Annual Report 2021
NATIONAL DAIRY COUNCIL 2
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. can find out more about the work of the National Dairy Council at www.ndc.ie
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ANNUAL REPORT 2021 Contents 02 Chairman’s Statement 07 NDC Strategy 04 Chief ReviewExecutive’s 13 NDC Reports and Financial Statements 1
GLOBAL PERFORMANCE
Reduced milk output from major European producers like France, Germany and the Netherlands coupled with strong demand for ingredients particularly from China all led to a positive market environment for much of the year. Butter and cheese exports, which normally account for approximately 40% of all dairy exports both recorded growth with increased demand for casein and whey also contributing positively to export values. Combined these four sectors are estimated to have contributed an additional over €300 million of exports during the year.
There are currently 17,500 family-owned dairy farms in Ireland, producing milk of an outstanding quality from over 1.6 million dairy cows and one in forty jobs in Ireland is directly linked to the dairy sector. Dairy has a total employment of over 60,000 jobs. Irish farming also has a very significant export element to it. Irish dairy products found their way into 147 countries in 2021, the first year where exports of Irish Dairy to markets outside the EU and UK exceeded 50% of all exports. The economic importance of farming in Ireland is huge, in terms of employment, and sustaining livelihoods within the rural economy. Our Irish dairy farmers have demonstrated in the past they are both resilient and adaptable. It’s a €5.2 billion sector that generates a massive number of benefits to local economies — 85% is invested back into local and rural
The good news is however that Irish dairy farmers are actively engaged in measures to maintain water quality through programmes such as the Agricultural Sustainability Support and Advisory Programme (ASSAP) which is tasked with improving the water quality of 390 catchments through diagnostic measures and There are currently 17,500 familyowned dairy farms in theisfortycows1.6qualityofproducingIreland,milkanoutstandingfromovermilliondairyandoneinjobsinIrelanddirectlylinkedtodairysector.
IRELAND’S SUCCESS
2021 was a year of ongoing uncertainty due to the challenges posed by the global pandemic and the realities of Brexit coming through in all sectors. Our dairy sector and our member co-operatives showed great resilience in navigating the huge challenges of 2021.
Statement
We’veeconomies.gota thriving sector and we do it better than most other geographies in the world, we’re going to have to get better again and there is an action plan. It’s important that we have economic sustainability and livelihoods that can endure and thrive even through this time of change. SUSTAINABILITY Climate change is acknowledged as a ‘reality’ by almost all Irish consumers and the vast majority are deeply concerned about it. The most recent large-scale poll indicates that one third of Irish consumers are taking steps to reduce dairy consumption. As an industry we need to be really conscious of this and work to deliver a more sustainable production system that will eradicate this concern. Most consumers are unaware of the differences between Irish grass-based dairy and global dairy producers in terms of sustainability, while international measurements and targets fail to give Ireland any credits for carbon sequestration of grassland.
Chairman’s2
Irish dairy exports performed very well in 2021 with exports exceeding the €5 billion mark for the third year in a row, and continuing to be the most successful food export product from Ireland. Strong market returns across the core categories of butter, cheese, and powders coupled with a diversified market spread helped sustain strong demand during the year. This positive performance was achieved despite ongoing global supply chain disruption as well as soaring input, processing, and logistical costs.
NATIONAL DAIRY COUNCIL
NDC FUNDING At a time when dairy needs to reassure the questioning consumer in the areas of climate, animal welfare and nutrition, I believe a partially funded organisation has insufficient resources to do the job to its maximum effect. The sector is being challenged more now than ever before and an organisation that only has 70 per cent membership can only do the job to 70 per cent effectiveness. And I think this is a time when we need to have 110 per cent effectiveness. My ambition is to encourage farmers to encourage non-participating farmers to back the NDC and help provide the activity funding gap of €2 million next year so that NDC can have a real impact in promoting and protecting Irish Dairy.
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, Zoë Kavanagh and her Executive Team for their dedication and commitment to the work of the NDC in 2021. Eamonn Carroll Chairman The sector is being challenged more now than ever before and an organisation that only has 70 per cent membership can only do the job to 70 per effectiveness.cent
ANNUAL REPORT 2021 3 prescriptive actions. Irish dairy farmers have also been early adopters of new technologies to reduce greenhouse gas emissions such as Low Emissions Slurry Spreading and Protected Urea use. The carbon footprint of Irish milk has dropped by 7% since 2013. Our grass-based milk production system makes us one of the most carbon-efficient countries in the world to produce milk. To win back and sustain the trust of Irish consumers, including those who believe Irish dairy is not doing enough to reduce its impact on the Irish environment; dairy must demonstrate its commitment to being the best in the world when it comes to sustainability, with a clear plan to achieve reduction in GGE and protect habitats, that offsets the increase in production.
