ndc annual review 2010 & 2011 plan

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National Dairy Council Annual Report 2009

Dairy: Food for LifeAnnual Report 2009

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The National Dairy Council28 Westland Square, Dublin 2,Ireland Tel: +353 1 616 9726Fax: +353 1 616 9760E: [email protected]: www.ndc.ie

© National Dairy Council (NDC) 2010. All rights reserved. No part of this publication may be reproduced without prior permission from the NDC. The NDC has made all reasonable efforts to ensure the accuracy of information presented in this document, but can accept no responsibility for omissions or errors.

Pantone 342

Published by IFP Media, 31 Deansgrange Road, Blackrock, Co Dublin www.ifpmedia com

4 Chairman’s Statement

5 Chief Executive’s Statement: 2009 in Review

10 Reports and Financial Statements

22 Board Organisational Chart

23 Sub-Committee Organisational Charts

25 Staff Organisational Chart

26 Function Organisational Chart

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INTRoDuCINg ThE NATIoNAL DAIRy CouNCIL’s annual report for 2009 offers the welcome opportunity to reflect that, as of mid 2010, a sense of optimism about the future of our industry is now much more in evidence than it was during that exceptionally difficult year. This is not to say that the challenges impacting on the sector have been relieved entirely although there has been a good recovery in milk prices. However, volatility could be a key problem for the dairy industry going forward. Having said that, the collective prospects for the Irish dairy sector, as viewed by retailers, processors and dairy farmers themselves, are undoubtedly much improved and the combination of factors that impacted on the sector with such force in 2009 – weak global prices, a rapidly contracting national economy and consumers in economising mode – have eased.

For most of us, 2009 will be remembered as the year when the transition of the Irish economy into recession, which began in 2008, took full effect. The collapse in milk prices to below the cost of production, along with general price deflation across retailing, was the direct consequence of huge economic uncertainty both nationally and internationally and created a highly challenging environment for all within the dairy sector. One notable positive, however, was that levels of dairy consumption in Ireland were not adversely affected by recession.

As an advocacy and promotional agency funded directly by dairy farmers, the key priority for the NDC in 2009 was to ensure the public did not lose sight of the enduring values of locally farmed milk or the central place of our dairy output in Irish life. Guided by the five-year strategy Dairy: Food for Life, NDC activity over 2009 demonstrated once again the robustness and farsightedness of this strategy document, which was initially launched in April 2008, a time when few could have predicted the economic turmoil that lay ahead.

The launch of the ‘Farmed in the Republic of Ireland’ trade mark, in co-operation with our industry partners, in September 2009 was perhaps the most significant individual initiative undertaken over the year. Through it, the relationship between local dairy farmers and consumers has been renewed and revitalised. Research data published in early 2010 has confirmed very positive consequences for our industry.

This singular accomplishment is far from the whole story of NDC activity in 2009, however. A comprehensive programme of events has secured a national footprint that many far larger organisations would be proud of. Particular highpoints include the roll out of the School Milk Programme; the launch of the Quality Milk Awards; and the announcement, in December 2009, of EU co-funding for the ‘Milk in Action’ Programme, which the NDC is now tasked with overall responsibility in Ireland and the UK.

As Chairman, I am proud to be part of an organisation whch, through vision, determination and sheer hard work, has secured the confidence of its many diverse stakeholders, from consumers right through to the dairy farming community.I would like to thank all of our co-op members and dairy farmers, who continue to support the levy. In addition, I would like to express my appreciation to the Department of Agriculture, Fisheries and Food and Minister Brendan Smith T.D., as their support is so vital to our ongoing success and also to acknowledge the huge contribution and commitment my fellow board members and the members of expert committees made over 2009. Finally, may I sincerely thank Chief Executive Helen Brophy and her team for another results-driven performance that has surpassed expectations on all fronts.

I believe we can say that 2009, in spite of all the challenges it presented, was a successful one for the NDC and the commitment of so many to the goals at the heart of this organisation will ensure that 2010 is another year of achievement. We look forward to working together with all our stakeholders for the benefit of the Irish dairy industry and Irish consumers.

