NDC Annual Report 2017

The National Dairy Council Annual Report 2017

The National Dairy Council protects and promotes the image, quality, taste and nutritional credentials of Irish dairy. It promotes the benefits of the dairy portfolio to the consumer as part of a balanced, healthy lifestyle while also safeguarding the reputation of Ireland’s dairy producers and processors.

You can find out more about the work of the National Dairy Council at www.ndc.ie Find us on

NDCIreland

@NDC_ie

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Contents Chairman’s Statement

2

CEO’s Statement

4

2017 - A Gallery

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NDC Reports and Financial Statements for the Financial Year Ended 31 December 2017

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Chairman’s Statement

‘Irish Dairy has had a good year’ The Global reputation of Irish Dairy continues to Grow There was a welcome recovery in milk prices in 2017, an extended period of market weakness had curtailed milk output globally and strong demand, in particular for butterfat, led to a recovery in fat-based products. In Ireland, the recovery in milk prices and positive weather conditions led to a 9% increase in milk output.

According to Teagasc, the average milk price for 2017 was up 30% on 2016 and while total production costs on a per litre basis are estimated to have increased by 3%, net margins on a per litre of milk basis increased substantially. The outlook for 2018 is for a further growth in milk supply and a decline in commodity prices, most particularly for butter and possibly SMP, as the EU Commission seeks to reduce its stock of intervention. On the back of record milk output, both in the EU and in Ireland in 2017, EU milk prices have eased since the start of the new year. The supply side of milk remains uncertain due to poor Spring weather conditions in 2018.

Twelve months on, the challenge of Brexit to the Irish dairy industry is a major challenge.

We welcome the agreement to negotiate a transitional period once the UK leaves the EU

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at the end of March 2019. This transitional period is essential for both the EU and the UK to negotiate the details of the final agreement and for business to adjust to the new trading realities. Our objective will be to ensure that our UK customers and consumers continue to enjoy the very best of Irish dairy products and that the inevitable negative consequences of Brexit are minimized for all our stakeholders.

Recent Bord Bia figures have shown that we had over €4billion in exports of dairy and dairy ingredients in 2017, a 19% increase since 2016 with butter exports increasing by 60%. A great story for Irish dairy and its revered reputation at a global level.

I would like to acknowledge and thank our members for their continued support, which ensures the long-term success of NDC dairy marketing campaigns and initiatives. It is essential that the NDC takes a leadership role in promoting the health benefits of dairy in our diet while also clarifying the myths and misconceptions of dairy so often reported inaccurately in some media.

The National Dairy Council remains fully committed to delivering value and playing an important part in helping the Irish dairy sector to unlock its full potential.

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On behalf of the Board, I would like to thank CEO, Zoë Kavanagh and her team for their dedication and commitment to the work of the NDC. I would also like to thank my fellow Board members for their support and for giving their time and expertise in so many ways during the year.

Teddy Cashman CHAIRMAN

‘NDC takes a leadership role in promoting the health benefits of dairy’

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CEO’s Statement ‘A very successful and productive year for all at the NDC’ 2017 was a very successful and productive year for all at the NDC with a record number of events, seminars and meetings.

Educating the Generations Almost 3,000 secondary students and teachers from all over the country attended HealthFest 2017 - the NDC’s flagship event for transition year students. ‘Speaking in support of HealthFest 2017, Minister for Health Simon Harris said. “Healthy eating and physical activity habits learned during teenage years are an important foundation for later life. I welcome the lively, accessible approach taken

by HealthFest and I am happy to see that our new Food Pyramid, part of our Healthy Food for Life programme, is being promoted at this free event.”

As part of our ongoing partnership with Cappagh National Orthopaedic Hospital, a seminar was held to educate health professionals on the latest approaches in improving outcomes following elective orthopaedic surgery. Expert speakers from the UK and Ireland in the areas of Physiotherapy, Nursing and Nutrition spoke about practices which can enhance patient outcomes and experiences throughout their hospital journey.

International Networks At a European level, I continue to sit on the European Milk Form where we meet a number of times a year to discuss common issues

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and opportunities. The European Milk Forum (EMF) is an active network bringing together eight dairy organisations in Europe in order to promote professional exchange, shared reflection and carry out joint initiatives.

