The National Dairy Council Annual Report 2018
The National Dairy Council protects and promotes the image, quality, taste and nutritional credentials of Irish dairy. It promotes the benefits of the dairy portfolio to the consumer as part of a balanced, healthy lifestyle while also safeguarding the reputation of Ireland’s dairy producers and processors. You can find out more about the work of the National Dairy Council at www.ndc.ie
Contents Chairman’s Statement 1 CEO’s Statement 4 A Taste of 2018 7 NDC Reports and Financial Statements for the Financial Year Ended 31 December 2018
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Chairman’s Statement
Building a Sustainable Future 2018 was a year of continued momentum and growth for Ireland’s dairy sector and our member co-operatives. Global performance Dairy was the strongest performer within the agrifood sector in terms of export volume growth in 2018, with volumes up 5pc compared to 2017. The value of dairy exports remained stable, exceeding €4 billion for the second year in a row. Butter had an exceptional year in the US and continental Europe and for the first time the value of Irish butter exports exceeded €1 billion for the year, representing a 22pc increase on 2017’s value. More than 50pc of Ireland’s cheese exports – of which 83pc is cheddar – is destined for the UK. However in 2018, 22pc of cheese exports were destined for countries outside of the UK and continental Europe, a significant increase from 17pc in 2010. In 2018 the value of cheese exports to Asia and to North America increased 12pc and 35pc respectively to a total value of €75 million.
2018 Weather conditions Challenging weather conditions during the year saw a slow start to milk output in Ireland in the first quarter of 2018, due to an unseasonably cold spring, followed swiftly by a prolonged summer drought. By the end of the third quarter, milk output was up 1.2%. However, benign climatic conditions enabled milk output to recover strongly to end 4% up on 2017 by year end.
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This recovery helped offset a decline in milk price in 2018. However, net margins declined substantially due to a rise in on-farm costs. The outlook for 2019 will continue to be weather and supply-side driven. Weaker EU milk supply in the first quarter of 2019 and improved export demand will help support commodity prices at the start of the year and, in the absence of any unforeseen market shocks, prices should remain steady to mid-year.
Volatility There is no doubt that today’s political, economic and environmental landscape is demanding, bringing challenges such as market volatility, Brexit, other international trade barriers and unpredictable weather events. As I write this, the challenge of Brexit to the Irish dairy industry is clear and while the future is still uncertain, we must endeavor to prepare ourselves as an industry for every possible scenario. Whatever happens in October, our objective will be to ensure that our UK customers and consumers continue to enjoy the very best of Irish dairy products and that the inevitable negative consequences of Brexit are minimized for all our stakeholders.
Sustainability The topic of sustainability and its importance to all industries continues to grow and protecting our planet for the future generations is more important than ever. Our strong heritage in Ireland to dairy farming and the grass-fed attributes that our products are built upon ensures that a commitment to sustainability lies at the heart of our industry. The onus is on NDC members and all the industry to address climate change and to reduce agriculture’s impact on the environment. We must take this responsibility very seriously and will continue to support initiatives that help address this such as Origin Green's Sustainable Dairy Assurance Scheme. Dairy farmers are continuing to adopt new practices and technologies towards the goal of sustainability with the support of state agencies such as Teagasc. I would like to acknowledge and thank our members for their continued support, which ensures the long-term success of NDC dairy marketing campaigns and initiatives. It is essential that the NDC takes a leadership role in promoting the overall benefits of dairy in our diet as well as continuing to promote and protect the reputation of the dairy industry which is more important than ever before as we face increased international competition.
The National Dairy Council remains fully committed to delivering value and playing an important part in helping the Irish dairy sector to unlock its full potential. On behalf of the Board, I would like to thank our CEO, ZoĂŤ Kavanagh and her Executive Team for their dedication and commitment to the work of the NDC. And for my last Annual Report as Chairman I would also like to thank my fellow Board members for their support and for giving their time and expertise in so many ways during the year.