Dominic CroninChairmanNDC

Chairman’s Statement

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IT WouLD bE hARD To ovERsTATE the particular challenges the economic turmoil of 2009 presented to the Irish dairy industry, particularly over the first half of the year. Of most immediate concern to those of us closely involved in the industry was the intense financial pressure exerted on thousands of Irish dairy farm families, and those who work within the processing sector, as the downturn took full effect and employment and financial security were widely compromised.

In an environment of such uncertainty, Irish consumer behaviour was profoundly influenced by a perceived need to curb expenditure and outgoings. In the dairy cabinet, this found expression in an increased propensity towards private label, discounter and imported dairy products, with branded and value-added products most frequently losing out as a result. One significant positive not to be overlooked, as the Chairman has pointed out in his statement, was that overall dairy consumption was not adversely affected. This was helped by consumers swapping ‘dining out’ for ‘dining in’ experiences. In general though, volume sales were maintained through heavy discounting and promotional activity, none of which is ideal in the long term for a sustainable and progressive dairy industry.

However, to see the narrative of 2009 purely in terms of challenges would be to ignore a very significant element of the story. This was also a year when the Irish dairy industry showed tremendous resilience and self-reliance; a year when, with considerable vigour, it confirmed its enduring significance to the Irish economy. As an organisation funded directly by the dairying community, the National Dairy Council (NDC), was proud to be at the heart of a number of key initiatives and sought to play the fullest role possible in promoting the values of the sector to Irish consumers. It was also a year of further development in its role as an authoritative and respected voice in health and nutrition issues, with its growing credibility evident both nationally and internationally.

All NDC activity over 2009 directly reflected the environment of challenge confronted by our community of stakeholders. However, underwriting its approach was the Dairy: Food for Life strategy, which was launched in April 2008 and for which 2009 represented the first full year of activity. The continuing

value and validity of this strategy document, against a backdrop of unprecedented challenge, must be seen as testament to its inherent coherence and robustness. As much as 2009 was a year of new initiatives, therefore, it was also a year of continuity and capacity building through the six key channels of service delivery set out in Dairy: Food for Life:

• Marketing & Promotion Programme• Advocacy & Communications Programme• School Milk & Dairy Programme• Issues Management & Nutrition Programmes• Accountability & Corporate Governance

This concerted programme-focused approach facilitated the NDC in communicating to a range of audiences that included consumers, healthcare professionals, media, school-going children and the dairying community. As Chief Executive, I am happy to report that progress was significant on all fronts, with the targets set out in Dairy: Food for Life met and, in many cases, surpassed.

Marketing & PromotionWhile the issue of value was a prevalent consumer concern over the entire year, as 2009 progressed, a notable shift in attitudes could be discerned, with greater emphasis returning to the area of food provenance. The NDC was heartened by the findings of a Food Safety Authority of Ireland survey on food labelling in December 2009, which showed that ‘nearly three quarters (74%) of consumers thought that it should be compulsory for an indication of origin to be given for all foods’. A public increasingly receptive to such concerns was, then, the backdrop against which the NDC undertook what was its highest profile activity in 2009 – the launch of the ‘Farmed in the Republic of Ireland’ trade mark in November. Developed following a period of extensive consultation with all our member dairies, the trademark was not only important from a dairy perspective but also, arguably, one of the most significant media campaigns run on behalf of any sector of the Irish food industry over the course of the year. Through a concerted cross-platform media campaign, the ‘Farmed in the Republic of Ireland’ trade mark was effectively communicated as an easy-to-understand and trustworthy indicator of dairy origin to a wide

