3412 - Dale Farm - Annual Report 2024 - Final Digital - COMPRESSED

ANNUAL REPORT & ACCOUNTS 20 23/24

The family farm is at the heart of everything we do as a cooperative. On the front cover of this year’s annual report and in the pages that follow we are showcasing the role people across our Dale Farm family play in producing quality, nutritious dairy products. Bringing it all back to the farm - the home and origin of milk.

Our thanks go to all those who helped bring this creative concept to life. Pictured on the front cover we have (L-R) Claudia and Jesse Carrick from Portadown; James McKendry, Transport Manager, Pennybridge; Edel Madden, Ruminant Nutrition Advisor, United Feeds Belfast; Matthew Carrick, Dale Farm member, Portadown; Marian Fundureanu, Process Operative, Dromona and Christine Sloan, Red Tractor Manager, Head Office Belfast.

ABOUT DALE FARM

OUR PURPOSE

To process all members’ milk and add optimal value to enable a competitive milk price and investment in assets to ensure the long-term stability and viability of the society.

OUR GROUP

Dairy cooperative owned by approximately 1,300 UK farmer members

Largest UK farmer owned dairy cooperative

Milk pool 938M litres

1 ,051 employees operating across eight locations with head office in Belfast

Specialise at every step of the food chain from farm support to milk collection, processing and manufacturing a wide range of dairy products for the retail, foodservice and ingredient markets

Operate across seven different categories - Beverages, Cheddar & Whey, Butter & Spreads, Creams & Custards, Ice Cream, Feeds, Agri Services

Distribute products across the UK and export to 40 markets across the globe

Home to award-winning brands - Dale Farm, Dromona and Mullins.

ANNUAL RESULTS AT A GLANCE

£3.5M SAVINGS THROUGH IMPROVEMENT PROGRAMME

938M £70M LITRES DELIVERED MILK SUPPLIES GREW BY 0.6% CHEDDAR INVESTMENT Record customer service levels 99.8% LAUNCHED SUSTAINABILITY PROGRAMME FUTURE STRONG

PROFIT PER LITRE PURCHASED 3.24 ppl SIGNED AN AGREEMENT WITH THE SCIENCE BASED TARGETS INITIATIVES

THROUGH MILK CHEQUE REBATE AND MEMBER TRADING DIVIDEND UNITED FEEDS RETURN £33.3M

OF CAPEX SPEND

Another year has passed, not without its challenges for ourselves as producers. Continued input cost inflation, a volatile global dairy market and difficult weather patterns all impacted profitability on-farm in the 2023/24 period. As a result, NI volumes only increased by 0.6% while GB volumes remained flat.

Challenging weather in the first half of May 2023, delayed most farmers first cut silage which affected quality but increased bulk. The subsequent heatwave in June limited the yield of second cuts. With rain returning from July onwards, it was difficult to get sufficient weather opportunities for the subsequent silage cuts. This also impacted the grazing season resulting in cows being housed early in many parts of the province.

Milk volumes fell over autumn, but returned to growth from December onwards, due to an improving milk price versus meal price. This trend has continued into the 2024/25 season, despite relentless rainfall which delayed turn out to grass on many farms this spring.

Autumn 2023 saw the launch of our Future Strong sustainability programme. This programme will develop and evolve in due course as we endeavour to meet environmental targets. The information collected in the sustainability survey has been used to calculate a baseline carbon footprint of our milk pool. Having this baseline assessment and the accompanying data has already enabled us to showcase the positives within the milk pool, which has proved invaluable in retaining and winning new business for the cooperative. On this note, we as a business, appreciate members taking the time and effort to complete and return the survey.

We have an important year ahead for the Future Strong programme as the second phase of the on-farm initiatives role out this autumn. As ever, the Farm Services team will be available to advise and support producers throughout.

Looking ahead, the Board are working closely with the Executive Leadership Team (ELT) to constantly review the strategy of the business. As always, our focus is squarely on delivering sustainable income for our farmers and future generations. Sustainable investment, like the expansion of our cheddar operation at Dunmanbridge, is key to delivering this goal. Which today is on schedule and is due to be operational for the 2025 spring peak.

I want to thank my colleagues on the board for their commitment, support and dedication to moving the business forward throughout the year, through engagement with members, attending meetings and their work on our various committees.

The Sustainability Committee shaped the approach of the Future Strong programme and our framework to addressing climate change. The Membership Committee also made important recommendations which have been implemented, including a revised bactocount payment model and the introduction of the Milk Production Realignment Scheme from August 2024. This scheme will see 4ppl paid on additional litres supplied from August to January each year for a three-year term.

My thanks also go to the ELT and all our employees across the business who have delivered another profitable year for the cooperative.

Most importantly, I want to thank you, our producers for your continued support. The financial performance of Dale Farm cannot be achieved without the efforts of our producers in providing milk of the highest quality standard.

The cooperative is in a strong position, but we are aware of the financial pressure producers are feeling at present, and the challenges we have ahead of us. As a business, Dale Farm is focused in the years ahead, to deliver both economically and environmentally, in order to return the best possible milk price to all our producers and future proof all aspects of the business.

Chairman Fred Allen

CHIEF EXECUTIVE’S REVIEW

Group Chief Executive Nick Whelan

These have been challenging times for businesses. Over the past number of years across all industries we have had to deal with a global pandemic, and subsequently inflation and the cost-of-living crisis. Against this challenging backdrop, we can take great encouragement from our business performance at Dale Farm. For the last financial year we recorded £29.8M net profit before tax which equates to 3.24ppl net profit per litre purchased. Net profit before tax was up from £26.8M in 2022/23 and £22.1M in 2021/22.

The success of the business over this period comes down to people, culture, and strategy. Our farmers continue to excel and lead the industry on quality and hygiene, delivering for our customers while operating in challenging conditions including input cost inflation and unusual weather patterns. At our processing facilities across NI and GB our driven, innovative team members continue to shine. We have a high performance culture at Dale Farm, and our farmers and people across the business share a can-do attitude and a determination for the cooperative to continue to succeed.

Our strategy that has brought us to this position is built around four key pillars - growth, focus, data, and people. A laser ‘focus’ was paramount to taking the business forward which has been critical to improving performance and

delivering growth. We have focused our energies on the parts of the business that are best delivering for our customers, and ultimately the farmers who own the cooperative. We have exited categories that were not delivering for us, such as yogurts and desserts, and while we reported a lower turnover for this year following the closure of two of our factories in GB, our profitability has increased over the period, so that sharp focus has been effective.

As we move forward the focus is now firmly on sustainability, which will be pivotal to growth as customers work towards their sustainability targets and require us to respond to independent verification. This past year we signed an agreement with the Science Based Targets initiative (SBTi) in which we have committed to setting achievable, evidence-based pathways to bring down our greenhouse gas (GHG) emissions. We have initiated our Future Strong sustainability framework, through which we are working to be more sustainable in every sense of the word. It’s not just about reducing carbon footprint but ensuring our farmers businesses are resilient and profitable for generations to come and that Dale Farm retains the trust of customers and government, for whom having strong environmental credentials is now a must. I am impressed with the level of uptake for the programme following our initial launch with the

farm survey and accompanying sustainability payment. The next step is the on-farm programme which begins in September 2024.

Data gathering is essential, not just for Future Strong, but in enabling us to make the best decisions as a business. As we introduce more digitisation and advanced manufacturing technology to our factories, data will be key to driving productivity and efficiency. It is also a tool that allows us to better anticipate upcoming trends and manage costs.

Recruiting and retaining the right people continues to be a strength of the business in what is a very competitive marketplace. We have the right people in the right roles who are getting results. Every employee can benefit from learning and development to further improve their skills and build a career at Dale Farm.

Significant progress has been made at Dunmanbridge as we expand the site following the £70M investment in our cheddar operation announced earlier this year. As one of the largest ever investments of its kind by a NI agri-food company, it is a statement of intent and is a mark of our position as a leading European cheddar manufacturer.

It is a testament to the commitment of the team at Dunmanbridge that such progress has been made on construction while maintaining dayto-day operations at the site. Across all of our processing sites, operations teams have delivered exceptional quality and service throughout the past year, supporting the growth of the cooperative and strengthening our customer relationships.

Every decision we take as a cooperative is about ensuring the 1,300 farmers who supply us with milk have sustainable, profitable farm businesses for the future. That is what

drives every part of our strategy and it is through investment in our facilities and pursuing further growth as a cooperative that we can drive further competitiveness on milk price.

Looking forward, we are progressing with a five year strategy review to ensure the future sustainability of the business for the next generation. We face some significant headwinds, not least the climate, but we are well positioned to navigate short and long-term challenges and continue to grow the business sustainably.

Successive years of growth and strong financial results can only happen with a strong team. I want to thank my colleagues on the ELT. I am honoured to work with and have the support of such a strong, dedicated team, and as a team we have grown together over the past number of years. That determination is shared by our employees across the business.

I also want to pay tribute to our colleagues on the Board who play a key role in challenging us and directing the business all year round. Together, as a board and ELT we share that strong focus in sustainably growing the business, and the support and direction from Board members has been invaluable in taking us forward.

I particularly want to thank our farmer members for their commitment to Dale Farm. Thank you for choosing Dale Farm as your cooperative, and for your support as we collectively take our business forward and continue on this journey of sustainable growth.

Group Chief Executive Nick Whelan

MARKET OVERVIEW

2023/24

Group Commercial Director

Mark Boyle

At a glance

Cost-ofliving crisis Brands under pressure

CONSUMER MARKETS

Summary:

Cost-of-living crisis impacts consumer behaviour.

Consumers continue to ‘shop around’.

Own label on the increase.

Brands under pressure to maintain share.

Consumers have been living through one of the most challenging economic periods in years with high inflation, rising energy costs and interest rates impacting living standards. In order to manage overall basket spend consumers have been adapting their shopping habits and seeking more value in their purchases.

Brands have faced the challenge of maintaining market share and own label has been able to grow its share in key categories. Branded milk volumes are declining at a faster rate than own label with premium added value milks becoming less affordable for consumers. In butter, consumers are switching from branded butter to own label butter and there is a migration from butter to spreads,

while in cheese consumers have reduced their repertoire with staples like cheddar performing best. Again, within cheddar specifically, brands lost out to own label and furthermore value own label lines.

Consumers remained concerned by the rising prices of food and the price has increased in importance as a factor when choosing a dairy product.

Foodservice remains an important channel for consumers, even for households with financial concerns. Over the last year, volume and spend have increased year-onyear, with increased trips per week driving the growth.

LOOKING FORWARD

There are signs that inflation is easing, and interest rates may also start to reduce. Consumer confidence however remains fragile given the high cost-of-living at present. With this in mind, consumers will continue to take a planned approach to purchases, shopping around for best value as they manage their overall basket spend. Own label will remain popular, and promotions and marketing investment will play an important role for brands to protect market share.

COMMODITY MARKETS

Summary:

Supply and demand vying to provide market direction.

UK cheddar stock overhang a challenge.

Lack of demand growth from China impacts global markets.

Watch out for new USA cheese capacity coming onboard.

The first half of 2023 saw dairy commodity prices continue the aggressive slide from the record pricing experienced in 2022. High inflation was met with increasing interest rates throughout the year, eventually contributing to reduced demand globally. As a result, dairy markets were demand-led for most of 2023 as consumers stood back or traded down. Industry buyers only covered short-term requirements due to increased financing and storage costs in the hope that commodity prices would continue to slide.

UK and EU domestic retail demand finished 2023 on a stronger note, but it wasn’t enough to make up for a year of sluggish retail sales growth as weak consumer confidence continued to hold back spending. Domestic business-to-business (B2B) demand was challenging as buyers adopted wait-and-see strategies, but it was the lack of international demand growth particularly from China that weighed heavily for so long.

Domestic milk production in China is growing, while population and number of births are declining. China

is also facing reduced economic growth and a real estate crisis. While China is an insignificant cheddar cheese market, the reaction to this from New Zealand manufacturers - redirecting milk from drying towers to cheddar plants in response to reduced Chinese milk powder imports - has impacted global dairy markets. Late 2023 and early 2024 saw the arrival of New Zealand-origin cheddar shipments into the UK, adding to the already overbearing stocks of UK cheddar.

The latter part of 2023 brought more moderate decreases before some stabilisation towards the end of the year and into 2024, with this period unlike most of 2023 seeing the market much more supply-led.

Record milk prices in 2022 and two consecutive years of above average milk prices failed to stimulate milk production growth across Europe and major exporting countries, which has stagnated since 2020/21. Inflation, geopolitical and economic conditions as well as extreme weather patterns have dampened milk production and contributed to cost increases across the supply chain.

EU milk supply had a poor finish to 2023. Ireland in particular saw some areas post supply variances as much as 27% below the corresponding period of the previous year. The start of 2024 has seen EU supply improve except for the Netherlands and, once again, most notably Ireland, which for the first quarter of 2024 ran on average 9% behind the same period in 2023.

Throughout 2023/24 EU cheese production increased, while butter

and skimmed milk powder (SMP) decreased. Overall, this led to an oversupply of cheddar which saw UK cheddar undervalued against other origins for a period. However, with Irish production falling in 2024 thus far (cheese production in March 2024 fell behind March 2023), cheddar markets are just beginning to move forward with some support.

Dairy markets and subsequently farmgate milk prices have decreased everywhere since late 2022, but both have stabilised above pre-2022 levels.

Mild cheddar prices peaked in September and October 2022 but bottomed out exactly a year later, falling by a huge £1,600/mt or 33%. Butter prices fell 38% while SMP prices fell a heavy 46% in the same period.

After setting a record in 2022, whey protein concentrate (WPC80%) pricing fell very aggressively in the first half of 2023 before rallying again in the second half of the year with export and domestic demand in the sports nutrition category reaching new heights.

Looking forward, cheddar production from Ireland is forecasted to be lower in the short-term and aggressively increasing fat values will be supportive of all cheese types. However, with increased cheddar and WPC80% capacity coming online in the United States, the export effectiveness of the UK and EU will be key.

At a glance

Ice cream restructure

COMMERCIAL, MARKETING AND INNOVATION

Group Commercial Director Mark Boyle

CONSUMER FOODS

2023/24

Summary:

Robust performance in the face of significant market challenges.

Overall held volumes broadly flat vs. prior year, outperforming the market.

Cheddar capacity increase

Dromona wins Best Marketing Campaign

Focus on health

Satisfactory volume performance in beverages.

Focus on building pipeline for further cheddar growth with long-term partners.

Ice cream restructured and reset for growth.

Excellent customer service was delivered by the team across the year in Dale Farm’s Consumer Foods business. We sell a wide range of products to the domestic, international retail and foodservice markets, including branded and own label cheddar cheese, butter, dairy spreads, liquid milk, custard and creams.

A positive performance was recorded in 2023/24, with volumes

broadly flat in the face of significant market pressures and evolving consumer buying behaviours, driven primarily by the cost-of-living crisis. Consumer beverages volume performed satisfactorily in the year and came in broadly flat in volume terms against the previous year. The liquid milk business volume delivered broadly in line with the previous year in a challenging market, with a solid performance recorded across our multiple retail business. Strong sales were recorded across the foodservice channel despite cost-of-living challenges as consumers continued to treat themselves to out-of-home coffee consumption. The Sukie drinks business followed up a strong year with another year of robust growth. Continued new listings in the retail channel supported by improved instore merchandising drove year-onyear sales growth. Retail buttermilk enjoyed a strong performance with new national listings across several GB multiple retailers, boosting retail sales volumes.

