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2020-12-31-accounts

Annual Report & Accounts For the year ended 31 December 2020

The Group has hosted online events, competitions and webinars to continue engaging with Members during the Covid-19 pandemic.

Officers of the Society

President – Mr R Clare

Chairman – Mr M Smale

Registered Office

Speir House, Stafford Park 1, Telford, Shropshire TF3 3BD

Advisors to the Society

Auditors

WR Partners Chartered Accountants and Statutory Auditors Belmont House, Shrewsbury Business Park, Shrewsbury, Shropshire SY2 6LG

Bankers

Barclays Bank Plc, 32 Clarendon Road, Watford, Hertfordshire WD1 1LO

Fund Managers

Close Brothers Asset Management 10 Exchange Square, Primrose Street, London EC2A 2BY

Contents

Contents
President’s Report 3
Chairman’s Report
Chief Executive’s Report		 4
6
Report of the Trustees 8
Strategic Report 14
Report of the Independent Auditors 18
Consolidated Statement of Financial Activities 20
Consolidated and Charity Balance Sheets 21
Charity Statement of Financial Position 22
Consolidated Statement of Cash Flows 23
Notes to the Financial Statements 24

Cover photo by Richard Hodgson

2 Annual Report & Accounts For the year ended 31 December 2020

PRESIDENT’S REPORT

Robert Clare

My year as President is rapidly coming to a close and I must say what a privilege and honour it has been to be appointed to that position. But what a year it has been. This report from the President is traditionally a resume of all the events which have been attended throughout the year of office. Well, the year started with a virtual AGM when I was duly elected to this position, that was a first-time event for the Society and it went very smoothly, but it was such a disappointment when we had to cancel all our plans for the Celebration in Shropshire which we were so looking forward to. Also of course we were arranging to host the Holstein Young Breeders Weekend Rally at Harper Adams, that we are still hoping to do when circumstances permit.

This year’s Celebration and AGM, scheduled to be held in Scotland when Mr John Jamieson starts his term of Presidency, is also now postponed until, hopefully 2022, so John’s inauguration will also be a virtual event. I most sincerely hope he will see some normality during his term of office.

The only event I have been able to participate in was the President’s Medal competition, when it was my pleasure to interview this year’s six finalists along with my co-judges Andrew Axford and Ann Taylor, with the results being published in the February Journal. Congratulations to all who competed. They had all put a tremendous amount of thought and research into their essays which I found extremely impressive, and it was a delight to talk to these ultraenthusiastic and confident young people. The pity is we could only have one eventual winner, Steven Harris from Cornwall, with Rob Higgins (Shropshire) and Heather Martin (Northern Ireland) being runners up. It is so reassuring to know we have such a high calibre of youngsters coming along.

Another thing I would like to comment on is the buoyant trade for pedigree Holsteins over the last year. We had some very rewarding prices at the autumn sales and the Black and White Sale at Carlisle in December was probably one of the best ever. Brexit seems to have

boosted trade in most commodities, but it is causing problems with exports at the moment which I hope will only be teething troubles?

I would like to say a very big and sincere thank you to all the staff at Holstein UK for keeping things going so well during these extremely testing circumstances. The laboratory, I know, has seen very challenging times with personnel being absent either through actual sickness or shielding. Most of the

office staff have been able to work from home, which in the main, has been successful but not without the additional stress, in some cases, of home schooling and the tension of isolation and furlough. The classifiers were grounded for a while, but now thankfully, they are out and about again.

Some of the clubs have done really well with virtual meetings and herd competitions, all of which help to keep the camaraderie going until we can resume normal activities.

The All-Time People’s Choice competition, which has been going on recently, has been a very popular way of engaging with our membership. Thank you to those who submitted photographs and to those who set it up.

In conclusion, I would just like to again thank those who entrusted me to be your Holstein UK President for this year. I am just saddened that I have had such an inactive term of office, but nevertheless I am extremely proud to have held the position and I wish Mr Jamieson well for next year.

Robert Clare

President

2020 Holstein UK President’s Medal Winner Steven Harris (Cornwall) receiving the award from Michael Smale.

Annual Report & Accounts For the year ended 31 December 2020 3

CHAIRMAN’S REPORT

MICHAEL SMALE

2021 seems to have been a year of déjà vu for many of us, with Covid, Brexit, uncertainty and volatility being a part of everyday life. But thankfully there now seems to be light at the end of the tunnel for a more normal life to return.

The past 12 months has seen a strong performance from the Holstein UK Group, particularly CIS as they continue to experience an increase in health testing demands. NBDC sees a steady improvement in its operations even though classifying has been badly affected by Covid regulations. We apologise to those whose classification service has been affected. The team are working hard, making every effort to catch up with everybody while bearing in mind the safety of members and staff alike. Holstein UK has seen a 2% increase in cow registrations and is showing a healthy profit however this is due mainly to the cancellation of shows and events which means our costs have been reduced. Overall, the Group is in a good position and the trustees and management team continue to look for new income sources and improved efficiencies.

Within the year, the board has agreed changes in the Supplementary Register, Master Breeder Award and Star Brood Award which are now both automated and updated for the British Friesian also. We have carried out a major review of registration charges which has been agreed and will be implemented throughout the year, allowing for a fairer system. We are also pleased to introduce The Consistent Performer Award for Breed Code 20, which will identify the top Friesian cows in the UK each year.

As a Society we have increased our lobbying activity over the past 12 months responding to DEFRA consultations on Milk Contracts, Livestock Transport, Gene Editing and two TB consultations. As well as responding to the Red Tractor consultation and post

Brexit Herd Book rules changes. We continue to work with other industry organisations to voice the concerns of our membership and will maintain this activity as the agricultural industry faces a transition period to new domestic policy.

But most notably this year, we have agreed the purchase of a larger premises in Telford. The new building will allow the Society to develop and

expand services in the future, covering 1,550sqm. The £1.139 million spend will be funded from our cash position made possible by the improvement in the Holstein Group’s profitability over recent years and the annual gifting of profits from CIS to Holstein UK. We will remain at Speir House until the new labs and office spaces are complete and ready to move into. The sale of Scotsbridge House is still ongoing and has been affected by Covid slowing the planning permission process down.