Along with colleagues at the European Milk Forum, the National Dairy Council has been working to promote the concept of the Dairy Matrix through educational literature and seminars for health professionals. In addition, an EU Hearing on the Dairy Matrix was held in Brussels in October to highlight the importance of promoting dairy as a source of nutrition in the diet of European citizens.

We had a very successful third year of the EU-funded Cheese Up Your Life campaign, which included a cheese recipe competition, full media campaign and in-store cheese tastings. We produced a recipe booklet with the six finalists’ recipes and this was promoted at stands across selected SuperValu stores for National Cheese Week – in June.

We represented Ireland at a special Cheese symposium in Brussels also in June where we had the opportunity to promote Irish cheese to a European audience and celebrate the recipes of our two winning chefs.

Working with Sport Bodies We continue to enjoy an excellent relationship with the Sport Ireland Institute and we carried out a number of successful events

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‘We continue to enjoy an excellent relationship with the Sport Ireland Institute.’ and collaborations in 2017. NDC sponsored the High Performance Knowledge Exchange Conference (HPX) which took place at the world class Sport Ireland National Indoor Arena.

Over 40 speakers from nine countries shared their key lessons identified during the Rio 2016 cycle through insightful keynote presentations, case studies and workshops.

We held a special press event in advance of World Milk Day 2017, sports and lifestyle media were invited to the Sport Ireland Institute for a Q&A press conference with seven top Irish athletes discussing the importance of good nutrition for optimum performance. The event had two objectives, firstly to raise awareness of World Milk Day (1st June) and secondly to launch our new booklet Fuelling Wise for Sport & Exercise, produced in association with Sport Ireland.

The Complete Natural One of the major areas we have focused on in 2017 was the consumer space and in particular the growing sentiment towards a plant based diet. We carried out extensive market research to really understand what is going on around dairy sentiment and detractors. We spoke to a cross section of Irish consumers to get a better understanding of their views and concerns about consuming dairy in their diet. This culminated in the launch of our new marketing campaign “The Complete Natural” which

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launched with a major ad campaign - out of home, and online ads as well as a new website with a fresh inspiring focus designed to attract the younger generation who want learn more about dairy – www.thecompletenatural.ie

Taking on School Milk In 2017, the NDC was appointed by the EU Commission as the Aid Applicant for the School Milk Scheme. This step is significant in the fact that the NDC is the first private organisation recommended by the Department of Agriculture, Food & the Marine for aid-applicant status at EU level. It is a direct recognition of the NDC’s lengthy engagement with schools via Moo Crew and more recently HealthFest.

In June, we also held a seminar entitled “Quality as an Essential Component of Export Development” in association with Glanbia Ingredients Ireland, Ornua and Teagasc. The seminar was followed by a Teagasc farm walk hosted by Tom and Moya Power, from Drumhills Farm, Cappagh, Co. Waterford who were the overall winners of the 2016 NDC & Kerrygold Quality Milk Awards.

Member Communications We launched our first internal magazine in 2017, The Dairy is a new online magazine which we publish quarterly and gives a real insight into the comprehensive work carried out by the NDC. We have received very

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

positive feedback from our stakeholders since its launch. We also continue to promote the excellent Dairy A-Z app which includes 187 Q&A’s on dairy and has proved to be a valuable information tool for the industry.

Another major highlight of 2017 was our presence at the National Ploughing Championships; we created a real sense of excitement bringing Irish celebrities to the stand this year which resulted in great talkability and press coverage for NDC over the three days.

‘In 2017, the NDC was appointed by the EU Commission as the Aid Applicant for the School Milk Scheme.’

Irish Dairy continues to Shine Through our extensive market research this year, we discovered the average Irish household consumes 6.5 litres of milk per week with milk, yogurt and cheese seeing a 2% annual growth. Three out of four consumers see Irish dairy farming as positive due to our grass-based system. We have identified that 2% of the Irish population are vegan but 50% of this group trust Irish dairy farming and Ireland is the second biggest in Europe for milk consumption, with 99% penetration. A great story we continue to tell.

Zoë Kavanagh CHIEF EXECUTIVE

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A Gallery of Events 2017

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January 2017

February 2017

Starting the New Year well! The NDC and Drinagh Co-op hosted a Health & Wellbeing evening at the Westlodge Hotel in Bantry.