Teddy Cashman Chairman
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CEO’s Statement
Upholding Irish Dairy’s Reputation 2018 was a busy and challenging year as we continued to manage the detractor’s debate around dairy in the diet. Throughout the year, the NDC took part in a number of radio interviews following an article in the Sunday Times on the rising impact of social media influencers on diet. In light of this and ongoing vegan-based debates on radio and television, the NDC took the initiative to develop a communications team of credible experts consisting of representatives from veterinary, GP, dietician, farmer and industry sectors. Eight individuals from across the industry were trained in both traditional and social media skills in order to provide a panel of individuals who can speak on the benefits of dairy from an economic, health & welfare and social point of view. The NDC, as the appointed Aid Applicant for the School Milk Scheme, launched a significant School Milk promotion and recruitment campaign in April 2018. This campaign succeeded in halting the decline in the number of schools participating in the scheme for the first time in over a decade.
perspective. In summary, despite fortification with calcium and other nutrients, plant-based alternatives lack vital components for population health. Cow’s milk and dairy alternatives are not nutritionally equivalent. This research was distributed to industry stakeholders and an extensive list of health professionals.
Educating Generations A total of ten culinary students (five from France and five from Ireland) were selected to take part in the 2018 finale of Dairy Chef. The inaugural competition was organised in a partnership between the Embassy of France in Dublin; Dublin Institute of Technology (DIT); the National Dairy Council (NDC) and the French Dairy Council (Cniel). Culinary students from top colleges in France and Ireland were invited to champion their institution by creating a three-course menu celebrating Irish and/or French dairy produce. Each dish had to include dairy as the main ingredient. There was an exciting build to HealthFest, the NDC flagship event for transition year students. We had two Government-led photocalls to promote this year’s event, one with Minister for Education, Richard Bruton and I also had the pleasure of meeting An Taoiseach Leo Varadkar who took part in a photocall with students and some of the speakers. This year’s event was held in the new venue at Sport Ireland’s National Indoor Arena and was a huge success with nearly 3,000 students attending.
We commissioned and published a Dairy Nutrition Forum, a publication for industry and health professionals, dealing with the topic of dairy alternatives and how they compare from a nutrition
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The NDC held a very successful seminar in July in association with Dairygold, Ornua and Teagasc. Over 100 people attended the seminar in Tipperary which focused this year on Dairy and the Modern Consumer and included presentations form Ciara O’Callaghan, Brand Director from Ornua and Food Writer John McKenna who looked at future food trends. The seminar was followed by a national farm walk organised by Teagasc on the Walsh Family Farm, winners of the 2017 NDC & Kerrygold Quality Milk Awards. Also in July, the NDC held a special Business Breakfast in association with the Marketing Institute of Ireland. The event focused on the modern consumer and how it is challenging the dairy industry both in Ireland and globally. This year’s National Ploughing Championships was a challenging event for many as Storm Ali hit on the Tuesday evening of the three days, however the NDC stand weathered conditions as the stand and 30-foot Milk Carton display stayed fully intact! We launched with great excitement on Day One with stars from RTÉ’s Dancing with the Stars. Experts from Cappagh National Orthopaedic Hospital were on hand with TV3’s Mark Cagney, Social Media star Nathalie Lennon and Dr John O’Beirne to discuss the Mind your Bones campaign in a panel discussion. The big star this year was Queen of Cakes herself Mary Berry and the three winners of the Dairy to Dairy with Mary Afternoon Tea competition presented their cakes to Mary to great excitement from the crowds present.
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Our social media influencers including Doireann Garrihy were also out in force over the three days and really enjoyed interacting and taking selfies with the crowds. Instagram star and chefs James Kavanagh and William Murray were also on the stand for a live cookery demonstration and promotion of their new Currabinny Cookbook.
A Sustainable Future Our consumer-facing brand “Irish Dairy – The Complete Natural” continued to gain momentum in 2018 by focusing our strategy on the millennial generation who are limiting or avoiding dairy. We recruited a number of social media influencers to raise our profile on channels such as Instagram. We also became title sponsors for the first year of Tour de Picnic which is a sponsored cycle or run to Electric Picnic. This sponsorship formed part of the Complete Natural Recovery Tour where we provided our Dairy Bar with free milk drinks to people taking part in various sporting events throughout the Summer. The issue of sustainability is receiving considerable focus globally with significant challenges identified for the dairy industry. This year, a Greenpeace report called for meat and dairy consumption to be cut in half by 2050 in order to avoid dangerous climate change. While other official recommendations are less extreme, it is widely accepted that livestock contributes to the world’s greenhouse gas emissions. Population awareness about the environmental impacts of such foods is often cited among the drivers of veganism, and vegan campaigners argue for the complete elimination of all animal products from the food chain.