Consumer butter and spreads business had a good year with total volumes showing year-on-year growth of circa 2.5%. Overall retail sales were in line with 2022/23 volumes. A softening of on-shelf retail prices

on butter drove growth across own label stock keeping units (SKUs). Continued promotional activity across our branded portfolio also delivered year-on-year sales volume growth. This caused a modest reduction across our dairy spreads business in the year. Foodservice sales in the year were significantly ahead of 2022/23. The introduction of several new customers over this period boosted year-on-year sales volumes by almost 13%. Butter volumes were supported by a satisfactory performance on portions with the dairy spreads business volume performing in line with the previous year.

Consumer cheddar sales volume was recorded at circa 4% behind the previous year as the business resets for future growth. Sales across both the retail and foodservice sectors were impacted by some customers changing buying policies to ensure they had multiple suppliers across their respective portfolios. Our retail channel continues to benefit from partnerships with key UK grocery retailers which grew ahead of the market in the year. This positions the Consumer business on a strong platform for growth in the years ahead.

We have restructured and consolidated our ice cream business which had a strong underlying trading performance in the year and is in a good position for future growth. Ice cream continued to trade well across impulse and takehome categories despite significant cost inflation in the category. A move into own label manufacturing bolstered volumes through our Mullins production site and secured a national listing. Foodservice demand in ice cream was strong, however, significant cost inflation in this channel was challenging to recover.

INGREDIENTS

2023/24

Summary:

Strong overall performance.

Gearing up for increased cheddar capacity.

Significant foundations laid for cheddar pipeline growth.

Building long-term strategic partnerships key.

Our Ingredients business is evolving rapidly as we adjust our team to focus ever more on cheddar cheese as part of our strategy to significantly grow our cheddar business.

The new cheddar plant will result in less butter/powders and more cheddar for retail and B2B markets, and the team therefore is actively engaged in building our cheddar growth pipeline.

Over the past 24 months we have been marketing our new cheddar volumes across the UK, Europe, the MENA region and Asia working on new opportunities, building growth plans with existing and new clients and optimising our pipelines and cheddar profiles.

Increased cheddar volumes flowed through the ingredients channel in 2023/24, opening new doors particularly in the processing channels of the EU and the Middle East. Our cheddar is now processed in more factories in these regions with a focus on longterm strategic partnerships.

The UK has been a challenging market for B2B over the past 1218 months. The industry has had

to work through an overhang of cheddar stocks as milk was prioritised into cheese and retail volumes continued to normalise post-pandemic. This was further impacted by the arrival of cheddar to our shores from New Zealand. All our UK competitor set have been active in markets outside of their normal client base and any new business has been very competitive.

As we grow our cheddar volumes and seek more value-add opportunities outside the UK we are more exposed to global markets and other cheddar origins such as the USA and New Zealand. The USA will become a major competitor in export markets in the years to come with expansive new capacity coming online.

Our whey business continues to perform satisfactorily. WPC80% remains a volatile commodity but it outperformed most milk proteins and whey derivatives over 2023/24. Again, the USA is the biggest competitor to the EU in this market which is reliant on export business. Over the last few years, the US has been growing its exports winning market share from the EU, but both regions have been particularly strong at finding wider applications for high-protein whey derivatives, which seems to be helping maintain prices above the historical lows.

Fat markets have had another volatile year with butter bottoming out in August 2023. The lack of demand and dairy fat substitution brought sell-side pressure, however butter markets reacted favourably to the tightening of milk supply late in the year keeping butter above historic averages. Butter started strongly in 2024 as more milk was prioritised into cheese causing stocks on both the buy and sell side to tighten, resulting in aggressive spikes in pricing and bullish sentiment.

BRAND ACTIVITY

Summary:

Dromona wins Best Marketing Campaign at the Belfast Telegraph Grocer Marketing Awards.

Focus on brand awareness during cost-of-living squeeze to protect market share.

Sukie engagement plan with students.

Dale Farm ice cream takes to the road across the summer.

It was a busy year for brand marketing activities with a big focus on driving brand awareness. This was delivered through advertising campaigns coupled with extensive brand sampling to promote product excellence across all product categories, driving rate of sale during a challenging year for brands in the market amid the cost-of-living squeeze.

DROMONA WINS BEST MARKETING CAMPAIGN

Dromona switched focus in 2023/24 from promotions to campaign activity, highlighting the quality of our branded cheddar. The brand won the highest accolade at the

annual Belfast Telegraph Grocer Marketing Awards in May 2024, scooping Best Marketing Campaign for the Dromona Cheddar ‘Give in to the Melt’ campaign. This fully integrated campaign included out-of-home, radio and digital advertising, an extensive social media campaign and road trips with the bespoke Dromona toastie van sampling delicious cheese toasties.

SUKIE ENGAGEMENT WITH STUDENT POPULATION

Sukie is NI’s iconic market-leading ambient juice brand with pack formats appealing to a crosssection of consumers. Marketing activity in September focused on experiential and sampling activities within students’ unions across NI, reaching over 50,000 students locally.

DALE FARM ICE CREAM TAKES TO THE ROAD

To ensure our ice cream range was top of consumers’ minds across the summer season an extensive outof-home advertising campaign was supported with sampling activity. Our customised Dale Farm ice cream van visited workplaces, charities and schools offering refreshing ice lollies to delighted consumers.

INNOVATION

Summary:

Strong focus on cheese process innovation and patented technology.

Product optimisation, cost reduction and sustainability key.

Focus on health across our portfolio of products.

19 rejuvenation projects and 223 rejuvenated products launched.

The focus of the innovation team was on process innovation, cost reduction, sustainability, and product rejuvenation in 2023/24.

There was a continued spotlight on process improvement, especially at Dunmanbridge, for new projects using novel instrumentation and statistical programs.

We are also working with customers to enhance the flavour and texture of our cheddar products and continue work on patents related to cheddar processing.

With our focus on cost reduction and sustainability most of these product rejuvenations have been driven by supplier and packaging changes in our cheese and beverages businesses - for example the move to clear caps on all consumer milk and Sukie products produced at Pennybridge, which are now food grade recyclable.

At Mullins the attention shifted to reformulation to optimise products, which was successfully completed for several products during the year.

A food ingredients spread product was reformulated at Dromona Cullybackey to address shifting consumer behaviour and continues to perform well for the site.

LOOKING FORWARD

We are progressing with a longterm project with the Agri-Food and Biosciences Institute (AFBI) to assist with cheese grading predictability .

A newly acquired texture analyser will be used to help develop bespoke cheese products and processes.

New recipes with a focus on flavour and health will be launched in 2024/25 to optimise our Sukie drinks range.

OPERATIONS AND SUPPLY CHAIN

Group Operations Director Chris McAlinden

At a glance OPERATIONS

Summary:

Cheese Plant 2 progress

Developing capability

Managing costs

Costs managed well in a challenging environment.

Cheese Plant 2 investment making significant progress, build remaining on time and budget.

Upgrade of the fresh cream processing facility in Pennybridge to improve efficiency and quality.

Focus on accessing production data to deliver improvements.

It has been a very successful year with significant progress made in the operational engine of the business.

Excellent service levels

Over 900M litres of milk was successfully processed in the year, and over 58,000 tonnes of cheese was produced. This is the largest ever output from Dunmanbridge and outlines the continued improving performance in efficiency in our factories. Less milk was used to produce this record volume of cheddar which has delivered the much improved year-on-year yield performance for the Group.

Costs were well managed in a challenging environment. Cost inflation and regulatory headwinds continued to pose challenges. Against this backdrop and a volatile global political landscape, the operations team performed exceptionally ensuring we continued to have supply of all key inputs while manufacturing our products at a competitive price.

Our focus on effective tendering, looking at alternative technologies, value engineering our products and the relentless improvement and cost reduction activity have all played a key part in this.

Operations performed well during the year with strong operational efficiencies achieved across the main categories. Effective measurement of performance across all areas, implementing LEAN manufacturing principles to drive improvement and a culture of continuous improvement were all key enablers.

From a quality perspective we have made significant progress this year in improving performance across a number of areas - investing in tanker CIP systems, site building upgrades and improved focus on exfarm milk quality through increased testing have all been targeted

developments in the year which are helping drive improvements in the underlying quality of our products.

INVESTMENT

We have made significant strides forward in developing our capability and delivering on our strategy to pay a long-term competitive milk price.

Over the past year we continued our investment in a second cheddar cheese plant at Dunmanbridge. Totalling £70m this marks one of the largest investments by a NI agri-food company to date. The investment includes the replacement of our old, inefficient milk powder driers at Dunmanbridge. Once complete the expansion at Dunmanbridge will increase our cheese manufacturing capacity and enable us to improve returns on circa 100M litres of our current milk pool.

We also installed and commissioned a second cheese slicing line in our packing factory at Dunmanbridge. Investment in this state-of-the-art technology not only increases our capacity and sales potential but also significantly improves our cost base through high speed packing and automation, delivering operational efficiencies as we move forward.

In addition to the above we invested over £6M in a number of key infrastructure projects across our business to both manage the reliability of our core assets and improve on safety, environmental and quality requirements as dictated by changing legislation. The projects included fabric upgrades of the cream room at Pennybridge and water system upgrades at Dromona Cullybackey and Dunmanbridge.

We have also started on a journey to both improve the access to factory production data and manage the risk associated with this data and associated factory IT hardware

systems. The aim of this project is not only to derisk the IT systems running our production sites but to also gather and use the data we have to uncover further improvement opportunities. This is the essence of continuous improvement and building on the culture of improvement throughout our business.

SUPPLY CHAIN

Factors including the Russia/Ukraine and Israel/Palestine conflicts, inflation, continued material scarcity post-pandemic, unplanned energy plant outages and the blocking of cargo ships around the Red Sea have all created unprecedented challenges in the past year.

Our robust procurement and supply chain strategies have helped us navigate these challenges well, ensuring we continued to have supply of all raw materials, packaging and ingredients at competitive prices and ultimately ensuring we had finished product on shelves. These issues have highlighted areas for improvement where we can further derisk parts of our supply chain, for example through dual and local sourcing strategies, both of which are being looked at for the future.

It was a good year from a collection and distribution perspective with service maintained at a high level both in terms of milk collected and product delivered to customers. Ongoing improvement opportunities are being explored in this area. To give one example, we hope to be able to improve the efficiency of our collection and delivery fleet over time through route optimisationdriving fewer miles, using less fuel and completing activity in less time. We recognise this is a challenging area to get right and we are carefully and slowly working through this with all key parties to ensure the best possible outcome for all involved.

Key Stats

Litres of milk collected

58,893 tonnes of cheese produced - our best year on record

£3.46M of savings through improvement programme

Yield performance improved by

0.2% YoY

Service levels an excellent

99.79%

£33.3M of capex spend

IT

Chief Financial Officer

John Morgan

LIMS system upgrade

Cyber security

Summary:

Successful Laboratory (LIMS) system upgrade.

Continued focus on Cyber Security enhancements.

Alignment between Operational Technology (OT) and Information Technology (IT).

Continued development of a data led strategy.

The IT team successfully completed an upgrade of the Group laboratory information management (LIMS) system in 2023/24, incorporating the farmer milk quality testing process and chemical and microbiology testing for finished goods produced at our manufacturing sites. A LIMS technology refresh allows for future software development and (FOSS) instrument integrations.

The ongoing group enterprise resource planning (ERP) upgrade project remains on track with good progress made on the development phase. To limit downtime we will take a phased approach, with our first company agreed to go live in autumn 2024, with project completion on schedule for 2026.

Due to the considerable threat of cyber-attacks, investment in our IT security system solutions continued to evolve with the implementation of a new behavioural AI email solution to detect potential incoming phishing emails. The email solution add-on will also provide end users with colour-coded banners to strengthen security awareness supported by our MetaCompliance security awareness training platform which publishes monthly training courses for all computer users. Independent internal and external penetration (PEN) tests were carried out throughout the year, with remediation actions completed.

A new disaster recovery (DR) solution was implemented ensuring all key centralised systems are replicated at an independent location. Several isolated system tests have been successfully completed with plans in place to align our DR and business continuity plans for the Group.

Alignment between operational technology (OT) and information technology (IT) made good progress across 2023/24, with budget approval granted and a successful OT pilot developed at Dunmanbridge. In addition to the implementation of new OT software and infrastructure, key programmable logic controller (PLC) programme backup and change control processes have been developed with our production system partners significantly

At a glance

reducing business risk. The convergence of IT and OT is a key part of our future data strategy.

The data and analytics team continued to develop our Central Data Hub which now holds over six billion data points from internal and external (Big Data) sources. This has resulted in a significant proportion of the business using the hub as the single source of truth for information. This central data store includes information from milk collection volumes and milk composition to finished good quality to commercial sales and profitability. A new Dale Farm Data Governance Framework protects the integrity of this information. Through the development of a cross functional governance committee there is now a structure in place to support and maintain the quality of critical data.

Recently laboratory testing data (from LIMS) has been added to the Central Data Hub. This provides insight into both milk quality received from members and quality performance through the production processes at each site. This data will enable further value adding analytical projects that will not only aid decision making but feed into long-term strategic planning.

The integration of a new central survey solution provides the business with a way to collect data from a wide range of internal and external stakeholders. As part of the Future Strong initiative nearly 1,200 members responded to a sustainability survey. This data is being used to better prepare and inform Dale Farm and its members on steps they can take to become more sustainable in the future.

The business improvement team actively supports the IT and data and analytics teams by identifying opportunities for process automation and LEAN projects. These initiatives aim to reduce waste through technical solutions, enhance system compliance, and leverage data from our Central Data Hub.

At a glance

Learning and development

PEOPLE AND HEALTH & SAFETY

Group HR Director

Karen Gaw

PEOPLE

Summary: 260k spend on learning and development.

66% of workforce trained in external development programmes.

OCNNI accreditation

Proud to work for Dale Farm

Reduction in incidents

689 people trained in external programmes, including 21% Dairy Skills Training.

The strength of our people is vital to the continued success of our business. It is through the exceptional effort, dedication and commitment of everyone, that we continue to grow and achieve our strategic objectives.

We have marked several achievements and introduced various initiatives over the past year, emphasising our commitment to an engaged and inclusive

workplace, which we believe is key to our growth and success. Significant progress has been made in hiring, developing, and retaining talent, and enhancing the opportunity for continuous learning and professional growth. We prioritise

the strength of our people is vital to the continued success of our business

the health, safety, and well-being of our employees through wellness programmes and a strong safety record. Employee engagement is crucial, and we have implemented initiatives on communication, recognition and teamwork, to improve workplace satisfaction.

LEARNING & DEVELOPMENT

Summary:

Learning Management SystemOpen LMS.

OCNNI accredited.

20% of jobs filled internally.

Fostering an environment for our people to learn and grow is a key priority. In 2023/24, we invested and provided development opportunities, including launching the Open LMS online learning management platform, while offering tailored and soft skills programmes across all levels. Key dairy skills programmes were curated and delivered, including Cheese Manufacturing, CIP Fundamentals, and Dairy Masterclasses on butter, ice cream, and cheese research and development. Environmental management and fertiliser training was also provided to the sustainability and agri teams.

Our Colour Insights programme continued with Uspire, to build selfawareness and high-performing teams, and expanded to six further teams; the Team Development Programme for the ELT with Dynamic

Partners also continued. We received approval as a recognised centre to deliver Level 3 and 4 qualifications from Open College Network NI (OCN NI), rolling out “LEAN and Problem Solving Techniques” and “Statistics - better data, better decisions.”

Professional advancement for employees included a PG Certificate in Cheese Science and Technology, with University College Cork, and a Masters in Business for Agri-Food and Rural Enterprise with Loughry College. Invest NI’s Skills for Growth Programme continues to provide support on learning and development.

As a result of our investment, 20% of job roles were filled through internal advancement.

ENGAGEMENT

Summary: 74% engagement / 75% participation.