Chief Executive’s Statement: 2009 in Review

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consumer audience. As of early 2010, the trade mark is now used by ten Irish dairies and appears on over 740 retail milk and cream products. Feedback on the campaign, from both consumers and participating dairies, indicated, as early as January 2010, the strength of positive feeling it had engendered.Some 72 per cent of consumers surveyed commented favourably on the television advertisement while 55 per cent stated that milk with the NDC mark is now either the only milk they would consider or the milk they would look out for first. Meanwhile, all dairies rated the campaign around the trade mark as positive and 60 per cent were able to provide concrete evidence of specific customer accounts that had benefited from the trade mark. While the trade mark can be viewed as a marketing initiative, underpinning it is a comprehensive and robust audit programme, designed to monitor and verify that it features on milk farmed in the Republic of Ireland. No small credit for the success of the launch can be attributed to the choice of Paul O’Connell as spokesperson. A national sports figure who speaks convincingly to urban and rural, and younger and older consumers, Paul carried out his role as ‘voice’ of the campaign with great conviction and it is the first promotional activity he has undertaken outside the sporting arena.In a short period of time, we can speak confidently of the trade mark playing an important role in safeguarding the livelihoods of dairy farming families. Looking to 2010 and beyond, the NDC believes it will continue to grow in significance.

Though it was certainly a centrepiece of NDC’s Marketing & Promotion activity, the ‘Farmed in the Republic of Ireland’ trade mark was not the only significant output in the programme in 2009. A calendar of promotional events has now evolved with highlights including our Pancake Tuesday promotion with the Irish Osteoporosis Society. In 2009, the assistance of Ryan Tubridy and Derry and Sally Anne Clark of the renowned Dublin restaurant L’Ecrivain, helped the NDC promote the importance of dairy in the diet and received widespread media coverage, including a number of radio interviews.Meanwhile, participation at key farming events, such as the National Ploughing Championships, the Tullamore Show and National Dairy Show, has proved extremely successful as a means of communicating directly to our farming stakeholders and, in 2009, to further develop our links with the farming community, we were delighted to engage in a partnership agreement with Macra na Feirme.

Advocacy & CommunicationsFurther evidence of the NDC’s determination to engage as directly as possible with the farming community was the launch of the NDC Quality Milk Awards in October, as part of its Advocacy & Communications programme. The Quality Milk Awards represented a concerted new initiative, recognising the realities of modern farming and of the need for greater lines of communication between farmers and consumers. The quality of the award nominees received through our member co-ops was outstanding and the media profile generated through the supporting PR campaign confirmed a huge opportunity to build awareness among consumers of the values of Irish dairying. The award also benefited from an expert judging panel, which included Professor Paddy Wall, Associate Professor of Public Health at UCD, Dr David Gleeson, Milk Quality Research, Teagasc and Jack Kennedy, Dairy Editor, Irish Farmers Journal. At the awards ceremony, which was held in early October in Citywest, Co. Dublin, Ireland’s top dairy farmer for 2009 was named as Brochan Cocoman from Kilwarden, Kill, Naas, Co Kildare. A supplier to Glanbia, Brochan was presented with the NDC Perpetual Cup and a cheque for €5,000. A national category award was also presented to manufacturing milk supplier Michael O’Donovan from Gurranes, Ballineen, Co Cork, who supplies milk to Lisavaird Co-op. Singled out for special commendation were:• Richard Claxton, Colt, Ballyroan, Portlaoise, Co. Laois

(supplying Glanbia);• Gordan Kingston, Tawnies, Clonakilty, Co. Cork (supplying

Clona Dairy Products);• Sean and Goretti Leahy, Corran, Waterfall, Co. Cork

(supplying Bandon Co-op); and,• Cathal Moran, Curraghlane, Skeoughvosteen, via Borris,

Co. Kilkenny (supplying Glanbia)Commending the finalists at the awards ceremony, Dr Gleeson noted: ‘The winners stand out for their attention to detail. Their record keeping is excellent and knowledge and enthusiasm for their work was obvious.’

Advocacy must have at its core accurate and up-to-date science-based information. To strengthen its credibility in this regard, the establishment of the Scientific, Nutrition & Technical Committee (SNT) was an important milestone of NDC activity in 2009. This Committee now provides expert guidance on the organisation’s science-based communications and will play a pivotal role in ensuring the highest standards underwrite all our health-care communications.

