extra duties, skills and roles as committee chairs. This year, the Board used approximately $45,000 of that total pool. The proposed remuneration for the Board this year is the chair, dollars 132,500 directors, dollars 60,000 pool for additional duties, dollars 60,000 and a provision for an extra appointed director if required, dollars 60,000 So the honorary committee recommends for this year a further increase of 6.19 percent for directors, 1.92% for the chair and an overall increase to the base honoraria of the Board resulting in total remuneration of $732,500 The shareholders' reference group. Shareholders voted at last year's AGM to change from the shareholder council, the 21 members, to the shareholder reference group of 12 members, 8 of whom are elected and 4 appointed. The role of the shareholder reference group differs from that of the Board in that it is an independent body of shareholders whose purpose is to work collaboratively with the Board and LRC management to promote the interests of shareholders and assist the company to deliver on its purpose and vision. There are few organizations that have a body similar to the shareholder reference group given its unique role and as such the Honorary Committee has few organizations which it can use for direct comparison. The Honorary Committee had a particular focus this year to understand the change in role, skill sets and workload required of the shareholder reference group and acknowledge the increased workload of the shareholder reference group members. Given this, the Honorary Committee recommends an adjustment to remuneration of the shareholder reference group to ensure a fair recognition of the economic and role and a time away from members' home farm businesses. The amount paid to the previous members of the shareholder council, including the deputy chair, have not increased since 2013. The chair received small increases in 2017 2018. Last year, an increase of 8.33 percent to the share, 11.11 percent to the deputy share and 51.11 percent for shareholders and Councillors would have been recommended, but due to the uncertainty around the impact of COVID-nineteen, the recommendation was not implemented. This year, the committee recommends an increase from current remuneration rates of 7.69% per share, 60% for the deputy share and 71.43 percent for the shareholder reference group members. This increase reflects the change in growth in the role and workload of shareholder reference group members and the lack of an increase since 2013. So the proposed remuneration for shareholder reference group members are: share, dollars 35,000 the deputy chair, dollars 16,000 and each of the other shareholder reference group members, dollars 12,000 So the committee recommends an increase to the current level of shareholder reference group remuneration to a total pool of $171,000 and we recommend maintaining the daily allowance at $320 I would like to close by thanking Melanie Tompkins for her knowledge, effort and support as Secretary of the Honorary Committee. And I would also like to acknowledge the contribution of Paul Todd, who retires from the Committee after 8 years' service at the completion of this AGM. Paul brought a wealth of industry and governance experience and knowledge to the Committee, and I am sure I speak for all committee members in appreciation of Paul's sound and thoughtfully reflective comments in committee discussions. The committee wishes Paul all the very best for their future. Thank you, and I'll return to you, Mr. Chairman. Right. Thanks, Ian. We'll now move to the resolutions of the meeting. So we have Resolution 1, which is the approval of directors of remuneration to receive and consider the honorary committee's recommendation and if thought fit to resolve by way of ordinary resolution to approve that remuneration. So I so move that resolution. Can I have a seconder, please? I'll second that, Mr. Chairman. Thank you, Scott Montgomery. I now ask that those participating please make your vote. While you're doing that, we'll move to Resolution 2. Resolution 2 is to approve the LIC Shareholder Reference Group remuneration as outlined by the Chair of the Committee. So that is to approve the total remuneration of all shareholder reference group members being increased from 134,000 to 171,000. And I so move that resolution. Can I please have a seconder? I'll second that as well, Mr. Chew. Thank you, Scott Montgomery. Please mark your vote or make your vote. Resolution number 3 is to appoint KPMG as our external auditor. It's considered a fit to resolve by way of ordinary resolution to reappoint the Chartered Accountancy Partnership of KPMG as the auditor until the conclusion of the company's next annual meeting and that directors be authorized to fix its remuneration. And also move that resolution and ask for a seconder, please. Happy to second that resolution, Mr. Chair. Thank you. Seconded, Ben Dickey. If you would please make your vote now. We then move to Resolution 4 to ratify the reappointment of Candace Kinser as an appointed director to consider and thought fit to resolve by way of ordinary resolution to ratify the reappointment of Candace as an appointed director for a term expiring at the conclusion of the 3rd Annual Meeting, which