85% would recommend Dale Farm as a great place to work.

84% say they are proud to work for Dale Farm.

MySay, our annual engagement survey, is an important tool for ensuring Dale Farm remains a good place to work. In 2023, 75% of staff participated, the highest rate in four years. The employee engagement score was 74%, surpassing the UK Food and Beverage Industry benchmark.

Our strengths include company values, work/life balance, and company confidence, while areas for improvement are acting on feedback, collaboration & communication, and feedback & recognition. Resultant from the feedback, the ELT identified three focus areas: performance management, recognition, and communication. Survey results are shared with all teams, and local action plans are created.

Responding to previous feedback on reward and recognition, we launched “Rewarding the Legendairy,” which has already recognised over 40 employee members who have demonstrated excellence while upholding the company values. Our HR team also delivered “Make it Your Dale Farm” roadshows in October to drive further engagement and connection with our people and to highlight our company benefits and services.

TALENT

Summary:

Total numbers employed at March 2024: 1164; (1051 employed, 113 agency).

Increased from 1140 in March 2023.

Inclusive of temporary and agency workers.

It is important that we continue to attract, develop, and retain talent. Through our Higher Level Apprentice Food Manufacturing Programme with Loughry College, we onboarded three apprentices and were shortlisted for the Northern Ireland National Apprenticeship Awards 2023. We support our apprentices through their education with two achieving BSc degrees in Food & Drink Manufacturing in the past year.

We are committed to developing attractive career pathways in engineering. Our first Engineering Apprentice was appointed at Dunmanbridge, who will complete NVQ Level 3 Food & Drink Maintenance Engineer Apprenticeship in partnership with South West College. We have a five-year Engineering Apprenticeship Plan to address skill shortages and support succession.

Our recruitment strategy is supported by a dedicated Dale Farm Careers Facebook page and a LinkedIn profile. This year, we enhanced our induction and onboarding process using our new Learning Management System.

The total number of employees across the Group, including temporary and agency workers, increased from 1,140 in March 2023 to 1,164 in March 2024. This can be attributed to additional temporary agency personnel.

Our community of dedicated people are core to the success of our business. The remarkable skills, efforts, agility, and commitment of all our people has contributed to the growth and success of the company in 2023/24.

HEALTH & SAFETY

Summary:

8% reduction in incidents.

21.4% reduction in reportable incidents.

Days lost as a result of incidents reduced by 13.6% compared to 2022/23.

Slips Trips and Falls - biggest contributor of accidents.

We remain committed to supporting the health, safety, and well-being of our Dale Farm community by providing a safe and healthy work environment, and promoting wellness programmes and resources.

In 2023/24, we focused on transport safety, incident investigation, mental health first aid, and comprehensive employee training, including permit to work, defibrillator, and NEBOSH and IOSH certifications.

We also continue to provide Driver CPC training internally. Our site safety committees have been instrumental in providing forums to actively address concerns. Despite slips, trips, and falls being the leading causes of lost time accidents during the year, we reduced overall incidents by 8% and reportable incidents by 21.4%. This safety performance continues to compare favourably with industry benchmarks.

committed to supporting health, safety and wellbeing of our Dale Farm community

Our “Thrive - Live Well, Work Well” programme offers a calendar of activities and guidance on health and well-being, supported by Inspire Wellbeing’s Employee Assistance Programme. For a second year Cancer Focus NI provided health checks for our employees, while we also expanded our team of mental health first aiders.

Future focus remains on safety process control, transport initiatives, contractor management, and fostering a safety culture, through engaging with our people and our site safety committees.

At a glance

Milk supplies increase Tankcare, Parlour Care and Dairy Herd Management welcome new customers

AGRI DIVISION

Managing Director of Agri Division Keith Agnew

MILK SUPPLY

Summary:

Milk supplies increase slightly, averaging 717,924 litres per farm.

Milk components improve for eighth successive year.

Milk price impacted by weakened global market.

Feed price reductions Future Strong launched

Milk supplies from our 1,244 NI producers increased slightly during 2023/24 to an average of 717,924 litres per farm. Milk production during the year was impacted by lower milk prices, poor forage quality and prolonged periods of wet weather. The core Dale Farm producers were joined by 16 new entrants commencing milk for the first time and five new suppliers coming on board. However 22 members retired throughout the year so by year end the cooperative finished with one less producer.

Milk components improved for the eighth year in a row. While protein remained at 3.34%, butterfat improved to an average of 4.26%. Bactocount fell to average 47,000/ml, however, somatic cell count increased year-on-year to average 192,000/ml.

The base milk price plus loyalty bonus paid to members began the year at an April price of 33.55ppl. Due to a continually weakening global market, milk price declined from May onwards reaching a low of 30.55ppl by August. This reduction was primarily driven by a decline in powder and butter price, which meant Dale Farm was somewhat sheltered from the full effects of the market. With global milk supplies in decline throughout the autumn, milk price rallied, increasing to 32.55ppl in November and continued to strengthen reaching 35.55ppl by the close of the year.

Thus, over the 2023/24 year, the average base milk price paid by the Society was 33.26ppl, rising to an actual paid out price net of transport of 34.81ppl.

PRODUCER SERVICES

Summary:

Steady increase in new customers for Tankcare, Parlour Care and Dairy Herd Management.

Dairy Herd Management sees 29% increase in paperless recording.

Sensehub proves popular to support herd health and fertility management.

The Farm Liaison team has been active advising members on all manner of milk quality topics. This year has seen an increased focus on hygiene in line with the increased bonuses available for bactocount and the roll out of thermoduric testing of all producers’ milk samples.

The team also assists farmers in preparation for Red Tractor audits and helps new entrants and suppliers in commencing supply to the cooperative.

Following the launch of the Future Strong sustainability framework, the team has also been assisting producers through the requirements at farm level and demonstrating

how farmer participation helps the business progress as customer focus increases in this area.

Despite cash flow pressures on dairy farms, it was another strong year for Tankcare. New tanks once again proved popular, with a dearth of second-hand tanks available, particularly in the small to mid-range bracket. Tankcare, in partnership with Flogas, continued to promote sales of new water heating systems using LPG. To combat cash flow pressure on farms Tankcare now offers a 12-month 0% finance scheme payable through the milk cheque for Dale Farm members to assist with the purchase.

Tankcare is underpinned by a comprehensive service contract which offers a reliable breakdown service. This has led to a steady increase in new customers who appreciate the value in rapid response times, knowledgeable engineers, and a fixed monthly cost.

Parlour Care has been very active during the year with several new customers benefiting from its service and maintenance of their milking parlour. Several parlour upgrades have also been undertaken with positive feedback being received by members on the high standard of service provided.

Dairy Herd Management welcomed 29 new customers during the year. While improving milk quality is still a common reason for those commencing milk recording, an increasing number highlight a desire to receive additional management information to improve efficiency and profitability, with resultant benefits for farm sustainability. Additional service offerings in the form of Johne’s testing and PregCheck have continued to remain popular during the year. A heightened awareness of Johne’s disease has been driven by the veterinary risk assessment required by Red Tractor and vets are now encouraging farmers to be more proactive in testing individual animals. The demand for access to online data continues and this year Dairy Herd Management saw a 29% increase in customers moving to paperless recording.

SenseHub once again proved extremely popular for customers seeking an accurate, cost-effective solution for fertility and health management. Labour and cost savings technology continues to be in demand on dairy farms and with a 0% finance deal being offered, customers were keen to avail of this technology at a modest monthly price. The popularity of this offer has seen it extended into the current year.

UNITED FEEDS

Summary:

Feed price reductions during 2023/24.

Russia/Ukraine conflict continues to affect commodity markets.

£458,000 returned to members through milk cheque rebate and member trading dividend.

United Feeds saw revenue decrease by 17% in the past year, mainly reflecting lower commodity and therefore selling prices. Feed sales fell during the year, having benefitted from highly volatile commodity prices and a record high milk price in the prior year. Feed price fell by 14% by year end, down from the high levels seen in the previous year, with a further 6% reduction recorded in May 2024.

A wet spring delayed turnout and silage making by 2 - 3 weeks in most areas. This resulted in large crops of wet, low digestibility silage on many farms which impacted milk performance during the winter of 2023/24. Drier conditions returned in June with many areas suffering drought and reduced grass growth.

The dry conditions did not last long however, with wet weather returning in July which persisted for the remainder of the grazing season leading to early housing in most areas. The winter of 2023/24 remained mild and wet which resulted in difficult conditions for turnout in spring 2024. Thankfully, the weather improved in late April and early May for first cut silage.

The Russian invasion of Ukraine continued to impact commodity markets but to a much lower level than the previous year. Although there were periods of volatility, the trend in commodity markets over the year was downward. The South American harvest in February to April 2023 saw Brazil produce record levels of soya beans and maize, but Argentina production was significantly reduced due to drought conditions. As the year progressed an El Nino weather pattern developed which resulted in wetter conditions returning to Argentina but southern Brazil was impacted by hot, dry conditions. This resulted in the current Argentinian harvest returning to normal levels but Brazilian production falling slightly.

In the Northern Hemisphere, the intense drought conditions which had affected large parts of North America and Europe in 2022 were not repeated in 2023. This improved harvest saw world stock levels rising and resulted in commodity prices continuing to weaken over the winter

of 2023/24. Although Northern Europe had a wet winter which reduced winter and delayed spring planting, North America has had its best planting season for a number of years.

In the fertiliser sector the financial year started with falling gas prices and that trend continued for the first few months into summer 2023. This brought a welcome reduction in nitrogen prices with the first six months of the calendar year seeing prices fall by 50%, before stabilising. Across NI demand in the summer period was down approximately 30% compared to the previous year due to the wet weather. However, in the same period United Feeds’ sales increased by 30% on the previous year. The second half of the calendar year saw prices increase slightly before falling again at the start of 2024.

Global fertiliser manufacturing capacity has reduced significantly in recent years which has led to global demand outstripping supply at times. As a result, the market can be quite volatile for some key products.

During the year United Feeds paid out over £458,000 through its milk cheque rebate and the member trading dividend, which pays a dividend of 1% on the purchases of feed and fertiliser by members. This is a slight decrease on the previous year and reflects the lower commodity and therefore selling prices for feed and fertiliser.

ENVIRONMENTAL & SOCIAL GOVERNANCE

Summary:

Future Strong sustainability framework launched.

Commitment to ScienceBased Targets Initiative (SBTi).

Strong producer commitment and participation in Future Strong.

CLIMATE CHANGE

The release of GHGs from human activities such as agriculture, energy production and transport is responsible for 1.1oC increase in global warming since 1850-1900.

Over the next 20 years, global temperature is expected to reach or exceed 1.5oC of global warming, per the Intergovernmental Panel on Climate Change’s Sixth Assessment Report 2022. This level of warming will dramatically change our weather systems and affect human health, natural ecosystems, our ability to grow food and the infrastructure we rely on.

An appropriate response to the challenge of climate change, as well as other environmental issues such as biodiversity loss and water pollution is required to ensure the continued well-being of our cooperative and our community.

FUTURE STRONG

In 2023 Future Strong, our sustainability framework was launched, with an initial focus on farm sustainability.

Future Strong was introduced through 15 farmer meetings held across NI in August and September 2023. The two central themes of the first year of the programme are to develop a detailed understanding of our suppliers’ farming practices as they relate to the environment, and to start practically building sustainability from the ground up by focusing on how nutrients are managed on farm.

From January 2024 participants in the programme received a payment within the base milk price for the following actions:

1. A commitment to undertaking GHG footprinting and allow Dale Farm access to the anonymised input data and results.

2. Completion of the farm sustainability survey. This survey asked for information on those elements of farming practice, for calendar year 2022, that interact with the environment under the following headings: Farm Description, Land and Nutrient Management, Manure Management, Feed Management, Herd Management and Energy Management.

3. Provide soil testing results and slurry application rates to enable Dale Farm to produce a Nutrient Management Plan for each farm.

To date, we have had 96% participation from our suppliers for items 1, 2 and 3 which is a fantastic achievement.

FARM SUSTAINABILITY SURVEY

The farm sustainability survey provides detailed information on the farming systems used across the milk pool. Using the data provided in the survey, a single GHG footprint value for the whole milk pool in 2022 was produced using the Agrecalc carbon footprinting tool. The value calculated does not include any carbon that may have been sequestered into pastures, hedges or trees.

The results of the survey will be used to target interventions and support in the coming months at those areas which will have the greatest impact in terms of reducing the GHG emissions while driving profitability on farm. In addition, the survey results will inform the development of our climate risk assessment as we seek to identify and mitigate the risks of climate change across our business.

PROCESSING FACILITIES

Environmental infrastructure improvements are well advanced at Dunmanbridge in preparation for the new cheese manufacturing facility. New wastewater drainage and collection sump construction is completed and the new swale that treats stormwater releases is completed and operational.

Work has commenced on the Dunmanbridge water treatment plant upgrade with the new aeration tank and anoxic tank completed. Work is ongoing on the new membrane facility.

A new standby generator has been installed at the Dunmanbridge water treatment plant, which can meet the full demand at the plant in the event of a grid outage.

ISO 14001 ENVIRONMENTAL MANAGEMENT CERTIFICATION

In July Ash Manor was fully integrated within Dale Farm’s ISO 14001 certified Environmental Management System (EMS). This means all Dale Farm’s sites fall under one group wide EMS, ensuring a consistent approach to environmental management across the business.

COMPLIANCE SCHEMES

Dunmanbridge successfully complied with the UK Emissions Trading Scheme (UK ETS) and all sites with Climate Change Agreements (CCA) met the CCA requirements. Our obligation under the Energy Savings Opportunity Scheme (ESOS) phase three was discharged through the completion and submission of an ESOS assessment. Dunmanbridge, Pennybridge, Dromona Cullybackey, and the United Feeds mills at Belfast and Dungannon have maintained compliance with the site-specific Pollution Prevention and Control (Industrial Emissions) permits.

PACKAGING

The focus of packaging sustainability at Dale Farm is around ensuring that the packaging is recyclable, is lightweight and contains recycled content where practicable. A project completed this year on lightweighting our cheese slice packaging will enable the saving of an additional 74 tonnes of plastic per annum.

CORPORATE SOCIAL RESPONSIBILITY

We have developed a programme over the last four years to proactively engage and support the work of charities and nonprofit organisations within our community. This has promoted employee engagement and delivered tangible positive societal impacts.

This marked the fourth year of our charity partnership with Cancer Focus NI. As NI’s leading local cancer charity it provides care and support services for cancer patients and their families, as well as funding scientific research into the causes and treatment of the disease. Cancer Focus NI also offers a range of cancer prevention programmes to help reduce the risk of getting cancer, which includes 1:1 health checks in the charity’s Keeping Well van.

In the first three years of our partnership we were delighted to reach our £50,000 target. We further surpassed this milestone in 2023/24, raising £53,000 for Cancer Focus NI. Our charity committee, consisting of members from all our NI locations,

displayed their dedication and enthusiasm through a range of events and initiatives. This included a Dale Farm cycling team completing Lap the Lough, Dunmanbridge Golf Day, a Mourne hike as well as festive draws and quizzes. With our partnership as a conduit, Cancer Focus NI facilitated Keeping Well visits to all NI sites. Our sites were also able to avail of the charity’s Stop Smoking programme.

We further surpassed this milestone in 2023/24, raising £53,000 for Cancer Focus NI.

Fundraising activities also extended to Air Ambulance NI, through the collection at Balmoral as well as a Halloween online raffle which was open to both our farmers and employees. Collectively, these activities raised £2,480.