As Chairman of NDC, I welcome the new strategic direction and plan (2021 – 2023) taken this year and the two pillars identified as Social Licence to Produce and Permission to Consume. The clear focus which has moved to the production system will help identify the gaps in consumer understanding from milk parlour to fridge. The new marketing campaign From the Ground Up clearly tells the story of Ireland’s grass-based production system through NDC’s Farm Ambassadors.
NDC NEW STRATEGIC DIRECTION
DELIVERING VALUE TO OUR MEMBERS
Executive’s Review
Chief4
CHALLENGING TIMES 79% of Irish consumers agree that for the preservation of our planet we need to change the way we consume and produce food; but only 26% of consumers are aware of Irish dairy’s sustainability programmes. With greater scrutiny on how farmers produce milk, dairy’s reputation depends upon demonstrating greater commitment to practices that protect the environment. It’s creating a new conversation that the NDC needs to join.
In August, the NDC issued a statement in response to the Climate Action Bill which called for clarity and visibility in the way sectoral emissions targets are set, ensuring that key undertakings in the Climate Action Bill are acted on and given proper weight and consideration.
Climate change is the single most important challenge facing the Irish dairy farmers ‘social licence to produce’. There is still a continued rush to embrace the latest dairy alternatives by younger millennials, both for ‘health’ reasons and climate concerns. The fact that these products are not in fact comparable nutritionally, and often more costly to the planet than is being made out, will be a key communication challenge that the NDC needs to continually address.
NATIONAL DAIRY COUNCIL
Moving forward, we started 2021 with a more focused and strategic marketing plan, the NDC embraced the challenge to achieve a fully inclusive membership from across the dairy industry. Our vision for 2021 and beyond was for Irish Dairy to be seen as relevant and important to consumers of all ages and to establish a widely held sense of pride in the Irish Dairy Farming industry. We developed two strategic pillars where all our initiatives would flow: PILLAR 1. Protect & grow social licence to produce PILLAR 2. Promote dairy consumption FROM THE GROUND UP – PRESENTING A NEW VOICE To move us closer to this vision, the NDC developed a new, stronger brand identity –From the Ground Up, which was accompanied by a refreshed logo and visual identity. This project focused on a high impact ‘reveal’ of this new brand identity, followed by a series of momentum-building initiatives throughout 2021 designed to achieve our objectives of telling the farmer story to the Irish consumer. We created visually appealing ads on TV, radio and in print to tell the story of real Irish farmers all around Ireland delivering high quality dairy 365 days a year. Our NDC brand logo was fully redesigned to reflect Ireland’s grass-fed story and this included an updated trademark logo in line with the new brand positioning.
The NDC was pleased to note that the Bill, before going before the Seanad, was in line with the Programme for Government (taking into account the distinct characteristics of biogenic Our vision for 2021 and beyond was for Irish Dairy to be seen as relevant and important to consumers of all ages and to establish a widely held sense of pride in the Irish Dairy Farming industry.
– A NEW FRONTIER In 2020, the National Dairy Council commenced a strategic review with the key objective to examine the landscape, sharpen the NDC’s role within it, identify how the NDC can best serve the sector. The period of consultation and research in 2020 made it abundantly clear that the challenges facing Irish Dairy today called for a stronger, louder, more unified voice that could speak to Irish consumers credibly. The widening gap between parlour and plate and the resulting loss of consumer connection to the land and this world-famous indigenous industry is now creating a lot of our issues as it means that consumers are open to substitute alternatives. In addition, a lack of knowledge of modern farming practices that protect the land and support sustainable farming, makes it easier for this industry to fall victim to attacks from extreme lobby groups - vegan lobby etc.
Nutrition & You: Talking to the Experts was a free online event in association with the Irish Nutrition & Dietetic Institute (INDI), which brought together expert dietitians to discuss a range of nutrition topics across the life stages, including: Weaning and Feeding Toddlers; Sports Nutrition; Healthy Ageing; Body Weight; Disordered Eating; Gut Health; Food Allergies and Alternative Diets. Television Presenter, Anton Savage moderated the proceedings.
World Osteoporosis Day took place on the 20th October and the National Dairy Council marked the occasion by sponsoring a scientific event and by issuing a press release to media, highlighting dairy’s benefits. The scientific event focused on ‘Bone Health, Injury and Recovery in Athletes’. It was hosted online by Sport Ireland Institute and was attended by 142 healthcare professionals.
