Dairy: Food for Life Annual Report 2008
The National Dairy Council
Contents 4 Chairman’s Statement 5 9 21 22 22 23 23 24
CEO Statement: 2008 in Review Reports & Financial Statements NDC Board Marketing & Communications Sub-Committee School Milk & Dairy Sub-Committee Accountability & Corporate Governance Sub-Committee Issues Management & Nutrition Sub-Committee Organisational Structure & Staff
Annual Report 2008 3
The National Dairy Council
Chairman’s Statement Undoubtedly, 2008 will long be remembered as an exceptionally difficult year on all fronts of our economy. For dairy farmers, it was marked by a dramatic and sustained decline in milk prices as processors were exposed to the triple challenges of the reduction in global demand, a contracting national economy and highly price-sensitive consumers. This rapid deterioration in prospects was especially disheartening given the Irish dairy industry had, only a year before, enjoyed real price rises for the first time in many years, and the burgeoning sense of confidence that came with this. The decline in milk prices has caused real hardship on farms, particularly given the recent substantial investment under the Farm Waste Management Scheme. The global financial crisis has undermined many certainties and Ireland’s economic priorities have been reshaped in a short space of time. But, even in this most challenging of environments, we must not lose sight of the fact that milk and dairy are central to Irish life and that Ireland, as home to an efficient and environmentally-friendly milk production system, has a longterm and sustainable future as a major international supplier. Similarly, the immediate challenges of price sensitivity and market confidence should not deflect us from addressing the diverse range of issues which impact on the relationship between consumers and dairy, and which the NDC, as the Irish dairy industry’s advocacy and promotional body, is uniquely positioned to address. The pork recall in late 2008 reminded us of the far-reaching consequences that a seemingly localised event can have, and underscored the need for a comprehensive issues management strategy for the dairy sector. With the launch, in April 2008, of Dairy: Food For Life – A Strategy to Promote Irish Milk & Dairy Products 2008-2012, the NDC has signalled not only its intention to play a decisive, proactive and positive role in the interface between consumer and the industry, but also set out a sustained and robust roadmap by which it will achieve these goals. The speed and professionalism with which this strategy was implemented over the course of 2008 can leave no observer in any doubt that the NDC is an organisation with the vision and determination to play a long-term role in strengthening the position, visibility and relevance of Irish milk and dairy products to the consumer. Annual Report 2008 4
Developments such as the School Milk & Dairy Programme; progress in marketing and consumer research; and the strengthening of our scientific and nutrition knowledge base, have all demonstrated the purposefulness of the NDC and its ability to impact at national level. Built into the architecture of Dairy: Food for Life is a commitment not just to progress, but to measurement by credible means. Over the course of 2008, the NDC has demonstrated itself to be a high performance organisation and has made significant advances towards becoming a world-class dairy advocacy agency, one that will deliver value to its stakeholders over the course of this five-year plan. The current economic crisis is unlikely to have any short-term resolution but, even in these difficult times, it is more important than ever to stress that market research, promotion and issues management are not ‘extras’ to our industry but fundamental to its evolution. Commitment to strategic thinking can only reinforce the prospects of recovery once the current market difficulties ‘bottom out’ and the NDC will play a central role in negotiating the challenges ahead. I would like to take this opportunity to express my sincere thanks to all our dairy farmers and member co-ops for their unreserved support during 2008 and pay tribute to our board members, new sub-committee members and many stakeholders for their hard work and dedication. Finally, I would like to acknowledge the work of CEO Helen Brophy and her staff, who contribute on a daily basis, with unfailing enthusiasm and hard work, to the progress and development of our industry.
Dominic Cronin Chairman NDC
The National Dairy Council
CEO Statement: 2008 in Review The NDC entered 2008 in a mode of restructuring and renewal. This process, instigated with a change of CEO in September 2007, would rapidly gain momentum in the following six months. Through a commitment to frank and open dialogue, the NDC sought to assess the many serious structural deficits identified by its broad community of stakeholders, among them dairy processors, farmers, health practitioners and Government departments, as it sought to gain the clearest possible picture of the core issues and challenges facing the Irish dairy industry. Recognising that there was also much to be learned from peer organisations, the NDC studied the work of comparable dairy organisations internationally, a process that served to bring it up to speed in the global trends in milk production and consumption. There were many strands to this process and many contributors to be thanked. Ultimately, the work would be seen to feed a common purpose, one that took expression in Dairy: Food for Life – A Strategy to Promote Irish Milk & Dairy Products 20082012. Launched in April by then Minister for Health Promotion, Mary Wallace TD, and endorsed by the Department of Agriculture, Fisheries & Food, Dairy: Food for Life marked the beginning of a new direction for the NDC and signified nothing less than its complete strategic reorientation, one that would commit it to delivering services of real value and relevance to those it sought to serve: the Irish consumer, the Irish dairy industry and our partners in the broader community. Core Values Without a sense of purpose, there can be no meaningful action; without values, it is difficult to generate purpose. Before setting out our plan of action for the future, Dairy: Food for Life reflected on the question of identity or, put simply, what the organisation stood for. This is never a straightforward question but it proved a worthwhile exercise in self reflection. Through it, the core values of the NDC were identified, values that it would set out to convey in its actions and embed in its culture and its ways of working. These values bear repeating in advance of any review of our activities: Trusted The NDC is building trust with key stakeholder groups through the provision of well-informed and balanced views and information.