Obviously, it has been a shame that we haven’t been able to meet up with fellow breeders and friends over the last 12 months as it is very much part of the Society’s activities. It is the board’s intention to return to our normal calendar of shows and events as soon as it is deemed safe to do so. I would like to thank members for their patience and continued support during what has been for all, some turbulent times.

The shortlist for the Holstein UK All Time People’s Choice Competition.

4 Annual Report & Accounts For the year ended 31 December 2020

Holstein UK were Platinum Contributors of the Milk Your Moments campaign

HYB however has adapted very quickly to the virtual world for competitions and events with videos from dairies around the world, stock judging competitions, photography and Test-YourTopline all being very well supported. Congratulations must go to our award winners Steven Harris from Cornwall winning this year’s highly coveted President’s Medal award. The Littlestar went to William Neale also from Cornwall and Jonny Woodhouse from Lancashire, won the Louise Hartley Award. The standard of those entering these awards remain to be outstanding and all should be congratulated for their efforts and enthusiasm.

We would like to thank Robert Clare for being our President this year. Although I haven’t been able to shake him by the hand to congratulate him or thank him for his service, it should not distract from the recognition of Robert joining a distinguished list of Holstein UK Presidents.

We say goodbye to three longstanding trustees in Jane Targett, Edward Griffiths and Iwan Morgan, who have all had an important and vital part to play in the development of Holstein UK and the

wider group. However we welcome three new trustees in David Lawson, Richard Thomas and Ben Yates and look forward to their input and contribution in the future. We are also delighted to have John Jamieson as our new President. John has previously served many years on the Holstein UK board and we are honoured that he has agreed to take a two year term of office in the anticipation that normality will return by 2022 – 2023.

Finally, I would like to take the opportunity to thank members for their continued support without whom we would not have a Society; the trustees for their time and commitment in developing a strategy in pushing the business forward and most importantly our employees in the Holstein UK Group who have adapted to changes in work circumstances admirably in order to keep Holstein UK running.

Michael Smale

Chairman

Annual Report & Accounts For the year ended 31 December 2020 5

CHIEF EXECUTIVE’S REPORT

SUE COPE

Many words not previously expressed with regularity were used during 2020, pandemic, lockdown, unprecedented, Zoom, furlough and sadly for too many, loss. For me, if I had to choose one word to sum up our business’s largest challenge, it would be uncertainty.

For the whole of the Holstein UK Group, the uncertainty has meant we have had daily challenges, which have required a fluid approach. We have had to manage the day-to-day issues of positive Covid cases, self-isolation, and furloughed employees; the hurdles that have been put in place due to Brexit, and new ways to engage with our members following the loss of face-to-face meetings and events. I am extremely proud of all the employees, as they have done whatever has been asked of them with a flexible and positive attitude.

Holstein UK is also very aware that the year presented great challenges for the dairy industry, that has directly impacted our members and customers. The turmoil of market conditions throughout the year compounded the last five years of the dairy sector being battered by volatile and low milk prices. The resilience demonstrated by UK dairy farmers and their ability to adapt to new challenges is a credit to them.

Whilst 2020 will not be remembered as a good year, in fact, quite the opposite, it is now that we must look to the future and consider the way forward. During 2020, consumption of dairy in the UK took a positive turn as many households cooked and baked more from scratch. I believe a growing number of UK residents are now much more appreciative of your hard work and UK food standards. We must do all we can to continue to promote the benefits of UK dairy produce domestically and internationally.

The financial results for the Group within this Annual Report are very positive, this is due to our core services continuing and the loss of the cost of our events. As an organisation we need to consider though that our Pedigree and Membership Services continue to trade negatively and without the return on Holstein UK investments the Society would not be financially viable. We are pleased that we have made significant movement in the right direction since publishing our strategy in 2018. The trustees are now considering the feedback from the membership, and they will launch the Holstein UK strategy for the next five years imminently.

Membership

As the dairy industry continues to be financially challenging, we inevitably have dairy farmers deciding to leave the industry. As a result, we have sadly seen members selling their herds and ceasing milk production. This has impacted membership volumes with lost members slightly up on previous years but in line with industry trends. I am pleased to report though, that we attracted 135 new members.

Herd Book Management

We are extremely pleased that registrations have increased in 2020 by 2% over the previous year resulting in 194,537 new animals entering the Herd Book. This trend has continued into 2021. We continue to strive to meet the challenges of new legislation that is being placed on us following Brexit. Holstein UK is now a recognised third-country Breed Society following EU approval of our Breeding Programme. Our registration processes and certificates have been updated to meet the requirements of (EU) 2016/1012 and (EU) 2017/717 but we know that

depending on the future actions of the devolved Governments, that we will need to continue to invest in this area.

Approved Registered Cattle (ARC)

The ARC initiative continues to grow momentum with sales of tags increasing by 28% in 2020 as more members take advantage of their combined buying power. The increase in sales has also been attributed to the escalation of BVD testing through CIS and genomic testing through NBDC.

Genomics

The NBDC genomic testing service processed 26% more samples over the previous year. This is exceptional growth, especially as we were forced into pausing the AHDB Herd Advance Project in Wales due to the restrictions, which was expected to bring more than 4,000 samples during the period.

Type Classification

It has been a difficult year for the classifiers as they were placed on furlough during the lockdowns and had to rearrange work to ensure they did not contravene government guidelines. I am very pleased to report, due to the flexibility given by members and the classifier’s determination to catch up, the team inspected 133,412 cattle; a slight decrease of 809.

Milk Recording and Animal Health Testing

The Cattle Information Service (CIS) continues to prove itself as an excellent investment for Holstein UK. Even through a difficult year when a proportion of milk recordings had to be cancelled or the level of service was changed by the customer, which resulted in credits being given. The continued growth in health testing for milk, blood, and tissue has meant that the business has remained in a stable position. The strategy of performing tests and providing services for third-party companies is also paying off as the combined test volumes from CIS customers and external contracts keep the prices as low as possible.

The CIS milk recording customer base increased in 2020 with 123 new herds joining CIS, a 9.8% increase over the previous year. Whilst the lost customers decreased by 19.4% to 54; most of these herds have gone out of production.

Charitable Activities

The Society is committed to encouraging, promoting, and improving the breeds within the Herd Book, representing our Members, and investing in activities to encourage the next generation.

The turmoil of 2020 forced us into looking at different ways to engage with our membership, promote UK genetics and ensure the voice of our members was heard. When it became apparent that we were not going to be able to host our usual events and exhibit at agricultural shows, we began a series of initiatives to meet the Charitable Objectives virtually.