HEALTH AND NUTRITION Dairy always has a good story to tell in terms of health and nutrition, and in 2021 we continued to deliver on these messages through successful events and alliances with key stakeholders and groups. The 2021 HealthFest was brought to 8,777 students and teachers virtually for the first time, we used a very interactive platform to deliver credible information from Irish experts in the areas of physical activity, nutrition, and mental wellbeing to an audience of 15–16-yearolds across Ireland. The virtual delivery of HealthFest allowed us to deliver our message to approximately three times the number of participants at one third of the cost on the day, compared to previous events.
of tothethirdparticipantsthethreetodeliverallowedHealthFestustoourmessageapproximatelytimesnumberofatoneofthecostonday,comparedpreviousevents.
ANNUAL REPORT 2021 5 methane), Article 2 of the Paris Agreement of 2015 (managing the impacts of climate change without threatening food production) and acknowledged the risk of substantial and unreasonable carbon leakage as a consequence of measures implemented by the State.
In April, the Food Safety Authority of Ireland (FSAI) published updated scientific recommendations on dietary guidelines for older adults. The report highlighted those older adults need a more protein-dense diet than the general adult population and those dairy foods provide high-quality protein. In addition, dairy foods were recognised as being easy for frail older adults to consume.
SCHOOLS ACTIVITY Delivery of School Milk during the 2021 school year was again severely impacted due to enforced school closures. Recognising the increased pressures that Covid-19 pandemic put on families from our most disadvantaged part of society and in achieving their recommended daily intake of fruit, vegetables and dairy, 13,566 Irish schoolchildren attending DEIS schools (Delivery Equality of Opportunity in Schools) received healthy eating food packs containing fresh fruit, vegetables and dairy. To support the programme and roll-out to schools, the NDC and Bord Bia joined forces to create a series of educational videos. These videos featuring ambassadors, All Ireland GAA footballer Philly McMahon and World Champion Boxer Kellie Harrington were developed with the aim of empowering primary school children to adopt healthy eating habits while promoting the importance of physical activity. The virtual delivery
NATIONAL DAIRY COUNCIL EU CAMPAIGNS
In 2022 Irish dairy needs a theandwithlegislators,andagriculturaljustindustrychampionsvoice,consolidatedcentral,onethatthenotinthewidersectoramongstbutthewomanmanonstreet.
The NDC like many other sectors worked hard to deliver a complete work programme in 2021 despite the ongoing challenges of the global pandemic. In smartly navigating an alternative approach to all our core activities we managed to deliver a very successful programme of online events, advertising, PR, School’s activity and nutrition communications as well as continued stakeholder networking on behalf of the NDC. I would like to thank my Executive Team for their hard work and the ongoing support of my Board. In 2022 Irish dairy needs a central, consolidated voice, one that champions the industry not just in the wider agricultural sector and amongst legislators, but with the woman and man on the street – the consumer of dairy products –the people who, ultimately, grant us our social licence to produce. The NDC will be that voice.
An NDC-EU factbook communicating progress on Irish Dairy farms was launched, with Minister Charlie McConalogue’s support, to key stakeholders including journalists, TDs, MEPs and academia. There was also a good opportunity to communicate the consumer’s view in the Farming Independent.
The NDC continued its work on EU-funded marketing campaigns and managed four separate campaigns in 2021 – Everything Starts with Milk, Cheese your Way, EU Sustainable Dairy and a one-year campaign specifically to fund the promotion of dairy in the foodservice industry impacted by the Covid-19 pandemic. This campaign included a major national advertising campaign featuring café owners across Ireland with the tagline “Milk and Dairy – Open for Business. The NDC also worked with Musgraves to produce a special online training platform on Dairy nutrition and cheese production for their staff online training manual.
Zoë Kavanagh Chief Executive Officer
ANNUAL REPORT 2021
NDC Strategy 2021 —
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STRATEGIC2023PILLARS
SocialFarmers’LicencetoProduce Reasons IrishConsumetoDairy
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In 2020, the National Dairy Council commenced a strategic review with the key objective to examine the landscape, sharpen the NDC’s role within it and identify how the NDC can best serve the sector. The period of consultation and research in 2020 made it abundantly clear that the challenges facing Irish Dairy today called for a stronger, louder, more unified voice that could speak to Irish consumers credibly. The widening gap between parlour and plate and the resulting loss of consumer connection to the land and this world-famous indigenous industry is now creating a lot of our issues as it means that consumers are open to substitute alternatives. In 2021, we developed a more focused and strategic marketing plan, the NDC embraced the challenge to achieve a fully inclusive membership from across the dairy industry. Our vision for 2021 and beyond was for Irish Dairy to be seen as relevant and important to consumers of all ages and to establish a widely held sense of pride in the Irish Dairy Farming industry. To bring this together, we developed two strategic pillars where all our initiatives would flow – Farmers’ Social Licence to Produce and Reasons to Consumer Irish Dairy.