MC for the evening was 96FM’s Deirdre O’Shaughnessy, who introduced the speakers for the evening - Dietitian Paula Mee, Psychologist Shane Martin and Drinagh’s Executive Chef Alan Shannon. The evening was held to raise funds for West Cork Down Syndrome Support Group and the The Tristan Cahalane Medical Fund.

Photo: Tony McElhinney.

Irish Olympian Derval O’Rourke was out to support the NDC at a Kid’s Press Conference at the Family Farm, developed by Agri Aware and Dublin Zoo, to launch this year’s Moo Crew Campaign. Students from Christ the King Boys National School in Cabra were on hand to answer questions about the programme accompanied by Moo Crew Mascot Milly.

Photo: Robbie Reynolds Photography

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February 2017

March 2017

Minister for Health, Simon Harris helping to launch HealthFest 2017 with Zoë Kavanagh and Teddy Cashman, NDC and Fiona Gilligan, safefood. HealthFest is the National Dairy Council’s flagship event for transition year students with over 3,000 students in attendance.

Photo: Robbie Reynolds Photography.

The NDC invited food enthusiasts and culinary students to enter a cheese recipe competition to celebrate European cheese.

The competition formed part of an EU-wide programme with the aim of promoting and creating awareness of the taste, versatility and convenience of cheese in everyday life.

Pictured are judges Clodagh McKenna, Derval O’Rourke and Vanessa Greenwood of Cooks Academy in Dublin.

Photo: Robbie Reynolds Photography

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April 2017 Another successful Health & Wellbeing event was hosted in April by the NDC in association with Lee Strand Co-op. The event was held in the Brandon Hotel in Tralee, hosted by Deirdre Walsh of Radio Kerry, speakers included former Irish Olympian Derval O’Rourke, Dancing with the Stars winner Aidan O’Mahony, Dietician Paula Mee and RTE Fitness expert Joe O’Connor pictured with Donal Pierse, Chairman, Lee Strand and Zoë Kavanagh, CEO NDC. Photo: Domnick Walsh Photography

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May 2017 The seven finalists who took part in the Cheese Up Your Life recipe cook-off in Dublin were (l-r) Winner, Róisín Gallagher; Gráinne and Shauna Moggan; winner, Hanna Mathe; Donna Hennessy; Kristen Jensen; and Elke O’Mahony.

National Cheese Week was held on 5th to 9th June 2017 with in -store tastings and various events held nationwide.

Photo: Dora Kazmierak

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

June 2017 Quality as an Essential Component of Export Development was the title of the NDC seminar in association with Glanbia Ingredients Ireland, Ornua and Teagasc, held ahead of the Teagasc Farm Walk on the winning farm of the Power family in Co. Waterford. Speakers included Sean Molloy of Glanbia; Jeanne Kelly, Ornua; John Lynch of Teagasc; Zoë Kavanagh, NDC; John Murphy, NDC; and Jack Kennedy, IFJ. Photo: Clare Keogh

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

June 2017 Finalist schools in the 2017 Moo Crew Awards enjoyed a fun-packed day out at Airfield Estate in Dublin. Irish Athlete Derval O’Rourke gave fitness lessons to some of Ireland’s youngest future athletes to celebrate with the top winning primary school children in the National Dairy Council’s Moo Crew, the Primary Dairy Moovement competition.

Photo: Conor McCabe Photography

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August 2017

August 2017

In July, Food Ambassador Clodagh McKenna visited some of the finalists of the 2017 NDC & Kerrygold Quality Milk Awards to share recipes and cook in their farm kitchens.

(top) Gerard and Kathleen Doyle, Co. Kilkenny (bottom) Michael and Marguerite Crowley, Co. Cork.

Photos: Clare Keogh

Robert and Shirley Shannon, Co. Cork.

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September 2017

September 2017

The NDC caused great excitement at the 2017 National Ploughing Championships held in Screggan, Co. Offaly. Launching the new Complete Natural marketing campaign with Irish celebrities Glenda Gilson from TV3, the X Factor’s Louis Walsh and Irish model Vogue Williams.

Photo: Brian McEvoy

Rás na mBan, the premier women’s cycling event in Ireland, was held in September. The points jersey, supported by the National Dairy Council, is awarded to the rider who shows the most consistency in stage finishes by accumulating the most points on offer for each stage. The NDC Points jersey was won in 2017 by England’s stage winning sprint star Alice Barnes.