Holstein UK launched a series of ‘Just for Fun’ competitions, these ranged from light-hearted photographic competitions, poster designs, scrapyard challenges, and quizzes to testing stock judging skills, video clipping competitions, and voting for The All-Time People’s Choice calf,

Annual Report & Accounts For the year ended 31 December 2020

6

heifer, and cow. These competitions helped us keep in touch with our Members and certainly gave some a break from home schooling!

We also embarked on a raft of educational online features. The longest running was ‘Trait Talk’ where each classifier talked viewers through how and why they linear score cows, giving a real guide to the importance of good type. In addition, we hosted webinars on BVD, IBR, Neospora, pregnancy testing and launched a range of ‘how to’ guides for our online tools. It was also a great pleasure for us to be invited to speak on externally organised webinars on subjects such as profitable cows, the value of milk recording, disease testing, and genomics. Many of these were arranged by agricultural colleges, further building the relationship we have with the next generation of dairy farmers.

Partly due to these initiatives we have seen a 26% increase in page views of our website and followers of our social media.

Whilst it was good to build on our online presence, we were disappointed that we were unable to host and attend many of our usual events, however, we did find ways to facilitate some of the HYB competitions. Congratulations to Lancashire HYB member Jonny Woodhouse on winning the Louise Hartley Award and to Cornwall HYB member William Neale for winning the Littlestar Award. The Cornwall Club achieved double award success when Steven Harris was announced as the winner of the President’s Medal Award. Congratulations to Steven and runnersup Heather Martin (Northern Ireland) and Rob Higgins (Shropshire).

During 2020 we reviewed all of our awards and automated as many as possible to ensure that all cows and members had the opportunity to be included; these included our production, Star Brood, and breeder awards. We also introduced a British Friesian Herd of the Year Award; my congratulations go to the Stockdale Family of the Castledale herd in Northern Ireland for being the first winners.

The Master Breeder Award was also automated with new criteria to recognise Holstein members whose herds achieve a high standard in both classification and production. I was delighted that the new criteria recognised herds that had previously been awarded Master Breeder status - a remarkable achievement as their herd can only be considered every ten years - and Members that received Master Breeder for the first time. Congratulations to all at Clarby, Corringham, Erie, Foxminster, Holymoor, Llancourt, Richaven, Sahara, Whinchat and Whitgreave who have all received Master Breeder 2021 Awards.

The lack of events has certainly helped our positive financial results for 2020, I am aware though, that as a Breed Society we must meet our Charitable Objectives, and whilst we will have made new lines of communication with our Members, we cannot replace our usual club, regional and national activities with virtual interaction. It is comforting though that whilst we still have uncertainty in the future, our businesses as a whole are in a much better position than they were three years ago, which gives us a robust outlook.

The robustness of the Holstein UK Group can be attributed to strong strategy and policy decisions from Holstein UK Trustees and the hard work and flexibility shown by the employees to operationally meet those decisions. I would like to thank every single one of them for their support.

It has been a pleasure to work with Michael Smale as Chairman for a second year, and I feel between us we have made great progress. Michael is never shy of giving his time to the Society and for that I would like to thank him and his family.

Holstein UK has been extremely lucky to have some great ambassadors as President of the Society and Bryan Thomas certainly fulfilled that role. I was so very sad that he passed away following his retirement as President. My admiration grew for Bryan as I saw him carry out his duties with great enthusiasm, even though he was often suffering with ill health. The support of his wife Eirlys and family was ever-present, and I am sure they are very proud.

Robert Clare became President at the AGM in 2020. Robert has had a very different set of challenges to any previous Holstein UK President, I am sure when he was nominated, he did not know he would be conducting most of his duties via Zoom. It is a shame that Robert and his wife Hilda were unable to meet as many Members as they would have liked, but I know Robert was very proud to be voted as President, and whilst he was only able to represent the Society at limited events, his willingness to support the Society and encourage Members has been a tribute. So, Robert is not the first President to be an ambassador, but he certainly is the first virtual one!

Finally, I would like to thank the members of Holstein UK and the customers of CIS and NBDC for their continued support and the flexibility given to us as we have strived to keep our core services going. I look forward to a time when we will be able to meet again.

Sue Cope

Chief Executive

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Annual Report & Accounts For the year ended 31 December 2020

7

REPORT OF THE TRUSTEES

TRUSTEES’ REPORT

The trustees present their Annual Report together with the audited financial statements of the Charity for the year 1 January 2020 to 31 December 2020. The Annual Report serves the purposes of both a trustees’ report and a directors’ report under company law. The trustees confirm that the Annual Report and financial statements of the charitable company comply with the current statutory requirements, the requirements of the charitable company’s governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2015) as amended by Update Bulletins 1 and 2.

The audited consolidated financial statements comply with the Statement of Recommended Practice (SORP) – Accounting and Reporting by Charities as revised in 2005, the Charities Act 2011, the Companies Act (2006), Charities (Accounts and Reports) Regulations 2008 and Charities SORP – FRS 102. The trustees’ report (including the strategic report) and financial statements are submitted to the Charity Commission following approval by the membership at the AGM.

The Charity was incorporated on 25 November 1998 and is governed by its Memorandum and Articles of Association.

Emily Davis and Jonny Woodhouse representing Holstein Young Breeders at the Masters Open Competition in Verden, Germany

The trustees who served during the period were:

ELECTED 2011 Aled Jones
retired 01.07.20		 North Wales
Stephen Brough
retired 01.07.20		 Northern
ELECTED 2012 Iwan Morgan South Wales
Jane Targett Southern
Edward Grifths Yorkshire
ELECTED 2014 Michael Smale Far Western
ELECTED 2016 Peter Prior South East
& Eastern
ELECTED 2017 Sandy Pirie Scotland
David Jones West Midlands
ELECTED 2018 David Yates Scotland
Wallace Gregg Northern Ireland
ELECTED 2019 Jane Whittaker North Western
John Hartley Lancashire
Matthew Winter East Midlands
Stephen Hill North Midlands
ELECTED 2020 William Williams
from 01.07.20		 North Wales
Andrew Williamson
from 01.07.20		 Northern

8 Annual Report & Accounts For the year ended 31 December 2020

OBJECTIVES AND ACTIVITIES

a. Policies and objectives

The objectives of the Charity are to support the development of the UK dairy industry by focusing on breeding pedigree Holstein and British Friesian cattle in the United Kingdom. The Society also supports other charities working in the dairy industry through the provision of services in support of their objectives. As a member organisation, Holstein UK represents the views of its members to those with influence or interest in dairying for the further interest of the industry.

b. Strategies for achieving objectives and activities undertaken

The Charity aims to increase the efficiency of dairy cattle, specifically Holstein and British Friesian breeds, in a sustainable manner consistent with the advancement of animal welfare and environmental protection.