In addition to fundraising, our direct support to those in need extended to FareShare NI. This charity directly tackles food poverty by collecting food from the food industry and redistributing it to charities as well as providing meals to vulnerable and disadvantaged groups across NI. With the demand for its services increasing, Dale Farm has continued to support their purpose by providing fresh milk and spreads every week. In the 2023/24 year the Group’s contribution amounted to 56,119 equivalent meals, 101.6 tonnes C02e avoided and assisted 135 charities.

Membership with non-profit organisations and charities, namely Arts and Business NI, Business in the Community and Women in Business NI continued during the year. These organisations provide a segue to valuable connections with our wider community as well as providing opportunities for team engagement in addition to career and personal development for employees. One such example is the Arts and Business NI Leaders on Arts programme. This allows individuals to develop leadership skills, provides insights into the arts and culture sector as well as

the Group’s contribution amounted to 56,119 equivalent meals, 101.6 tonnes C02e avoided and assisted 135 charities.

strategies for successful governance. Our relationship with the arts sector in NI was further supported through our sponsorship of the pantomime at the Grand Opera House, Belfast. We renewed our commitment to this sponsorship with an agreement extending for a further three years. This unique sponsorship aligns with our Dale Farm community in bringing generations of family and friends together and providing a platform to engage with our farmers, employees, customers and consumers.

In February we announced our partnership with Young Enterprise NI (YENI), pledging £12k to their Business Backer Campaign.

Through this partnership we will actively support YENI to deliver its entrepreneurial programmes to 100,000 young people across NI.

This was the third year of our Local Roots Community Support Fund which supports organisations close to our production sites. Three schools close to our sites have now each received £20,000 over a three-year period. We also supported the schools’ career departments with skill workshops and factory visits.

We continue to collaborate with all suppliers to ensure that a high standard is maintained for health, safety, environment, ethics, and labour and are proud to be accredited with the internationally recognised Sedex Ethical Trading standard.

GOVERNANCE

The issue of climate change is central to the operations and activities of Dale Farm and therefore the response to the issue requires a high degree of oversight. The following structure is now in place:

The Board Sustainability Committee. Climate risk and opportunity is now a set agenda item for the quarterly meetings of the Sustainability Committee. This Committee then brings climate risk and opportunity issues to the Board as required. The current focus is on ensuring that strategy and risk management processes are being suitably developed but will broaden through time. It is the responsibility of the Head of Sustainability to report to the committee on this issue.

ELT Risk Committee.

Quarterly ELT Sustainability Meeting. Climate risk and opportunity as a set agenda item and it is the responsibility of the Head of Sustainability to report to the meeting on this issue.

Quarterly Environmental Group Meeting. The quarterly meeting of the Environmental Team within Dale Farm has climate risk and opportunity as a set agenda item.

STRATEGY

CLIMATE RELATED RISKS AND OPPORTUNITIES MANAGEMENT

To thrive as a business Dale Farm needs to understand the climate hazards it is facing and prepare for the future. A formal process for the assessment of climate risks and opportunities commenced this year.

Climate-related risks to Dale Farm fall into two categories:

Physical risks. The consequences of hotter, drier summers, warmer, wetter winters and increasing frequency of floods, storms and drought; and

• Transitional risks. The consequences of government and customers’ approaches to addressing climate change and related risks.

The starting point for assessing risks and opportunities is an understanding of the hazards presented by a changing climate. Dale Farm has undertaken a hazard assessment to determine the key climate hazards for Dale Farm locations, and to set the scene for climate-related risk assessments. The assessment of climate hazards has been tailored to be specific to Dale Farm’s key sites and important locations across NI. It provides tangible information relevant to the timeframes that Dale Farm works to and that climate projections are available (ShortTerm (2030s), Medium-Term (2050s) and Long-term (2080s)) Over 1000 sites across NI have been used to identify assessment areas.

These sites include:

• Farmer member locations

• Key ports for transporting goods in and out (Dale Farm and United Feeds)

• Major or strategic warehousing and storage facilities (Dale Farm and United Feeds)

This information, along with the results of the Future Strong farm sustainability survey will inform the development of our formal climate-related risk and opportunities register to be undertaken in 2024, which will consider our businesses, strategy and financial planning. This process will be integrated within Dale Farm’s overarching approach to business risk, determining which risks and opportunities have the potential for material, financial impact.

The risks and opportunities formally identified will be built into decision making and strategy formation. Dale Farm’s understanding of climate risks and opportunities, both physical and transitional, have informed the requirements of the Future Strong farm sustainability programme and our activities at the processing facilities, but not as part of a formal assessment to date.

Part of our risk assessment process will include determining the resilience of the strategy and different climate-related scenarios.

METRICS AND TARGETS

Dale Farm formally committed to the SBTi in February 2024. Nearterm science-based emissions reduction targets will be set in line with the SBTi criteria and recommendations for validation by SBTi.

In 2023 Dale Farm set the following targets which will be revised as part of the SBTi process:

Reduction in absolute GHG emissions from our processing facilities and owned transport by 50% by financial year 2027/28 from a 2017/18 baseline; and A reduction in the GHG intensity of milk produced on farm by 31% by 2030 from a 2020 baseline.

Work is currently ongoing to ensure accuracy of our GHG inventories. Dale Farm has a record of success in reducing GHG emissions from our factories. Since 2019/20 reporting under the streamlined energy and carbon reporting (SECR) requirements demonstrates an emissions reduction of over 25%.

Detailed pathways to meet our GHG reduction targets will be developed during the course of 2024. This will include setting KPIs required to monitor progress against the GHG targets.

John Morgan

Mark Boyle

Dr. Keith Agnew

Chris McAlinden

EXECUTIVE LEADERSHIP TEAM 2023/24

NICK WHELAN

Group Chief Executive

Appointed Group Chief Executive of Dale Farm in 2016. Nick is a member of the UK Food and Drink Sector Council, is Vice Chair at Dairy UK and a board member of the Dairy Council for Northern Ireland. He is a former Chair of the Northern Ireland Food and Drink Association and the CBI NI’s Innovation Forum. He was previously Commercial Director at Glanbia for 10 years and held senior management positions in the Kerry Group for 12 years.

CHRIS MCALINDEN

Group Operations Director

Appointed Group Operations Director in 2013 with responsibility for group manufacturing and supply chain operations as well as the Group’s capital investment programme. Chris is a Chemical Engineering Graduate with a Masters degree in Agri-food Business Development and is a member of the Chartered Management Institute. He joined Dale Farm in 2008 from Moy Park where he held a number of production management posts.

MARK BOYLE

Group Commercial Director

Joined Dale Farm in 2021 as Group Commercial Director and leads the cooperative’s Commercial, Innovation and Marketing teams, responsible for delivering sustainable growth for the business. Mark has a depth of experience in a variety of leadership roles in the international food industry having started his career at the Green Isle Foods Group followed with 20 years at Kerry Group culminating in the leadership of the Kerry Foods Consumer Foods business in Ireland.

KAREN GAW

Group HR Director

Joined Dale Farm in 1990 and has extensive experience in generalist HR management within the Group. Karen was Group HR Manager for 14 years prior to her appointment as Group HR Director in 2021 with responsibility for People, Health & Safety, and Corporate Communications. Karen is an Associate Member of the Chartered Institute of Personnel & Development, and a member of the Institute of Directors.

DR KEITH AGNEW

Managing Director of Agri Division

Joined Dale Farm in 2002 as Business Development Director for United Feeds and was appointed Chief Executive in 2013. In 2017 he became Managing Director for the Agri Division with responsibility for the animal feed business, farm support and producer services within the Group, and the growing area of sustainability. In 2021, Keith took on the role of Company Secretary.

JOHN MORGAN Chief Financial Officer

Appointed Group Chief Financial Officer in May 2023. Prior to this, John was Finance Director of South, Wales & Northern Ireland, BT Enterprise. Before joining BT, John trained as a Chartered Accountant with EY in Belfast before spending two years working within the London Private Equity Corporate Finance Team. John was elected to the CBI Northern Ireland Council in 2019.

Karen Gaw

Nick Whelan

BOARD OF DIRECTORS

BRYCE KELSO

Bryce Kelso is a dairy farmer from Maghera, Co. Londonderry. He was elected a Director of Dale Farm Cooperative in April 2022.

STEVEN BROWN

Steven Brown is a dairy farmer from Moneymore, Co. Londonderry. He was elected as a Director of Dale Farm Cooperative in 2016 and is also a Director of the Dairy Council for Northern Ireland.

HAROLD JOHNSTON

Harold Johnston is a dairy farmer from Ahoghill, Co. Antrim. He was elected as a Director of Dale Farm Cooperative in 2011. He is a past County Chairman of the Ulster Farmers’ Union for Co. Antrim.

4.

IVOR BROOMFIELD

Ivor Broomfield is a dairy farmer from Armagh, Co. Armagh. He was elected as a Director of Dale Farm Cooperative in April 2020.

JAMES MURPHY

James Murphy is a dairy farmer from Tempo, Co. Fermanagh. He was elected as a Director of Dale Farm Cooperative in 2010 and is a former County Chairman of the Ulster Farmers’ Union for Co. Fermanagh.

DAVID REA

David Rea is a dairy farmer from Crossgar, Co. Down. He was elected as a Director of Dale Farm Cooperative in 2008. He was re-appointed as Vice-Chairman in April 2024.

The Board of Directors of Dale Farm Cooperative consists of 12 non-executive Directors. The Board of Directors of Dale Farm Limited consists of four nonexecutive Directors, all of whom are also Directors of Dale Farm Cooperative.

7.

ROBERT BRYSON

Robert Bryson is a dairy farmer from Banbridge, Co. Down. He was elected as a Director of Dale Farm Cooperative in 2013.

10.

FRED ALLEN

Fred Allen is a dairy farmer from Randalstown, Co. Antrim. He was elected as a Director of Dale Farm Cooperative in 2009. He was re-appointed as Chairman in April 2024.

8.

NORMAN THOMPSON

Norman Thompson is a dairy farmer from Banbridge, Co. Down. He was elected a Director of Dale Farm Cooperative in 2015. He is Vice-Chair of the Dairy Council for Northern Ireland.

9.

EUGENE LYNCH

Eugene Lynch, an Independent Director of Dale Farm Cooperative since April 2020, is a Chartered Accountant with board leadership experience at Hughes Christensen, JP Corry Group Ltd, and The McAvoy Group Ltd.

DAVID ROWE

12.

11. ELLVENA GRAHAM OBE

David Rowe is a dairy farmer from Armoy, Co. Antrim. He was elected as a Director of Dale Farm Cooperative in 2014.

Ellvena Graham OBE, an Independent Director of Dale Farm Cooperative since April 2020, chairs Tourism NI and Catalyst, as well as working with a number of NI’s leading companies. She was formerly Head of Ulster Bank in NI.

AREA COUNCILS

AREA 1

DISTRICT 1

DISTRICT 2

DISTRICT 3

DISTRICT 4

DISTRICT 5

Philip Hanson

David Rowe

Gary Thompson

Mark McIntyre

Robert McConaghy

Wallace Gregg

Robert Crawford

Cyril Andrew Orr

Ben Scott

Thoburn McCaughey

Bryan Graham

Caryn Webster

Jonathon Moore

Arron Graham

Fred Allen

John Ferguson

Andrew Boyd

David Wilson

James Bell

Harold Johnston

James Bamford

Hall Taylor

Trevor McNeilly

Robert J Smyth

AREA 2

DISTRICT 6

DISTRICT 7

DISTRICT 8

DISTRICT 9

DISTRICT 10

Chris Hamilton

Jason Rankin

Martin Sloan

Stuart Simpson

Thomas Connolly

Stuart Orr

David Rea

Chris Crea

Simon Stevenson

John Hanna

Trevor McConnell

Robert Bryson

Andrew Murray

Geoffrey Malcomson

Andrew Shanks

Alan Johnston

Colin Johnston

Seth Mathers

Gregg Somerville

Norman Thompson

George Mitchell

John Beckett

David McCann

AREA 3

DISTRICT 11

NAME

H Doupe

David Simpson

Matthew Carrick

Desmond Bloomer

Mervyn Robert Ewing

DISTRICT 12

Ivor Broomfield

B Morton

Lee McKinstry

James Brownlee

Raymond McKenzie

DISTRICT 13

DISTRICT 14

DISTRICT 15

Alan Latimer

Wayne Ferguson

Nigel Graham

Derek Edgar

George Henderson

James Murphy

Alan Graham

Ian Hamilton

Arnold Maxwell

Neville Robinson

Peter Coote

Martin McGirr

Peter Bleakley

AREA 4

DISTRICT 16

NAME

Bryce Kelso

William Hamill

Hugh Harbison

John McCaughern

Mark Patterson

DISTRICT 17

William Robert Wallace

Thomas Johnston

Adam Davis

R Sheppard

Richard Mulholland

DISTRICT 18

Steven Brown

Ronan Campbell

Paul Millar

Neil Gourley

T W Sterling

DISTRICT 19

Adrian McFarland

Ian Patterson

Stephen Brown

William Crawford

Andrew Wright

DISTRICT 20

Andrew Dale

David Stevenson

Tynan Roulston

William McCollumn

Scott Thompson

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

The Board is committed to adopting best practice in Corporate Governance as deemed practical and appropriate for a member owned cooperative.

THE BOARD

The Board meet monthly (except for July) with a formal schedule of matters specifically reserved for its decision. Additional meetings are held as required. The Board reviews trading performance, ensures adequate funding, sets and monitors strategy, examines major acquisition opportunities and formulates policy on key issues. To enable the Board to discharge its duties all members receive appropriate and timely briefing papers. The Group has appropriate insurance cover in place for Board Members.

The Board comprises 12 Directors, eight of whom are appointed by the farmer members through Area elections; two are elected by the members’ Area Councils acting collectively; and two Directors are appointed by the elected Directors. The term of office of elected Directors is four years while appointed Directors are appointed for not more than three years and can only serve a maximum of two terms.

The attendance of Directors at the 11 routine Board meetings in 2023/24 was as follows:

Fred Allen

David Rea

Ivor Broomfield

Stephen Brown

Robert Bryson

Ellvena Graham

Harold Johnston

Bryce Kelso

Eugene Lynch

James Murphy

David Rowe

Norman Thompson

The Chairman and Vice Chairman are both elected annually by the Board. The remuneration of the Directors of the Society is determined each year by the members at the Annual General Meeting (AGM). All farmer Directors are also suppliers of milk to Dale Farm Cooperative, but they and the appointed Directors are regarded as independent. Induction training is provided for newly elected/ appointed Directors and further training is provided as required.

The Board Committees Comprise:

Audit

Eugene Lynch

Robert Bryson

Ellvena Graham

Harold Johnston

Bryce Kelso

David Rowe

Nominations

Fred Allen

David Rea

Nick Whelan

THE AUDIT COMMITTEE

The Audit Committee meets at least twice a year and has specific terms of reference which include responsibility for reviewing the Annual Accounts prior to submission to the Board, monitoring the internal control systems and liaison with both external and internal auditors. The Committee satisfies itself on the independence of the auditors and monitors the level of non-audit fees. The internal auditors review key risk areas and relevant controls across the Group and report their findings to the Audit Committee, together with any recommendations for improvement.

THE NOMINATIONS COMMITTEE

The Nominations Committee makes recommendations to the Board on the appointment of “non-elected” Directors to the Boards of the Group subsidiary and associate companies, as well as senior executive appointments.

THE MANAGEMENT TEAM

The Group Chief Executive and management team, who are responsible for operating decisions and the effective functioning of the main activities in the Group, report to the Board.

DIALOGUE WITH SHAREHOLDERS

Communication with members is given the highest priority by the Board and the Annual Report gives a comprehensive review of the financial and operating performance of the Group for the year. The Board uses the AGM to have an

open dialogue with members and the Group has four Area Councils elected by the membership, which meet about four times a year with the elected Directors for their Area to discuss the affairs of the Society. In addition, “Open” Area Council meetings are held to which all members in the relevant Area were invited. The Society also keeps in

touch with members through the issue of the bi-monthly magazine “Dale Farm View” and via the Group Website www.dalefarm.com.