Innovative The NDC strives to be innovative, bringing new ideas and a fresh approach to the work undertaken. Forward-looking The NDC endeavours to be forward-looking, pre-empting issues and matters of interest and importance to its funders and the milk and dairy sector. Authoritative The NDC ensures that the views and opinions of the organisation are rooted in robust scientific research so that it can speak with authority. Accessible The NDC strives to engage openly with the many stakeholder groups and to be accessible and responsive. The strategy of Dairy: Food for Life could now unfold in a meaningful context. The resources of the NDC, channelled through distinct but interconnecting programmes, would be seen to progress in ways that made sense for the organisation: forward-thinking, strategic, innovative, transparent and measurable in their results. The implementation of the various programmes outlined by Dairy: Food for Life could also be seen as meaningful expressions of a single purpose: to play a dynamic role in the space between industry and consumers, and to earn the trust and respect of consumers, dairy farmers and industry. Challenges Ireland’s position as both a major dairy producer and consumer is well established, and the country leads the EU in per capita consumption of milk. However, as research undertaken in 2008 confirmed, this position masks often serious misgivings and misunderstandings about milk and dairy among Irish consumers. Strong competition from overseas suppliers and innovations in other food and beverage categories have often capitalised on lifestyle trends at the expense of Irish milk and dairy consumption. While Irish processors have made important contributions to value-added products and NPD (new product development), key Irish outputs such as butter and cheese are seen to belong Annual Report 2008 5
The National Dairy Council
to mature categories, and have not benefited from the kind of marketing activity that has transformed the perception of categories such as yogurts and spreads. Over 2008, the global economic crisis impacted heavily on Ireland, and the speed and depth of the downturn astonished many onlookers. The consequences for the dairy industry were dramatic. Branded Irish milk has traditionally enjoyed almost complete market dominance domestically. However, 2008 brought significant pressure to this position as consumers became increasingly price sensitive, and private label and discount suppliers taking a growing share of the market. In the broader dairy category, price sensitivity was also one of the major trends. While consumers had embraced a range of innovative and value-added products in previous years, the end of 2008 saw retrenchment towards the ‘essentials’. Strategic Programmes Dairy: Food for Life set out the road map by which the NDC could play its role in meeting these challenges and promote Irish milk and dairy products to Irish consumers as a 21st century organisation. It set out six core programmes in which all activity would be directed over its five-year lifespan. These are: • Advocacy & Communications; • Marketing & Promotions; • School Milk & Dairy; • Issues Management; • Nutrition; and, • Accountability & Corporate Governance. Embedded in the strategy, and in keeping with our values as a trusted and authoritative organisation, is the belief that actions must be measurable in their impact. The six programmes incorporate a substantial feedback and monitoring element, meaning it will be possible to talk with confidence about their progress over the five-year period and, ultimately, give real substance and credibility to the claims made by the NDC. Advocacy & Communications In the review phase that preceded the launch of Dairy: Food for Life, the NDC’s communications strategy was recognised as demonstrating a number of serious deficits and part of the disconnect that had emerged between the NDC and its stakeholders. Dairy: Food for Life set out an Advocacy & Communications Programme that would reposition the NDC as a trusted and respected information source, one which could confront the pervasive anti-dairy agenda that had gained influence, in spite of a lack of scientific credibility, in many influential quarters. Over the course of 2008, significant progress was made in laying the foundations for a communications programme worthy of the industry and some key achievements are set out here: • Formal links were developed with organisations such as the Irish Osteoporosis Society and the Dental Health Foundation, who made contributions to a range of wellreceived information guides, including ‘Making Sense of Food Allergies and Intolerances’ and the ‘Guide to Osteoporosis’. These were distributed through the appropriate healthcare channels including GP surgeries, healthcare centres and hospitals, and were also made freely available on the NDC website; • A range of new and revised consumer-specific information guides, including the NDC Dairy Den Programme, designed Annual Report 2008 6