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Darran McKenna and family, the 2018 winners of the NDC & Kerrygold Quality Milk Awards, clearly remind us of the unique benefit of grass-based family farming. Despite widespread opinions about the environmental impact of dairy, scientific research suggests that dairy can continue to play an important role in sustainable diets for future generations. With this in mind, the NDC has embarked on a journey to assess the available science and communicate such important messages to relevant stakeholders. This fits well with the three-year EU-funded campaign on Sustainability which the NDC will be leading in Ireland.
ZoĂŤ Kavanagh Chief Executive
International Networks At a European level, the NDC continues to sit on the European Milk Form (EMF) where we meet a number of times a year to discuss common issues and opportunities. The EMF is an active network bringing together eight dairy organisations in Europe in order to promote professional exchange, shared reflection and carry out joint initiatives. As part of our international networking the NDC attended the 9th Annual Global Dairy Platform meeting in London in June. NDC along with 13 other participating countries attended the week-long conference exploring the challenges and opportunities of the dairy category. These also included meetings of the International Milk Promotion Group and a number of presentations were shared including one on de-commoditising the dairy category through innovations.
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A Taste of 2018 Celebrating Good France (Gout de France) 2018 in January, the French Embassy in Ireland came together with the French and Irish Dairy Councils and the School of Culinary Arts (DIT) to launch a really exciting competition for culinary students. Pictured are: M. Guillaume Lebrun, Head Chef, Restaurant Patrick Guilbaud; French Ambassador to Ireland, H.E. Stéphane Crouzat; CEO of the NDC Zoë Kavanagh and Ross Lewis, Chapter One Restaurant. Photo: Robbie Reynolds Photography
Later in March, culinary students from top colleges in France and Ireland were invited to champion their institution by creating a three-course menu celebrating Irish and/or French dairy produce. Ten culinary students (5 from France and 5 from Ireland) were selected to take part in the 2018 finale of Dairy Chef. The competition was organised in a partnership between the Embassy of France in Dublin, Dublin Institute of Technology (DIT), the National Dairy Council (NDC) and the French Dairy Council (Cniel). Each dish had to include dairy as the main ingredient. Pictured with the students taking part in the Cook Off at DIT are: (L-R) - Ross Lewis, Chef/Owner - Chapter One Restaurant; Cathy Curran, NDC and M. Guillaume Lebrun, Head Chef - Restaurant Patrick Guilbaud. Photo: Dora Kazmierak
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HealthFest 2018, organised by the NDC and safefood in April, was launched by An Taoiseach, Leo Varadkar (pictured at Leinster House with students from Newpark Comprehensive School, Blackrock, Co. Dublin). HealthFest, a free event designed to educate young people about the importance of healthy eating and physical activity in a practical, engaging and fun environment, has become one of the most highly anticipated events for transition year students. For full details visit www.healthfest.ie Photo: Robbie Reynolds Photography
To help spread the message of healthy eating, nutrition and the importance of dairy as part of a balanced diet, the NDC held a competition for primary schools participating in the School Milk Scheme during National School Milk Week (23rd-27th April). The School Milk Scheme is managed by the NDC and funded by the Department of Agriculture, Food and the Marine with the financial support of the European Union. The winning school, St. Luke’s NS, Cork received free School Milk for all pupils for the 2018/2019 school year and a School Trip to Airfield Farm. Pictured with Milly the Moo Crew mascot at the launch of the competition are (L-R) Rachel Kavanagh; Michael Creed TD, Minister for Agriculture, Food & the Marine; Eric Regan; Zoë Kavanagh, CEO, NDC; and Ethan Regan. Photo: Robbie Reynolds Photography
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In May, Eoghan Murphy TD, Minister for Housing, Planning & Local Government and Irish athlete, Jenny Egan, kicked off the launch of the 10th Tour de Picnic. Irish Dairy, the Complete Natural was the title sponsor for the 2018 Tour de Picnic, the annual charity cycle and run to Electric Picnic in Stradbally, Co. Laois. The Tour de Picnic formed part of the Complete Natural Recovery Tour, designed to educate the millennial audience on the importance of dairy in their diet and to focus on the 3Rs of exercise recover – Refuel, Repair, Rehydrate. Photo: Leon Farrell
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Pictured at Dromoland Castle in June to promote the Dare to Dairy with Mary Baking competition, were judges (L-R) Chef & Food Writer Lilly Higgins and Head Pastry Chef at Dromoland Castle, Chandima Gamage. In order to publicise Mary Berry attending the Ploughing Championships we designed a competition inviting people to create something unique and delicious that could be served at Afternoon Tea at the Ploughing with Mary. The three best recipes were selected and the lucky finalists got the opportunity to meet the Queen of Baking herself at the event. Photo: Dora Kazmierak