At the AGM in June 2018, the Charity launched its 2018-2022 Strategy which incorporated feedback from Members. The full strategy document can be found on the Holstein UK website, however, in summary, the strategy covers the following:

In setting objectives and planning for activities, the trustee have given due consideration to general guidance published by the Charity Commission relating to public benefit, including the guidance ‘Public Benefit: running a charity (PB2)’.

BREED DEVELOPMENT ASPIRATION

To have the ideal cow within the Holstein UK Herd Book for the UK and international markets.

OBJECTIVE ACTION

  1. Develop the Society breeds to meet the • Encourage UK producers to maximise genetic gain by utilising technology such as demands of dairy producers. genotyping, sexed semen and embryo transfer.

  2. Provide tools and services to aid • Educate producers about the benefits of genetic gain. improvement in the financial value of the Society breeds. • Promote the benefits of using independent mating services.

  3. Measure the financial impact of type improvement and promote the benefits.

  4. Continually review traits collected and add new traits when necessary.

  5. Annually review the model cow to ensure its relevance to dairy producers.

  6. Introduce an interpretation service following herd type evaluation visits in order to maximise usefulness.

RESEARCH & DEVELOPMENT ASPIRATION

The UK Holstein and British Friesian breeds to be the best placed breed choices for all UK farming systems and be recognised internationally.

OBJECTIVE ACTION

  1. Ensure UK dairy farmers recognise • Introduce research to determine the relationship between conformation and profitability. evidence and understand the benefits.

  2. Investigate correlation of type traits against production, health and fertility.

  3. Ensure international dairy cattle breeders • Analyse production and type data to establish longevity and profitability trends for understand the strengths of UK genetics. comparisons with other breeds and crossbreeds.

  4. Share data to prove the relationship • Partner with research establishments to investigate issues affecting the productive life of a between the use of Holstein UK services cow. and herd profitability.

  5. Work with type evaluation teams to track progress and direction.

  6. Communicate research findings with members and promote benefits to a wider audience.

  7. Keep up to date with external research and communicate findings to members.

  8. Recommend changes to services and products following research projects.

Annual Report & Accounts For the year ended 31 December 2020 9

PROMOTION ASPIRATION

Every UK dairy producer benefits from Holstein UK services and the Society Herd Book genetics at some level. International breeders recognise the quality of breed genetics and services.

OBJECTIVE

  1. Ensure all UK dairy farmers understand the benefits of registered cattle.

  2. Increase the use of Holstein UK services amongst UK producers.

  3. Ensure international dairy cattle breeders recognise the type, performance and longevity of Holstein UK breed genetics.

  4. Decrease the average age of the membership by encouraging youth members.

  5. Partner with key agricultural education centres.

  6. Ensure industry bodies understand the importance of registered cattle and the related benefits.

ACTION

SERVICES ASPIRATION

Society members use and benefit from all Holstein UK Group Services.

OBJECTIVE

  1. Ensure members understand the portfolio of services and their benefits.

  2. Attract new members to the Society using the benefits of its services.

  3. Eradicate, wherever possible, duplication of data entry.

  4. Ensure services meet the requirements of Holstein UK members and appeal to all dairy producers.

  5. Ensure services make use of the latest technology and innovation.

ACTION

Annual Report & Accounts For the year ended 31 December 2020

10

FINANCE ASPIRATION

Holstein UK to have a secure long-term future and remain the largest independent breed Society in Europe.

VOICE ASPIRATION

Holstein UK members to have a voice at industry and Government level.

OBJECTIVE ACTION

  1. Ensure Holstein UK understands member • Develop a process to collect member opinion and disseminate feedback. opinion. • Develop a united message regarding the future of the dairy industry, which represents the

  2. Have a unified message as a point of membership. reference for all members. • Forge partnerships with current industry lobbying parties.

  3. Have an established avenue of • Promote the benefits of registered cattle to milk buyers and retailers. communication to industry and • Work with industry partners to support consumer engagement and promotion of dairy

Government. products.

  1. Have robust facts and figures to support • Share industry news, education and developments with members.

communication. • Establish key data that will support communication.

  1. Become a source of data for the industry.

  2. Track trends within the Herd Book genetics and develop predictions based on past data.

  3. Address legislation matters that directly impact members. • Compile a communication document highlighting the forward planning required by members to meet future milk contracts.

  4. • Respond to Government consultations on behalf of members. • Develop direct communication with serving MP’s.

COMMUNICATION ASPIRATION

All members are fully informed and educated on the Society and relevant industry activities.

Annual Report & Accounts For the year ended 31 December 2020 11

RECOGNITION ASPIRATION

Holstein UK awards to be held with high regard within the domestic and international industries.

GOVERNANCE ASPIRATION

OPERATIONS ASPIRATION

12 Annual Report & Accounts For the year ended 31 December 2020

QUALITY ASPIRATION

Holstein UK Group data is proven and recognised as first class.

OBJECTIVE ACTION

  1. Have accreditations in place from • Follow guidelines and recommendations for ISO:17025 (UKAS) for all appropriate services. external bodies to give confidence in data • Participate in International Committee of Animal Recording (ICAR) accreditation schemes. collection and distribution. • Partake in external audits from ring testing with like-minded organisations, both formally and

  2. Have consistent procedures. informally.

  3. Ensure full confidence in data handling, storage and reporting.

  4. Conform to UK and international legislation.

  5. Review domestic and international procedures to view opportunities for internal improvement.

  6. Document all processes to ensure services and/or products are delivered consistently every time.

MEMBER DEVELOPMENT ASPIRATION

Leaders within the dairy industry have benefited from being members of Holstein Young Breeders (HYB).

OBJECTIVE ACTION

  1. Ensure HYB is seen as an educational • Form partnerships with agricultural colleges to create opportunities to speak to dairy organisation. students.