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to support dairy consumption from toddlers right through to the young adult years, were launched; The NDC developed closer links with relevant Government departments and authorities throughout 2008, and involved a number of Ministers in various high profile events including An Tánaiste, Mary Coughlan, TD and Minister for Education, Batt O’Keeffe, TD; The NDC became a participant in international committees such as the European Dairy Marketing Forum and the International Milk Promotion Group. The European Dairy Marketing Forum was held in Dublin in 2008, and the first steps were taken to develop a new Ireland-GB dairy alliance, a partnership between the NDC and the GB Dairy Council; The NDC maintained a presence at relevant conferences and seminars such as the Irish Osteoporosis Society AGM and annual conference; an all-Ireland multi-sectoral conference on obesity; a Teagasc relay workshop looking at the National Teens Food Survey; and the Irish section annual meeting of the Nutrition Society. On an international basis, the NDC was also represented at the Dairy Council for Northern Ireland annual conference, the Global Dairy Congress and meetings of the Utrecht Group; The NDC participated in health promotion fairs such as the Dublin City University Health Promotion Fair and the Dublin Institute of Technology Staff Day; As part of its reinvigorated PR strategy, the NDC received strong press coverage on key health concerns across the general media; NDC nutritional advice and information appeared in monthly columns in the Irish Farmers Journal and the Irish Farmers Monthly. Relationships with the agri-press will continue to grow in 2009 as the NDC shares information on its programmes and activities with both industry and the rural community; The NDC introduced consumers to a highly successful Health & Wellbeing Evening. The first of these, held in Sligo, attracted over 450 people. Hugely positive feedback has ensured it will be rolled out nationally to four locations in 2009; In September, the NDC returned to the National Ploughing Championships after many years, this time in partnership with the FAI. A very successful three-day penalty shoot-out competition involved over 12,000 children and brought more than 20,000 visitors to the marquee; The NDC website was also completely re-designed, with an emphasis not just on creating a positive, user-friendly experience for consumers, but also evolving as a portal for a range of IT services in 2009, including an e-library facility for health professionals; and, The NDC also embraced, as part of its new communications drive, the need to be proactive in engaging with stakeholders and making the activities of the NDC visible.
Marketing & Promotion The NDC’s marketing and promotional activity, while consistently well-funded, was identified in the review process of late 2007/early 2008 as being an area in fundamental need of review and realignment. The Dairy: Food for Life strategy put particular emphasis on purposeful and effective marketing and promotion activity, and recognised the programme needed, first and foremost, to be informed by and aligned to the Advocacy & Communications Programme. Soon after the launch of Dairy: Food for Life, the NDC returned
The National Dairy Council
to public prominence with a fresh, updated image and a message relevant to the targeted demographics. The ‘Nothing’s as Natural as Milk’ execution was the centrepiece of a 15-week multi-media campaign that saw the NDC secure considerable media coverage in the national and regional press, and national and local radio. The overall campaign commenced with the unveiling of the new identity for the NDC, and was supported by the 13 brands of liquid milk sold within the domestic market. This proactive promotion of the brands of its members was a first for the NDC. Key messages disseminated during the campaign included: the recommended intake of three dairy servings per day; the calcium deficiencies in Irish teenage girls; the importance of dairy for children; and the benefits of milk in sports nutrition. The advertising element of the campaign was highly targeted. In regional media and men’s magazines, the focus was on the endorsements of high-profile GAA players, which was further supported through public appearances. In women’s magazines, the message was around infant health. Arguably, the most memorable and successful aspect of the campaign was the ‘Pink Lady’ visual execution, which had 18-34-year-old urban, female consumers as its focus. This key demographic previously had little knowledge of the NDC, and is both highly sensitive to the healthy-living message, and also a group considerably influenced by the anti-dairy lobby. Follow-up market research undertaken by TNS MRBI, involving over 500 interviews among a nationally representative sample of adults, found the ‘Pink Lady’ campaign had very positive responses, with a higherthan-average recall among 18-to-34-year-olds and strong appeal across other demographics. Dairy: Food for Life highlighted the need for a more sophisticated understanding of the Irish dairy consumer. As the NDC overhauled its market intelligence services in 2008, it recognised the opportunity for a major contribution in this area. Working in partnership with TNS Worldpanel, the NDC developed a new segmentation model of the Irish dairy consumer that segmented it into five key ‘behaviour’ clusters. Information drawn from 3,000 Irish households and fused with actual purchasing data allowed for this new model of the Irish liquid milk and dairy consumer’s usage and attitudes. This ongoing market research programme not only allows the NDC to better measure the success of