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The NDC hosted a seminar in July focusing on “Dairy & the Modern Consumer” and included talks by (pictured L-R) Food Writer and Commentator, John Mckenna; Dr Marianne Walsh, Senior Nutritionist with the NDC; and Ciara O’Callaghan, Brand Director, Ornua. The seminar was held on the Walsh Family Farm in Cahir, Co Tipperary, overall winners in the 2017 NDC & Kerrygold Quality Milk Awards. This was followed by a National Milk Quality Farm Walk, organised by Teagasc with the support of Dairygold Co-op, the National Dairy Council and Ornua, and celebrates the excellence of Irish dairy farming, highlighted annually by the NDC & Kerrygold Quality Milk Awards. Photo: Clare Keogh
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ďƒ™ In August, the NDC, in association with Cappagh Hospital Foundation launched an awareness campaign – Mind Your Bones - to educate consumers on the importance of bone health through the life stages. Supporting the campaign, and pictured above, were TV personality, Mark Cagney who developed early bone density issues in his mid-40s; Patron of Cappagh Hospital Foundation, Francis Brennan; and personal trainer, Nathalie Lennon who experienced low density issues in her early 20s. Further info at mindyourbones.ie Photo: Robbie Reynolds Photography
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The NDC created an exciting festival theme at September’s National Ploughing Championships in Screggan, Co. Offaly. Alongside the Co-Op Marketplace, where the cream of Irish dairy produce was available to sample from our award-winning Co-ops, we had a really interesting programme of events, cooking demos, celebrities, influencers, healthcare experts and sports stars at our stand over the three days. As well as a spot of dancing! Photo: Robbie Reynolds Photography
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The NDC & Kerrygold Quality Milk Awards, a national programme recognising the standards of excellence in dairy farming while celebrating the top-quality dairy farmers in Ireland, were held in October. The 2018 National Winners of the competition, Darran and Denise McKenna and family (pictured above with Michael Creed TD, Minister for Agriculture, Food & the Marine) hail from Emyvale, Co. Monaghan. Photo: Clare Keogh
With increasing awareness about global warming and the environmental impact of food production, many consumers are striving for a more sustainable diet. To this end, the NDC held a symposium in November in association with the Irish Nutrition & Dietetic Institute (INDI) entitled “Keeping nutrition at the core of sustainable diets” where the role of dairy in sustainable diets was highlighted. The symposium presented a scientific review of sustainable eating, with a focus on the challenges facing dietitians. The speakers at the event (pictured L-R) were Dr. Aifric O’Sullivan, Lecturer in Nutrition, UCD; INDI Registered Dietitian, Sarah Keogh; and Dr. Stephan Peters, Manager of Nutrition and Food Law at NZO (Dutch Dairy Association). Photo: Conor McCabe
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ďƒ™ To celebrate Christmas and the month of party season, we asked Food stylist and chef Nikki Walsh to create a selection of decadent desserts to celebrate Dairy goodness at Christmas. The recipes were include in a special festive food magazine with Irish Country Living and the stunning profiteroles were featured on the front cover. Photo: Nikki Walsh, Sugar & Spice
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The National Dairy Council (A company limited by guarantee and not having a share capital) Reports and Financial Statements for the financial year ended 31 December 2018
Contents Directors and Other Information
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Directors’ Report 18 Directors’ Responsibilities Statement
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Independent Auditor’s Report 22 Income Statement 26 Statement of Financial Position
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Statement of Changes in Equity
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Statement of Cashflows 29 Notes to the Financial Statements
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Directors and Other Information
DIRECTORS Mr. E. Carroll (Chairman) Mr. J. Murphy (Vice Chairman) Mr. C. Ryan Mr. J. O’Donnell Mr. M. McArdle Mr. T. Maher Mr. P. Sheahan Mr. P. McCormack Mr. P. O’Donoghue Mr. J. Finn Mr. S. Blewitt Mrs. A. Keohane Mr. T. Phelan CHIEF EXECUTIVE AND SECRETARY
Zoë Kavanagh
REGISTERED OFFICE The Studio 55c Maple Avenue Stillorgan Industrial Park Co. Dublin REGISTERED NUMBER 21650 SOLICITORS Gleeson McGrath Baldwin 29 Angelsea Street Dublin 2 AUDITOR Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2 BANKERS AIB Bank 1 Lower Baggot Street Dublin 2 AIB Bank St. Helen’s 1 Undershaft London EC3A 8AB J & B Davy Davy House 49 Dawson Street Dublin 4
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Directors’ Report
The Board of Directors present their annual report, together with the financial statements for the financial year ended 31 December 2018. Companies Act 2014 Under the Companies Act 2014, the company is deemed to be a Company Limited by Guarantee (CLG).