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Recognising the important role of healthcare professionals as advocates for healthy lifestyle choices, DN Forum, a science newsletter which presents the latest peer-reviewed research findings on dairy, was published for the first time in early 2009. Three editions were produced over the year, reaching almost 5,000 Irish health professionals. The broader opportunity to communicate to consumers through the healthcare channel by providing attractively presented and targeted information has also been actively pursued and, by early 2010, three quarters of GP surgeries nationwide were distributing NDC nutritional guides.The NDC Dairy Den Programme developed this highly successful Guide to Toddler Nutrition in 2009, the first of a developing series of booklets on nutrition for mothers that will be enhanced in 2010. The NDC’s approach to reaching out through practical and effective means was further demonstrated by the highly successful Health & Wellbeing Evenings, which were pioneered in 2008 and rolled out further in 2009. Four separate events, co-hosted with North Cork Co-op in Kanturk; Arrabawn Co-op in Claregalway; Wexford Creamery in Wexford; and Connacht Gold in Westport, were extremely well attended and gained excellent feedback from the audiences. Proceeds raised were donated to a local charity of the co-ops’ choice.Effective advocacy strategies should have an international as well as national dimension and, during 2009, the NDC

strengthened its involvement in fora such as the Global Dairy Platform, European Dairy Marketing Forum and the Utrecht Group. Formal links were also developed with The Dairy Council, Great Britain through the GB Alliance. Covering a number of areas of strategic interest, this alliance formally allows for information sharing between the two bodies and was pivotal to the securing of EU funding for the ‘Milk in Action’ Programme, as a strong transnational element is a prerequisite of such funding.At home, the NDC’s partnership with the Irish Osteoporosis Society (IOS) remains a highly productive and mutually beneficial relationship. A radio campaign involving television presenter Craig Doyle increased awareness that osteoporosis is a disease affecting both men and women. Central to the campaign was the new 3aday.ie website, which acts as a gateway to both the NDC and Irish Osteoporosis Society’s websites.

School Milk ProgrammeThe School Milk Programme is central to the Dairy: Food for Life strategy and the nationwide launch of the ‘Fresh Milk Club’ to the country’s 3,300 national schools in September 2009 was a highpoint of activity last year. With 14,807 students enrolled in the programme in the months September-December 2009, across 500 targeted schools, the goal of raising participation by 12% on the year earlier figure (9,967) was well exceeded and this success points to further opportunities for growth

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ahead. The concept of the ‘Fresh Milk Club’ was developed following a period of in-depth consultation with school children, parents and teachers in early 2009 and comprehensive school information packs were sent to national schools in September and the website www.freshmilkclub.ie was launched. All important logistical support, in the form of a total of 90 fridges delivered to schools, as well as the provision of cooler bags to many others, has been central to improving the attractiveness of fresh milk to schools and their pupils. Over 400 visits of FAI liaison officers, offering coaching sessions and nutritional advice, helped to promote milk as central to an active, healthy lifestyle. In 2009, the NDC also undertook much of the preparatory groundwork needed to take the School Milk Programme to secondary schools in 2010. Supporting this, it worked closely with the Department of Education on the publication of a home economics supplementary guide to dairy for senior-cycle students and has explored the opportunity of developing osteoporosis information DVDs for both primary and secondary schools. The support of the School Milk Industry Working Group, along with the broader support of its co-operative partners, proved vital to the success of the School Milk Programme in 2009 and will continue to do so in 2010.