its own marketing activities, but affords the opportunity for member co-ops to better understand and track the behaviour and attitudes of their consumers. The NDC will continue to develop the cluster model in 2009, and build strategic targets for each of the five segments it has identified. Information from this will also feed back into its evolving Issues Management Manual (see Issues Management & Nutrition). School Milk & Dairy Unlike many other European countries, Ireland has never had a national school-lunch programme. Launched by the NDC in 1982, and reaching over 250,000 students at its peak, the School Milk Scheme stepped partially into the breach, providing a regular source of calcium and nutrition to Irish students, and was particularly favoured, for this reason, in the primary school system. For a variety of reasons, this programme had largely lost momentum over the last decade, to the point where its future viability was in question. The review process involved a full root and branch investigation of the School Milk Scheme and,
while significant issues were identified, it came out strongly in favour of its revitalisation under a new, more inclusive heading: the School Milk & Dairy Programme. Not only have a number of serious nutrition issues among Irish school children served to underline its continuing value, the programme itself was identified as offering a vital line of communication between the dairy industry and its consumers of the future. The review process highlighted promotion, administrative and storage issues that needed to be addressed, but also found that, while the image of the school milk scheme was poor among students, there was widespread support among parents for its continuation. The price point (x30 per annum) was perceived as excellent value for money, particularly in the current difficult economic circumstances. Revitalising a programme that had been seriously neglected required careful planning, not least because the NDC was conscious that its new messaging needed to engage with the target student audience as sophisticated consumers rather than, as they had previously been regarded, passive recipients. The recruitment of a dedicated School Programme Manager was an important indication of strategy in this regard. With the pilot programme initiated successfully in 75 schools, resulting in a 5 per cent increase in student participation, the learnings from it have fed directly into the national programme that is green-lighted to roll out in 2009/10. The new energy around the programme has also allowed the NDC to play a more direct role in contributing to health and nutrition information in schools. Partnership with the Football Association of Ireland (FAI) was instigated in 2008 and has provided an important stepping stone to building a much stronger link between milk and sport in the minds of schoolchildren. A pilot scheme, launched in 2008, involved the FAI’s club promotions officers promoting the link between milk and sport in five club areas, and doing so in close co-operation with the NDC and local dairies. The linkage also allowed the NDC to achieve significant media profile for the School Milk & Dairy Programme, with endorsements from Ray Houghton, Packie Bonner and Giovanni Trapattoni. Issues Management & Nutrition The need to take a robust and proactive approach to issues management and nutrition was recognised as a strategic priority at the very beginning of the review process. On an ongoing basis, the NDC needs to be in a position to confront assertively antidairy campaigners, while the management of food safety issues required a thoroughgoing, coherent and informed strategy. The impact of the Irish pork recall in late 2008 brought into sharp focus the devastating repercussions of even the slightest insecurity in our food safety systems, and served to underline the timeliness of the actions taken by the NDC over 2008. With the implementation of the Issues Management and Nutrition Programme, an expert Board Sub-Committee was established. Drawing on the expertise of members with medical, nutritional, marketing and media backgrounds, it laid, over a short period of time, a very solid foundation for a systematic and comprehensive issues mapping process. This was further supported by the creation of the template for an Issues Management Manual, the development of which will be a priority in 2009. The NDC’s Nutrition Programme was equally energised by an active and expert Board Sub-Committee which guided the NDC’s aim of becoming a national centre of knowledge on dairy and nutrition. Going forward, the NDC’s expertise in this area Annual Report 2008 7