Principal activities The principal activity of The National Dairy Council (“NDC”) is to support Irish dairy farmers by driving the positive position and consumption of milk and dairy products through integrated marketing and communications programmes, based on informed scientific evidence.
Results The results for the financial year and the state of affairs of the company are set out on pages 26 and 27 respectively.
Review of business The NDC has a vital role in supporting the dairy sector in driving the consumption and positioning of milk and dairy products. The NDC’s vision is to be the authoritative and trusted voice in advancing the consumer perception and consumption of Irish milk and dairy products. As part of the NDC’s Strategy, it is anticipated the level of funding from Europe will increase significantly over the coming years. In order to best leverage the EU opportunity, the NDC has had to build up its reserves to facilitate the cash flow requirements associated with running more EU Programmes and to demonstrate the necessary financial capacity to obtain the additional funding.
Risks and uncertainties The main risk facing the company during the financial year and anticipated in future years is the receipt of levy contributions and maintaining sufficient reserves to allow the entity operate efficiently and effectively.
Going concern The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements. Further details regarding the adoption of the going concern basis can be found in note 1 to the financial statements.
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Directors’ Report (continued)
Directors and secretary The directors and secretary, who served at any time during the financial year except as noted, were as follows: Directors: Mr. E. Carroll (Chairman) Mr. J. Murphy (Vice Chairman) Mr. P. Sheahan Mr. T. Maher Mr. C. Ryan Mr. J. O’Donnell Mr. M. McArdle Mr. Patrick McCormack (Appointed 30/1/2018) Mr. Patrick O’Donoghue (Appointed 30/1/2018) Mr. John Finn (Appointed 30/1/2018) Mr. Stephen Blewitt (Appointed 29/8/2018) Mrs. Anne Keohane (Appointed 29/8/2018) Mr. Thomas Phelan (Appointed 13/2/2019) Mr. T. Cashman (Resigned 13/2/2019) Mr. E. Sweeney (Resigned 29/6/2018) Mr. J. Comer (Resigned 30/1/2018) Mr. J. Murray (Resigned 5/6/2018) Mr. S. O’Leary (Resigned 30/1/2018) Mr. C. O’Sullivan (Resigned 30/1/2018) Mr. D. Fagan (Resigned 3/12/2018) Mr. R. Lenihan (Resigned 5/6/2018) Secretary: Zoë Kavanagh
Accounting records The measures that the directors have taken to secure compliance with the requirements of sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records, are the engagement of appropriately qualified accounting personnel and the maintenance of computerised accounting systems. The company’s accounting records are maintained at the company’s registered office at The Studio, 55c Maple Avenue, Stillorgan Industrial Park, Co. Dublin.
Events after the Balance Sheet date There have been no significant events affecting the financial statements since the financial year end. Since the financial year end Timothy Cashman resigned as director on 13 February 2019. Thomas Phelan was appointed as director on 13 February 2019.
Publication The directors are responsible for the maintenance and integrity of the website. Legislation in the Republic of Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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Directors’ Report (continued)
Disclosure of information to auditors So far as each of the directors in office at the date of approval of the financial statements is aware: • •
There is no relevant audit information of which the company’s auditors are unaware; and The directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
Auditors The auditors, Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm, continue in office in accordance with Section 383(2) of the Companies Act 2014. Approved by the Board and signed on its behalf by:
Eamonn Carroll John Murphy Director Director 25 April 2019
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Directors’ Responsibilities Statement
The directors are responsible for preparing the directors’ report and the financial statements in accordance with the Companies Act 2014. Irish company law requires the directors to prepare financial statements for each financial year. Under the law, the directors have elected to prepare the financial statements in accordance with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland issued by the Financial Reporting Council (“relevant financial reporting framework”). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the company as at the financial year end date and of the profit or loss of the company for the financial year and otherwise comply with the Companies Act 2014. In preparing those financial statements, the directors are required to: • • •
•
select suitable accounting policies for the Company Financial Statements and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for ensuring that the company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the company, enable at any time the assets, liabilities, financial position and profit or loss of the company to be determined with reasonable accuracy, enable them to ensure that the financial statements and directors’ report comply with the Companies Act 2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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Independent Auditor’s Report to the Members of the National Dairy Council Report on the audit of the financial statements
Opinion on the financial statements of The National Dairy Council (A company limited by guarantee and not having a share capital) (the ‘company’) In our opinion the financial statements: • •
give a true and fair view of the assets, liabilities and financial position of the company as at 31 December 2018 and of the surplus for the financial year then ended; and have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014.