Issues Management & NutritionWith a culture of misinformation often surrounding the consumption of dairy products, determined and pro-active Issues Management & Nutrition programmes are an essential foundation activity of the NDC. A front-line day-to-day priority, since 2008, has been to address misinformation in the media and broader public domain and anecdotal evidence suggests this has been a highly effective strategy. The establishment of the SNT has further allowed the NDC to draw effectively on the expertise of Irish academia and industry in the areas of food safety and nutrition.The recall of Irish pigmeat from supermarket shelves around the world in December 2008 confirmed the devastating if, fortunately, short-term impact a seemingly localised event can have on an entire sector. While the dairy industry was in no way connected with the recall, a concerted effort was needed to address broad ranging media and consumer concerns about safety in the aftermath. It underlined the absolute necessity of the full development of the NDC Issues Management Manual, which has been priority of the expert Issues Management Committee since it was established in 2008. The Issues Management Manual is a complex and extensive document which made considerable progress in 2009. This included the categorisation of potential issues under four headings: 1) farming and production methods; 2) processing; 3) marketing and consumers; and 4) nutrition and health.In total, 15 issues in the area of nutrition and health were

identified for which relevant position statements should be prepared as a matter of urgency. Work continues on the manual in 2010, and a full review and update of work completed will be made available to members through the online portal later in the year. A further expression of the NDC’s commitment to nutrition and issues management can be seen in DN Forum, the dairy nutrition newsletter targeting health-care professionals, and in the creation of a comprehensive e-library. Both developments underline the NDC’s extending scope as a nutritional knowledge hub, further aided by its alliance with the GB Dairy Council and by developing links with, for example, the agricultural advisory body Teagasc. Close association with the IOS, meanwhile, remains both significant and mutually beneficial in this area. Collaboration on a number of projects has increased awareness of the value of dairy in building bone health among health-care professionals, policy makers and the general public.

Accountability & Corporate GovernanceIn keeping with its intention of being recognised as a world-class advocacy and promotional agency, the NDC is confident that necessary progress has been made in the areas of corporate governance and accountability since the launch of Dairy: Food for Life in April 2008. With the publication of the Annual Review in January 2009 and 2010, as well at the Annual Report including the financial statements in June 2009 and, herewith, June 2010, the NDC seeks to give the clearest possible sense of the return on investment to stakeholders on all its initiatives.The NDC has also sought to develop its AGM into a broader conference-style event, communicating developments of interest and value to delegates.In 2010, the NDC will implement a comprehensive human resources policy in accordance with the advice and support of IBEC.Significant funding secured in late 2009 for the ‘Milk in Action’ Programme – involving co-op members, the Department of Agriculture, Fisheries and Food, and the EU – is perhaps the clearest expression yet that the NDC is widely recognised as an organisation of purpose, capability and accountability.

‘Milk in Action’ ‘Milk in Action’ is a three-year milk-promotion campaign that commenced in April 2010 and runs until 2013. Operating as a separate programme from the NDC’s core programmes, but designed to complement the Marketing & Promotion and School Milk Programmes in particular, it aims to link increased milk consumption to sporting activity in Ireland, Northern Ireland, England and Wales and targets young people as its main audience. ‘Milk in Action’ also aims to inform women of

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the nutritional benefits of milk and milk products, in particular cheese and yoghurt, in the battle against osteoporosis. Funding from EU has being matched by support from Irish industry and Department of Agriculture, Fisheries and Food and the first stages of promotional activity in the form of advertising will roll out in September 2010.

Looking forwardAt the mid point of 2010, the sense of uncertainty that pervaded the dairy industry through much of 2009 has retreated to a considerable degree. While such uncertainty was a live issue, however, important decisions were required to be made. With this in mind, I believe we can speak of the NDC as an organisation that has shown itself to be singular and uncompromising in its objective of driving and stimulating the domestic consumption of locally produced milk and dairy products. This record of achievement can, as was stressed earlier, be attributed to a clear plan of action, set out in the six programme areas of the Dairy: Food for Life strategy. However, the channels through which we advance these activities would be, without a dedicated team to advance them, simply ideas on a page. In the development and execution of the ‘Farmed in the Republic of Ireland’ trade mark; the launch of the Quality Milk Awards; the nationwide roll out of the School Milk Programme; and the securing of funding for the ‘Milk in Action’ Programme, the role of the small but dedicated team