NATIONAL DAIRY COUNCIL 8 1 SocialFarmers’LicencetoProduce 1 2 54 3 1. Barry family farm, Co. Cork. 2. Hamm family farm, Co. Longford. 3. Banville family farm, Co. Wexford. 4. Fitzpatrick family farm, Co. Longford. 5. Michael, Mary Ita & Alex McCarthy, Co Limerick - overall winners of the NDC & Kerrygold Quality Milk Awards 2021. 6. Kingston family farm, Co. Cork. 7. O’Brien family farm, Co. Galway. 8. Keane family farm, Co. Kerry. 9. Hurley family farm, Co. Cork. 10. O’Sullivan family farm, Co. Cork. 11. McCarthy family farm, Co. Cork. 12. Ormond family farm, Co. Tipperary.
ANNUAL REPORT 2021 9 6 7 8 9 10 11 12
8. Winners of NDC competition take part in training session with GAA Footballer Con O’Callaghan. 1 2 4 3
4. All Ireland GAA footballer Philly McMahon and World Champion Boxer Kellie Harrington took part in healthy-eating videos - joint collaboration between the Food Dudes and School Milk Scheme programmes.
6. Chef Cuan Green making finishing touches to a dish at the ‘Cheese your Way’ dinner.
1. Food media dinner held to celebrate the end of the 3 year EU-funded ‘Cheese Your Way’ campaign for 2021.
Reasons IrishConsumetoDairy
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3. Jackie Hoyne proprietor of the Blackberry Café in Thomastown, Co Kilkenny pictured to promote dairy as part of the EU Covid Foodservice campaign.
7. GAA players Grace Walsh, Cian Lynch and Con O’Callaghan were announced as Milk Ambassadors for the ‘Everything Starts with Milk’ EU-funded initiative.
2 & 5. Kids enjoying a sports day at the NDC’s Moo Crew Summer camps held at Sport Ireland.
NATIONAL DAIRY COUNCIL 2
ANNUAL REPORT 2021 11 5 6 7 8
ANNUAL REPORT 2021 13 Directors and Other Information 14 Directors’ Report 15 Directors’ Responsibilities Statement 17 Independent Auditor’s Report 18 Income Statement 21 Statement of Comprehensive Income 22 Statement of Financial Position 23 Statement of Changes in Equity 24 Statement of Cash Flows 25 Notes to the Financial Statements 26 For the financial year ended 31 December 2021 Reports FinancialandStatements
NATIONAL DAIRY COUNCIL DIRECTORS14 Mr Stephen Arthur Mr Stephen Blewitt Mr Keith Boyle Mr Eamonn Carroll (Chairman) Mr Jerry Doody Mr Vincent Gorman Mr Larry Hannon Ms Anne Keohane Mr Tim Maher Mr William Murphy Mr Patrick O’Donoghue Mr Patrick O’Keefe Mr Conor Ryan Mr Patrick Sheahan SECRETARY Ms Zoё Kavanagh REGISTERED OFFICE The Studio 55c Maple Avenue Stillorgan Industrial Park IrelandDublin COMPANY NUMBER 21650 AUDITOR Deloitte Ireland LLP Chartered Accountants & Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2 BANKERS 1AIBLower Baggot Street Dublin 2 St.AIBHelen’s 1 Undershaft London EC3A 8AB SOLICITORS Gleeson McGrath Baldwin 29 Anglesea Street Dublin 2 Directors and Other Information
BUSINESS REVIEW AND RESULTS
ANNUAL REPORT 2021 15
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. The Company has a VAT recoverable balance of €1,536,587 and additional related contingent liability of €678,927 at 31 December 2021. These amounts relate to claims for VAT input credits which the Revenue Commissioners have refused. The Company has appealed this decision to the Tax Appeals Commission. The Company have obtained external professional advice on this matter and believe we will, more likely than not, be successful in our appeal.
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.