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will feed naturally into its marketing and promotion activity, and strengthen relationships in the health professional area. While more and more studies confirm the health benefits of milk and dairy, this objective and scientific information is often obscured and marginalised, sometimes for simple want of advocates to highlight it. The Nutrition Programme has a critical role in correcting this imbalance and in making information available as and when needed by health professionals. Work on an electronic nutrition library began in 2008 and, when completed in 2009, will offer a comprehensive on-line reference database incorporating research studies, media clippings and information material specifically focused on dairy nutrition. Alongside the strategic development process, the NDC also dealt with a range of individual nutrition and issues management concerns that emerged during 2008. These included: • The advertising campaign by the World Heart Federation drawing links between the dangers associated with saturated fats and heart disease which used destructive images of cheese and butter to illustrate their claims; • The application by the European Natural Soyfood Manufacturer’s Association to gain legal recognition of the term soya ‘milk’, which was subsequently rejected by the EU; • The new Broadcasting Bill published in May 2008, which sought to restrict the advertising of foodstuffs that contain fat, transfatty acids, salts or sugars to children and which could have serious implications for the dairy sector; and, • Responding to a large number of false and misleading claims regarding milk and dairy products which received either press or radio coverage. Examples included: high levels of hormones and antibiotics present in milk; milk from cows not being suitable for human consumption; links to cancer; and higher levels of calcium in green vegetables than milk. The NDC plays a vital role in dealing with ongoing issues that arise in the media or from particular sources (e.g. alternative practitioners) and was proactive throughout 2008 in providing balanced, evidence-based facts to debunk these claims. Equally, the need for strong representation at political level was recognised as vital on issues that could potentially harm the future development of the sector, as in the quest for ‘milk’ designation for soy products. Accountability & Corporate Governance The NDC’s total budget spend for 2008 reached just under x2.8m and is funded directly through a levy system, with the average dairy farmer contributing approximately x160 per annum. The need for transparency, accountability and professionalism is, accordingly, self-evident and part of the NDC’s commitment to ensuring value for money for every euro of funding it receives. In early 2008, the redundancy and restructuring programme was completed, reducing staff numbers in the organisation to three, in addition to the CEO. This was followed by a restructuring of roles and the recruitment of a new School Programme Manager. As part of this programme, the finance function was outsourced, IT systems modernised and a new external auditor, Deloitte, appointed. The NDC also became a member of IBEC for the first time. Governance structures were improved by increasing board meetings from a quarterly to a bi-monthly basis, and establishing four new expert board sub-committees tasked with overseeing and monitoring the progress of key aspects of the Annual Report 2008 8
Dairy: Food for Life strategy. Accountability is also about managing resources and, while it is a small organisation, the NDC has proved its ability over 2008 to perform at a national level. In 2008, a number of positive developments included the return of Connacht Gold and the joining of Town of Monaghan as contributors for the first time. Confidence in the NDC’s new strategy was further highlighted by the Irish Dairy Board’s decision to increase its funding by 50 per cent for 2008 and 2009. Reflections and Achievements Last year was a highly significant year for the NDC, as it reasserted itself as a strong and positive voice for the Irish dairy industry. It was also, of course, a year of dramatic change for the Irish economy, the repercussions of which are still being felt. To be viable, any strategy document must have an inbuilt review component, reflecting and adapting to changed circumstances as it progresses. There can hardly be a better example of such change than the economic challenges that beset our economy in late 2008. Dairy: Food for Life has adapted its priorities accordingly. Given the fact that the take-home market is likely to grow in 2009 as a result of less out-of-home consumption and the ongoing pressures from competitors, the NDC will examine how it can be proactive in the marketing of milk and dairy products for the specific benefit of its members. However, changes have not simply been economic. The issues of environmental sustainability as both a consumer and trade issue rose notably in prominence over the course of 2008, and will be monitored closely as the five-year strategy moves forward. These new challenges underline the need for a strong, authoritative and strategy-driven advocacy organisation. The NDC is determined to play its role in safeguarding the longterm development of the Irish milk and dairy industry, and communicating the message to Irish consumers that they are abundantly supplied with one of nature’s most nutritious and versatile foods. A more complete review of the work completed in 2008 was published in early 2009 in our Annual Review 2008 & 2009 Plan, which can be downloaded on www.ndc.ie I would like, firstly, to sincerely thank all those in the industry who helped and supported the NDC over the year, in particular, Chairman Dominic Cronin, the members of the Board and Sub-Committees, the NDC staff and, of course, our co-operative supporters, who collectively provide the NDC with the range of resources that allowed it to perform at a high level in 2008. I look forward to sustaining this level of progress in 2009.