at the NDC has been critical. No less important has been the unstinting support of Chairman Dominic Cronin and the Board of the NDC; our dedicated expert committees; our member co-operatives; the Department of Agriculture, Fisheries and Food; Minister Brendan Smith TD; and, of course, the dairy farming community as a whole. Their collective support is, undoubtedly, the greatest single resource available to the NDC and I would like to express my sincere thanks to all as we fulfil the remit of developing a world-class organisation dedicated to delivering long-term benefits to our dairy industry. Together, we have overcome many obstacles and progressed activities on numerous fronts over 2009. I have no doubt we will continue this momentum in 2010 and, working together, will serve the Irish dairy industry with distinction and determination.

Helen BrophyChief Executive

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REPORTS AND FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER, 2009

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THE NATIONAL DAIRY COUNCIL

Directors’ ReportThe directors present their annual Report and the Financial Statements for the year ended 31 December, 2009.

PRINCIPAL ACTIVITIESThe 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.

RESULTSThe results for the year and the state of affairs of the company are set out on pages 14 and 16 respectively.

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

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

DIRECTORSThe current directors of the company are:

Mr. D. Cronin (Chairman)Mr. H. Corbally (Vice Chairman)Mr. E. BrayMr. J. CahillMr. T. CorcoranMr. S. GriffinMr. P. KellyMr. R. KennedyMr. K. Kiersey

Mrs. M. PurcellMr. C. RyanMr. S. McAuliffe Mr. F. Tobin (appointed 29 January 2009)Mr. J. Collum (resigned 29 January 2009)Mr. G. Quain (resigned 18 March 2009)Mr. J. Hehir (appointed 18 March 2009)

BOOKS OF ACCOUNTThe measures taken by the directors to secure compliance with the company’s obligation to keep proper books of account are the use of appropriate systems and procedures and employment of competent persons. The books of account are kept at 28 Westland Square, Dublin 2.

EVENTS AFTER THE BALANCE SHEET DATEThere have been no significant events affecting the company since the year end.

PUBLICATIONThe 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.

AUDITORSThe auditors, Deloitte & Touche, Chartered Accountants continue in office in accordance with Section 160(2) of the Companies Act 1963.

Signed on behalf of the Board:

DIRECTORSDate: 21 April 2010

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The National Dairy Council Statement of Directors’ Responsibilities

Irish company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;• makejudgementsandestimatesthatarereasonableandprudent;• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethatthe

company will continue in business.

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish statute comprising the Companies Acts, 1963 to 2009. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Independent Auditors’ Report to the Members of The National Dairy Council

We have audited the financial statements of The National Dairy Council for the year ended 31 December 2009 which comprise the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet, the Cashflow Statement and the related notes 1 to 13. These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the company’s members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditorsThe directors are responsible for preparing the financial statements, as set out in the Statement of Directors’ Responsibilities, in accordance with applicable law and accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Our responsibility, as independent auditor, is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2009. We also report to you whether in our opinion: proper books of account have been kept by the company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purpose of our audit and whether the company’s balance sheet and profit and loss account are in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding directors’ remuneration and directors’ transactions is not disclosed and, where practicable, include such information in our report.

We read the Directors’ Report and consider the implications for our report if we become aware of any apparent misstatement within it. Our responsibilities do not extend to other information.

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Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we evaluated the overall adequacy of the presentation of information in the financial statements.

OpinionIn our opinion the financial statements:• giveatrueandfairview,inaccordancewithGenerallyAcceptedAccountingPracticeinIreland,ofthestate

of the affairs of the company as at 31 December 2009 and of the deficit for the year then ended; and• havebeenproperlypreparedinaccordancewiththeCompaniesActs,1963to2009.

We have obtained all the information and explanations we considered necessary for the purpose of our audit. In our opinion proper books of account have been kept by the company. The company’s balance sheet and its profit and loss account are in agreement with the books of account.