PRINCIPAL RISKS AND UNCERTAINTIES
FUTURE DEVELOPMENTS
The directors present their report on the affairs of the Company, together with the financial statements and auditors’ report, for the financial year ended 31 December 2021.
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.
Income for the financial year amounted to €5,457,483 (2020: €5,163,405). The Company earned a profit after taxation totalling €1,191,726 (2020: €1,210,169). The net current asset position of the Company as at the financial year end amounted to €4,509,666 (2020: net current asset The€3,314,656).netasset position of the Company as at the financial year end amounted to €4,518,893 (2020: net asset €3,327,167). The directors do not recommend payment of a dividend (2020: €Nil).
PRINCIPALReportDirectors’ACTIVITIES
The auditors, Deloitte Ireland LLP, continue in office in accordance with Section 383(2) of the Companies Act 2014.
DIRECTORS’ AND SECRETARY’S INTERESTS AND DEBENTURES
Details of significant events since the balance sheet date are contained in the note 19 to the financial statements.
The directors have a reasonable expectation, taking the Covid-19 crisis into consideration, 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.
GOING CONCERN
EVENTS AFTER THE BALANCE SHEET DATE
ACCOUNTING RECORDS
Directors’ Report
The directors and secretary of the Company who held office at 31 December 2021 had no beneficial interest in the Company at 31 December 2021 or at 01 January 2021.
DIRECTORS’ STATEMENT OF RELEVANT AUDIT INFORMATION
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.
Approved by the Board of Directors and signed on its behalf by: Mr Eamonn Carroll (Chairman) Director Mr Larry Hannon Director 28 April 2022
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 employment 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, Dublin, Ireland.
SECRETARY
NATIONAL DAIRY COUNCIL 16
Continued DIRECTORS
This confirmation is given and should be interpreted in accordance with the provisions of Section 330 of the Companies Act 2014 (as amended).
AUDITORS
The directors, who served during the financial year and to the date of this report except as noted, were as follows: Mr Stephen Arthur (Appointed 21 April 2021) Mr Stephen Blewitt Mr Keith Boyle Mr Eamonn Carroll Mr(Chairman)JerryDoody (Appointed 21 April 2021) Mr Patrick Duffy (Resigned 21 April 2021) Mr Vincent Gorman (Appointed 21 April 2021) Mr Larry Hannon Ms Anne Keohane Mr Tim Maher Mr Michael McArdle (Resigned 28 April 2022) Mr John Murphy (Resigned 21 April 2021) Mr William Murphy (Appointed 16 Feb 2022) Mr Patrick O’Donoghue Mr Pat O’Keeffe (Appointed 28 April 2022) Mr Thomas Phelan (Resigned 21 April 2021) Mr Gerald Quain (Resigned 16 Feb 2022) Mr Conor Ryan Mr Patrick Sheahan
The secretary, who served during the financial year and to the date of this report except as noted, was as follows: Ms Zoё Kavanagh
• 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.
In preparing these 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;
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.
ANNUAL REPORT 2021 17
Directors’ StatementResponsibilities
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.
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.
ToAuditor’sIndependent18ReporttheMembersofTheNationalDairyCouncil.
• The related notes 1 to 19, including a summary of significant accounting policies as set out in note 1.
NATIONAL DAIRY COUNCIL
Report on the audit of the financial statements Opinion on the financial statements of The National Dairy Council (the ‘Company’) In our opinion the Company’s financial •statements:Giveatrue and fair view of the assets, liabilities and financial position of the Company as at 31 December 2021 and of the profit of the Company 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 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”).
• The Statement of Changes in Equity;
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. Emphasis of matter We draw attention to Note 2, Note 9 and Note 14 to the financial statements which indicate that the company had a VAT recoverable balance of €1,536,587 and additional related contingent liability of €678,927 at 31 December 2021. These amounts related to claims for VAT input credits which the Revenue Commissioners have refused. The company has appealed this decision to the Tax Appeals Commission. The company have obtained external professional advice on this matter and believe they will, more likely than not, be successful in their appeal. Our opinion is not modified in respect of this matter.
The financial statements we have audited •comprise:TheIncome Statement; • The Statement of Comprehensive Income; The Statement of Financial Position;
• The Statement of Cash Flows; and
Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively , may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
ANNUAL REPORT 2021 19
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 Asstatements.partofan audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
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.
• 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.
The other information comprises the information included in the Reports and Financial Statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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. 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.
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.
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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.
• 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.
Use of our report 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.