  2. Ensure HYB members experience a range • Widen areas of interest within HYB to attract non-Holstein UK family members. of dairy related operations. • Create awards in partnership with external bodies.

  3. Use competitions to improve knowledge • Encourage exchange programs nationally and internationally. whilst encouraging new participation.

  4. Review and, if necessary, introduce competitions that encourage all skill levels to participate.

  5. Include a networking element in events • Expand awards available to incorporate all elements of the dairy industry.

which builds individual connections.

c. Volunteers

Holstein UK does not use volunteers to achieve its objectives.

d. Main activities undertaken to further the Charity’s purposes for the public benefit

In setting out our aims and objectives, the trustee have given careful consideration to the Charity Commission’s general guidance on public benefit and in particular to its supplementary public benefit guidance on the advancement of animal welfare, the advancement of environmental protection or improvement and the advancement of education, and fee charging. The Charity aims to increase the efficiency of dairy cattle, specifically Holstein and British Friesian breeds, in a sustainable manner consistent with the advancement of animal welfare and environmental protection.

Membership of the Charity is available not only to those whose interests are in the husbandry of Holstein and British Friesian cattle but the wider public. Within the categories of membership there is a junior section for those aged up to 27 years of age with similar interests to those above and again this section is not restricted. The Charity also offers a reduced associate membership for those who wish to maintain a communication with the Charity. The Trustees do not consider the membership fees for the above categories restrictive. Trustees are levied with the same fees for services as those incurred by other members of the Charity.

Annual Report & Accounts For the year ended 31 December 2020 13

STRATEGIC REPORT

ACHIEVEMENTS AND PERFORMANCE

a. Main achievements of the Charity

The principal activity of the Charity is that of the promotion of the Holstein and British Friesian breeds and the recording and maintenance of pedigree records for the benefit of Charity members.

The Charity ensures that performance is managed against appropriate benchmarks. The income from investments for the year was £34,652 (2019: £36,907) and investment gains totalled £92,845 (2019: £195,994). Across the asset classes, returns were generally in line with benchmarks. A review of the policy is conducted every year.

FINANCIAL REVIEW

The Charity has continued to undertake registrations of animals, registering 185,261 full pedigree females during the full year January to December 2020 (2019: 181,673). The Charity has established processes for its members, one of which authenticates parentage via DNA samples. The Charity continues to explore technological advances in the collection and analysis of genetic, genomic and phenotypic data and is working with other industry bodies to further improve the accuracy of such measurements. The Charity has an on-going project to monitor the total number of tests undertaken to ensure acceptable compliance levels.

During the full year January to December 2020, the Charity undertook 117,407 (2019: 117,534) inspections of Holstein and British Friesian cattle which were assessed on 27 varying traits. The results of these assessments were published in the Charity’s Journal and are freely available to view on the Charity’s website. The traits collected are also used for research purposes. The assessments are acknowledged by the industry for independent use in the valuation of animals.

The Charity’s trading subsidiaries are actively involved in disease testing and record a number of on farm events both on a compulsory and optional basis. During the reporting period significant investment has again been made to enhance the capabilities for widening the number and variety of tests available, and UKAS accreditation has been obtained for a number of these tests. The Charity encourages, wherever possible, the inclusion of regular health and welfare programs for monitoring of the herd.

The Charity is committed to hosting events that share knowledge throughout the dairy industry. Sadly during 2020, we had to cancel UK Dairy Day, Holstein UK Celebration, HYB Weekend Rally and The All Breeds All Britain Calf Show. The Group compensated by facilitating online events which have enabled us to continue engaging with members to provide educational, networking and marketing opportunities during the Covid-19 pandemic.

The Charity has made representations and responded on a number of matters relating to the dairy industry within national and devolved Governments and other bodies. Information is available to the wider community via the Charity’s website www.holstein-uk.org and via its trading subsidiaries www.thecis.co.uk and www.nbdc.uk.

b. Fundraising activities and income generation

Holstein UK does not undertake fundraising activities.

c. Investment policy and performance

Under the Memorandum and Articles of Association, the Charity has wide powers to invest at the discretion of the trustees. The investment policy is designed to support the reserves policy. The Charity seeks to adopt a cautious, prudent and well-diversified investment stance to balance potential returns with appropriate levels of risk.

The Charity’s aim is to ensure that reserves maintain a real value across an investment cycle. Close Brothers Asset Management managed the reserves on a discretionary basis. The portfolio was invested in a range of securities in line with levels agreed by the Charity.

a. Going concern

Due to the current Covid-19 situation we are working under unusual circumstances and having to adapt to new ways of working. With the support of our members and customers we are continuing to deliver services where it is safe to do so. Our laboratory at Speir House is continuing to test samples within normal timescales and our member services for registrations, DNA and genomic testing are continuing without impact. We have unfortunately had to take our classifiers off the road during two periods to comply with Government restrictions regarding essential travel. The situation is under constant review and with the support of our dedicated staff and the trustees, we are able to flex our approach promptly to meet changing needs.

The trustees have considered the ongoing financial viability of the Charity and the appropriateness of preparing the accounts on a going concern basis. With the Government support provided through the Job Retention Scheme (and the associated furloughing of staff where appropriate), ongoing provision of services, positive year end cash balances and banking support in place should the situation extend further into 2021, the trustees are confident that the Charity can continue to operate in the future.

b. Reserves policy

Our reserves policy is set to ensure our work is protected from the risk of disruption at short notice due to a lack of funds, whilst at the same time ensuring we do not retain income for longer than required.

It is the policy of the Charity to maintain unrestricted funds, which are free reserves of the Charity. The purpose of maintaining unrestricted funds is to cover:

The Group’s reserves at the end of 2020 were £15,383,071 (2019: £14,296,461). A substantial proportion of the reserves are held in property and assets other than ‘managed cash and investments’.

At the reporting date, assets represented by Net Current Assets were £2,820,645 (2019: £1,544,558), representing on average 15 (2019: 8) weeks running costs. Assets which could be reasonably realised were £7,742,227 (2019: £6,104,270), representing 78% (2019: 57%) of annual running costs. The trustees consider it prudent that unrestricted reserves should be sufficient:

The reserves policy is kept under periodic review and reserves levels will be adjusted as perceptions of risk and other factors change.

