NDC Annual Report 2022

Annual Report 2022

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

Chairman’s Statement

2022 was a record year for dairy prices globally, driven by weaker flows from the major milk producing regions for much of the year. Global dairy prices began climbing in mid-2020, and despite inflationary pressures felt right throughout the supply chain, prices maintained this trajectory to reach record highs in early 2022.

GLOBAL SUCCESS

The value of Irish food and drink exports in 2022 was more than a quarter ahead of prepandemic levels. Irish dairy exports reached a record value of €6.8 billion in 2022 representing 33% growth versus 2021 with over 1.7 million tonnes of product shipped to over 130 markets worldwide.

The foundation for this growth was a solid year in milk collections on Irish farms, estimated to be close to 2021 levels at approximately 8.7 billion litres for the year. This was despite evidence of lower fertiliser usage and relatively slow grass growth in the spring and early summer.

Despite the strength of this overall performance, 2022 presented a particularly challenging year in the form of increasing inflationary pressures. Muted buyer activity in some key import regions and continued uncertainty exacerbated by the war in Ukraine are factors which will impact on prospects into 2023.

According to Eurostat, average prices for EU (European Union) butter were up 74% for January to September versus the same period in 2021. The equivalent figure for cheese and Skim Milk Powder (SMP) was 29% and 45% respectively (European Commission, 2022). These three categories accounted for just under 40% of Irish dairy volume exports in 2022.

ENVIRONMENTAL SUSTAINABILITY

Ireland’s dairy sector is on a pathway towards a low-emissions, sustainable production system. To continue producing highly nutritious products, our dairy food producers will adopt a range of new practices which will reduce the carbon footprint and ultimately yield better outcomes for society and the environment.

Despite ongoing commentary regarding the ‘industrialization’ of dairy farms, the supplier base in Ireland has largely retained its family farm profile. The average dairy farm is now milking ninety cows at a stocking rate of 2.1 livestock units per ha (Teagasc National Farm Survey, 2021), with a spring-calving, pasturefed model predominating. This average ninety cows per herd is worth comparing to a range of 140 to 230 average in Northern Ireland and Great Britain and just under five hundred in New Zealand.

However, the Climate agenda continues to redefine and reshape all aspects of industry. The regulatory picture in Ireland has become clearer for the agriculture sector following the legally binding agreement on a 25% reduction in emissions by the end of the decade. This represents a significant challenge for the sector and will require significant collective effort from all parties to achieve. Co-operation is a deep-rooted value within our industry and only through continued collaboration, vision, and investment can we build on the positive progress made to-date and be successful in delivering on our long-term ambitions as a sector.

As a sector we need to be stronger and more defiant in our messaging, to combat the increasingly negative commentary around Irish dairy production, while still winning hearts and minds by reminding people of our heritage and how much there is to be proud of – in terms of both dairy’s nutritional credentials and Irish production practices. We need to position Irish dairy farmers and the sector as committed to solving climate challenges arising from

Irish dairy exports reached a record value of €6.8 billion in 2022 representing 33% growth versus 2021 with over 1.7 million tonnes of product shipped to over 130 markets worldwide.

The European Commission is predicting that EU milk collections will continue to decline marginally in 2023, although fat and protein levels should improve to counter this deficit.

production of dairy- we are not on opposing sides- farmers together with us see and share the problem and are working to resolve it.

STRENGTHENING OUR MEMBERSHIP

NDC is pleased to have secured Dairygold as a full member, effective from July 2022 for an initial period of 3 years. Increased membership provides additional scope for NDC to work on behalf of Irish Dairy Farmers with stronger impact.

2023 PROSPECTUS

Looking forward to 2023 it is expected that Irish dairy supply will be modestly ahead of 2022. Increased availability of fertiliser early in the year and favourable weather conditions would provide support to volumes. Volatility in energy costs and availability of labour will be other factors that may influence production decisions.

Environmental considerations, and indeed regulations, are playing a more prominent role in the direction of dairy production globally. Dutch farmers took to the streets in 2022 to protest at their government’s plans to cut nitrogen use by 50% by 2030 (Financial Times, 2022). New Zealand has announced plans to apply a levy on methane emissions from livestock as part of their national climate efforts. Although not signed into law yet this is likely to feed into farmer sentiment and could provide some of the context as to why the USDA is predicting a further modest reduction in New Zealand supply.