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
• 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 to cease to continue as a going Evaluateconcern.theoverall 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. 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:
Independent Auditor’s Report Continued For and on behalf of Deloitte Ireland LLP StatutoryAccountantsChartered&Audit Firm Deloitte & Touche Hse Earlsfort Terrace Dublin 2: Kevin Sheehan 28 April 2022
• In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
ANNUAL REPORT 2021 21 Income Statement For the financial year ended 31 December 2021 Notes 2021 € 2020€ Income 3 5,457,483 5,163,405 Cost of sales (3,979,619) (3,619,074) Gross profit 1,477,864 1,544,331 Administrative expenses (286,137) (334,133) Operating profit and profit before taxation 4 1,191,727 1,210,198 Tax on profit on ordinary activities 7 (1) (29) Profit for the financial year 1,191,726 1,210,169 All amounts relate to continuing operations. There were no recognised gains and losses for 2021 and 2020 other than those included in the Income Statement.
NATIONAL DAIRY COUNCIL 22 Statement of Comprehensive Income For the financial year ended 31 December 2021 Notes 2021 € 2020€ Profit for the financial year 1,191,726 1,210,169 Other comprehensive income –Total comprehensive income 1,191,726 1,210,169
ANNUAL REPORT 2021 23 Statement of Financial Position As at 31 December 2021 Notes 2021 € 2020€ Fixed assets Tangible assets 8 9,227 12,511 9,227 12,511 Current Assets Debtors 9 2,092,333 1,767,882 Cash at Bank and in hand 10 2,919,577 2,073,258 5,011,910 3,841,140 Current liabilities Creditors: Amounts falling due within one year 11 (502,244) (526,484) Net current assets 4,509,666 3,314,656 Total assets less current liabilities 4,518,893 3,327,167 Net assets 4,518,893 3,327,167 Reserves Profit and loss account 13 4,518,893 3,327,167 Total reserves 4,518,893 3,327,167 The financial statements of The National Dairy Council (registered number: 21650) were approved by the Board of Directors and authorised for issue on 28 April 2022. They were signed on its behalf by: Mr Eamonn Carroll (Chairman) Director Mr Larry Hannon Director
NATIONAL DAIRY COUNCIL 24 Statement of Changes in Equity For the financial year ended 31 December 2021 Profit and accountloss € Total € At 1 January 2020 2,116,998 2,116,998 Profit for the financial year 1,210,169 1,210,169 Total comprehensive income 1,210,169 1,210,169 At 31 December 2020 3,327,167 3,327,167 At 1 January 2021 3,327,167 3,327,167 Profit for the financial year 1,191,726 1,191,726 Total comprehensive income 1,191,726 1,191,726 At 31 December 2021 4,518,893 4,518,893
ANNUAL REPORT 2021 25 Statement of Cash Flows For the financial year ended 31 December 2021 2021 € 2020€ Net cash flows from operating activities (note 16) 849,960 735,965 Cash flows from investing activities Purchase of plant and machinery (3,645) (4,698) Interest received 4 117 Net cash flows from investing activities (3,641) (4,581) Cash flows from financing activities Net cash flows from financing activities Net increase in cash and cash equivalents 846,319 731,384 Cash and cash equivalents at beginning of year 2,073,258 1,341,874 Cash and cash equivalents at end of year 2,919,577 2,073,258 Reconciliation to cash at bank and in hand Cash at bank and in hand at end of year 2,919,577 2,073,258 Cash and cash equivalents at end of year 2,919,577 2,073,258
The principal accounting policies are summarised below. The accounting policies and measurement bases have all been applied consistently throughout the financial year and to the preceding financial year. General information and basis of accounting
Tangible fixed assets Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment property and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows: Office equipment 4 years straight line Computer equipment 4 years straight line Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.
For26 the financial year ended 31 December 2021.
These financial statements are separate financial statements. 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, taking the Covid-19 crisis into consideration, 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.
1. ACCOUNTING POLICIES
NATIONAL DAIRY COUNCIL
Notes to the Financial Statements
Taxation The Company is exempt from Income Taxation in respect of its trading activities. Passive income, if any, (such as deposit interest) remains taxable. Expenditure Expenditure is accounted for on an accruals basis. 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.
The National Dairy Council (registered number 21650) is a company, limited by guarantee, registered in Ireland under the Companies Act 2014. The address of the registered office is The Studio, 55c Maple Avenue, Stillorgan Industrial Park, Dublin, Ireland. The nature of the Company’s operations and its principal activities are set out in the Directors’ Report.
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 EUR because that is the currency of the primary economic environment in which the Company operates.
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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Financial instruments
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that period, or in the financial year of the revision and future periods if the revision affects both current and future periods.