Helen Brophy CEO
The National Dairy Council
THE NATIONAL DAIRY COUNCIL (being a company limited by guarantee and not having a share capital) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2008
Annual Report 2008 9
The National Dairy Council
THE NATIONAL DAIRY COUNCIL Directors’ Report The directors present their Report and the Financial Statements for the year ended 31 December, 2008. PRINCIPAL ACTIVITIES The principal activity of the National Dairy Council (NDC) is to support Irish dairy farmers by driving the positive position and consumption of milk and dairy products through integrated marketing and communications programmes, based on informed scientific evidence. RESULTS The results for the year and the state of affairs of the company are set out on pages 13 and 15 respectively. REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS The NDC has a vital role in supporting the Irish dairy sector in driving the consumption and positioning of milk and dairy. 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. DIRECTORS The current directors of the company are: Mr. D. Cronin (Chairman) Mr. H. Corbally (Vice Chairman) Mr. E. Bray Mr. J. Cahill Mr. T. Corcoran Mr. S. Griffin Mr. P. Kelly Mr. R. Kennedy Mr. K. Kiersey
Mrs. M. Purcell Mr. C. Ryan Mr. S. McAuliffe (appointed 12 March 2008) Mr. F. Tobin (appointed 29 January 2009) Mr. J. Hehir (appointed 19 March 2009)
Mr. J. Collum resigned 29 January 2009 Mr. G. Quain resigned 18 March 2009
BOOKS OF ACCOUNT The measures taken by the directors to secure compliance with the company’s obligation to keep proper books of account are the use of appropriate systems and procedures and employment of competent persons. The books of account are kept at 28 Westland Square, Dublin 2. EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events affecting the company since the year end. PUBLICATION The directors are responsible for the maintenance and integrity of the website. Legislation in the Republic of Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. AUDITORS The auditors, Deloitte & Touche, Chartered Accountants, were appointed during the year and continue in office in accordance with Section 160(2) of the Companies Act 1963. Signed on behalf of the Board:
DIRECTORS Date: 20 May, 2009 Annual Report 2008 10
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The National Dairy Council Statement of Directors’ Responsibilities Irish company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • 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 keeping proper books of account, which disclose with reasonable accuracy, at any time, the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish Statute comprising the Companies Acts, 1963 to 2006. 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 Auditors’ Report to the Members of The National Dairy Council We have audited the financial statements of The National Dairy Council for the year ended 31 December, 2008, which comprise the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet, the Cashflow Statement and the related Notes 1 to 16. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the company’s members, as a body, in accordance with Section 193 of the Companies Act, 1990. 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 auditors’ 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. Respective responsibilities of directors and auditors The directors are responsible for preparing the financial statements, as set out in the Statement of Directors’ Responsibilities, in accordance with applicable law and accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland). Our responsibility, as independent auditors, is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2006. We also report to you whether in our opinion: proper books of account have been kept by the company; whether, at the Balance Sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all information and explanations necessary for the purpose of our audit and whether the company’s Balance Sheet and profit and loss account are in agreement with the books of account. We also report to you if, in our opinion, any information specified by law regarding directors’ remuneration and directors’ transactions is not disclosed and, where practicable, include such information in our report. We read the Directors’ Report and consider the implications for our report if we become aware of any apparent misstatement within it. Our responsibilities do not extend to other information. Annual Report 2008 11
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Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion, the financial statements: give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the affairs of the company as at 31 December, 2008 and of the deficit for the year then ended; and have been properly prepared in accordance with the Companies Acts, 1963 to 2006. We have obtained all the information and explanations we considered necessary for the purpose of our audit. In our opinion, proper books of account have been kept by the company. The company’s Balance Sheet and its profit and loss account are in agreement with the books of account. In our opinion, the information given in the Directors’ Report is consistent with the financial statements.
Deloitte & Touche Chartered Accountants and Registered Auditors Dublin Date: 20 May, 2009
Annual Report 2008 12
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The National Dairy Council Income and expenditure account For the year ended 31 December, 2008 2008 â‚Ź Income
As restated 2007 â‚Ź
Notes
2,418,120
2,318,912
Expenditure Direct expenses Establishment expenses Administrative expenses
2,284,136 151,150 329,933
2,221,960 147,059 144,584
Total expenses
2,765,219
2,513,603
Deficit on ordinary activities before taxation
2
(347,099)
(194,691)
Taxation 4
(40,297)
(37,334)
Deficit on ordinary activities after taxation
(387,396)
(232,025)
Opening Accumulated Surplus as previously reported
2,281,670
3,918,560
Prior year adjustment 5
1,404,865
Accumulated surplus as restated
3,686,535
3,918,560
Deficit on ordinary activities after taxation
(387,396)
(232,025)
Retained accumulated surplus carried forward
3,299,139
3,686,535
All of the results for the year derives from the continuing activities of the company.
The financial statements were approved by the Board of Directors on and signed on its behalf by:
DIRECTORS Annual Report 2008 13
The National Dairy Council
The National Dairy Council Statement of total recognised gains and losses For the year ended 31 December, 2008 2008 â‚Ź Notes Deficit after taxation
(387,396)
Prior year adjustment 5 1,404,865 Total recognised surplus since the last annual report
Annual Report 2008 14
1,017,469
As restated 2007 â‚Ź
(232,025)
The National Dairy Council
The National Dairy Council Balance sheet As at 31 December, 2008 2008 Notes €
As restated 2007 €
FIXED ASSETS Tangible assets 6
81,881
76,655
Debtors 7 Bank
238,088 3,135,343
79,479 3,820,067
3,373,431
3,899,546
CREDITORS: (Amounts falling due within one year) 8
(156,173)
(289,666)
NET CURRENT ASSETS
3,217,258
3,609,880
3,299,139
3,686,535
Represented by: ACCUMULATED SURPLUS 10
3,299,139
3,686,535
CURRENT ASSETS
The financial statements were approved by the Board of Directors on 20 May, 2009, and signed on its behalf by:
DIRECTORS Annual Report 2008 15
The National Dairy Council
The National Dairy Council Cashflow statement For the year ended 31 December, 2008 2008 Notes â‚Ź
As restated 2007 â‚Ź
Reconciliation of operating deficit to net cash (outflow)/inflow from operating activities Operating deficit Add back depreciation (Increase)/decrease in other debtors (Decrease)/increase in creditors
(347,099) 36,309 (158,609) (127,847)
(194,681) 25,812 106,999 215,067
Net cash (outflow)/inflow from operating activities
(597,246)
153,197
Taxation paid
(45,943)
(35,062)
(45,943)
(35,062)
Payments to acquire fixed assets
(41,535)
(83,909)
(Decrease)/increase in cash position for the year 10
(684,724)
34,226
Taxation
Financing activities
Annual Report 2008 16
The National Dairy Council
The National Dairy Council Notes to the financial statements For the year ended 31 December, 2008 1.