The financial statements we have audited comprise: • • • • •
the Income Statement; the Statement of Financial Position; the Statement of Changes in Equity; the Statement of Cash Flows; and the related notes 1 to 16, including a summary of significant accounting policies as set out in note 1.
The relevant financial reporting framework that has been applied in their preparation is the Companies Act 2014 and FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” issued by the Financial Reporting Council (“the relevant financial reporting framework”).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the “Auditor's responsibilities for the audit of the financial statements” section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us to report to you where: • •
the directors’ use of the going concern basis of accounting in preparation of the financial statements is not appropriate; or the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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Independent Auditor’s Report to the Members of the National Dairy Council (continued) Report on the audit of the financial statements
Other information The directors are responsible for the other information. The other information comprises the information included in the Reports and Financial Statements for the financial year ended 31 December 2018, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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Independent Auditor’s Report to the Members of the National Dairy Council (continued) Report on the audit of the financial statements
As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: •
•
• •
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the entity (or where relevant, the group) to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit. This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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Independent Auditor’s Report to the Members of the National Dairy Council (continued) Report on the audit of the financial statements
Report on other legal and regulatory requirements Opinion on other matters prescribed by the Companies Act 2014 Based solely on the work undertaken in the course of the audit, we report that: • • • •
We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited. The financial statements are in agreement with the accounting records. In our opinion the information given in the directors’ report is consistent with the financial statements and the directors’ report has been prepared in accordance with the Companies Act 2014.
Matters on which we are required to report by exception Based on the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.
Kevin Sheehan For and on behalf of Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm Deloitte & Touche House, Earlsfort Terrace, Dublin 2 25 April 2019
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Income Statement For the Financial Year Ended 31 December 2018
2018
2017
Notes
â‚Ź
â‚Ź
3
4,601,588
3,762,396
4,156,667
3,451,373
Establishment expenses
54,272
51,110
Administrative expenses
296,492
258,703
4,507,431
3,761,186
Income
Expenditure Direct expenses
Total expenses
Surplus on ordinary activities before taxation
4
94,157
1,210
Taxation
7
(21)
(83)
94,136
1,127
Surplus on ordinary activities after taxation
All of the results for the current and prior financial year derive from the continuing activities of the company. All recognised gains and losses for the current and prior financial year are included in the income statement.
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Statement of Financial Position As at 31 December 2018
2018
2017
Notes
€
€
8
7,433
11,320
9
721,110
276,792
1,537,693
1,987,997
2,258,803
2,264,789
(744,989)
(848,998)
Net current assets
1,513,814
1,415,791
NET ASSETS
1,521,247
1,427,111
1,521,247
1,427,111
Fixed Assets Tangible assets
Current Assets Debtors Bank
Creditors: (Amounts falling due within one year)
10
Represented by: ACCUMULATED SURPLUS
The financial statements were approved and authorised for issue by the Board of Directors on 25 April 2019 and signed on its behalf by:
Eamonn Carroll John Murphy Director Director
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Statement of Changes In Equity For the Financial Year Ended 31 December 2018
At 1 January 2017 Surplus for the financial year At 31 December 2017 Surplus for the financial year At 31 December 2018
Accumulated surplus
Total
€
€
1,425,984
1,425,984
1,127
1,127
1,427,111
1,427,111
94,136
94,136
1,521,247
1,521,247
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Statement of Cashflows For the Financial Year Ended 31 December 2018
2018
2017
€
€
94,157
1,210
(83)
(333)
Depreciation
6,688
6,055
Taxation paid
(21)
(51)
Increase in debtors
(444,318)
(20,986)
(Decrease)/increase in creditors
(104,009)
441,104
NET CASH FLOWS FROM OPERATING ACTIVITIES
(447,586)
426,999
83
333
Payments to acquire fixed assets
(2,801)
(4,773)
NET CASH FLOWS FROM INVESTING ACTIVITIES
(2,718)
(4,440)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(450,304)
422,559
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
1,987,997
1,565,438
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
1,537,693