Photo: Lorraine O’Sullivan

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

October 2017

October 2017

The 2017 winners of the NDC & Kerrygold Quality Milk Awards were John and Maria Walsh and their three children; Brendan, Claire and Helena from Cahir in Co. Tipperary.

Pictured at the awards ceremony with Minister for Agriculture, Food & the Marine, Michael Creed TD. The Walsh family are the 6th generation of farmers to farm the land and take great pride in their work.

Photo: Clare Keogh

In partnership with the Irish Nutrition & Dietetic Institute (INDI), a “Dairy Matrix” seminar took place in Dublin for dietitians.

The event was chaired by RTÉ journalist and broadcaster, Philip Boucher-Hayes. He was joined by expert speakers Prof Ian Givens from the University of Reading; Dr Emma Feeney from University College Dublin; Louise Reynolds, INDI and Prof. Arne Astrup from the University of Copenhagen.

Photo: Robbie Reynolds Photography.

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

November 2017 Irish Dairy - The Complete Natural was launched with a major advertising campaign out of home and online. To coincide with the launch, the NDC created a pop-up dairy bar on South William Street in Dublin. Pictured at the launch event is X Factor Judge Louis Walsh.

Photo: Brian McEvoy

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November 2017

December 2017

The National Dairy Council and Cappagh National Orthopaedic Hospital, held a seminar in October to educate health professionals on the latest approaches in improving outcomes following elective orthopaedic surgery. Expert speakers from the UK and Ireland in the areas of Physiotherapy, Nursing and Nutrition spoke about practices which can enhance patient outcomes and experiences throughout their hospital journey.

Photo: Finbarr O’Rourke

The final Health & Wellbeing evening of 2017 was held in Kanturk, Co. Cork in association with North Cork Creameries. Dr. Marianne Walsh, NDC is pictured with speakers - former Munster and Ireland rugby international Alan Quinlan; Chef Brian McDermott; Dietician Paula Mee and MC Colm O’Sullivan from Red FM. Photo: Sheila Fitzgerald

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

The National Dairy Council (A company limited by guarantee and not having a share capital)

Reports and Financial Statements for the financial year ended 31 December 2017

Contents Directors and Other Information Directors’ Report Directors’ Responsibilities Statement Independent Auditor’s Report

20 21 - 23 24 25 - 28

Income Statement

29

Statement of Financial Position

30

Statement of Changes in Equity

31

Statement of Cashflows

32

Notes to the Financial Statements

33 - 42

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Directors and Other Information

DIRECTORS

Mr. E. Carroll Mr. T. Cashman (Chairman) Mr. J. Comer Mr. D. Fagan Mr. R. Lenihan Mr. T. Maher Mr. M. McArdle Mr. J. Murphy (Vice Chairman) Mr. J. Murray Mr. J. O’Donnell Mr. S. O’Leary Mr. C. O’Sullivan Mr. C. Ryan Mr. P. Sheahan Mr. E. Sweeney

CHIEF EXECUTIVE AND SECRETARY

Zoë Kavanagh

REGISTERED OFFICE

The Studio 55c Maple Avenue Stillorgan Industrial Park Co. Dublin

REGISTERED NUMBER 21650

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SOLICITORS

Gleeson McGrath Baldwin 29 Angelsea Street Dublin 2

AUDITOR

Deloitte Chartered Accountants and Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2

BANKERS

AIB Bank 1 Lower Baggot Street Dublin 2

AIB Bank Saint Helen’s, 1 Undershaft London EC3A 8AB

J & B Davy Davy House 49 Dawson Street Dublin 2

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Directors’ Report

The Board of Directors present their annual report, together with the financial statements for the financial year ended 31 December 2017.

COMPANIES ACT 2014 Under the Companies Act 2014, the company is deemed to be a Company Limited by Guarantee (CLG).

PRINCIPAL ACTIVITIES The principal activity of The National Dairy Council (“NDC”) is to support Irish dairy farmers by driving the positive position and consumption of milk and dairy products through integrated marketing and communications programmes, based on informed scientific evidence.

RESULTS The results for the financial year and the state of affairs of the company are set out on pages 29 and 30 respectively.

REVIEW OF BUSINESS The NDC has a vital role in supporting the dairy sector in driving the consumption and positioning of milk and dairy products. The NDC’s vision is to be the authoritative and trusted voice in advancing the consumer perception and consumption of Irish milk and dairy products.