The European Commission is predicting that EU milk collections will continue to decline marginally in 2023, although fat and protein levels should improve to counter this deficit. Overall, 2023 looks to be a year of both challenge and opportunity for the Irish dairy industry. The prospect of a modest increase in milk supply against a potentially lower global supply is positive. These prospects are balanced however, by an uncertain global economic forecast and its effect on consumer spending and the ongoing cost and input availability

pressures facing farmers and processors. It remains to be seen how commodity prices respond to these challenges in 2023. On a positive note, the diverse nature of the Irish dairy industry in terms of product output and markets served, not to mention its agility and sustainability credentials, positions it well to navigate these factors over the coming year.

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 2022.

Eamonn Carroll Chairman

Chief Executive’s Review

ONE DAIRY VOICE

We started off 2022 with a Manifesto, a strong direction on the future success of Ireland’s dairy industry. 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.

ENVIRONMENTAL SUSTAINABILITY

2022 was the year when the challenge of what it takes to achieve national emissions targets became a reality with the implementation of the legal target of a 25% reduction in emissions by agriculture by 2030. People realised that, when the phrase ‘everyone must play their part’ is used, it means all of us. The dairy sector has been subjected to much criticism around its perceived negative environmental impact. The core criticism has been that expansion is causing irreparable damage to our water quality, our soils and biodiversity. The facts contradict these allegations. Firstly, there are now the same number of dairy livestock on Irish farms as were on our farms in 1986.

What has changed is the increased productivity of the current herd in comparison to 36 years ago. Milk output per cow has increased from an average of 3,500 litres per cow in 1984 to 5,300 litres per cow per lactation in 2021. That is the result of a progressive breeding strategy, so that the same numbers of cows produce increased amounts of milk. We need to realise that blanket criticism of farmers will get us nowhere. Farmers are, and will be, the caretakers of the environment, because no one else can do it. They are the ‘front-line troops’ that will adapt their management practices and adopt new and challenging standards just like they have done for generations.

KEY NDC 2022 ACTIVITY

HEALTH AND NUTRITION

In collaboration with the Irish Nutrition and Dietetic Institute, the NDC organised a lunchtime webinar on Emerging Treatment Approaches for Food Allergy. The webinar took place on 26th January and had 299 registrants, with 120 attending the live event. Attendees included dietitians, nutritionists, students, and practice nurses.

An NDC webinar took place for practice nurses on the key watchouts in the diets of Irish children and teens from the National Nutrition Surveys including the need to increase portions of fruit and veg as well as dairy.

NDC commissioned research into Osteoporosis awareness amongst 18–25 year-olds through Coyne Research in an omnibus survey to a sample of 2,000 adults which formed the basis to the press release for World Osteoporosis Day on 20th October.

FROM THE GROUND UP ADVERTISING & ADVOCACY

The next phase of From the Ground Up campaign involved three new sports ambassadors in 2022 when we recruited Olympic rower, Paul O’Donovan, Meath GAA player Vikki Wall and international rugby player Eimear Considine. To celebrate the launch of the new ads, we held a special press briefing for sports media at Sport Ireland in April. The briefing included a Q&A with the athletes and a section on nutrition with Dr Sharon Madigan. A large number of sports media attended resulting in strong press coverage.

2022 was the year when the challenge of what it takes to achieve national emissions targets became a reality with the implementation of the legal target of a 25% reduction in emissions by Agriculture by 2030.

NDC is proud to have secured Dairygold as a full member, effective from July 2022 for an initial period of 3 years. Increased membership provides additional scope for NDC to work on behalf of Irish Dairy Farmers with stronger impact.

EVOLVING TRADEMARK & BUILDING RELEVANCE

The transition to the new Trademark brand logo commenced with an aim of 75% of the existing portfolio re-branded by end of Q3. The Trademark Taskforce met to discuss the evolution of Trademark and the communication strategy which will underpin its progress. A stronger voice where the product portfolio and retailers present a communication opportunity which strengthens the producer’s Social Licence to Produce locally. The aim should be to roll out the mark on all dairy category products going forward which will provide a good opportunity to engage with retailers and activate in-store, highlighting the importance of locally produced dairy for Irish consumers.