UNCERTAINTY
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.
Critical judgement - VAT Recoverable
ANNUAL REPORT 2021 27
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the Financialinstrument.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.
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 the Income Statement, 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 Financialinstrument.assetsand liabilities are 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 Financialsimultaneously.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.
Financial assets and liabilities
Critical judgements in applying the Company’s accounting policies
2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Financial assets and liabilities are only offset in the Balance Sheet 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.
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 Company has a VAT recoverable balance of €1,536,587 and additional related contingent liability of €678,927 at 31 December 2021. These amounts relate to claims for VAT input credits which the Revenue Commissioners have refused. The Company has appealed this decision to the Tax Appeals Commission. The Company have obtained external professional advice on this matter and believe we will, more likely than not, be successful in our appeal.
NATIONAL DAIRY COUNCIL 28 Notes to the Financial Statements Continued 3. INCOME Turnover is derived from its principal activities wholly undertaken in Ireland. An analysis of the Company’s turnover is as follows: 2021 € 2020€ Voluntary Levy 3,885,415 3,693,113 Ornua 90,241 50,000 Interest 4 117 Grants 1,445,535 1,417,925 Other 36,288 2,250 5,457,483 5,163,405 4. OPERATING PROFIT AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Operating profit and profit on ordinary activities before taxation is stated after charging/(crediting): 2021 € 2020€ Depreciation of tangible fixed assets (note 8) 6,928 7,211 Auditor’s remuneration – audit of financial statements 11,500 11,500 – tax compliance services 3,400 – tax advisory services 24,000 – other non-audit services 33,800 All income, apart from European Union Grant income of €1,422,645 (2020: €1,387,523) arose in the Republic of Ireland.
ANNUAL REPORT 2021 29 Notes to the Financial Statements Continued 5. STAFF NUMBER AND COSTS 2021 Number Number2020 The average monthly number of employees (including directors) was: Employees 8 8 Directors 10 10 18 18 Their aggregate remuneration comprised: 2021 € 2020€ Wages and salaries 695,699 682,091 Social security costs 75,462 73,920 Other retirement benefit costs (note 15) 60,167 63,413 831,328 819,424 The number of employees at the financial year ended 31 December 2021, including ten directors, was 19 (2020:18). 6. DIRECTORS’ REMUNERATION 2021 € 2020€ Aggregate emoluments paid to or receivable by directors in respect of qualifying services 39,851 38,200 In addition to the remuneration disclosed above, the directors were reimbursed €3,402 (2020: €2,514) for expenses incurred in the provision of their services.
NATIONAL DAIRY COUNCIL 30 7. TAX ON PROFIT ON ORDINARY ACTIVITIES 2021 € 2020€ Current tax on profit on ordinary activities Irish corporation tax 1 29 Total current tax 1 29 Total tax on profit on ordinary activities 1 29 Tax reconciliation The differences between the total tax charge shown above and the amount calculated by applying the standard rate of Irish corporation tax to the profit before taxation is as follows: 2021 € 2020€ Profit on ordinary activities before taxation 1,191,727 1,210,198 Tax on profit on ordinary activities at standard Irish corporation tax rate of 12.50% (2020: 12.50%) 148,966 151,275 Effects of: 1 29 Net income and expenditure not subject to taxation (148,966) (151,275) Higher tax rates on interest 1 29 Total tax charge for year 1 29 The National Dairy Council is chargeable to taxation on bank and other interest. Notes to the Financial Statements Continued
ANNUAL REPORT 2021 31 8. TANGIBLE ASSETS Cost equipmentOffice € equipmentComputer € Total € At 01 January 2021 22,701 37,681 60,382 Additions 401 3,243 3,644 At 31 December 2021 23,102 40,924 64,026 Accumulated Depreciation At 01 January 2021 20,101 27,770 47,871 Charge for the financial year 1,121 5,807 6,928 At 31 December 2021 21,222 33,577 54,799 Carrying value At 31 December 2021 1,880 7,347 9,227 At 31 December 2020 2,600 9,911 12,511 Notes to the Financial Statements Continued 9. DEBTORS 2021 € 2020€ VAT 1,536,587 1,191,728 Other debtors 32,790 153,659 Prepayments and accrued income 522,956 422,495 2,092,333 1,767,882 Other debtors relates to grants receivable representing qualifying expenditure incurred for which claims will be made after the balance sheet date. The Company has a VAT recoverable balance of €1,536,587 at 31 December 2021. See Note 2 for further detail.