is approximately 3 years. And so I'll also move that resolution and ask for a seconder, please. Very happy to second, Chair. Thank you. Seconded, Ken Haims. I'll ask you if you're participating to please make your vote now. We move to Resolution 5, which is the appointment of Gordon Glentworth to the Honoraria Committee to consider a full fit by way of to resolve by way of ordinary resolution to approve the appointment of Gordon to the Honoraria Committee with effect from the conclusion of this annual meeting. And I so move that resolution and ask for a seconder, please. Thank you, Mr. Chairman. I'll be happy to second that resolution. Thank you, Gray seconded, Gray Baldwin. So if you'd please make your vote now. Now moving to Resolution 6 to reappoint Ian Brown to the Honorary Area Committee to consider and thought fit to resolve by way of ordinary resolution to approve the reappointment of Ian to the Honorary Area Committee with effect from the conclusion of this annual meeting. And I so move that resolution and ask for a seconder, please. Thank you, Chair. I'm more than happy to second that resolution. Thank you. Seconded, Alison Waters. Please mark your vote now. We'll now just take a short break to review questions and we will resume shortly. If you haven't sent your questions yet, you're still able to do so by way of the question button. And if you're having any trouble making this work, there's the helpline there or helpline number there, 800-200-220. They'll be able to assist. And while we're collating the questions, we'll play a short video, which you may have already seen, which was run at Field Days earlier this year. Before the environment was such a hot topic, LIC was developing technologies that were having a beneficial impact on our environment, not just because it was good for the environment, but because it was good farming. In the '50s, LIC developed long last liquid semen, which enabled New Zealand dairy farmers to significantly increase the rates of genetic gain, increasing efficiency and reducing waste. Today, LIC continue with innovations that set the bar high. Their investment into genomics improves the genetic selection that is core to their work. Constantly improving the production rate of New Zealand's dairy herd, making it the most efficient in the world with the lowest carbon footprint. With new tools and products like Print, sex semen and dairy beef genetics, this allows us to continue farming in a sustainable way financially, environmentally and socially. While I work on my land, LIC work on improving my animals. LIC seeing that the standards they set for themselves run ahead of those set for them. They see that they can keep improving in areas such as sustainability, low impact dairy farming with lower methane and nitrogen emissions to make sure our land stays productive and pure for generations to come. We want to keep improving and farming in the best place on Earth. Okay. So we're now into the general business section. So do we have any questions there? Can we have the first question please, Mike? Thank you, Mr. Chairman. Two questions here addressed to yourself as Chair and Wayne. Two questions relating to technology and specifically to Minder. The first question is, I hear Minder can now connect with collars. Is that for all collar brands? Can you answer that please, Wayne? Thanks, Murray. Yes, we've just announced that we've invited all leading cola suppliers to integrate with Minder and we do hope to have agreements in place with the leading cola brands in the near future that will include Affymilk, Datamars, CowManager and GEA CowScout. But all collar providers are welcome to integrate with Minder. Thank you, Wayne. The second question that we have here, again technology question related to minder. How many farmers use minder live now? Are there still many that use Minder Pro? Yes. Thanks, Murray. So about 70% of farmers now use only Minder Live. About 2% of farmers use only Minder Pro, which means it's about 28% of farmers who are still using both Minder Live and Minder Pro. We're working with farmers to encourage them to use Minder Live and Minder App as we move towards the retirement of Minder Pro at the end of May 2022. Thanks, Wayne. Do you have further questions there, Mike? Mr. Chairman, that brings us to the end of the questions that we have here. Thank you very much. I might just wait for a moment or 2 just in case any come through. It's always a little bit difficult in this format to get your questions down if you're a slow typer. So just wait for a moment or 2. No further questions there, Mike. I assume nothing proceeds at this stage. No. Okay. What I suggest that it's time to draw the meeting to a close, but I would remind shareholders that directors are available to talk at any time throughout the year. So if you do have a question and you didn't have the opportunity to have it raised or answered here today, please contact directors or management for that matter and we'll certainly follow-up. So thank you to you all for attending this Annual Meeting, virtual as it might be, and for your support over the last year to help achieve a great result that we've shared here today. And finally, I just wish you all well for the season ahead. Thank you.