NDC AT BORD BIA BLOOM

The NDC sponsored a garden at Bord Bia Bloom for the first time in 2022. Designed by Sean Russell, the Sustainable Dairy Farm Garden resembled a traditional, old-style Irish country farm, complete with milk churns, dry stone walls, a mature grass clover pasture and an old open-structured farm outhouse. The garden was designed to emphasise the importance of grass-fed dairy animals in Ireland and the quality of milk which is produced. The garden provided an excellent platform to communicate the messages around sustainable dairy production to a largely urban audience in Dublin. A number of panel discussions took place over the course of the event and NDC secured extensive media coverage as well as winning two awards for the garden.

NDC FARMER ADVOCACY PROGRAMME

As part of NDC’s ongoing farmer advocacy programme, we recruited 11 farmer ambassadors to tell the story of sustainable dairy production to Irish consumers. The Ambassadors are a team of people involved in the production of Irish dairy, who will act as advocates and spokespeople for Ireland’s family-farm-based, grass-fed dairy production system. They are

champions for the many initiatives being employed to make Irish dairy more sustainable and environmentally-friendly – and they are all keen to speak about what they are doing and what needs to be done.

NDC MEMBERSHIP

The NDC is proud to have secured Dairygold as a full member, effective from July 2022 for an initial period of 3 years. Increased membership provides additional scope for NDC to work on behalf of Irish Dairy Farmers with stronger impact.

The NDC continued its discussions with additional non-member co-ops with a view to securing their membership in the future, these included Tipperary Co-op, Drinagh Co-op and Lakeland Dairies.

SCHOOLS ACTIVITY

The NDC prepared for the final year of the EU funded 6-year programme for School Milk. To support Schools participating in School Milk Scheme, NDC prepared a pack of educational resources including a Moo Crew Resource Pack containing updated Moo Crew material, two animated videos, one of which will be suitable

for primary school pupils and one appropriate for secondary school pupils. The purpose of these videos is to provide pupils with an understanding of how milk is produced, to call out our unique grass-based dairy production system and to underpin the role that dairy plays as part of a sustainable diet. The School Milk Scheme portal went live with 5 active suppliers using this platform with 392 schools registered and logging in to complete their claims. The portal is still in its infancy and not without adjustments and improvements to be made but it has been very well-received by all users. NDC ran some dedicated advertising for the School Milk Scheme and for refrigeration awareness in the IPPN magazine which goes out to Irish Primary School principals and in the latest edition of the Intouch magazine which is delivered into all schools in (Q4).

EU CAMPAIGNS

2022 was the first of a two-year EU-funded campaign on sustainable milk – Milk. It’s Good to Know it’s Good. The pan-European campaign is being implemented to highlight the sustainability of the EU’s agriculture and dairy sector, stressing its beneficial role for climate action, the environment and population health. A €220k media plan was delivered in two bursts, in December 2022 and January 2023. The TV ad featured NDC Farmer Ambassador Nicholas Cooney and Rugby star Eimear Considine. The media plan also included sponsorship of Donal Skehan’s Christmas Cookery shows with supporting display and social.

The second year of the EU Climate programme enabled NDC to continually engage with key opinion leaders and academics on the important matter of “The role of Irish Dairy in a healthy and sustainable diet”. Over 40 features across radio and print media were achieved on this area.

The evolution of our dairy industry needs to be one that is long-term and sustainable in its strategy, delivering for both the farmer and the consumer while protecting our environment.

I would like to thank my Executive Team for their hard work and the ongoing support of my Board in 2022.

A €220k media plan was delivered in two bursts, in December 2022 and January 2023. The TV ad featured NDC Farmer Ambassador Nicholas Cooney and Rugby star Eimear Considine.

Zoë Kavanagh Chief Executive Officer

Our Strategic Focus

It’s Ireland’s heritage. 17,500 family dairy farms in Ireland, 60,000 Irish jobs and exports to more than 130 countries worldwide and more that €6bn for the Irish economy each year.