Annual Report & Accounts For the year ended 31 December 2020

14

----- Start of picture text -----
Wiltor Silver Centerpiece owned by N & L Sercombe at UK Dairy Expo,
the only Holstein show which took place during 2020.
----- End of picture text -----

c. Principal risks and uncertainties

The Board have examined the major strategic, business and operational risks which the Charity faces and confirm that systems have been established to enable regular reports to be produced so that necessary recommendations can be made to reduce these risks. The Board also considers non-financial risks arising from fire, and health and safety aspects of the employment of its staff. The finance committee regularly reviews the risk register, discussing the risks faced by the Charity and the mitigating actions taken to manage these risks. The risk management approach is reviewed annually by the Board.

The main risk to the Charity’s financial well-being would be CIS ceasing to gift aid sufficient profits to enable Holstein UK to achieve its charitable objectives. This is a risk which is reviewed by the trustees at the quarterly board meetings. The services delivered by CIS are constantly reviewed with new products developed to meet changing needs and protect market share where appropriate. Spend within Holstein UK is also under constant review to ensure maximum return is received for each pound expended.

d. Principal funding

The annual accounts presented are the report on the year to December 2020.

The Charity’s principal funding sources are: voluntary income (membership and registration income contribute mainly to this), investment income (through properties held by the Charity for

rent and return on shares via dividends) and profit from trading subsidiaries which undertake various activities including health testing, milk recording, genomic testing, type classification and other farm events.

Group consolidated income for the year totalled £11,012,644 (2019: £11,243,041). On a like-for-like comparative basis, income is down 2.05%.

The budget set for 2021 will enable the Society to operate within its resources whilst still delivering the high-quality services members deserve.

National Bovine Data Centre Ltd (NBDC) was was set up and began trading in 2017. In its fourth year of operation a deficit of £5,555 was recorded (£123,654 in 2019). NBDC received Government support in 2020 of £91,022 through the Job Retention Scheme for the period the classifiers were furloughed.

The Cattle Information Service Ltd (CIS) continued to contribute to the Holstein UK Group with surpluses of £1,066,682 (2019: £1,171,424) gift aided to the Charity.

STRUCTURE, GOVERNANCE AND MANAGEMENT

a. Constitution

Holstein UK (the Charity) is a company limited by guarantee (not having a share capital) and is a registered Charity. It is governed by a Board of Trustees (the Board). The Board sets strategic direction and ensures the Charity achieves its objectives. It oversees governance

Annual Report & Accounts For the year ended 31 December 2020 15

and is responsible for upholding the charity’s values. It is supported by four committees (Finance (incl. Scotsbridge House Sale), Show & Sale, Science and Operations) to which it delegates certain authorities. The day-to-day running of the charity is the responsibility of the Executive Team.

b. Members

The charity’s constitution allows for the appointment of members and has no restriction on member numbers. They are entitled to attend all general meetings, including the AGM, where they receive the Annual Report and accounts and elect or re-elect trustees. Regular contact is maintained with members, mainly through the bi-monthly magazine The Journal.

There are currently 5,471 members, of which 15 are trustees. Each member guarantees to contribute up to one pound sterling (£1) to the charity’s debts, liabilities and costs in the event of the charity being wound up and for one year after ceasing to be a member.

c. Organisational structure and decision-making policies

The Board

The Board oversees a robust governance framework. The charity’s governance complies with the Code for the Voluntary and Community Sector endorsed by the Charity Commission, and with other best practice guidelines. It has agreed a schedule of matters reserved to the Board which includes approval of annual budgets. It delegates operational responsibility for the charity’s activities to the Chief Executive and Executive Team and provides advice, guidance and support on an on-going basis. Fifteen trustees comprised the Board at 06 May 2021. All trustees are members of the charity and directors of the charitable company. During the reporting period there were 9 (2019: 6) trustees’ meetings due to the requirement to conduct meetings remotely, which achieved a 92.6% (2019: 82%) attendance; this excludes the Annual General Meeting. The individual trustees’ percentage attendance for the reporting period was as follows: S Brough 100%, W Gregg 100%, E Griffiths 88.9%, J Hartley 100%, S Hill 77.8%, A Jones 100%, D Jones 100%, I Morgan 100%, S Pirie 100%, P Prior 77.8%, M Smale 100%, J Targett 77.8%, M Winter 77.8%, J Whittaker 100%, W Williams 83.3%, A Williamson 100%, D Yates 100%. The amount of expenses reimbursed to trustees during the reporting period was £6,856 (2019: £33,955).

Committees

All trustees serve on at least one committee. The committees are delegated specific responsibilities by the trustees. They provide counsel, expertise and support to the Executive Team. Committees undertake an evaluation of their own performance on a periodic basis and use any feedback to support improvements in the overall governance of the charity.

Executive Team

The Executive Team is responsible for the day-to-day running of the charity under authority delegated by the Board. It proposes to the Board where the charity should invest its time, money and expertise. It reviews with the Board any changes to strategy on an annual basis. It proposes an annual operating budget to the finance committee and the Board for approval and monitors financial performance accordingly. It recommends any changes to budget in light of performance to date. The Executive Team comprises of the following key employees: Chief Executive Officer, Chief Finance Officer, Head of Events & Marketing, Head of IT, Head of Product Development and Head of NBDC & Breed Development, and for CIS, Head of Field Services and Head of Laboratory Operations.

d. Policies adopted for the induction and training of trustees

The trustees offer a wide range of skills and experience essential to the good governance of the charity. New trustees undergo an orientation day to brief them on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the committees and decision-making process, the business plan and recent financial performance of the charity. During the induction day, trustees meet key employees of the charity.

Trustees are encouraged to attend appropriate external training events where these will facilitate the performance of their role.

e. Pay policy for key management personnel

Key management staff do not have annual salary reviews, however, annual cost of living pay increases are given to key management staff at the same inflationary rate as for all other staff. The salaries awarded to new key management staff are benchmarked against the market to ensure appropriately qualified staff are attracted to the organisation.

f. Related party relationships

The Charity works with other organisations to further its objectives. In 2019, the Group won two contracts from AHDB to increase testing with delivery continuing in 2020.

g. Financial risk management

The trustees have assessed the major risks to which the Group and the Charity are exposed, in particular those related to the operations and finances of the Group and the Charity, and are satisfied that systems and procedures are in place to mitigate exposure to the major risks.

h. Plans for future periods

The charity will continue to promote and encourage the breeding of Holstein and British Friesian cattle within the UK dairy herd. Where appropriate, links with other industry bodies will continue to achieve the charity’s objectives. Centralising information and data for the beneficial improvement of the dairy breeds and the promotion of holistic management systems for dairy cattle will be a key objective.