ACCOUNTING POLICIES
Basis of preparation The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Companies Acts, 1963 to 2006. Accounting standards generally accepted in Ireland in preparing financial statements, giving a true and fair view, are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board. Basis of accounting The financial statements have been prepared under the historical cost convention. Income Income comprises of voluntary levies, 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. Expenditure Expenditure is accounted for on an accruals basis. Depreciation Depreciation of fixed assets is provided on a straight line basis as follows: Motor vehicles 20% per annum Office equipment 25% per annum Computer equipment 25% per annum Pension The company operates a defined contribution pension scheme. Contributions payable to the scheme are charged to the profit and loss account in the period to which they relate. Taxation The company is exempt from Corporation taxation in respect of its activities. Passive income, if any, (such as deposit interest) remains taxable. Leases Lease rentals in respect of assets held under operating leases are expensed in the period to which they relate.
Annual Report 2008 17
The National Dairy Council
The National Dairy Council Notes to the financial statements (continued) For the year ended 31 December, 2008 2. DEFICIT BEFORE TAXATION The deficit before taxation is stated after charging: Directors’ remuneration Directors’ expenses
2008 €
2007 €
24,999 23,483
14,333 14,541
Auditors’ remuneration Depreciation Operating leases
11,000 36,309 4,275
11,970 25,812 3,780
3. EMPLOYEES
2008 €
2007 €
Wages and salaries Redundancy costs PRSI Pension
382,854 109,866 37,390 16,898
418,789 39,845 16,998
547,008
475,632
The number of employees at year ended 31 December, 2008, including two directors, was seven (2007: 10).
4. TAXATION The company is not liable to taxation on the excess of its income over its expenditure. Tax was paid on interest earned as follows: 2008 € Corporation tax @ 25%
40,297
2007 € 37,334
5.
PRIOR YEAR ADJUSTMENT In prior years, income from levy contributions was deferred for expenditure for a period of eight months from its receipt. The company recognises income from levy contributions on a receipts basis in the year which the levy contributions relates. 2007 € Income and Expenditure Account Deferred revenue as previously stated 1,404,865 Prior Year Adjustment (1,404,865) Restated Balance Sheet Creditors: (Amounts falling due within one year) Prior Year Adjustment
1,694,531 (1,404,865)
Restated
289,666
Opening income and expenditure account as previously reported Prior Year Adjustment Restated
(111,795) (120,230) (232,025)
Annual Report 2008 18
The National Dairy Council
The National Dairy Council Notes to the financial statements (continued) For the year ended 31 December, 2008
6.
TANGIBLE ASSETS
Computer equipment €
Office equipment €
56,692 (26,589) 10,214
45,999 (41,802) 31,321
68,381 - -
171,072 (68,391) 41,535
40,317
35,518
68,381
144,216
Depreciation: At 1 January, 2008 30,650 42,740 21,027 Transfers (26,589) (41,802) - Charge for the period 13,642 8,991 13,676
94,417 (68,391) 36,309
Cost: At 1 January, 2008 Transfers Additions At 31 December, 2008
At 31 December, 2008
17,703
Motor vehicles Total € €
34,703
62,335
Net book value: At 31 December, 2008 22,614 25,589 33,678
81,881
At 1 January, 2008
76,655
26,042
9,929
3,259
47,354
7. DEBTORS: (Amounts falling due within one year)
2008 €
2007 €
Other debtors
238,088
79,479
8. CREDITORS: (Amounts falling due within one year) 2008 €
As restated 2007 €
Trade creditors Corporation tax Accruals and sundry creditors PAYE/PRSI
100,763 2,957 40,648 11,805
235,248 8,603 19,218 26,597
156,173
289,666
Annual Report 2008 19
The National Dairy Council
The National Dairy Council Notes to the financial statements (continued) For the year ended 31 December, 2008 9.