What about the environment and the contribution that agriculture makes to global emissions? Well, our dairy producers have been told to reduce their emissions by 25% by 2030 and that’s something they are completely committed to achieving.

Irish dairy farmers and Irish agricultural scientists are already taking action on the climate challenge. Up and down the country they’re doing things differently, thinking about their impact, embracing new ways of operating and developing world-leading technologies and farming practices.

Incorporating clover and other plants into our pastures reduces the amount of chemical fertiliser that’s needed lowering emissions, reducing run-off into our waterways and saving money for the farmer.

Irish breeding strategies allow our farmers to improve the genetic make-up of their cattle, potentially creating a lowemission cow. Research into feed supplements will also affect cows’ emissions the big question is how a grass-fed cow can be fed the supplements.

Demand for high-quality, nutritious dairy products is increasing and shows no slowing down. We rely on dairy for the vitamins and minerals needed for a healthy body. In Ireland, the government recommends three servings of milk, cheese or yogurt daily.

1

Farmers’ Social Licence to Produce

QMA 2022

The Connelly family from Tuam in Co. Galway were the winners of the 2022 NDC & Kerrygold Quality Milk Awards. Husband and wife team Austin and Yvonne are 4th generation farmers. Relatively new to dairy - Austin took over the family farm in 2003 and continued suckler and sheep farming until he and Yvonne took the leap and switched to dairy in 2019. They milk 97 Holstein Friesian cows on 120 acres and enjoy the family life balance dairying has allowed them to have with their four daughters –Ava, Anna, Jane and Kate who all play active roles in operating the family farm.

Bord Bia Bloom 2022

The NDC had a show garden for the first time at Bord Bia Bloom during the June Bank Holiday weekend in the Phoenix Park. NDC leveraged the opportunity to promote sustainable dairy production to 120,000 urban consumers over five days at the event, the garden resembled a rural dairy farm complete with an old farm gate, old farmhouse kitchen, cow sculpture and native Irish planting to demonstrate biodiversity in action on Ireland’s dairy farms. The garden won two awards –Best Medium sized garden and the Designers Choice Award.

Photo: Clare Keogh

Photo: Robbie Reynolds

Milk Quality Farm Walk & Seminar

The 2022 National Milk Quality Farm Walk took place on the farm of the McCarthy family in Feenagh, Co Limerick, who were winners of the 2021 NDC & Kerrygold Quality Milk Awards. There was a large turnout for the farm walk in idyllic weather conditions which was preceded by an NDC-hosted seminar on “Dairy and its role in sustainable diets of the future”. The event was held in association with Kerry Agribusiness, Ornua and Teagasc.

NDC Farmer Ambassador Programme

The NDC launched its Ambassador Programme in 2022 with 11 Farmer Ambassadors representing the cream of Irish dairy farming excellence. These individuals will work with NDC to promote positive stories on dairy farming through PR, events and speaking opportunities throughout the year. The ambassadors were photographed, and a video was taken of each, telling their own unique story and the efforts they are making to farm more sustainably, these sit in a special section on the NDC website, they also regularly appear on NDC’s social media channels.

NDC “From the Ground Up” Ad Campaign

The NDC produced the next stage of its marketing campaign – From the Ground Up - which comprised a new ad featuring NDC farm ambassador Tom Power, with sports ambassadors Vikki Wall and Paul O’Donovan. The shoot took place on Tom Power’s farm and showed the correlation between the hardworking farmers, and the work and dedication it takes to be a top-performing athlete. The campaign aired across Ireland’s TV stations and on BVOD, and was supported by a comprehensive social media campaign.

Photo: Louis O’Sullivan

Photo: Tommy Dickson

Photo: Clare Keogh

Reasons to Consume Irish Dairy

Back To School

Sinead Delahunty of Delalicious and Registered Dietitian Evan Lynch worked with the NDC to produce a video with advice on creating nutritious, tasty affordable and above all quick Back to School Lunches that any teenager can get stuck into. Not only do we know that many Irish teens are not getting sufficient amounts of important nutrients like calcium and vitamin D which are important for bone health but we also know that unhealthy eating patterns established during these years can continue into adulthood.