Annual Report & Accounts For the year ended 31 December 2020

16

The expansion of health and welfare testing within the UK and collection of on-farm data for research purposes to improve the Charity’s services to its members remains a key feature of the trustees’ plans.

The Charity will undertake research into future trends in dairy cattle breeding and management and will disseminate these results to its members and the wider industry. The Charity will maintain its position as the pre-eminent source of independent dairy cattle breeding information in Europe.

The Charity is very aware of the issues facing the dairy industry and the need to develop the next generation of pedigree farmers, fully equipped to be successful in a rapidly changing industry. The Charity will continue to invest in its Holstein Young Breeders scheme to ensure that future dairy farmers will continue to enjoy success.

At the AGM in June 2018, the Charity launched its 2018-2022 Strategy which incorporated feedback from members.

i. Members’ liability

The members of the Charity guarantee to contribute an amount not exceeding £1 to the assets of the Charity in the event of winding up.

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charity’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DISCLOSURE OF INFORMATION TO AUDITORS

j. Engagement with employees and employment of the disabled

Employees have been consulted on issues of concern to them by means of regular consultative committee and staff meetings and have been kept informed on specific matters directly by management. The Group and the Charity carries out exit interviews for all staff leaving the organisation and has adopted a procedure of upward feedback for senior management and the trustees.

The Group and the Charity has implemented a number of detailed policies in relation to all aspects of personnel matters including:

In accordance with the Group and the Charity’s equal opportunities policy, the Group and the Charity has long-established fair employment practices in the recruitment, selection, retention and training of disabled staff.

Full details of these policies are available from the Charity’s offices.

k. Statement of trustees’ responsibilities

The trustees (who are also the directors of the Charity for the purposes of company law) are responsible for preparing the Trustees’ Report including the Strategic Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Each of the persons who are trustees at the time when this Trustees’ Report is approved has confirmed that:

AUDITORS

The auditors, WR Partners, have indicated their willingness to continue in office. The designated trustees will propose a motion reappointing the auditors at the Holstein UK AGM.

Approved by order of the members of the Board of Trustees and signed on their behalf by:

Michael Smale (Chairman)

Date: 17 May 2021

Company law requires the trustees to prepare financial statements for each financial. Under company law, the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the trustees are required to:

Annual Report & Accounts For the year ended 31 December 2020 17

REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF HOLSTEIN UK

OPINION

We have audited the financial statements of Holstein UK (the ‘parent charitable company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Charity Balance Sheet, the Consolidated Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group’s or the parent charitable 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.

OTHER INFORMATION

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors’ 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.

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Report including the Strategic Report.

We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:

Annual Report & Accounts For the year ended 31 December 2020

18

RESPONSIBILITIES OF TRUSTEES

As explained more fully in the Trustees’ Responsibilities Statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees 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 trustees are responsible for assessing the Group’s and the parent charitable 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 trustees either intend to liquidate the Group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

AUDITORS’ 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 Auditors’ Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Charity and the Group and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR).

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

USE OF OUR REPORT

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Malpass (Senior Statutory Auditor)

for and on behalf of

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

WR Partners Chartered Accountants and Statutory Auditors Belmont House Shrewsbury Business Park Shrewsbury Shropshire SY2 6LG

Date: 18 May 2021

• We reviewed the Charity’s regulatory environment to ensure we could conclude that it had acted in accordance with the framework relevant to the Charity and its environment and identify any instances of non-compliance.

Annual Report & Accounts For the year ended 31 December 2020

19

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

(incorporating an income and expenditure account)

FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Total Total
funds funds funds
2020 2020 2019
Note £ £ £
INCOME FROM:
Donations 4 172,838 172,838 25,995
Charitable activities 5 2,325,441 2,325,441 2,693,078
Other trading activities 6 8,370,761 8,370,761 8,334,901
Investments 7 143,604 143,604 189,067
Total income 11,012,644 11,012,644 11,243,041
EXPENDITURE ON:
Raising funds 8 7,451,856 7,451,856 7,287,129
Charitable activities 9 2,567,023 2,567,023 3,352,408
Total expenditure 10,018,879 10,018,879 10,639,537
Net gains on investments 92,845 92,845 195,994
Net movement in funds 1,086,610 1,086,610 799,498
RECONCILIATION OF FUNDS:
Total funds brought forward 22 14,296,461 14,296,461 13,496,963
Net movement in funds 1,086,610 1,086,610 799,498
Total funds carried forward 15,383,071 15,383,071 14,296,461

The Consolidated Statement of Financial Activities includes all gains and losses recognised in the year. The notes on pages 24 to 38 form part of these financial statements.

20 Annual Report & Accounts For the year ended 31 December 2020

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2020

2020 2019
Note £ £
FIXED ASSETS
Intangible assets 14 308,291 524,457
Tangible assets 15 8,632,880 8,737,206
Investments 17 1,621,255 1,490,240
Investment property 16 2,000,000 2,000,000
12,562,426 12,751,903
CURRENT ASSETS
Stocks 19 145,305 221,796
Debtors 20 1,948,897 1,758,880
Cash at bank and in hand 2,026,770 633,354
4,120,972 2,614,030
Creditors: amounts falling due within one year 21 (1,300,327) (1,069,472)
Net current assets 2,820,645 1,544,558
Total net assets 15,383,071 14,296,461
CHARITY FUNDS
Restricted funds 22 - -
Unrestricted funds 22 15,383,071 14,296,461
Total funds 15,383,071 14,296,461

The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the trustees and signed on their behalf by:

Michael Smale (Chairman)

Date: 17 May 2021

The notes on pages 24 to 38 form part of these financial statements.