1,987,997
RECONCILIATION OF SURPLUS ON ORDINARY ACTIVITIES BEFORE TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES Surplus on ordinary activities before tax Less: interest income
CASH FLOWS FROM INVESTING ACTIVITIES Interest income
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements For the Financial Year Ended 31 December 2018
1. ACCOUNTING POLICIES The principal accounting policies are summarised below. They have all been applied consistently throughout the current and to the preceding year. General Information and Basis of Accounting The National Dairy Council is a company incorporated in Ireland under the Companies Act 2014. The address of the registered office is given on page 17. The nature of the company’s operations and its principal activities are set out in the directors’ report on pages 18 to 20. The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with the Companies Act 2014 and Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council. The functional currency of The National Dairy Council is considered to be euro because that is the currency of the primary economic environment in which the company operates. Going Concern The company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the directors’ report. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Financial Instruments Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Financial assets and liabilities All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. 30
THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. Income Income is comprised of voluntary levies, grant income, donations and interest receivable. Income received in the form of voluntary levy contributions is based on a price per litre of milk produced and is recognised on a receipts basis. All other income is credited to income in the period to which it relates. Expenditure Expenditure is accounted for on an accruals basis. Fixed Assets Fixed assets are held at cost less accumulated depreciation. Depreciation of fixed assets is provided on a straight line basis at the rates shown below which are estimated to reduce the assets to their residual values of Nil by the end of their expected useful lives. Office equipment Computer equipment
25% per annum 25% per annum
Pension The company operates a defined contribution pension scheme. Contributions payable to the scheme are charged to the income and expenditure account in the period to which they relate. Taxation The company is exempt from Income Taxation in respect of its trading activities. Passive income, if any, (such as deposit interest) remains taxable.
2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the company’s accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Information about judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the accounting policies and the notes to the financial statements. None of the judgements required are considered to be critical to the organisation. 31
THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
3. INCOME 2018
2017
€
€
3,308,509
3,257,175
88,367
54,000
Grant income
1,192,800
431,751
Other income
11,829
19,137
83
333
4,601,588
3,762,396
An analysis of the company’s turnover is as follows: Voluntary levy Ornua
Interest income Total income
All income, apart from European Union Grant income of €1,192,800 (2017: €431,751) and other income of €Nil (2017: €9,178), arose in the Republic of Ireland.
4. SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION 2018
2017
€
€
Directors’ remuneration
36,400
38,600
Directors’ expenses
11,867
18,376
10,700
10,700
- tax advisory services
7,000
-
- other non-audit services
1,500
1,400
Depreciation
6,688
6,055
83
333
The surplus before taxation is stated after charging:
Auditor’s remuneration - audit of financial statements
and after crediting: Interest income
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
5. STAFF NUMBERS AND COSTS 2018
2017
€
€
Wages and salaries
675,024
620,898
Social Welfare costs
71,656
65,022
Pension (Note 12)
47,445
38,198
794,125
724,118
The average monthly number of employees for the financial year was 9 (2017: 9). The number of employees at the financial year ended 31 December 2018, including ten directors, was 18. (2017: 19).
6. DIRECTORS REMUNERATION
Aggregate emoluments paid to or receivable by directors in respect of qualifying services Compensation paid or payable, or other termination payments, in respect of loss of office to directors of the company in the financial year
33
2018
2017
€
€
36,400
38,600
-
-
THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
7. TAXATION 2018
2017
€
€
21
83
Based on the surplus for the financial year: Taxation charge
The effective tax rate for the financial year is higher than the standard rate of corporation tax in Ireland, which is 12.5%. The differences are explained below: 2018 €
2017 €
Surplus for financial year before taxation
94,157
1,210
Surplus for financial year multiplied by standard rate of corporation tax of 12.5% (2017: 12.5%)
11,770
151
(11,770)
(151)
Higher tax rates on interest
21
83
Total tax charge for year
21
83
Effects of: Net income and expenditure not subject to taxation
The National Dairy Council is chargeable to taxation on bank and other interest.