Sports Ambassador Launch

The NDC launched three new sports ambassadors in 2022, Irish Olympic rower Paul O’Donovan, International GAA Football player Vikki Wall and international rugby player Eimear Considine. The athletes took part in a press conference to announce their roles with NDC and a number of interviews took place with extensive press coverage. The athletes also took part in further promotion campaigns for NDC throughout the year.

Photo: Rob Ahearne

Photo: Robbie Reynolds

Tour de Picnic

The NDC was title sponsor for Tour de Picnic – the sponsored run or cycle to Electric Picnic - for a second year. The event was promoted with NDC/Tour de Picnic branded jerseys worn by all the people taking part. A specially created dairy-rich breakfast was served in Tallaght stadium ahead of the participants heading off on the route, with further milk fuel stops along the way. The event was completed at Stradbally in a dedicated welcome area serving dairy-rich smoothies and other treats.

Sponsorship of Donal Skehan’s Christmas Show

The NDC ran the first year of the EU Sustainable Milk campaign in 2022 and as part of the media plan sponsored Donal Skehan’s special Christmas episodes which aired on the week running up to Christmas and ahead of New Year’s Eve. As part of the sponsorship deal NDC had three recipes specially developed by Donal for the show – these included a range of tasty brunch dishes rich in milk and cheese and using leftovers to be more sustainable. They featured in PR and also as part of NDC’s Christmas food promotion on social media.

Nutrition Food Shoot

The NDC continues to leverage the amazing nutrition credentials of Irish Dairy – in 2022 we commissioned renowned food stylist and photographer Sarah Kim Watchorn to take a series of photos of healthy recipes that are rich in dairy. She worked closely with NDC’s nutritionists to ensure each recipe was carefully balanced for health and nutrition. The recipes were widely promoted on NDC’s social media channels and the recipe section of the website.

Photo: Tommy Dickson

Photo: Sarah Kim Watchorn

Photo: © Donal Skehan

Directors and Other Information

DIRECTORS

Mr Stephen Arthur

Mr Stephen Blewitt

Mr Keith Boyle

Mr Eamonn Carroll (Chairman)

Mr Jerry Doody

Mr. Vincent Gorman

Mr Larry Hannon

Mr Patrick O’Keefe

Mr Conor Ryan

Mr Patrick Sheahan

Mr Denis Drennan

Mr John O’Connor

Mr John O’Brien

Mr Eamon O’Sullivan

Mr Sean O’Brien

Mr Con Callanan

SECRETARY

Ms Zoё Kavanagh

REGISTERED OFFICE

The Studio

55c Maple Avenue

Stillorgan Industrial Park

Dublin Ireland

COMPANY NUMBER

21650

AUDITOR

Deloitte Ireland LLP

Chartered Accountants & Statutory Audit Firm

Deloitte & Touche House

Earlsfort Terrace

Dublin 2

BANKERS

AIB

1 Lower Baggot Street

Dublin 2

AIB

St. Helen’s 1 Undershaft

London EC3A BAB

Bank of Ireland

Sandyford Industrial Estate Unit B

Apex Building

Blackthorn Road

Dublin 18

SOLICITORS

Gleeson McGrath Baldwin

29 Anglesea Street

Dublin 2

Directors’ Report

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 2022.

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.

BUSINESS REVIEW AND RESULTS

Income for the financial year amounted to €5,502,522 (2021: €5,457,483). The Company earned a profit after taxation totaling €1,137,518 (2021: €1,191,726).

The net current asset position of the Company as at the financial year end amounted to €5,651,109 (2021: net current asset €4,509,666).

The net asset position of the Company as at the financial year end amounted to €5,656,411 (2021: net asset €4,518,893).

FUTURE DEVELOPMENTS

The NDC is the appointed agency working on behalf of dairy farmers to champion the Irish dairy sector ensuring its social license to produce top quality sustainable products endures. The NDC is the authoritative and trusted voice advancing the consumer perception of Irish milk & dairy products while supporting the industry in promoting their consumption.