PENSION The company operates a defined contribution pension scheme. Contributions payable in respect of the year ended 31 December 2008 amounted to €16,898 (2007: €16,998). There were no pension contributions outstanding at the year end (2007: €Nil).
10. ACCUMULATED SURPLUS 2008 € Opening accumulated surplus as previously stated 2,281,670 Prior year adjustment 1,404,865
As restated 2007 € 2,393,465 1,525,095
Accumulated surplus at the beginning of the year
3,686,535
3,918,560
Deficit for the year
(387,396)
(232,025)
Accumulated surplus at the end of the year
3,299,139
3,686,535
Cashflow €
Closing balance €
(684,724)
3,135,343
11. ANALYSIS OF CHANGES IN NET FUNDS Opening balance € 12.
Cash at bank and in hand 3,820,067
OPERATING LEASES The company had annual commitments under non-cancellable operating leases, these leases were due to expire as follows: 2008 € Between two and five years – office equipment 4,485
2007 € 5,865
13. RELATED PARTY TRANSACTIONS Certain directors of the company are also directors of the co-operatives from which the company receives voluntary levy income. The total voluntary levy income received in the normal course of business from these co-operatives amounted to €1,632,933 (2007: €1,670,998). The total expenses claimed by these directors for the year ended 31 December, 2008 amounted to €8,109 (2007: €4,359). The directors held seven meetings during the year ended 31 December, 2008 (2007: four meetings). There were four new board sub-committees established during the period. 14. REPORTING CURRENCY The currency used in these financial statements is the Euro which is denoted by the symbol €. 15. PRIOR YEAR AMOUNTS For comparative purposes, certain prior year figures and disclosures have been reclassified under different headings. 16. APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the Board of Directors on 20 May, 2009.
Annual Report 2008 20
Eamonn Bray (National Milk Agency)
Jackie Cahill (ICMSA)
Joe Collum (Glanbia)
Tom Corcoran Sean Griffin (ICOS) (Barryroe Co-op)
Patrick Kelly Richard Kennedy Kevin Kiersey (Donegal (IFA) (IFA) Creameries)
Henry Corbally Vice-Chairman (Glanbia)
Dominic Cronin Chairman (ICMSA)
NDC Board December 2008
Sean McAuliffe (North Cork Co-op)
Mary Purcell (Centenary Thurles Co-op)
Gerald Quain Conor Ryan (Kerry Group) (Arrabawn Co-op)
The National Dairy Council
Annual Report 2008 21
The National Dairy Council
Eamonn Bray
Eamonn Bray
Philip Carroll (Principal Officer Milk Policy Division, Department of Agriculture, Fisheries & Food
James Burke (MD, James Burke & Associates)
Joe Collum
Patrick Kelly
NDC Board Sub-Committee Marketing & Communications December 2008
Dominic Cronin Chairman
Joe Collum
NDC Board Sub-Committee School Milk & Dairy Programme December 2008
Noel Mooney (National Club Promotions CoOrdinator, Football Association of Ireland)
Dominic Cronin Chairman
George Kearns (Secretary, National Dairies Association)
Mary Purcell
Prof. Damien McLoughlin (Director - Mktg Development Prog., Michael Smurfit Graduate Business School)
Gerald Quain
Gerald Quain
Conor Ryan
Annual Report 2008 22
Annual Report 2008 23
Jackie Cahill
Dominic Cronin
Dr. Pat Dillon (Head of Centre, Teagasc, Moorepark Dairy Prod. Research Centre
Sean McAuliffe
Ciaran Fitzgerald (MD, Ciaran Fitzgerald Consulting)
Sean Griffin
Henry Corbally Chairman
Kevin Kiersey
NDC Board Sub-Committee Issues Management & Nutrition December 2008
Tom Corcoran
Henry Corbally Chairman
NDC Board Sub-Committee Accountability & Corporate Governance December 2008
Fiona Lalor (Research Asst., School of Public Health & Population Science, UCD)
Catherine Lascurettes (Executive Secretary IFA)
Paula Mee (MD, Paula Mee Nutrition Consulting)
The National Dairy Council
National Dairy Council Staff Organisational Chart December 2008
Helen Brophy
Lynda Thompson
National Dairy Council Function Organisational Chart December 2008
Dr Catherine Logan
Tara McHugh
Joe Podesta
Chief Executive
PA/Admin
Issues Management & Nutrition
Annual Report 2008 24
School Milk & Dairy Programme
Marketing & Communications
The National Dairy Council 28 Westland Square, Dublin 2. Ireland Tel: +353 1 6169726 Fax: +353 1 6169760
www.ndc.ie