As part of the NDC’s Strategy, it is anticipated the level of funding from Europe will increase significantly over the coming years. In order to best leverage the EU opportunity, the NDC has had to build up its reserves to facilitate the cash flow requirements associated with running more EU Programmes and to demonstrate the necessary financial capacity to obtain the additional funding.

RISKS AND UNCERTAINTIES The main risk facing the company during the financial year and anticipated in future years is the receipt of levy contributions and maintaining sufficient reserves to allow the entity operate efficiently and effectively.

GOING CONCERN The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements.

Further details regarding the adoption of the going concern basis can be found in note 1 to the financial statements.

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Directors’ Report (continued)

DIRECTORS AND SECRETARY The directors and secretary, who served at any time during the financial year except as noted, were as follows: Directors: Mr. E. Carroll Mr. T. Cashman (Chairman) Mr. J. Comer Mr. D. Fagan Mr. R. Lenihan Mr. T. Maher Mr. J. Murphy (Vice Chairman) Mr. J. Murray Mr. S. O’Leary Mr. C. O’Sullivan Mr. C. Ryan Mr. P. Sheahan Mr. E. Sweeney Mr. M. McArdle (Appointed 3/10/2017) Mr. J. O’Donnell (Appointed 28/8/2017) Mr. P. Gibbons (Resigned 28/8/2017) Mr. F. Tobin (Resigned 1/9/2017) Secretary: Zoë Kavanagh ACCOUNTING RECORDS The measures that the directors have taken to secure compliance with the requirements of sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records, are the engagement of appropriately qualified accounting personnel and the maintenance of computerised accounting systems. The company’s accounting records are maintained at the company’s registered office at The Studio, 55c Maple Avenue, Stillorgan Industrial Park, Co. Dublin.

EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events affecting the financial statements since the financial year end.

Since the financial year end John Comer, Con O’Sullivan and Sean O’Leary resigned as directors on 30 January 2018. Patrick McCormack, Patrick Donoghue and John Finn were appointed as directors on 30 January 2018.

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Directors’ Report (continued)

PUBLICATION The directors are responsible for the maintenance and integrity of the website. Legislation in the Republic of Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

DISCLOSURE OF INFORMATION TO AUDITORS So far as each of the directors in office at the date of approval of the financial statements is aware: •

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

•

The directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

AUDITORS The auditors, Deloitte, Chartered Accountants and Statutory Audit Firm, continue in office in accordance with Section 383(2) of the Companies Act 2014.

Approved by the Board and signed on its behalf by:

Timothy Cashman

Patrick Sheahan

DIRECTOR DIRECTOR

25 April, 2018

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Directors’ Responsibilities Statement

The directors are responsible for preparing the directors’ report and the financial statements in accordance with the Companies Act 2014.

Irish company law requires the directors to prepare financial statements for each financial year.

Under the law, the directors have elected to prepare the financial statements in accordance with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (“relevant financial reporting framework”). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the company as at the financial year end date and of the profit or loss of the company for the financial year and otherwise comply with the Companies Act 2014.

In preparing those financial statements, the directors are required to: •

select suitable accounting policies for the company financial statements and then apply them consistently;

•

make judgements and estimates that are reasonable and prudent;

•

state whether the financial statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for ensuring that the company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the company, enable at any time the assets, liabilities, financial position and profit or loss of the company to be determined with reasonable accuracy, enable them to ensure that the financial statements and directors’ report comply with the Companies Act 2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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Independent Auditor’s Report to the Members of the National Dairy Council Report on the audit of the financial statements

Opinion on the financial statements of National Dairy Council (the ‘company’) In our opinion the financial statements: •

give a true and fair view of the assets, liabilities and financial position of the company as at 31 December 2017 and of the surplus for the financial year then ended; and

•

have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014.

The financial statements we have audited comprise: •

the Income Statement;

•

the Statement of Financial Position;

•

the Statement of Changes in Equity;

•

the Statement of Cash Flows; and

•

the related notes 1 to 15, including a summary of significant accounting policies as set out in note 1.

The relevant financial reporting framework that has been applied in their preparation is the Companies Act 2014 and FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“the relevant financial reporting framework”).

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the “Auditor’s responsibilities for the audit of the financial statements” section of our report.