As part of the NDC’s strategy, it is anticipated that three sources of funding will support the delivery of services to the sector over the coming years. These include: Farmer levy income, EU project income and Dairy businesses who wish to procure NDC services.

PRINCIPAL 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 to operate efficiently and effectively.

The Company has a VAT recoverable balance of €1,965,127 and additional related contingent liability of €678,927 at 31 December 2022. 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.

DIRECTORS

The directors, who served during the financial year and to the date of this report except as noted, were as follows:

Mr. Stephen Arthur

Mr. Stephen Blewitt

Mr. Keith Boyle

Mr. Con Callanan (Appointed 17 April 2023)

Mr. Eamonn Carroll (Chairman)

Mr. Jerry Doody

Mr. Denis Drennan (Appointed 1 December 2022)

Mr. Vincent Gorman

Mr. Larry Hannon

Ms. Anne Keohane (Resigned 6 July 2022)

Mr. Tim Maher (Resigned 17 April 2023)

Mr. Michael McArdle (Resigned 28 April 2022)

Mr. William Murphy (Appointed 16 February 2022 – Resigned 1 December 2022)

Mr. Patrick O’Donoghue (Resigned 15 February 2023)

Mr. John O’Brien (Appointed 6 July 2022)

Mr. Sean O’Brien (Appointed 24 August 2022)

Directors’ Report Continued

Mr. John O’Connor (Appointed 15 February 2023)

Mr. Patrick O’Keefe (Appointed 28 April 2022)

Mr. Eamon O’Sullivan (Appointed 24 August 2022)

Mr. Gerald Quain (Resigned 16 February 2022)

Mr. Conor Ryan

Mr. Patrick Sheahan

SECRETARY

The secretary, who served during the financial year and to the date of this report except as noted, was as follows:

Ms. Zoe Kavanagh

DIRECTORS’ AND SECRETARY’S INTERESTS AND DEBENTURES

The directors and secretary of the Company who held office at 31 December 2022 had no beneficial interest in the Company at 31 December 2022 or at 01 January 2022.

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.

EVENTS AFTER THE BALANCE SHEET DATE

Details of significant events since the balance sheet date are contained in the note 19 to the financial statements.

POLITICAL CONTRIBUTIONS

There were no political donations made during the financial year.

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 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.

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:

a) There is no relevant audit information of which the Company’s auditors are unaware; and

b) 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.

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 auditors, Deloitte Ireland LLP, continue in office in accordance with Section 383(2) of the Companies Act 2014.

Approved by the Board of Directors and signed on its behalf by:

Mr Eamonn Carroll (Chairman) Director

Mr Larry Hannon Director

17 April 2023

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 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;

• 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.

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 (the

‘Company’)

In our opinion the Company’s financial statements:

• Give a true 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 financial statements we have audited comprise:

• The Income Statement;

• The Statement of Comprehensive Income; The Statement of Financial Position;

• The Statement of Changes in Equity;

• The Statement of Cash Flows; and

• The related notes 1 to 19, 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.

Emphasis of Matter related to VAT

We draw attention to Note 2, Note 9 and Note 17 to the financial statements which indicate that the company had a VAT recoverable balance of €1,965,127 and additional related contingent liability of €678,927 at 31 December 2022. 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 has 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.

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 authorized 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

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 Reports and Financial Statements. 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.

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.

A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at: https://iaasa. ie/publications/description-of-the-auditorsresponsibilities-for-the-audit-of-the-financialstatements. This description forms part of our auditor’s report.

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.

Independent Auditor’s Report Continued

• 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.

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.

Income Statement

ended 31 December 2022

All amounts relate to continuing operations. There were no recognised gains and losses for 2022 and 2021 other than those included in the Income Statement.

Statement of Comprehensive Income

Statement of Financial Position

The financial statements of The National Dairy Council (registered number: 21650) were approved by the Board of Directors and authorised for issue on 17 April 2023. They were signed on its behalf by:

Mr Eamonn Carroll (Chairman) Director Mr Larry Hannon Director

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

For the financial year ended 31 December 2022.

1. ACCOUNTING POLICIES

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

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.

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 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.