Any member wishing to contact the Company can do so at the registered office of the Company.

CHAIRMAN

Fred Allen

VICE-CHAIRMAN

David Rea

DIRECTORS

Robert Bryson

Harold Johnston

James Murphy

David Rea

David Rowe

Norman Thompson

Steven Brown

Eugene Lynch

Ellvena Graham

Ivor Broomfield

Bryce Kelso

CHIEF EXECUTIVE

Nick Whelan

CHIEF FINANCIAL OFFICER

Nasair Hussain (resigned 19 June 2023)

John Morgan (appointed 19 June 2023)

SECRETARY

Keith Agnew

AUDITORS

Ernst & Young LLP

Bedford House 16 Bedford Street

Belfast BT2 7DT

BANKERS

Ulster Bank 11-16 Donegall Square East Belfast BT1 5UB

Danske Bank Donegall Square West Belfast BT1 6JS

PNC Financial Services UK Ltd 34-36 Perrymount Road Haywards Heath West Sussex RH16 3DN

SOLICITORS

Tughans LLP

The Ewart 3 Bedford St Belfast BT2 7EP

COMPANY STATUS

Dale Farm Cooperative Limited is a registered co-operative society under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969

REGISTERED OFFICE

Dale Farm House 15 Dargan Road Belfast BT3 9LS

STRATEGIC REPORT

PRINCIPAL ACTIVITIES

Dale Farm Cooperative Limited is a registered co-operative society under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969. The principal activities of the Group include manufacturing an extensive range of dairy products for the retail, food service and food ingredients sectors and marketing and distributing these products to both domestic and international markets. The Group includes the overall parent, Dale Farm Cooperative Limited, and its subsidiary undertakings referenced in note 12. The Group also collects and markets members’ milk, supplies animal feed to farmers, and provides a range of other farm inputs and services.

FINANCIAL PERFORMANCE

The key performance indicators (“KPI”s) for the Group are:

OPERATIONAL PERFORMANCE

Group turnover decreased by 13% year on year, primarily due to falling dairy commodity prices. The Group profit before tax increased by £3,010k to £29,783k. The profit variance primarily reflects the following:

• A focus on higher returning divisions and value-added markets, coupled with continued emphasis on quality and exceptional levels of customer service;

• Corrective action in response to rapidly falling commodity prices in the early part of the year, including an intensive effort to mitigate and reduce exposure to the most volatile commodities;

• Cost efficiencies across the business, targeting all opportunities to make gains throughout the Group’s cost base;

• Leveraging the Group’s data, technology, and research and development offering, using these critical points of difference to drive decision making and innovation across our business processes;

• Rising sales volumes across the Group’s core divisions;

• In-year incremental gains from closing loss-making divisions in the previous financial year; and

• Proactive management of inflationary pressure through engagement with our commercial partners.

The average milk price paid to NI members decreased by 10.29ppl (22.6%) in 2023/24 reflecting difficult conditions and lower returns in global dairy markets during the year (2022/23: increase of 11.61ppl (34.3%)).

RISK MANAGEMENT

APPROACH TO RISK MANAGEMENT

The Group assesses each new and emerging risk according to overall risk appetite. The Group’s risk appetite is the amount of risk that would be acceptable in order to meet operational strategies and goals. The Board have assessed that the Group’s overall risk appetite is low. This means the Group will not accept risks where it is deemed there may be adverse consequences which could have a material impact on, amongst others, profitability, the Group’s farmer members and their milk pool, group reputation and brand, and key stakeholder relationships. This does not mean the Group is not exposed to risks with a potentially medium to high impact, but in these cases robust controls and mitigations are implemented to reduce residual risk to an acceptable level.

RISK MANAGEMENT GOVERNANCE

The Board retain overall responsibility for risk management oversight, which includes ensuring that an appropriate risk appetite has been set and that suitable policies relating to risk are in place. The Board has delegated responsibility for monitoring the Group’s risk management process and system of internal controls to the Audit and Risk committee.

The Audit and Risk committee report to the Board on the status of the risks identified within the Group’s risk register. This is maintained by senior management, supported by the Group’s Head of Risk. The Audit and Risk committee will also gain assurance over the Group’s internal controls through internal review, and audit procedures performed by external professionals.

Senior management are responsible for the day-to-day maintenance of the Group’s system of internal control and mitigation strategies for new and emerging risks. Senior management are supported by sub-committees and taskforces which have responsibility for tailoring mitigation plans for specific risks. A ‘three lines of defence’ model is used to facilitate effective risk management:

Level 1: provided by frontline staff and operational management, including systems, internal controls, and culture developed and implemented across operations.

Level 2: provided by risk management and compliance functions, including financial control measures, health and safety, quality measures, compliance checks, cyber, and IT management.

Level 3: provided from risk assurance through the Group’s internal audit function

RISK ASSESSMENT

The Group operate a live rolling risk register which tracks the status of risks. When new risks are identified by management, a thorough assessment is made which considers the likelihood, together with the potential impact. The assessment is based on a range of both qualitative and quantitative factors depending on whether the risk relates to:

• Strategic;

• Financial;

• Commercial and operations; or

• Regulatory and compliance

The risk is then assigned an impact and likelihood risk scoring between 1 and 9. This allows for appropriate prioritisation of the risk, so that it can be managed and mitigated effectively. All risks are assigned an ultimate owner within the Executive Leadership Team (ELT), who is responsible for the development and implementation of effective mitigation plans.

The Audit and Risk committee receive regular updates on the status of items on the risk register, as well as the progress of ongoing mitigation plans.

PRINCIPAL RISKS

The following represent the principal risks identified by the Group:

BUSINESS

PERFORMANCE RISK

The Group faces a number of business performance risks due to internal and external factors including competitive pressures in markets in which it operates. The cost-of-living inflationary crisis, and geopolitical issues, such as the ongoing conflicts in Ukraine and the Middle East, also pose significant risks to the performance of the global economy.

These risks are managed through several different measures: ensuring the appropriate management team is in place; business planning and regular forecasting; financial controls; key performance indicators; monthly reporting and timely corrective action when variances occur.

BUSINESS CONTINUITY RISK

While there is a reliance on physical infrastructure, the Group operates seven geographically autonomous production facilities which helps mitigate business continuity risks. The Group also ensures that there is adequate knowledge throughout the management team and sufficient IT support and back up capability available should an unforeseen event occur. Management conducts ongoing reviews of business continuity and IT disaster recovery plans and participate in industry wide crisis management exercises.

PRODUCT QUALITY

The Group has stringent controls in place to monitor product quality and safety throughout the production process. The Group continuously invests significant levels of technical knowledge, resource and attention to ensure that quality standards remain high.

HEALTH AND SAFETY RISK

The Group is committed to ensuring a safe working environment. These risks are managed by the Group through the promotion of a best practice health and safety culture, risk management, extensive safety training and well-defined health and safety policies.

CYBER SECURITY AND CRISES MANAGEMENT

The activities of the Group rely on various IT systems. In the current environment, all organisations are vulnerable to cyber-attacks, which could jeopardise the integrity of systems and potentially result in data breaches or disruption to activities. The Group has both cyber security and data protection policies in place which provide frameworks and controls to protect against this risk. The Group also have a dedicated IT team, who are responsible for the security of IT systems, through implementing and maintaining best practice in relation to cyber processes. The Group has detailed disaster recovery and crises management plans in place which are thoroughly designed and regularly tested.

CLIMATE RELATED RISKS

Climate related risks are discussed within the Task Force on Climate related Financial Disclosures report on page 63.

KEY MANAGEMENT DEVELOPMENT AND EMPLOYEE RETENTION

The long-term success of the business depends on the Group’s ability to attract, retain, and develop talent. This risk is managed through succession planning and the pursuit of best practice in HR, through group wide development plans which are regularly reviewed and updated. These are accompanied by specific policies in areas such as recruitment, training, management development and performance management.

FINANCIAL RISK MANAGEMENT POLICY

The Group’s principal financial instruments comprise cash, trade debtors and creditors, and certain other debtors and accruals. The main risks associated with these financial assets and liabilities are set out below.

PRICE RISK

The Group’s exposure to foreign currency risk arises primarily from revenues from customers denominated principally in Euro. The Group has a policy of entering into forward currency contracts to reduce this risk.

FOREIGN CURRENCY RISK

The Group’s exposure to foreign currency risk arises primarily on revenues from customers denominated principally in Euro. The Group has a policy of entering into forward currency contracts to reduce this risk.

CREDIT RISK

Credit risk arises principally on third party derived revenues. Group policy is aimed at minimising such risk through the application of satisfactory creditworthiness procedures, including where appropriate, taking out credit insurance cover. The Group monitors the levels of credit to individual customers within their approved credit limits, so as to ensure the Group’s exposure to bad debts is minimised.

LIQUIDITY RISK

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group aims to mitigate liquidity risk by managing cash generated by its operations and applying cash collection targets throughout the Group. The Group also manages liquidity risk via revolving credit facilities.

CASH FLOW RISK

Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability, such as future interest payments on variable rate debt. The Group manages this risk, by reviewing short and medium term cashflows and taking appropriate action as necessary. Particular attention is paid to headroom within debt facilities.

TASK FORCE ON CLIMATERELATED FINANCIAL

DISCLOSURES (“TCFD”)

INTRODUCTION

In 2015, the Financial Stability Board (FSB) established the TCFD to develop recommendations for more effective climate-related disclosures. These aim to promote more informed decisions, and better consideration of the risks and opportunities from climate change within organisations, while, in turn, enabling stakeholders to understand better the concentrations of carbonrelated assets and exposures to climate-related risks, by providing a common global framework.

Companies within the scope of the TCFD are required to make climaterelated disclosures structured around four thematic areas, representing core elements of how companies operate. These are:

Governance

Strategy

Risk management

Metrics and targets

The TCFD further recommends eleven specific disclosures across these four core elements which allow companies to report on how they are considering, assessing, and addressing climate-related risks and opportunities.

The Board recognises the very real risks, but also opportunities, that climate change will pose both to the Group and the wider dairy industry, and understands the key role the Group will play in the industry’s response to those challenges moving forward. The Board also recognises that the Group is still early in this journey, and the importance of continuing to evolve and enhance the Groups processes, policies, and

controls with regards to climate change over time, allowing for reporting of the Groups progress, while also allowing it to effectively respond to the risks and opportunities arising from climate change.

The Board confirms that Dale Farm Cooperative Limited has reported on climate-related financial disclosures consistent with the TCFD recommendations. A summary of the Group’s progress against the eleven disclosure recommendations is presented below.

GOVERNANCE

Disclose the organisation’s governance around climaterelated risks and opportunities.

a) Describe the board’s oversight of climate-related risks and opportunities.

The issue of climate change is central to the operations and activities of the Group, as well as its key stakeholders, and response to the issue requires a high degree of oversight from the Board. During the current financial year, a Sustainability Committee, comprising members of the Board and Executive Leadership Team, as well as the Group’s Sustainability department, has been established and meets quarterly, with climate risks and opportunities as a central agenda point. The current focus of this committee is to further develop the Group’s risk management processes in response to climate risk, along with considerations of climate impacts on the Groups forward strategy. This focus will develop over time as the committee takes shape. The Board receives presentations on specific areas of focus in relation to climate change. This process is coordinated by the Group’s Head of Sustainability, with presentations from senior members of the Group’s commercial, operational, and financial teams to bring awareness

of specific risks and opportunities in relation to climate change in these areas. The Board monitors these issues and challenges management processes and controls, enabling more effective oversight. liquidity risk via revolving credit facilities.

b) Describe management’s role in assessing and managing climaterelated risks and opportunities.

Management is engaged in risk management exercises with regards to climate-related issues impacting the Group. In 2021, a Sustainability department was established within the society, with an experienced Head of Sustainability recruited externally to lead it. In the years since, the department has been further resourced and its role and responsibilities within the business have broadened. The CEO and Executive Leadership Team (ELT) receive updates from the Head of Sustainability with regards to risks and opportunities arising from climate change. This is laid out formally at the ELT’s quarterly sustainability meeting where risks and opportunities are a key agenda item. Additional meetings are scheduled, if required, as and when challenges arise, new information comes to light, or the Group becomes aware of changes in its environment, via legislation or otherwise, which requires a more immediate response.

Climate change impacts are considered in the Group’s short, medium, and long term strategy. As well as robust risk management programmes being initiated in the short term, innovative discussions with several stakeholders are being led by the CEO and the ELT, to explore ways to both mitigate the risk posed to the Group by climate change, but also realise the opportunities presented by the Group’s unique position. These discussions receive oversight from the Board and are an ongoing process.

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (CONTINUED )

STRATEGY

Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material.

a) Describe the climate related risks and opportunities the organisation has identified over the short, medium, and long term.

Climate-related risks to the Group fall into two categories:

Physical risks: The consequences of both hotter, drier summers, or warmer, wetter winters, as well as increasing frequency of floods, storms, and drought; and

Transitional risks: The consequences of government, customers, suppliers, financiers, and other stakeholders approaches to addressing climate change and related risks.

With regards to the physical risks described above, the greatest risk posed to the Group by these phenomena, over the short, medium, and long-term outlook, are the knock-on impact that they would have on the Group’s farmer members production capabilities, and ultimately the impact this would have on the timing and quantum of the Group’s aggregated milk pool. The Group has an ambitious outlook for the future, and at the heart of this is the aim for its farmer members to continue to grow milk volumes organically, in a sustainable manner through milk pool efficiency. Exceptional weather events and a changing climate pose a real risk to that ambition. In response to these risks, the Group launched the ‘Future Strong’ farm sustainability programme in 2023. The two central themes of the

programme in its first year have been to develop a detailed understanding of members’ farming practices as they relate to the environment, and to start to build a programme of sustainability at farm level.

The first step in the programme was to issue a farm sustainability survey to all members. The aim of the survey is to provide the Group with a detailed understanding of the production systems used across the milk pool. To date the Group have had over 95% participation in the survey. The results will be used to target support in the coming months, in those areas which will have the greatest impact in reducing greenhouse gas (GHG) emissions, and enabling the society to better assist its members achieve enhanced profitability through sustainable production efficiency.

Regarding the risks posed to the Group’s physical infrastructure, the Group has undertaken a hazard assessment to determine the key climate hazards for group locations, and to establish a baseline for climate-related risk assessments. The assessment of climate hazards has been tailored to be specific to the Group’s key sites and important locations across Northern Ireland. It provides tangible information relevant to the timeframes that the Group works to, and for which climate projections are available (short-term (2030s), medium-term (2050s) and long-term (2080s)). Over 1000 sites across Northern Ireland have been used to identify assessment areas.

These sites include:

• Farmer member locations

• Key ports for transporting goods in and out

• Major or strategic warehousing and storage facilities

This information, along with the results of the Future Strong farm sustainability survey will inform the development of the Group’s formal climate-related risk and opportunities register.

Transitional risks will also form part of these assessments. These are being monitored and addressed by both the Board and senior management. The Group has robust, long-term relationships with all its key stakeholders. The Group engages with these stakeholders on climate-related issues. These strategic partnerships allow for greater transparency and understanding on the Group’s climate journey, and what may be required from key partners in the future. These assessments will continue to broaden in the coming year as the Group builds out its climate-related risk register.

In relation to opportunities, the Group is currently developing the next stages of its forwardlooking strategy. Climate change and sustainability considerations contribute to this process, and although there are several significant risks, there are also tangible opportunities. The Group’s strategy is being formulated, with oversight from both the Board and the ELT.