We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Accounting and Auditing Supervisory Authority, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us to report to you where: •

the directors’ use of the going concern basis of accounting in preparation of the financial statements is not appropriate; or

•

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

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Independent Auditor’s Report to the Members of the National Dairy Council Report on the audit of the financial statements

Other information The directors are responsible for the other information. The other information comprises the information included in the Reports and Financial Statements for the financial year ended 31 December 2017, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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Independent Auditor’s Report to the Members of the National Dairy Council Report on the audit of the financial statements

As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: •

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

•

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the entity (or where relevant, the group) to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit.

This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

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Independent Auditor’s Report to the Members of the National Dairy Council Report on the audit of the financial statements

Report on other legal and regulatory requirements Opinion on other matters prescribed by the Companies Act 2014 Based solely on the work undertaken in the course of the audit, we report that: •

We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

•

In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited.

•

The financial statements are in agreement with the accounting records.

•

In our opinion the information given in the directors’ report is consistent with the financial statements and the directors’ report has been prepared in accordance with the Companies Act 2014.

Based on the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report.

Matters on which we are required to report by exception We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.

Kevin Sheehan FOR AND ON BEHALF OF DELOITTE CHARTERED ACCOUNTANTS AND STATUTORY AUDIT FIRM DELOITTE & TOUCHE HOUSE, EARLSFORT TERRACE, DUBLIN 2

25 April, 2018

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Income Statement For the Financial Year Ended 31 December 2017

2017 2016 Notes â‚Ź â‚Ź

Income 3 3,762,396 3,391,119 Expenditure Direct expenses

3,451,373

3,213,291

Establishment expenses

68,455

61,558

Administrative expenses

241,358

167,448

Total expenses

3,761,186

3,442,297

(Deficit)/Surplus on ordinary activities before taxation 4 1,210 (51,178) Taxation 7 (83) (190) (Deficit)/Surplus on ordinary activities after taxation

1,127

(51,368)

All of the results for the current and prior financial year derive from the continuing activities of the company. All recognised gains and losses for the current and prior financial year are included in the income statement.

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Statement of Financial Position As at 31 December 2017

2017 2016 Notes € €

Fixed Assets Tangible assets

8

11,320

12,602

Current Assets Debtors 9 276,792 255,838 Bank 1,987,997 1,565,438

2,264,789 1,821,276 Creditors: (Amounts falling due within one year)

10

(848,998)

(407,894)

Net current assets 1,415,791 1,413,382 NET ASSETS 1,427,111 1,425,984 Represented by: ACCUMULATED SURPLUS 1,427,111

1,425,984

The financial statements were approved and authorised for issue by the Board of Directors on 25 April 2018 and signed on its behalf by:

Timothy Cashman

Patrick Sheahan

DIRECTOR DIRECTOR

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Statement of Changes In Equity For the Financial Year Ended 31 December 2017

Accumulated

surplus Total

€ €

At 1 January 2016

1,477,352

1,477,352

Surplus for the financial year

(51,368)

(51,368)

At 31 December 2016

1,425,984

1,425,984

Deficit for the financial year

1,127

1,127

At 31 December 2017 1,427,111 1,427,111

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Statement of Cashflows For the Financial Year Ended 31 December 2017

2017 2016

€ €

RECONCILIATION OF (DEFICIT)/SURPLUS ON ORDINARY ACTIVITIES BEFORE TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES (Deficit)/Surplus on ordinary activities before tax

1,210

(51,178)

Less: interest income

(333)

(761)

Depreciation 6,055 5,214 Taxation paid

(51)

(101)

(Decrease)/increase in debtors

(20,986)

(144,470)

Decrease/(increase) in creditors

441,104

202,178

NET CASH FLOWS FROM OPERATING ACTIVITIES 426,999

10,882

CASH FLOWS FROM INVESTING ACTIVITIES Interest income

333

761

Payments to acquire fixed assets

(4,773)

(11,775)

NET CASH FLOWS FROM INVESTING ACTIVITIES

(4,440)

(11,014)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS 422,559

(132)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 1,565,438 1,565,570 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 1,987,997 1,565,438

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements For the Financial Year Ended 31 December 2017

1. ACCOUNTING POLICIES The principal accounting policies are summarised below. They have all been applied consistently throughout the current and to the preceding year.

General Information and Basis of Accounting The National Dairy Council is a company incorporated in Ireland under the Companies Act 2014.