NATIONAL DAIRY COUNCIL 32 10. CASH AND CASH EQUIVALENTS 2021 € 2020€ Cash at bank and in hand 2,919,577 2,073,258 11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2021 € 2020€ Trade creditors 201,643 190,201 Corporation tax 14 30 Other taxation and social security 42,046 39,628 Other creditors 479 512 Accruals 258,062 296,113 502,244 526,484 12. FINANCIAL INSTRUMENTS The carrying values of the Company’s financial assets and liabilities are summarised by category below: 2021 € 2020€ Financial assets Measured at undiscounted amount receivable – Other debtors (note 9) 32,790 153,659 Financial liabilities Measured at undiscounted amount receivable – Trade creditors (note 11) (201,643) (190,201) – Other payables (note 11) (479) (512) (202,122) (190,713) Notes to the Financial Statements Continued
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.
ANNUAL REPORT 2021 33
Defined contribution schemes: The Company operates a defined contribution pension scheme. Contributions payable in respect of the financial year ended 31 December 2021 amounted to €60,167 (2020: €63,413). There were no pension contributions outstanding at the financial year end (2020: €Nil).
Notes
The Company’s other reserves are as follows: The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments. to the Financial Statements
15. RETIREMENT BENEFIT OBLIGATIONS
13. RESERVES
Continued
14. FINANCIAL COMMITMENTS
The Company has entered into bank guarantees in the normal course of business. The amount outstanding at the balance sheet date was €250,000 (2020: €250,000).
Disclosure of Bank guarantees
NATIONAL DAIRY COUNCIL 34 16. STATEMENT OF CASH FLOWS 2021 € 2020€ Operating profit 1,191,727 1,210,198 Adjustment Depreciationfor:and amortisation 6,929 7,211 Operating cash flows before movement in working capital 1,198,656 1,217,409 Increase in debtors (324,451) (282,290) Decrease in creditors (24,224) (199,006) Cash generated by operations 849,981 736,113 Income taxes paid (17) (31) Interest paid (4) (117) Net cash flows from operating activities 849,960 735,965 17. ContingentCONTINGENCIESliabilities 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 €339,807 (2020: €267,559). On 25th January 2021 the Revenue Commissioners wrote to the Company stating that VAT repayment claims previously refunded are not allowable and therefore arrangements are being made to issue VAT assessments for the recovery of the VAT reclaimed. The value of these claims is €678,927. This matter is currently under appeal to the Tax Appeals Commission. The claims previously refunded would have to be repaid to the Revenue Commissioners should the Company lose this appeal. Notes to the Financial Statements Continued
The total expenses claimed by these directors for the financial year ended 31 December 2021 amounted to €1,693 (2020: €1,557). The directors held 7 meetings during the financial year ended 31 December 2021 (2020: 6 meetings). compensation
Key management
2021 € 2020€ Key management compensation 289,347 290,817 Notes to the Financial Statements Continued
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 €2,641,959 (2020: €2,373,387).
ANNUAL REPORT 2021 35 19. EVENTS AFTER THE BALANCE SHEET DATE There have been no events after the balance sheet date affecting the Company since the financial year. 18. RELATED PARTY TRANSACTIONS
The amount outstanding at the balance sheet date was €70,166 (2020: €78,244).
The total expenses payable to these co-operatives relating to their participation in the School Milk Scheme programme amounted to €132,930. (2020: €265,332).
Bainne Codladh Ltd.
Barryroe Co-operative Ltd.
Ornua Co-operative Ltd. National Dairy Council wishes member co-ops
Glanbia Ingredients Ireland Ltd.
Clóna Dairy Products Ltd.
to thank its
Lee Strand Co-operative Creamery Ltd.
The
Kerry Co-operative Creameries Ltd.
Bandon Co-operative Agricultural & Dairy Society Ltd.
Aurivo Co-operative Society Ltd.
Mullinahone Co-operative Dairy Society Ltd.
North Cork Co-operative Creameries Ltd.
Boherbue Co-operative Ltd.
Callan Co-operative Agricultural & Dairy Society Ltd.
Centenary Thurles Co-operative Society Ltd.
and associate members for their continued support, ensuring the long-term success of NDC dairy marketing campaigns and initiatives.
Arrabawn Co-operative Society Ltd.
NATIONAL DAIRY COUNCIL 36
Lisavaird Co-operative Creamery Ltd.
ANNUAL REPORT 2021 37
NATIONAL DAIRY COUNCIL 38 T: +353 1 290 2451 E: hello@ndc.ie W: www.ndc.ie