Income

Income is comprised of voluntary levies, grant income, sales and interest receivable. Income received in the form of voluntary levy contributions is based on a price per liter of milk produced and is recognised on a receipt’s basis. All other income is credited to income in the period to which it relates.

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 accrual’s 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.

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.

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

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 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.

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 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 instrument.

Financial assets and 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 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.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

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 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.

Critical judgements in applying the Company’s accounting policies

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 recognized in the financial statements.

Critical judgement - VAT Recoverable

The Company has a VAT recoverable balance of €1,965,127 and additional related contingent liability of €678,927 at 31 December 2022. 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 has obtained external professional advice on this matter and believe we will, more likely than not, be successful in our appeal.

Notes to the Financial Statements Continued

Turnover is derived from its principal activities wholly undertaken in Ireland. An analysis of the Company’s turnover is as follows:

All income, apart from European Union Grant income of €1,197,025 (2021: €1,422,645) arose in the Republic of Ireland.

Operating profit and profit on ordinary activities before taxation is stated after charging/(crediting):

3. INCOME

4. OPERATING PROFIT AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

Notes to the Financial Statements Continued

The average monthly number of employees (including directors) was:

Their aggregate remuneration comprised:

The number of employees at the financial year ended 31 December 2022, including twelve directors, was 18 (2021: 19).

In addition to the remuneration disclosed above, the directors were reimbursed €14,296 (2021: €3,402) for expenses incurred in the provision of their services.

5. STAFF NUMBER AND COSTS

6. DIRECTORS’ REMUNERATION

Notes to the Financial Statements

between the total tax charge shown above and the amount calculated by applying the standard rate of Irish corporation tax to the profit before

The National Dairy Council is chargeable to taxation on bank and other interest.

Notes to the Financial Statements Continued

Other debtors relate 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 €1,965,127 at 31 December 2022. See Note 2 for further detail.

8. TANGIBLE ASSETS

9. DEBTORS

Notes to the Financial Statements

12.

The carrying values of the Company’s financial assets and liabilities are summarised by category below:

Financial assets

Measured at undiscounted amount receivable –

(note 9)

Financial liabilities

Measured at undiscounted amount receivable

10. CASH AND CASH EQUIVALENTS

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Notes to the Financial Statements Continued

13. RESERVES

The Company’s other reserves are as follows: The profit and loss reserve represents cumulative profits or losses and other adjustments.

14. FINANCIAL COMMITMENTS

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 bank guarantees are required to secure grant funding received in advance from the Department of Agriculture, Food and the Marine. The amount outstanding at the balance sheet date was €250,000 (2021: €250,000).

15. RETIREMENT BENEFIT OBLIGATIONS

Defined contribution schemes:

The Company operates a defined contribution pension scheme. Contributions payable in respect of the financial year ended 31 December 2022 amounted to €49,966 (2021: €60,167). There were no pension contributions outstanding at the financial year end (2021: €Nil).

Notes to the Financial Statements Continued

16. STATEMENT OF CASH FLOWS

17. CONTINGENCIES

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 €467,242 (2021: €339,807).

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. As at 31 December 2022 the value of these claims is €678,927 (2021: €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

18. RELATED PARTY TRANSACTIONS

Certain directors of the Company are also directors of the co-operatives and other companies 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 and companies amounted to €3,037,925 (2021: €2,677,748). The total expenses payable to these co-operatives relating to their participation in the School Milk Scheme programme amounted to €175,342 (2021: €132,930). The amount payable to these co-operatives at the balance sheet date was €75,683 (2021: €70,166) and the amount receivable from these co-operatives and companies at the balance sheet date was €14,772 (2021: €1,230). The total expenses claimed by these directors for the financial year ended 31 December 2022 amounted to €13,055 (2021: €1,693). The directors held 6 meetings during the financial year ended 31 December 2022 (2021: 7 meetings).

Transactions with the entity’s directors (or members of its governing body)

19. EVENTS AFTER THE BALANCE SHEET DATE

There have been no events after the balance sheet date affecting the Company since the financial year.

The National Dairy Council wishes to thank its member co-ops and associate members for their continued support, ensuring the long-term success of NDC dairy marketing campaigns and initiatives.

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