The address of the registered office is given on page 20. The nature of the company’s operations and its principal activities are set out in the directors’ report on pages 21 to 23.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with the Companies Act 2014 and Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council.

The functional currency of The National Dairy Council is considered to be euro because that is the currency of the primary economic environment in which the company operates.

Going Concern The company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the directors’ report. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Financial Instruments Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Financial assets and liabilities All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

1. ACCOUNTING POLICIES (CONTINUED) Financial Instruments (continued) Financial assets and liabilities are only offset in the statement of ďŹ nancial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

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

Income Income is comprised of voluntary levies, grant income, donations and interest receivable.

Income received in the form of voluntary levy contributions is based on a price per litre of milk produced and is recognised on a receipts basis. All other income is credited to income in the period to which it relates.

Expenditure Expenditure is accounted for on an accruals basis.

Fixed Assets Fixed assets are held at cost less accumulated depreciation.

Depreciation of fixed assets is provided on a straight line basis at the rates shown below which are estimated to reduce the assets to their residual values of Nil by the end of their expected useful lives.

Office equipment Computer equipment

34

25% per annum 25% per annum

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

1. ACCOUNTING POLICIES (CONTINUED) Pension The company operates a defined contribution pension scheme. Contributions payable to the scheme are charged to the income and expenditure account in the period to which they relate.

Taxation The company is exempt from Income Taxation in respect of its trading activities. Passive income, if any, (such as deposit interest) remains taxable.

2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the company’s accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Information about judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the accounting policies and the notes to the financial statements. None of the judgements required are considered to be critical to the organisation.

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

3. INCOME 2017 2016

€ €

An analysis of the company’s turnover is as follows: Voluntary levy

3,257,175

3,019,311

Ornua 54,000 109,538 Grant income

431,751

248,757

Other income

19,137

12,752

Interest income

333

761

Total income

3,762,396

3,391,119

All income, apart from European Union Grant income of €431,751 (2016: €248,757) and other income of €9,178 (2016: Nil), arose in the Republic of Ireland.

4. (DEFICIT)/SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION

2017 2016

€ €

The (deficit)/surplus before taxation is stated after charging: Directors’ remuneration

38,600

39,200

Directors’ expenses

18,376

17,723

Auditor’s remuneration -audit of financial statements

10,700

10,700

-other non-audit services

1,400

-

Depreciation 6,055 5,214 and after crediting: Interest income

36

333

761

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

5. STAFF NUMBERS AND COSTS 2017

2016

€ €

Wages and salaries

620,898

516,333

Social Welfare costs

65,022

53,900

Pension (Note 12)

38,198

33,825

724,118 604,058 The average monthly number of employees for the financial year was 9 (2016: 9).

The number of employees at the financial year ended 31 December 2017, including eleven directors, was 19. (2016:18).

6. DIRECTORS REMUNERATION

2017 2016

€ €

Aggregate emoluments paid to or receivable by directors in respect of qualifying services 38,600 Compensation paid or payable, or other termination payments, in respect of loss of office to directors of the company in the financial year

-

39,200

-

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

7. TAXATION Based on the surplus for the financial year:

2017

2016

€ €

Taxation charge

83

190

The effective tax rate for the financial year is higher than the standard rate of corporation tax in Ireland, which is 12.5%. The differences are explained below:

2017 2016

€ €

1,210

(51,178)

151

(6,397)

Net income and expenditure not subject to taxation

(151)

6,397

Higher tax rates on interest

83

190

(Deficit)/Surplus for financial year before taxation (Deficit)/Surplus for financial year multiplied by standard rate of corporation tax of 12.5% (2015: 12.5%) Effects of:

Total tax charge for period 83 The National Dairy Council is chargeable to taxation on bank and other interest.

38

190

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

8. TANGIBLE ASSETS

Computer Office Equipment Equipment

Total

€ € €

Cost: At 1 January 2017 Additions Disposals At 31 December 2017

34,347

21,940

4,773

56,287

- 4,773

- - 39,120 21,940 61,060

Depreciation: At 1 January 2017 Charge for the financial year On disposals At 31 December 2017

25,815

17,870

43,685

4,180

1,875

6,055

-

-

-

29,995 19,745 49,740

Net book value: At 31 December 2017 9,125 2,195 11,320 At 1 January 2017

8,532

4,070

12,602

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

8. TANGIBLE ASSETS (continued) In respect of prior financial year:

Computer Office Equipment Equipment

Total

€ € €

Cost: At 1 January 2016

31,946

20,402

52,348

Additions

10,237 1,538 11,775

Disposals

(7,836)