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
8. TANGIBLE ASSETS Computer Equipment
Office Equipment
Total
€
€
€
39,120
21,940
61,060
Additions
2,107
694
2,801
Disposals
(6,840)
(3,320)
(10,160)
At 31 December 2018
34,387
19,314
53,701
29,995
19,745
49,740
4,707
1,981
6,688
On disposals
(6,840)
(3,320)
(10,160)
At 31 December 2018
27,862
18,406
46,268
At 31 December 2018
6,525
908
7,433
At 1 January 2018
9,125
2,195
11,320
2018
2017
€
€
167,618
54,241
99,556
32,913
453,933
189,636
3
2
721,110
276,792
Cost: At 1 January 2018
Depreciation: At 1 January 2018 Charge for the financial year
Net book value:
9. DEBTORS (Amounts falling due within one year)
Grants receivable Prepayments VAT recoverable Corporation tax
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
10. CREDITORS (Amounts falling due within one year) 2018
2017
€
€
Trade creditors
371,369
615,669
Accruals
315,813
196,247
442
565
57,365
36,518
744,989
848,998
Sundry creditors PAYE/PRSI
11. FINANCIAL INSTRUMENTS The carrying values of the company’s financial assets and liabilities are summarised by category below: 2018
2017
€
€
167,618
54,241
371,369
615,669
442
565
Financial assets Measured at undiscounted amount receivable Grants receivable (Note 9) Financial liabilities Measured at undiscounted amount payable Trade creditors (Note 10) Sundry creditors (Note 10)
12. PENSION The company operates a defined contribution pension scheme. Contributions payable in respect of the financial year ended 31 December 2018 amounted to €47,445 (2017: €38,198). There were no pension contributions outstanding at the financial year end (2017: €Nil).
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2018
13. COMMITMENTS Guarantees The company is a member of the GEIE European Milk Forum, a grouping set up to promote dairy products throughout Europe. The company, in conjunction with the other nine members of the forum, has provided a guarantee in relation to any commitments of the forum to third parties which remain outstanding following liquidation of the forum. Disclosure of Bank guarantees: The company has entered into bank guarantees in the normal course of business. The amount outstanding at the balance sheet date was €590,034 (2017: €405,729).
14. CONTINGENT LIABILITIES The company is in receipt of grant funding in advance from the Department of Agriculture, Food and the Marine in its normal course of business. The amounts received in advance would have to be returned should the Department deem them to be repayable. The amount at the balance sheet date was €503,413 (2017: €295,398).
15. RELATED PARTY TRANSACTIONS Certain directors of the company are also directors of the co-operatives from which the company receives voluntary levy income and other income. The total voluntary levy income and other income received in the normal course of business from these co-operatives amounted to €2,919,934 (2017: €2,660,327). The total expenses payable to these co-operatives relating to their participation in the School Milk Scheme programme amounted to €263,061 (2017: €54,126). The amount outstanding at the balance sheet date was €180,736 (2017: €54,126). The total expenses claimed by these directors for the financial year ended 31 December 2018 amounted to €7,879 (2017: €11,058). The directors held 6 meetings during the financial year ended 31 December 2018 (2017: 6 meetings). Key Management Personnel The total remuneration for key management personnel for the period totalled €289,672 (2017: €260,189), which is included in the total remuneration disclosed in note 5.
16. EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events affecting the financial statements since the financial year end. Since the financial year end Timothy Cashman resigned as director on 13 February 2019. Thomas Phelan was appointed as director on 13 February 2019.
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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2018
The National Dairy Council wishes to thank its member co-ops and associate members for their continued support, ensuring longterm success of NDC dairy marketing campaigns and initiatives.
Bainne Codladh Ltd. Arrabawn Co-operative Society Ltd. Aurivo Co-operative Society Ltd. Bandon Co-operative Agricultural & Dairy Society Ltd. Barryroe Co-operative Ltd. Boherbue Co-operative Ltd. Callan Co-operative Agricultural & Dairy Society Ltd. Centenary Thurles Co-operative Society Ltd. Clรณna Dairy Products Ltd. Drinagh Co-operative Ltd. Glanbia Ingredients Ireland Ltd. Kerry Co-operative Creameries Ltd. LacPatrick Dairies (ROI) Ltd. Lee Strand Co-operative Creamery Ltd. Lisavaird Co-operative Creamery Ltd. Mullinahone Co-operative Dairy Society Ltd. North Cork Co-operative Creameries Ltd. Ornua Co-operative Ltd.
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The National Dairy Council Tel: +353 1 290 2451
Email: info@ndc.ie
www.ndc.ie