It is likely that, with sustainability and climate change at the core of decision-making, the following will be key components of the overall strategy:

• A focus on on-farm and infactory efficiencies, leveraging innovative technology and data to ensure efficient and sustainable production processes are at the forefront of the Group’s operations.

• Exploring new technologies and diversification opportunities that may allow the Group to invest in new areas.

These discussions are ongoing and are expected to be progressed in the coming months.

b) Describe the impact of climaterelated risks and opportunities on the organisation’s businesses, strategy, and financial planning.

Financial projections, including those used for budgeting purposes and strategic 5+ year planning, are based on financial models. Each of these models makes a number of forward-looking assumptions about a broad range of variables. Included within these variables are considerations of climaterelated risks and opportunities, with assumptions adjusted for the best current estimate of their impact. Key variables such as milk pool growth, energy pricing, customer specific requirements, sustainable packaging legislation, as well as the wider needs of key stakeholders, are all factored into the Group’s projections.

The risks and opportunities outlined in section a) above, have, to varying degrees, the capacity to materially impact the Group’s business, strategy, and financial planning. Risks that could, for example result in a cap on the ability of the Group’s farmer members to grow their milk pool, or for the Group to expand its production, along with any punitive actions by key stakeholders with regards to climate change, could have significant impact. At the same time, opportunities that allow the Group to leverage its unique position as a member owned cooperative, or diversify into new technologies or sustainable, green business practices, could positively impact group performance and profitability.

These factors are being considered in detail as part of the Group’s strategic planning and risk management programme. The risks and opportunities formally identified will be built into decision making and strategy formation. The Group’s understanding of climate

risks and opportunities both physical and transitional have informed the requirements of the Future Strong farm sustainability programme, and recent transformative activities at the Group’s processing facilities. It will be a core focus moving forward.

c) Describe the resilience of the organisation’s strategy, taking into consideration different climaterelated scenarios, including a 2°C or lower scenario.

The Group are currently engaged in a process to stress test its strategy in the face of a number of different climate-related scenarios, including temperature increases across a range of potential outcomes. The Group have appointed external professional consultants in this regard and are currently working through the climate related scenarios described above with available data at a local level. The Group intends to report on these scenario assessments in future periods.

RISK MANAGEMENT

Disclose how the organisation identifies, assesses, and manages climate-related risks.

a) Describe the organisation’s processes for identifying and assessing climate-related risks.

The Group have a robust process in place to identify and assess climaterelated risks. This is in line with the risk management policy applicable to all risks that the Group faces.

As described in the Governance section, climate-related risks and opportunities are a key agenda point for the Sustainability committee. It is the responsibility of the Head of Sustainability to flag any current issues or threats from climaterelated risks to the committee so that these can be appropriately assessed. In addition, new business cases, strategic updates, changes

in key stakeholder relationships, and other business-as-usual processes are scrutinised and assessed for climate-related risks.

The Group operate a live risk register which tracks the status of risks. When new risks are identified by management, a thorough assessment is made which considers the likelihood, together with the potential impact. The assessment is based on a range of both qualitative and quantitative factors depending on whether the risk relates to:

• Strategy

• Financial planning;

• Commercial and operations; or

• Regulations and compliance.

The risk is then assigned an impact and likelihood risk scoring between 1 and 9. This allows for appropriate prioritisation of the risk, so that it can be managed and mitigated effectively. All risks are assigned an ultimate owner within the ELT, who is responsible for the development and implementation of effective mitigation plans.

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (CONTINUED )

b) Describe the organisation’s processes for managing climate-related risks.

Climate related risk is a significant risk on the overall risk register of the Group. The Group is developing a climate related risk and opportunity register which is a subset of the main risk register. This will be used as a tool to track the development of significant risks and opportunities, and also to monitor progress against mitigation plans. Further details are available in the risk management section of the Strategic report on page 58 and 59.

c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management.

The Group’s processes are the same across all identified risks, including climate-related risks. This is described in the risk management section of the Strategic report on page 58 and 59.

METRICS AND TARGETS

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

a) Disclose the metrics used by the organisation to assess climaterelated risks and opportunities in line with its strategy and risk management process.

The Group has established a qualitative and quantitative approach to the scoring/rating of risks in terms of both the likelihood and impact of a given risk occurring. Risks are scored both on an inherent basis, before considering the mitigating

internal controls, and then on a residual basis, after considering the effectiveness of mitigating controls.

Likelihood is related to the timescale within which a given risk may occurwith more imminent occurrence leading to a higher risk rating. Impact is assessed on both a qualitative and quantitative basis, depending on which of the four categories, outlined in the Risk Management section above, the risk relates to. Quantitative metrics are based on the potential financial impact from the risk, while qualitative metrics consider a range of factors including potential direct and indirect impact on stakeholders and employees, outcomes of adverse regulatory inspections, consideration of impact on brand and reputation, and various other considerations likely to have a material effect on the Group. Risks with more material impact receive higher risk ratings. The highest combined risk rating is nine.

Climate-related opportunities are also assessed based on their qualitative and quantitative merits. Business case assessments are required for all major strategic decisions, capital projects, and material contract negotiations/ renewals. These are presented to the Board for approval. Potential opportunities, as well as risks, from material climate-related matters are considered within these business case presentations.

b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.

The Group’s greenhouse gas emissions are available in the Streamlined Energy and Carbon Reporting (SECR) section of the Directors’ report on page 72. The Group is aware of the risks associated with GHG emissions and recognises

the importance of the society continuing efforts to reduce emissions moving forward. The Group is making considerable progress in this area, with year-on-year emissions from scope 1, 2 and 3 down 6.4% or 2,451 tonnes of carbon dioxide equivalent.

c) Describe the targets used by the organisation to manage climaterelated risks and opportunities and performance against targets.

The Group formally committed to working with the Science-Based Targets Initiative (SBTi) in February 2024. Near-term science-based emissions reduction targets will be set in line with the SBTi criteria and recommendations for validation by SBTi.

In 2023 Dale Farm set the following targets which will be revised as part of the SBTi process:

• Reduction in absolute GHG emissions from the Group’s processing facilities and owned transport by 50% by financial year 2027/28 from a 2017/2018 baseline; and

• A reduction in the GHG intensity of milk produced on farm by 31% by 2030 from a 2020 baseline.

Work is currently ongoing to ensure accuracy of the Group’s GHG inventories. The Group has a record of success in reducing GHG emissions from its factories. Since 2019/20 reporting under the Streamlined Energy and Carbon Reporting (SECR) requirements demonstrates an emissions reduction of over 25%:

TONNES OF CO2(E) PER FINANCIAL YEAR

OUR STRATEGY

19/20 20/21 21/22 22/23 23/24

Detailed pathways to meet the Group’s GHG reduction targets are currently being developed. This will include setting KPIs required to monitor progress against those targets.

SECTION 172(1) STATEMENT

The directors, having prepared the strategic report, have complied with s414CZA (1) - Section 172(1) statement of the Companies Act 2006 (“The Statement”). The Statement has been prepared for the Group as a whole and provides that a director must act in a way consistent to promoting the success of the Group while having due regard to the various stakeholder groups engaged. The key factors considered throughout include:

• The likely consequences of any decision in the long term;

• The interests of the Group’s employees;

• The need to foster the Group’s business relationships with suppliers, customer and others;

• The impact of the Group’s operations on the community and the environment;

• The desirability of the Group maintaining a reputation for high standards of business conduct;

• The need to act fairly between members of the Group.

The long-term strategy of the Group is to pay a competitive milk price and add sustainable value to our members’ milk through supply chain excellence, consumer led branded and own label innovation, and building added value positions in the consumer and nutrition markets. Exceptional service levels and the highest quality products are central to these aims, with well invested production facilities and a skilled workforce crucial to maintaining these high standards. The strategy has been directly developed to align with the interests of the key stakeholders of the Group. The inclusion of milk price and group profitability as key performance metrics, and a focus on collaboration with our stakeholders to achieve these metrics, underlines the commitment of the Group to delivering on its strategy.

BOARD MATTERS

The Board charges the Executive Leadership Team with the day-to-day management and decision making of the Group; however, the Board retains control over key strategic decision making and considers these at monthly board meetings throughout the year. Key decisions in the 2023/24 financial year are summarised, with reference to Section 172(1) as follows:

SECTION 172(1) STATEMENT (CONTINUED )

KEY DECISIONS/ACTIONS IMPACT

Agreeing the Dale Farm Red Tractor base milk price for milk payments at each Board meeting.

Review and approval of capital expenditure projects presented by the Executive Leadership Team at each Board meeting.

The Board makes the ultimate decision on this price as the milk payment is a key element in fostering the Group’s relationship with its main suppliers, i.e., the farmer members. The volume and quality of the milk supply is vital to the success of the Group.

Board review and approval of these projects is a vital part of the long-term decision-making responsibilities of the Board. This ensures the Board fulfil the requirements of contributing to the short and long-term success of the Group.

STAKEHOLDERS AFFECTED

Suppliers & Shareholders

A range of stakeholders are affected by this decision making across various projects, including shareholders, customers, suppliers, employees and wider communities

Oversight of treasury, including cash management and compliance with banking covenants.

Review and approval of strategy.

Consideration of inflationary pressures on both the Group and its farmer members.

Approval of the Annual Report & review, update and approval of the Group risk register through the Audit Committee processes.

The Board receives updates on the Group’s banking position throughout the year, ensuring the long-term funding requirements of the Group are met, and that the Group remains compliant with its covenants.

The Board has a major role to play in the strategic priorities and direction of the Group, ensuring all proposals align to the ethos and values of the society, while providing robust challenge and input. The Board has made a significant contribution to this process in the year and discussions to conclude the medium to long term strategic priorities of the Group are ongoing.

These ongoing reviews ensure that proper consideration is given to any risk around group operations, cashflow and milk price paid to farmer members.

This process and approval by the Board is key in ensuring compliance with the Board’s responsibilities under Section 172(1) of the Act. The annual report and ongoing group risk review encompass all operations across the Group, and as such are relevant to all aspects of the Board’s responsibilities. Risk management is a key function of the board and senior leadership.

Indirectly affected all group stakeholders

Some level of impact on all group stakeholders.

The Board considered, at each of its regular meetings, reports from the Executive Leadership Team on the commercial, financial, and operational performance of the Group, as well as applications for new members, and various other business matters and ad-hoc items requiring Board consideration.

These regular agenda points ensured that the Board considered all relevant matters in the discharge of its duties, in line with the factors outlined in Section 172(1) of the Act.

Some level of impact on all group stakeholders.

Some level of impact on all group stakeholders.

Some level of impact on all group stakeholders.

STAKEHOLDER ENGAGEMENT

The Group recognises that effective engagement with key stakeholders, including farmer members, suppliers, customers, employees, and communities is vital in achieving the overall group strategy. The Group has actively engaged with these stakeholders throughout the year across a variety of platforms.

EMPLOYEES

The Group acknowledges that its people play a central role in the success of the business, and recognises that group employees’ exceptional input, dedication and commitment, ensures the business continues to grow and achieve strategic objectives.

The Group are committed to and continue to invest in training and development for employees, providing pathways for learning across all levels of the business through the Group’s new Learning Management platform, Open LMS, together with tailored programmes for development. Invest NI continue to support the Group in this aim through their Skills for Growth Programme.

“Rewarding the Legen-dairy”, an employee reward and recognition scheme was launched in 2023/24, to recognise the hard work and dedication employees put into their everyday roles, and to acknowledge those that demonstrate the Group’s values to a consistently high standard.

Employee engagement is key to the success of the Group. In 2023/24, the Group received feedback from 75% of employees through its engagement survey MySay. The survey provided an engagement score of 74%, the highest rating in the four years of the Group conducing the survey. MySay continues to provide critical insights into engagement for the Group, and what is important to their people;

providing direction to the business on areas that require action.

“Thrive - Live Well, Work Well”, is the Group’s health and wellbeing programme providing an annual calendar of activities and guidance. Through the Group’s partnership with the charity and social enterprise, Inspire Wellbeing, the Group continues to provide an Employee Assistance Programme which is a valuable tool to support staff both personally and professionally on physical, mental, and financial health.

The Group continue to engage with their employees internally through a company app, Connected. The app provides the forum to share all formal and informal messaging, and is an interactive tool to drive engagement between group employees, while also offering access to other Dale Farm portals, such as payroll, recruitment opportunities, benefits and the HR management information system, Success Factors. Success Factors is the platform the business uses for performance management, providing opportunities for development, coaching, mentoring and timely feedback.

The Group use external communication channels including dedicated Dale Farm Careers social media channels to attract talent to the business.

CUSTOMERS

Exceeding the expectations of all our customers is key to having a sustainable and profitable business. To manage this process the Group has categorised its customers into four groups and has developed an appropriate engagement plan for each group of customers. The customer groups are strategic customers, key partners, key accounts and trading customers.

The level of engagement and resource is defined for each

customer group, including level and frequency of contact, level of account management and planning, the approach to new product development, and risk management.

In addition to current customer engagement and development, there is a program of new customer and business development to support the growth of the business.

FARMER MEMBERS

Effective engagement with our farmer members is key to the successful operation of the Group’s supply chain and achievement of the Group’s strategic objectives. On a micro level, the Group has a dedicated producer services team who actively engage with the members providing our milk pool on a day-to-day basis assisting members with milk quality issues, preparing for Red Tractor farm audits, attending member meetings and other general enquiries.

On a macro level, the Board of Directors is largely made up of dairy farmers representing members, and as such provide a vital link for engagement with the wider co-operative membership. Communication with the members is given the highest priority by the Board and the Annual General Meeting is utilised to have open dialogue with members. The Group has four Area Councils elected by the membership, which meet approximately four times a year with the elected directors for their Area to discuss the affairs of the society. In addition, “Open” Area Council meetings are held to which all members in the relevant Area are invited. All meetings through the year took place as normal. The society also keeps in touch with members through the issue of the bi-monthly magazine, Dale Farm View; via the members portal of the Group website www.dalefarm.com; and via the producers iMilk app.

SECTION 172(1) STATEMENT (CONTINUED )

SUPPLIERS

Regarding our non-farmer member supplier base, these suppliers are key to the provision of ingredients, packaging, energy and any other required operational inputs across the Group. The Group continues to collaborate with its network of suppliers, ensuring that a high standard is maintained across all areas including health, safety, environment, ethics and labour. We are proud to be accredited with the internationally recognised Sedex Ethical Trading standards.

COMMUNITY

The Group is committed to supporting the communities in which it operates, and has continued to engage in, support and drive numerous initiatives during the 2023/24 year. Group employees surpassed last year’s fundraising milestone with £53k raised this year alone for Cancer Focus NI through a broad range of fundraising activities, engaging both employees and farmer members. The Group remain committed to FareShare Northern Ireland, through the weekly provision of staple products, which are redistributed to charities and disadvantaged groups to help tackle food poverty. In 2023/24 the Group’s contribution amounted to 56,119 equivalent meals, 101.6 tonnes C02e avoided, and assistance to 135 charities.

The Group are dedicated to working in partnership with educational institutions to harness connections and promote career opportunities, both within the Group and the wider

food and drink industry. The Group proactively seek to identify and nurture future talent, facilitating one-year undergraduate work placements for students across several departments including laboratory, procurement, health & safety, IT and marketing. The Group also supports a range of short-term work experience opportunities for GCSE and A-level students. 2023/24 marked the third year of the Group’s Local Roots Community Support Fund, which offers £20k of funding to three schools close to our production sites over three years. The Group are active members of Arts and Business NI, Business in the Community as well as Women in Business NI, building networks to our wider community as well as supporting career and personal learning and development opportunities.