In our opinion the information given in the Directors’ Report is consistent with the financial statements.

Deloitte & ToucheChartered Accountants and Registered AuditorsDublin

Date: 21 April 2010

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2009 2008 € €

Notes

Income 1 2,221,690 2,418,120

Expenditure

Direct expenses 2,837,551 2,284,136Establishment expenses 127,302 151,150Administrative expenses 198,517 329,933 Total expenses 3,163,370 2,765,219 Deficit on ordinary activities before taxation 2 (941,680) (347,099)

Taxation 4 (16,744) (40,297) Deficit on ordinary activities after taxation (958,424) (387,396)

Opening accumulated surplus 3,299,139 3,686,535

Deficit on ordinary activities after taxation (958,424) (387,396) Retained accumulated surplus carried forward 9 2,340,715 3,299,139

All of the results for the year derive from the continuing activities of the company.

The financial statements were approved by the Board of Directors on 21 April 2010 and signed on its behalf by:

DIRECTORS

The National Dairy CouncilIncome and expenditure account

For the year ended 31 December, 2009

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2009 2008 € €

Notes

Deficit after taxation (958,424) (387,396)

Prior year adjustment 9 - 1,404,865 Total recognised (deficit)/surplus since the last annual report (958,424) 1,017,469

The National Dairy CouncilStatement of total recognised gains and losses

For the year ended at 31 December, 2009

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2009 2008 Notes € €

FIXED ASSETS

Tangible assets 5 50,339 81,881

CURRENT ASSETS

Debtors 6 303,320 238,088Bank 2,382,685 3,135,343

2,686,005 3,373,431

CREDITORS: (Amounts falling due within one year) 7 (395,629) (156,173)

NET CURRENT ASSETS 2,290,376 3,217,258

TOTAL NET ASSETS 2,340,715 3,299,139

Represented by:ACCUMULATED SURPLUS 9 2,340,715 3,299,139

The financial statements were approved by the Board of Directors on 21 April 2010 and signed on its behalf by:

DIRECTORS

The National Dairy CouncilBalance sheet

As at 31 December, 2009

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2009 2008 Notes € €

Reconciliation of operating deficit to net cash outflow from operating activities

Operating deficit (941,680) (347,099)Add back depreciation 33,002 36,309Increase in other debtors (65,232) (158,609)Increase/(decrease) in creditors 241,797 (127,847)

Net cash outflow from operating activities (732,113) (597,246)

Taxation

Taxation paid (19,085) (45,943)

Financing activities

Payments to acquire fixed assets (1,460) (41,535)

Decrease in cash position for the year 10 (752,658) (684,724)

The National Dairy CouncilCashflow statement


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1. ACCOUNTING POLICIES

Basis of preparation The financial statements have been prepared in accordance with accounting standards generally accepted in

Ireland and Irish statute comprising the Companies Acts, 1963 to 2009.

Basis of accountingThe financial statements have been prepared under the historical cost convention.

IncomeIncome is comprised of voluntary levies, donations and interest receivable.Income received in the form of voluntary levy contributions is based on a price per litre of milk produced and is recognised on a receipts basis.

ExpenditureExpenditure is accounted for on an accruals basis.

DepreciationDepreciation of fixed assets is provided on a straight line basis as follows:

Motor vehicles 20% per annumOffice equipment 25% per annumComputer equipment 25% per annum

PensionThe company operates a defined contribution pension scheme. Contributions payable to the scheme are charged to the profit and loss account in the period to which they relate.

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

LeasesLease rentals in respect of assets held under operating leases are expensed in the period to which they relate.

2. DEFICIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2009 2008 € €

The deficit before taxation is stated after charging: Directors’ remuneration 25,000 24,999 Directors’ expenses 23,904 23,483 Auditors’ remuneration 11,000 11,000 Depreciation 33,002 36,309 Operating leases 3,780 4,275

The National Dairy CouncilNotes to the financial statements


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3. EMPLOYEES 2009 2008 € €

Wages and salaries 372,547 382,854 Redundancy costs - 109,866 Social Welfare costs 37,791 37,390 Pension 29,434 16,898

439,772 547,008

The number of employees at the year ended 31 December 2009, including two directors, was 7 (2008:7).