At 31 December 2016

34,347 21,940 56,287

- (7,836)

Depreciation: At 1 January 2016

30,312

15,995

46,307

3,339

1,875

5,214

On disposals

(7,836)

-

(7,836)

At 31 December 2016

25,815 17,870 43,685

Charge for the financial year

Net book value: At 31 December 2016 8,532 4,070 12,602 At 1 January 2016

40

1,634

4,407

6,041

THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

9. DEBTORS: (Amounts falling due within one year)

2017

2016

€ €

Other debtors and prepayments

87,154

89,153

VAT recoverable

189,636

166,651

Corporation tax

2

34

276,792 255,838

10. CREDITORS: (Amounts falling due within one year)

2017

2016

€ €

Trade creditors

615,669

272,854

Accruals and sundry creditors

196,811

107,378

PAYE/PRSI 36,518 27,662

848,998 407,894

11. FINANCIAL INSTRUMENTS The carrying values of the company’s financial assets and liabilities are summarised by category below:

2017 2016

€ €

Financial assets Measured at undiscounted amount receivable Other debtors (Note 9)

87,154

89,153

Financial liabilities Measured at undiscounted amount payable Trade and other payables (Note 10)

812,480

380,232

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

Notes to the Financial Statements (continued) For the Financial Year Ended 31 December 2017

12. PENSION The company operates a defined contribution pension scheme. Contributions payable in respect of the financial year ended 31 December 2017 amounted to €98,198 (2016: €33,825). There were no pension contributions outstanding at the financial year end (2016: €Nil).

13. COMMITMENTS Guarantees The company is a member of the GEIE European Milk Forum, a grouping set up to promote dairy products throughout Europe. The company, in conjunction with the other nine members of the forum, has provided a guarantee in relation to any commitments of the forum to third parties which remain outstanding following liquidation of the forum.

Disclosure of Bank guarantees: The company has entered into bank guarantees in the normal course of business. The amount outstanding at the balance sheet date was €405,729 (2016: €187,965).

14. RELATED PARTY TRANSACTIONS Certain directors of the company are also directors of the co-operatives from which the company receives voluntary levy income and other income. The total voluntary levy income and other income received in the normal course of business from these co-operatives amounted to €2,660,327 (2016: €2,435,893). The total expenses claimed by these directors for the financial year ended 31 December 2017 amounted to €11,058. (2016: €10,342). The directors held 6 meetings during the financial year ended 31 December 2017 (2016: 6 meetings).

Key Management Personnel The total remuneration for key management personnel for the period totalled €260,189. (2016: €238,478), which is included in the total remuneration disclosed in note 5.

15. EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events affecting the financial statements since the financial year end. Since the financial year end John Comer, Con O’Sullivan and Sean O’Leary resigned as directors on 30 January 2018. Patrick McCormack, Patrick Donoghue and John Finn were appointed as directors on 30 January 2018.

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THE NATIONAL DAIRY COUNCIL | ANNUAL REPORT 2017

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

Bainne Codladh Ltd. Arrabawn Co-operative Society Ltd. Aurivo Co-operative Society Ltd. Bandon Co-operative Agricultural & Dairy Society Ltd. Barryroe Co-operative Ltd. Boherbue Co-operative Ltd. Callan Co-operative Agricultural & Dairy Society Ltd. Centenary Thurles Co-operative Society Ltd. Clรณna Dairy Products Ltd. Drinagh Co-operative Ltd. Drogheda Producers Co-operative Ltd. Fealesbridge & Headleys Bridge Co-operative Dairy Society Ltd. Glanbia Ingredients Ireland Ltd. Kerry Co-operative Creameries Ltd. Kill Co-operative Agricultural & Dairy Society Ltd. LacPatrick Dairies (ROI) Ltd. Lee Strand Co-operative Creamery Ltd. Lisavaird Co-operative Creamery Ltd. Mullinahone Co-operative Dairy Society Ltd. Newtownsandes Co-operative Dairy Society Ltd. North Cork Co-operative Creameries Ltd. Ornua Co-operative Ltd.

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The National Dairy Council t: +353 1 290 2451  e: info@ndc.ie

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@NDC_ie

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