ENVIRONMENTAL/ SUSTAINABILITY

Responding appropriately to the challenge of climate change and other linked environmental issues such as biodiversity loss and water pollution is central to the on-going well-being of the Group, its farmer members, and the rural communities it directly and indirectly serves.

FUTURE STRONG

2023 saw the launch of the Group’s ‘Future Strong’ sustainability programme, with an initial focus on farm sustainability. The two central themes of the first year of the programme have been to develop a detailed understanding of the

Group’s suppliers’ farming practices as they relate to the environment, and to start building sustainability from the ground up by focusing on how nutrients are managed on farm.

Participants in the programme have received a payment within the base milk price from January 2024 for the following actions:

• A commitment to undertaking Greenhouse Gas(GHG) footprinting, and allowing the Group access to anonymised input data and results.

• Completion of the farm sustainability survey. This survey asked for information on those elements of farming practice, for calendar year 2022, that interact with the environment under a number of different areas.

• Provide soil testing results and slurry application rates to enable the Group to produce a Nutrient Management Plan for each farm.

To date the Group have had over 95% participation from its suppliers on the points above.

PROCESSING FACILITIES

Environmental infrastructure improvements are well advanced at Dunmanbridge. New wastewater drainage and collection sump construction is complete and a new swale that treats stormwater releases is complete and operational. Work has commenced on the Dunmanbridge water treatment plant upgrade with a new aeration tank and anoxic tank already complete. Work is ongoing on a new membrane

facility. A standby generator has been installed at Dunmanbridge water treatment plant; this unit can meet the full demand of the plant in the event of a grid outage.

ISO 14001 ENVIRONMENTAL MANAGEMENT CERTIFICATION

All group sites fall under one group wide ISO 14001 certified Environmental Management System (EMS), ensuring a consistent approach to environmental management across the business.

COMPLIANCE SCHEMES

Dunmanbridge successfully complied with the UK Emissions Trading Scheme (UK ETS) and all sites with Climate Change Agreements (CCA) met the CCA requirements. Our obligation under the Energy Savings Opportunity Scheme (ESOS) phase 3 was discharged through the completion and submission of an ESOS assessment. All NI based sites have maintained compliance with the site-specific Pollution Prevention and Control (Industrial Emissions) permits.

By order of the Board

K Agnew Secretary

Date: 12 June 2024

DALE FARM COOPERATIVE LIMITED - REGISTERED NO. IP350

DIRECTORS’ REPORT

The

directors present their report and the audited financial statements for the year ended 31 March 2024.

RESULTS AND DIVIDENDS

The Group reported an operating profit before exceptional items of £37,548k, which was an increase of £2,070k on the previous year. The profit after taxation for the year amounted to £24,171k (2023 - £21,308k) which is to be transferred to reserves. The directors do not recommend the payment of a dividend (2023 - £nil).

REVIEW OF 2023/24 YEAR AND FUTURE DEVELOPMENTS

Dale Farm Cooperative Limited has continued to trade positively in the markets in which it operates, and the Group made a satisfactory return on sales during the year, despite many headwinds, not least ongoing inflationary pressures, and rising interest rates. The directors are satisfied with the performance of the Group during the financial year and of its position at the year end.

The directors continue to implement a proactive and forward-thinking strategy to ensure the Group can effectively meet the challenges posed by volatility in commodity markets, as well as the ongoing inflationary pressures on costs. Discussions are ongoing regarding the medium to long term strategic priorities for the Group, but the directors have confidence that the future outlook remains positive.

RESEARCH AND DEVELOPMENT

The Group maintains an ongoing programme of innovation in added value dairy products and further widened its portfolio of products offered as follows:

PRODUCT DEVELOPMENT

DIRECTORS

For the year ended 31 March 2024 the directors of the society were:

Elected by - Area 1

Elected by - Area 2

Elected by - Area 3

Elected by - Area 4

Elected by Conference of Area Councils

Appointed

Fred Allen, Harold Johnston

Robert Bryson, Norman Thompson

Ivor Broomfield, James Murphy

Steven Brown, Bryce Kelso

David Rea, David Rowe

Ellvena Graham, Eugene Lynch

The term of office of one of the elected directors from each of Area 3 and Area 4 ended on 31 March 2024. Ivor Broomfield was re-elected as director for Area 3 and Steven Brown was re-elected as a director for Area 4, effective 1 April 2024.

In addition, effective 1 April 2024, Fred Allen was re-elected as Chairman and David Rea was re-elected as Vice Chairman of the society which was ratified at the Board meeting on 15th April 2024.

FINANCIAL RISK MANAGEMENT

Details of financial risk management is provided in the strategic report on page 60.

EMPLOYMENT POLICY

The Group fully supports and complies with all legislation which is designed to promote equality of opportunity.

Health and safety awareness and best practice is actively promoted at all group sites. Other employee relevant information and policies, including matters relating to payroll and pensions, are conveyed via the employee handbook and internal communications.

The Group gives full consideration to applications for employment from disabled persons where the candidate’s particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.

Where existing employees become disabled, it is the Group’s policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

EMPLOYEE INVOLVEMENT

The Group is committed to involving all employees in the performance and development of the Group. Employees are encouraged to discuss with management matters of interest to the employee and subjects affecting day-to-day operations. The policies around employee involvement include performance improvement groups, personnel surveys, and a programme of continuous improvement. Discussions also take place regularly with trade unions representing employees on a wide range of issues.

DISCLOSURE OF INFORMATION TO THE AUDITORS

The directors confirm that so far as they are aware, there is no relevant audit information of which the Group’s auditor is unaware. The directors have taken all necessary steps in order to make themselves aware of any relevant audit information and to establish that the Group’s auditor is aware of that information.

GOING CONCERN

While market volatility and inflationary pressures continue to challenge the global dairy industry, the directors feel substantial progress has been made in mitigating potential risks to the Group. The Group is in a strong position to pursue its strategic objectives. The Group has adequate resources, strategic and wellembedded relationships with key stakeholders, and a strong order book to enable it to trade positively going forward. The Group’s financial forecasts and projections show that the Group continues to be cash generative and that it will operate within its banking covenants and meet its obligations until 30 September 2025. Thus, the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.

SECR (STREAMLINED ENERGY AND CARBON REPORTING)

The following section represents a summary of the Group’s reporting obligations as required under the Companies (Directors’ report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

In line with SECR requirements, energy consumption data and associated scope 1, 2 and 3 emissions were collated for all Dale Farm UK operations and are tabularised below. The intensity ratio has increased by 7.9% since last year. This is primarily down to falling revenue year on year, as a result of reduced commodity market returns. Tonnes of CO2 equivalent have continued to fall (6.38% year on year reduction).

For the year ended 31 March 2024

For the year ended 31 March 2023

The Group continue to monitor energy performance and comply with carbon compliance schemes. The sustainability team has grown in size in the year and is driving the energy and emissions strategy across the Group. The Group recognises its important role in the move towards net zero in the coming years- reducing emissions and focusing on sustainability remain central to group strategy.

DIRECTORS’ INDEMNITIES

Directors’ and officers’ insurance cover has been established for all directors to provide appropriate cover for their reasonable actions on behalf of the society.

AUDITORS

The auditors, Ernst & Young LLP, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual General Meeting.

By order of the Board

K Agnew Secretary Date: 12 June 2024

BOARD MEMBERS’ RESPONSIBILITIES STATEMENT

The board are responsible for preparing the Directors’ report and the financial statements in accordance with applicable law and regulations.

Company law requires the board to prepare financial statements for each financial year. Under that law the board have elected to prepare the Group financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. 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 state of affairs group and the company and of the profit or loss of the Group and the company for that period.

In preparing these financial statements, the board are required to:

• Select suitable accounting policies in accordance with Section 10 of FRS 102 and then apply them consistently; and

• Make judgements and accounting estimates that are reasonable and prudent;

• Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• Provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and company financial position and financial performance;

• In respect of the Group and parent company financial statements, state whether FRS 102 has been followed, subject to any material departures disclosed and explained in the financial statements; and

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and/ or the Group will continue in business.

The board are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s and group’s transactions and disclose with reasonable accuracy at any time the financial position of the company and the Group and enable them to ensure that the company and the Group financial statements comply with the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969. They are also responsible for safeguarding the assets of the Group and parent company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

INDEPENDENT AUDITORS’ REPORT

OPINION

We have audited the financial statements of Dale Farm Cooperative Limited (‘the parent company’ and ‘the Society’) and its subsidiaries (the ‘group’) for the year ended 31 March 2024 which comprise the Group Income Statement, the Group and Society Statement of Comprehensive Income, the Group and Society Statement of Changes in Equity, Group and Society Statement of Financial Position and Group Statement of Cash Flows and the related notes 1 to 31, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the Group’s and of the parent company’s affairs as at 31 March 2024 and of the Group’s income and expenditure for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, 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.

CONCLUSION RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the Boards’ 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 Group and parent company’s ability to continue as a going concern for a period to 30 September 2025.

Our responsibilities and the responsibilities of the Board with respect to going concern are

described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue as a going concern.

OTHER INFORMATION

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Board is responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this 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 course of 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 this gives rise to a material misstatement in the financial statements themselves.

If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters in relation to which the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 requires us to report to you if, in our opinion:

The Society has not kept proper books of account; or A satisfactory system of control over its transactions has not been maintained; or The financial statements are not in agreement with the Society’s books of account; or

We have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF THE BOARD

As explained more fully in the Board member’ responsibilities statement set out on page 73. the Board is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Board 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 Board is responsible for assessing the Group’s and the parent 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 Board either intend to liquidate the Group or the parent 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 (UK) 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.

EXPLANATION

AS

TO WHAT EXTENT THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary

responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the Society and determined that the most significant are the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, the reporting framework FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’, the Bribery Act 2010, Money Laundering Regulations and UK Tax Legislation.

We understood how Dale Farm Cooperative Limited is complying with those frameworks by making enquiries of senior management, those charged with governance and those responsible for legal and compliance procedures. We corroborated our enquiries through review of the following documentation or performance of the following procedures:

obtaining an understanding of entity-level controls and considering the influence of the control environment;

obtaining an understanding of policies and procedures in place regarding compliance with laws and regulations, including how compliance with such policies is monitored and enforced; obtaining an understanding of management’s process for identifying and responding to fraud risks, including programs and controls established to address risks identified, or otherwise prevent, deter and detect fraud, and how senior management monitors those programs and controls;

issuing confirmation letters to all known legal counsel in the year and reviewing responses for instances of non-compliance; and review of board meeting minutes in the year and to date of signing.

We assessed the susceptibility of the Society’s financial statements to material misstatement, including how fraud might occur which included:

• identification of related parties, including circumstances related to the existence of a related party with dominant influence; understanding the Group and Society’s business and entitylevel controls and considering the influence of the control environment; and considering the nature of the account and our assessment of inherent risk for relevant assertions of significant accounts. Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved journal entries testing, with a focus on journals meeting our defined risk criteria based on our understanding of the business’ inquiries of legal counsel and senior management of the company. Furthermore, to address the presumptive risk of management override we performed the following additional procedures: review of significant or unusual transactions, review of board meeting minutes, review of any correspondence from

regulatory authorities, review of correspondence from external legal counsel and performed a review of material related party transactions and balances.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org. uk/auditorsresponsibilities. This description forms part of our auditor’s report.

USE OF OUR REPORT

This report is made solely to the Society’s members, as a body, in accordance with Section 43 of Cooperative and Community Benefit Societies Act (Northern Ireland) 1969. Our audit work has been undertaken so that we might state to the Society’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 Society and the Society’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Michael Kidd (Senior Statutory Auditor) for and on behalf of: Ernst & Young LLP, Statutory Auditor Belfast

Date: 12 June 2024

GROUP INCOME

STATEMENT FOR THE YEAR ENDED 31 MARCH 2024

GROUP & SOCIETY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH

STATEMENT OF

CHANGES

IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2024

STATEMENT

OF CHANGES

IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2024

GROUP STATEMENT OF FINANCIAL POSITION

GROUP STATEMENT OF FINANCIAL POSITION (CONTINUED)

AT 31 MARCH 2024

The financial statements were approved and authorised for issue by the Board of directors and signed on their behalf on 12 June 2024 by:

Fred Allen Chairman David Rea Vice-Chairman

Date: 12 June 2024

Keith Agnew Secretary

SOCIETY STATEMENT OF FINANCIAL POSITION

FARM COOPERATIVE LIMITED - REGISTERED NO. IP350

SOCIETY STATEMENT OF FINANCIAL POSITION (CONTINUED)

AT 31 MARCH 2024

The financial statements were approved and authorised for issue by the Board of directors and signed on their behalf on 12 June 2024 by:

Fred Allen Chairman David Rea Vice-Chairman

Date: 12 June 2024

Keith Agnew Secretary

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2024

GROUP

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2024

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

1. ACCOUNTING POLICIES

DEFINITIONS

I Dale Farm Cooperative Limited is a registered society incorporated in Northern Ireland. The registered office is Dale Farm House, 15 Dargan Road, Belfast, BT3 9LS. The society’s activities include marketing and transport of milk, sales promotion, laboratory services, and other services to dairy farmers.

II ‘‘Dale Farm Limited’ is a private limited liability company which, as a wholly owned subsidiary of Dale Farm Cooperative Limited, carries out manufacturing, processing, distribution, and marketing activities. During the year under review it had three trading subsidiaries, Dale Farm (GB) Limited which sells and distributes milk, Ash Manor Cheese Company Limited which is involved in the cutting, packing and sale of cheese products, and Dale Farm Ice Cream Limited which is involved in the production, sale and distribution of a range of ice cream and frozen products. Dale Farm Limited also wholly owns two non-trading subsidiaries- Dale Farm Dairies (Ireland) Limited and Rowan Glen Dairy Products Limited. Dale Farm Ice Cream Limited wholly owns two further non-trading subsidiaries- Dale Farm Ice Cream (Ireland) Limited and Mullins Ice Cream Limited.

III ‘ United Feeds Limited’ is a wholly owned subsidiary of Dale Farm Cooperative Limited, which carries out manufacturing, distribution, and marketing activities in the animal feed sector.

BASIS OF PREPARATION AND GOING CONCERN

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with applicable accounting standards. The dairy industry experienced difficult trading conditions throughout 2023, with rapidly falling commodity market returns coupled with significant cost inflation and rising interest rates. Despite these challenges, the Group has continued to deliver positive trading results. This has been due to a combination of focusing on core divisions in which the Group has a proven track record of exceptional delivery and success, while also making concerted efforts to mitigate the risks posed by exposure to volatile commodity markets. The Group is proactively addressing cost challenges and targeting efficiencies across operations. Data, automation and new technology are being leveraged where possible and these areas will be crucial in the Group’s success into the future.

While market volatility and inflationary pressures continue to challenge the global dairy industry, the directors feel substantial progress has been made in mitigating potential risks to the Group. The Group is in a strong position to pursue its strategic objectives. The Group has adequate resources, strategic and well-embedded relationships with key stakeholders, and a strong order book to enable it to trade positively going forward. The Group’s financial forecasts and projections show that the Group continues to be cash generative and that it will operate within its banking covenants

and meet its obligations until 30 September 2025. Thus, the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements. The accounts are prepared under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 and where this Act does not provide relevant guidance the directors have adopted the requirements of the Companies Act 2006. The financial statements are prepared in Sterling which is the functional currency of the Group and rounded to the nearest £’000.

STATEMENT OF COMPLIANCE

The Group’s financial statements have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (‘FRS 102’).

BASIS OF CONSOLIDATION

The Group financial statements consolidate the financial statements of Dale Farm Cooperative Limited and all its subsidiary undertakings made up to 31 March each year. No profit and loss account is presented for Dale Farm Cooperative Limited as permitted by the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. Stock provision - The Group reviews and considers prevailing market conditions, the levels of stock held and forecast market movements and makes a provision to the carrying value of the stock where necessary.

NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

ISSUED BUT NOT YET EFFECTIVE

On 27 March 2024 the Financial Reporting Council published Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland - Periodic review 2024 (FRS 102). The key changes impact revenue recognition and accounting for leases effective from 1 January 2026. The company is currently assessing the impact on

the financial statements. There are no other applicable new standards, amendments and interpretations issued but not yet effective which have a material impact on the Group and company financial statements.

REVENUE RECOGNITION

Sale of goods

Revenue is recognised to the extent that the Group obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty. The following criteria must also be met before revenue is recognised: Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Dividends

Revenue is recognised when the Group’s right to receive payment is established.

EXCEPTIONAL ITEMS

The Group classifies certain oneoff charges or credits that have a material impact on the Group’s financial results as ‘Exceptional items’. These are disclosed separately to provide further understanding of the financial performance of the Group.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended. Depreciation is provided on all property, plant and equipment, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life. Rates vary according to the class of asset but are typically:

Buildings freehold - 50 years

Buildings leasehold - over the period of the lease

Plant and equipment - 3 to 15 years

Vehicles and associated equipment - 4 to 10 years

Land is not depreciated

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or the years of the leases where these are shorter. The carrying values of tangible fixed assets are reviewed for impairment in periods when events or changes in circumstances indicate the carrying value may not be recoverable.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

1. ACCOUNTING POLICIES (CONT.)

GOVERNMENT GRANTS

Capital grants are credited to a deferral account and are released to revenue on the same basis as the related assets are depreciated. Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

INVESTMENTS - SOCIETY

Investment in a subsidiary company is held at cost less accumulated impairment losses.

GOODWILL

Goodwill is the difference between the cost of an acquired entity and the aggregate of the fair value of that entity’s identifiable assets and liabilities.

Positive goodwill is capitalised, classified as an asset on the balance sheet and amortised on a straight-line basis over its useful economic life. It is reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

Negative goodwill is capitalised and released to the profit and loss account as the related assets are realised.

If a subsidiary or a business is subsequently sold or closed, any goodwill arising on acquisition that

was written off directly to reserves or that has not been amortised through the profit and loss account is taken into account in determining the profit or loss on sale or closure.

INTANGIBLE ASSETS

Intangible assets acquired separately from a business are capitalised at cost. Intangible assets acquired as part of an acquisition of a business are capitalised separately from goodwill if the fair value can be measured reliably on initial recognition, subject to the constraint that, unless the asset has a readily ascertainable market value, the fair value is limited to an amount that does not create or increase any negative goodwill arising on the acquisition. Intangible assets, excluding development costs, created within the business are not capitalised and expenditure is charged against profits in the year in which it is incurred.

Subsequent to initial recognition, intangible assets are stated at cost less accumulated amortisation and accumulated impairment. Intangible assets are amortised on a straightline basis over their estimated useful life. The carrying value of intangible assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. Rates vary according to the class of asset but are typically:

Goodwill - 10 years

Brands - 10 years

Software - 5 years

The carrying value of intangible assets is reviewed for impairment at the end of the first full year

following acquisition and in other periods if events or changes in circumstances indicate the carrying value may not be recoverable.

STOCKS

Stock is valued at the lower of cost or net realisable value. Cost includes an appropriate element of overheads. Net realisable value is based on estimated selling price less further costs expected to be incurred for disposal.

TAXATION

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively. Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or right to pay less or to receive more, tax with the following exceptions:

Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, or gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned.

However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold.

Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

GROUP RELIEF

It is the Group’s policy to pay for group relief at the fiscal rate of tax on losses utilised during the period.

PENSIONS

The Group operates, for most of its eligible employees, two defined contribution schemes - the Dale Farm Cooperative Group Scheme, and the United Feeds Limited Scheme. Contributions to the two defined contribution schemes are charged in the profit and loss account as they become payable in accordance with the rules of the schemes.

RESEARCH AND DEVELOPMENT

Research and development expenditure is written off as incurred.

FOREIGN CURRENCIES

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account. The assets and liabilities of non-UK subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. Income and expenses of non-UK subsidiary undertakings are translated an average rate for the year.

The exchange difference arising on the retranslation of opening net assets is taken directly to other comprehensive income. All other translation differences are taken to the profit and loss account.

LEASE COMMITMENTS

Assets held under finance leases, which are those where substantially all the risks and rewards of ownership of the asset have passed to the Group, are capitalised in the balance sheet, and are depreciated over their useful lives. The interest element of the rental obligations is charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding. Rentals paid under operating leases are charged to income on a straightline basis over the term of the lease.

CAPITAL INSTRUMENTS

Ordinary shares are included in shareholders’ funds as any redemption requires the prior consent of the Board. Other instruments such as preference shares are classified as liabilities if they contain an obligation to transfer economic benefits and if not, they are included in shareholders’ funds. The finance cost recognised in the profit and loss account in respect of capital instruments other than equity shares is allocated to periods over the term of the instrument at a constant rate on the carrying amount.

NOTES TO THE FINANCIAL STATEMENTS AT

31 MARCH 2024

1. ACCOUNTING POLICIES (CONT.)

INTEREST-BEARING LOANS AND BORROWINGS

All interest-bearing loans and borrowings which are basic financial instruments are recognised at the present value of cash payable to the bank (excluding interest).

BORROWING COSTS

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

PROVISIONS FOR LIABILITIES

A provision is recognised when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions for the expected costs of maintenance under guarantees are charged against profits when products have been invoiced. The effect of the time value of money is not material and therefore the provisions are not discounted.

DERIVATIVE INSTRUMENTS

The Group uses forward foreign currency contracts to reduce exposure to foreign exchange rates. Derivative financial instruments

are initially measured at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value through profit or loss. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

The fair value of the forward currency contracts is calculated by reference to current forward exchange contracts with similar maturity profiles. The Group does not undertake any hedge accounting transactions.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

SHORT-TERM DEBTORS AND CREDITORS

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Such assets are subsequently carried at amortised cost using the effective interest method. Any losses arising from impairment are recognised in the income statement in other operating expenses.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

2. TU RNOVER AND SEGMENTAL REPORTING

Turnover, which is stated net of value added tax, represents the amounts derived from the provision of goods and services which fall within the Group’s ordinary activities. Turnover is attributable to the marketing and transporting of milk, the processing and sale of dairy products and the manufacture and sales of animal feeds.

Segmental reporting, by areas of activity and geographical markets, has not been included in these financial statements. Disclosure of such information is not considered relevant and would be seriously prejudicial to the interests of the Group.

3. OPERATING PROFIT

(a) This is stated after charging/(crediting):

*£45k (2023 - £41k) of this relates to the society ** Included in non-audit services is £15k (2023 - £112k) relating to the society

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

5. STAFF COSTS

The number of group employees at 31 March 2024 was 1,051 (2023 - 1,051). The number of society employees at 31 March 2024 was 292 (2023 - 291).

6. EXCEPTIONAL ITEMS

Exceptional items of £1,493k (2023 - £5,073k) were incurred during the year. £359k relates to final costs associated with the GB restructuring completed in 22/23. £408k of costs relate to reductions in the carrying value of certain assets at the GB site. In addition, redundancy costs of £435k along with other exceptional costs of £291k were incurred.

NOTES TO THE FINANCIAL STATEMENTS

(a) The taxation charge is made up as follows:

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

8. TAX (CONTINUED)

(b) Factors affecting tax charge for the year

The tax assessed on the profit for the period varies from the standard rate of corporation tax in the UK. The differences are explained below:

9. PROFIT ATTRIBUTABLE TO THE MEMBERS OF THE PARENT COMPANY The profit attributable to the society for the financial year ended 31 March 2024 is £981k (2023 - profit of £1,443k).

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

11. TANGIBLE FIXED ASSETS

11. TANGIBLE FIXED ASSETS (CONTINUED)

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

12. INVESTMENTS

At 31 March 2024 the principal subsidiary undertakings were:

SUBSIDIARY UNDERTAKINGS HOLDING PROPORTION OF VOTING RIGHTS AND SHARES HELD NATURE OF BUSINESS

Dale Farm Limited

Ordinary shares

Dale Farm Dairies (Ireland) Limited

Dale Farm (GB) Limited

Rowan Glen Dairy Products Limited

shares

shares

Ash Manor Cheese Company Limited Ordinary shares

Dale Farm Ice Cream Limited Ordinary shares

Dale Farm Ice Cream (Ireland) Limited Ordinary shares

Manufacture, sale and distribution of milk and a comprehensive range of dairy products

Dormant

Sale and distribution of milk

Packing, sale and distribution of cheese products

Sale and distribution of ice cream and frozen products

Non-trading

NOTES TO THE FINANCIAL STATEMENTS

12. INVESTMENTS

Mullins Ice Cream Limited Ordinary shares

United Feeds Limited Ordinary shares

United Feeds (Ireland) Limited Ordinary shares

Dale Farm Dairies Limited Ordinary shares

Dale Farm Ingredients Limited Ordinary shares

Dale Farm Gridco Limited Ordinary shares

Ash Manor Holdings Limited Ordinary Shares

* Held by Dale Farm Cooperative Limited.

** Held by Dale Farm Limited.

*** Held by Dale Farm Ice Cream Limited.

**** Held by United Feeds Limited.

The registered offices of the subsidiary companies are as follows:

Dale Farm Limited, Dale Farm Ice Cream Limited, Mullins Ice Cream Limited, United Feeds Limited, Dale Farm Dairies Limited, Dale Farm Ingredients Limited, and Dale Farm Gridco Limited are registered at Dale Farm House, 15 Dargan Road, Belfast, BT3 9LS.

Ash Manor Limited and Ash Manor Holdings Limited are registered at Unit 63, Clywedog Road North, Wrexham Industrial Estate, Wrexham, N Wales, LL13 9XN.

Dale Farm (GB) Limited is registered at Lakeland Creamery, Shap Road Industrial Estate, Shap Road, Kendal, Cumbria. LA9 6NS.

Rowan Glen Dairy Products Limited is registered at Palnure, Newton Stewart, Wigtownshire, DG8 7AX.

Dale Farm Dairies (Ireland) Limited, Dale Farm Ice Cream (Ireland) Limited, and United Feeds (Ireland) Limited are registered at Unit 19, Pinehill Industrial Park, Mountain Top, Letterkenny, Donegal, Ireland.

Non-trading

Manufacture and sale of animal feeds

Dormant

Dormant

Dormant

Dormant

Dormant

The above undertakings are incorporated and operate in Northern Ireland, with the exception of Dale Farm (GB) Limited and Ash Manor Cheese Company Limited which are incorporated in England and Wales respectively and operate in Great Britain, Rowan Glen Dairy Products Limited which is incorporated in Scotland, and Dale Farm Dairies (Ireland) Limited and Dale Farm Ice Cream (Ireland) Limited which are incorporated in the Republic of Ireland.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

13. STOCKS

The difference between the carrying value of stocks and their replacement cost is not material. Stocks recognised as an expense in the period were £458m (2023: £556m) for the Group and £300m (2023: £386m) for the society. Stock with a carrying value of £30m (2023: £51m) is pledged as security for the Group’s banking facilities.

14. DEBTORS

In the company, an amount of £14,000,000 (2023 - £14,000,000) due from subsidiary undertakings falls due after more than one year. The amount is unsecured, and interest is charged at a variable rate based on SONIA.

Amounts due from group undertakings are unsecured, interest free and repayable on demand. Debtors with a carrying value of £40m (2023: £50m) are pledged as security for the Group’s banking facilities.

15. OTHER CREDITORS AND ACCRUALS

16. CREDITORS: AMOUNTS DUE AFTER MORE THAN ONE YEAR

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

17. CONVERTIBLE LOAN STOCK

Loan stock is convertible on the basis of £1 of loan stock to £1 of ordinary shares held, subject to current legal limits on the maximum number of shares being raised.

18. OBLIGATIONS UNDER FINANCE LEASE AND HIRE PURCHASE AGREEMENTS

The Group and society’s future minimum hire purchase agreement and finance lease agreement payments are as follows:

The finance lease and hire purchase agreements primarily relate to vehicles used by the society in the collection and

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

19. DEFERRED TAXATION

The movements in deferred taxation during the current year are as follows:

Deferred taxation provided in the financial statements is as follows:

20. DEFERRED INCOME

- CAPITAL GRANTS

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

21. ISSUED SHARE CAPITAL

Dale Farm Cooperative Limited is a registered society established under the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969. It is governed by its rules which require all members to have a minimum shareholding of 200 £1 ordinary shares, fully paid up.

22. RESERVES

Called up share capital

The balance classified as share capital includes the nominal value of issued society’s share capital.

Profit and loss account

The society’s profit and loss account includes the accumulated profits and losses of the society less any dividends declared.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH

23. SHARE CAPITAL REPAYABLE ON DEMAND

SOCIETY

£245k of share capital repayable on demand was issued in the year in lieu of ordinary shares to members who had retired from milk production (2023: £5k). Interest on the preference shares is payable annually at bank base rate less 0.25%, or at such higher rate as may be determined by the Board: for the year ended 31 March 2024 the rate of interest paid was 5%.

24. NOTES TO THE GROUP STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

24. NOTES TO THE GROUP STATEMENT OF CASH FLOWS (CONTINUED)

(b) Group analysis of net debt

25. PENSION SCHEME INFORMATION

Defined contribution schemes

The pension costs represent contributions payable by the Group to the schemes and amounted to £1,692k (2023£1,634k). The unpaid contributions outstanding at the year end, included in ‘Other creditors’, is £157k (2023 - £288k).

26. FUTURE CAPITAL COMMITMENTS

At 31 March 2024 the directors have authorised future capital expenditure which, without taking account of government grants, amounts to:

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

27. OTHER FINANCIAL COMMITMENTS

At 31 March 2024 the Group and society’s future minimum rentals payable under non-cancellable operating leases are as follows:

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

The Group enters into forward foreign currency contracts to mitigate exchange rate risk on foreign currency receipts. The forward currency contracts are measured at fair value, which is determined using quoted prices provided by independent third parties. The foreign exchange contracts all expire within the next 12 months.

NOTES TO THE FINANCIAL STATEMENTS

AT 31 MARCH 2024

29. RELATED PARTY TRANSACTIONS

The directors, with the exception of the appointed directors, are all engaged in dairy farming and supply their milk to Dale Farm Cooperative Limited on the same terms as all other members. They are also entitled to utilise all other services made available by Dale Farm Cooperative Limited on the same terms as other members. The net value of milk purchased from, and services provided to these directors during the year was £4,458,633 (2023 - £5,718,127).

At 31 March 2024 the net amount owed to the directors was £463,770 (2023 - £523,295).

Key management personnel

All directors and certain senior employees who have authority and responsibility for planning, directing, and controlling the activities of the Group are considered to be key management personnel.

30. CONTINGENT LIABILITIES

The Group’s bank borrowings are secured by certain fixed and floating charges over the property, assets, and undertakings of the Group. At 31 March 2024 the Dale Farm Cooperative group borrowings amounted to some £67 million (2023: £105 million). There exists an unlimited intercompany cross guarantee between the members of the Dale Farm Cooperative Limited group.

Under the terms of different grant schemes there exists a contingent liability to repay grants received if certain conditions therein are not fulfilled.

Certain other contingent liability claims and guarantees occur in the normal course of business, but it is not considered that any material liabilities will arise.

31. ULTIMATE CONTROLLING PARTY

The society is owned by members of Dale Farm Cooperative Limited, none of whom own more than 20% of the issued share capital of the society. Accordingly, there is no parent entity nor ultimate controlling party.