4. TAXATION The company is not liable to corporation taxation on the excess of its income over its expenditure. Corporation tax was paid on interest earned as follows: 2009 2008 € €

Corporation tax @ 25% 16,744 40,297

5. TANGIBLE ASSETS Computer Office Motor equipment equipment vehicles Total

€ € € €

Cost: At 1 January, 2009 40,317 35,518 68,381 144,216

Additions 765 695 - 1,460

At 31 December, 2009 41,082 36,213 68,381 145,676

Depreciation: At 1 January, 2009 17,703 9,929 34,703 62,335

Charge for the year 10,271 9,053 13,678 33,002

At 31 December, 2009 27,974 18,982 48,381 95,337

Net book value: At 31 December, 2009 13,108 17,231 20,000 50,339

At 1 January, 2009 22,614 25,589 33,678 81,881

The National Dairy CouncilNotes to the financial statements (continued)


20


6. DEBTORS: (Amounts falling due within one year) 2009 2008 € €

Other debtors 80,689 202,856 VAT recoverable 222,631 35,232

303,320 238,088

7. CREDITORS: (Amounts falling due within one year) 2009 2008

€ €

Trade creditors 350,740 100,763 Corporation tax 616 2,957 Accruals and sundry creditors 31,080 40,648 PAYE/PRSI 13,193 11,805

395,629 156,173

8. PENSION The company operates a defined contribution pension scheme. Contributions payable in respect of the

year ended 31 December 2009 amounted to €29,434 (2008: €16,898). There were no pension contributions outstanding at the year end (2008: €Nil).

9. ACCUMULATED SURPLUS 2009 2008 € €

Accumulated surplus at the beginning of the year 3,299,139 3,686,535 Deficit for the year (958,424) (387,396)

Accumulated surplus at the end of the year 2,340,715 3,299,139

Included in the 2008 opening accumulated surplus is an amount relating to a prior year adjustment of €1,404,865. This prior year adjustment related to levy contributions. In prior years income from levy contributions was deferred for expenditure for a period of eight months from its receipt. Since 1 January 2008, the company recognises income from levy contributions on a receipts basis in the year which the levy contributions relates.



21


10. ANALYSIS OF CHANGES IN NET FUNDS Opening balance Cashflow Closing balance

€ € €

Cash at bank and in hand 3,135,343 (752,658) 2,382,685

11. OPERATING LEASES The company had annual commitments under non-cancellable operating leases, these leases were due to

expire as follows: 2009 2008 € €

Between two and five years – office equipment 2,600 4,485

12. RELATED PARTY TRANSACTIONS Certain directors of the company are also directors of the co-operatives from which the company receives

voluntary levy income. The total voluntary levy income received in the normal course of business from these co-operatives amounted to €1,597,174 (2008: €1,632,933). The total expenses claimed by these directors for the year ended 31 December 2009 amounted to €9,780 (2008: €8,109). The directors held six meetings during the year ended 31 December 2009 (2008: 7 meetings).

13: APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the Board of Directors on 21 April, 2010.



22


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Catherine

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Sean Griffin

Jackie Cahill

Kevin K

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Henry C

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25


National Dairy CouncilStaff Organisational Chart

December 2009

Dr Catherine Logan Tara Regan Joe Podesta

Helen Brophy

Lynda Thompson

26


National Dairy CouncilFunction Organisational Chart

December 2009

Issues Management & Nutrition

School Milk & Dairy Programme

Marketing & Communications

Chief Executive

PA/Admin

28


The National Dairy Council28 Westland Square, Dublin 2. Ireland

Tel: +353 1 6169726Fax: +353 1 6169760www.ndc.ie

ndc annual review 2010 & 2011 plan

Documents