Annual Report & Accounts For the year ended 31 December 2020 21

CHARITY BALANCE SHEET

AS AT 31 DECEMBER 2020

2020 2019
Note £ £
FIXED ASSETS
Intangible assets 14 308,291 524,457
Tangible assets 15 8,300,520 8,302,070
Investments 17 2,387,240 2,256,225
Investment property 16 2,000,000 2,000,000
12,996,051 13,082,752
CURRENT ASSETS
Debtors 20 3,101,419 2,376,585
Cash at bank and in hand 1,314,529 220,248
4,415,948 2,596,833
Creditors: amounts falling due within one year 21 (3,715,815) (2,008,884)
Net current assets 700,133 587,949
Total net assets 13,696,184 13,670,701
CHARITY FUNDS
Restricted funds 22 - -
Unrestricted funds 22 13,696,184 13,670,701
Total funds 13,696,184 13,670,701

The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the trustees and signed on their behalf by:

Michael Smale (Chairman)

Date: 17 May 2021

The notes on pages 24 to 38 form part of these financial statements.

Annual Report & Accounts For the year ended 31 December 2020

22

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

2020 2019
Note £ £
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash used in operating activities 24 1,352,568 470,768
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends, interests and rents from investments 143,604 189,067
Purchase of tangible fxed assets (64,586) (55,891)
Disposal of investments 280,265 237,314
Purchase of investments (318,435) (280,326)
Net cash provided by investing activities 40,848 90,164
Change in cash and cash equivalents in the year 1,393,416 560,932
Cash and cash equivalents at the beginning of the year 633,354 72,422
Cash and cash equivalents at the end of the year 25 2,026,770 633,354

The notes on pages 24 to 38 form part of these financial statements

Annual Report & Accounts For the year ended 31 December 2020 23

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1. GENERAL INFORMATION

Holstein UK is a charitable company limited by guarantee and is incorporated in the United Kingdom. The registered office and operating address is Speir House, Stafford Park 1, Telford, Shropshire TF3 3BD. In the event of the Charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the Charity.

2. ACCOUNTING POLICIES

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the second edition Charities SORP (FRS 102) Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Holstein UK meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The Consolidated Statement of Financial Activities (SOFA) and Consolidated Balance Sheet consolidate the financial statements of the Charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a line-by-line basis.

The Charity has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Financial Activities in these financial statements.

The Consolidated Statement of Financial Activities (SOFA) and Consolidated Balance Sheet consolidate the financial statements of the Charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a line-by-line basis.

The Charity has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Financial Activities in these financial statements. The net movement in funds for the Charity was a surplus of £25,483 (2019: loss of £593,223).

2.3 Going concern

After making enquires, the trustees have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

The trustees have also assessed the potential impact on the future operations of the Group with regard to the Covid-19 outbreak. The Group is considered to be well positioned given the current environment with no impact on the going concern basis of the financial statements.

2.4 Income

All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Grants are included in the Consolidated Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the Balance Sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

2.2 Basis of consolidation

The consolidated financial statements present the results of the company and its own subsidiaries (“The Group”) as if they form a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.

2.5 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs

Annual Report & Accounts For the year ended 31 December 2020

24

involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Group’s objectives, as well as any associated support costs.

All expenditure is inclusive of irrecoverable VAT.

2.6 Research and development

Development costs are capitalised within intangible assets where they can be identified with a specific product or project anticipated to produce future benefits, and are amortised on the straight-line basis over the anticipated life of the benefits arising from the completed product or project.

Deferred research and development costs are reviewed annually, and where future benefits are deemed to have ceased or to be in doubt, the balance of any related research and development is written off to the Consolidated Statement of Financial Activities.

2.7 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Group; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.

2.8 Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the reporting date.

Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.

Exchange gains and losses are recognised in the Consolidated Statement of Financial Activities.

2.9 Taxation

The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

2.10 Intangible assets and amortisation

Intangible assets of a capital nature are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

At each reporting date the Charity assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined to be the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Amortisation is provided on intangible assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life.

Amortisation is provided on the following basis:

Development expenditure 20%

2.11 Tangible fixed assets and depreciation

Tangible fixed assets costing £500 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the revaluation model, tangible fixed assets whose fair value can be measured reliably shall be carried at a revalued amount, being their fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting date.

Fair values are determined from market-based evidence by appraisal that is normally undertaken by professionally qualified valuers. If there is no market-based evidence of fair value because of the specialised nature of the tangible fixed asset and it is rarely sold, except as part of a contributing business, a charity may need to estimate fair value using an income or depreciated replacement cost approach.

Gains and losses on revaluation are recognised in the Consolidated Statement of Financial Activities, with a separate revaluation reserve being shown in the Statement of funds note.

Investment property rented to other Group entities and accounted for under the cost model is stated at historic cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

2.12 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised

Annual Report & Accounts For the year ended 31 December 2020 25

or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Consolidated Statement of Financial Activities.

Investments in subsidiaries are valued at cost less provision for impairment.

2.13 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

2.14 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

2.15 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

pension contributions. Once the contributions have been paid, the Group, as employer, has no further obligations.

From April 2015, under the Pensions Act 2008, the Group must put certain staff into a pension scheme and contribute towards it. This is called automatic enrolment. To comply with automatic enrolment laws, the Group signed a participation agreement with a pension provider by which staff become members on an independently administered pension plan. The Group and staff make contributions as specified in the plan.

At the reporting date contributions outstanding amounted to £Nil (2019: £Nil).

2.20 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.

Investment income, gains and losses are allocated to unrestricted funds.

2.16 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated Statement of Financial Activities as a finance cost.

2.17 Financial instruments

The Group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

2.18 Operating leases

Rentals paid under operating leases are charged to the Consolidated Statement of Financial Activities on a straight-line basis over the lease term.

2.19 Pensions

The Group operates an occupational pension scheme providing money purchase benefits on a defined contribution basis. Employees who joined the money purchase pension scheme contract directly with the pension company, NOW: Pensions Ltd (previously Phoenix Life & Pension Ltd, ceased December 2020). Contributions by the Group and employees are determined by the scheme rules. The Group acts as an agent in collecting and paying over employee

3.CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGMENT

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions:

The Charity makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results.There are no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4. INCOME FROM DONATIONS AND LEGACIES

Unrestricted Total Total
funds 2020 funds 2020 funds 2019
£ £ £
Gift aid 26,133 26,133 25,995
Grants* 146,705 146,705 -
172,838 172,838 25,995
Total 2019 25,995 25,995

*Job Retention Scheme

Annual Report & Accounts For the year ended 31 December 2020

26

5. INCOME FROM CHARITABLE ACTIVITIES

Unrestricted Total Total
funds funds funds
2020 2020 2019
£ £ £
INCOME FROM:
Member subscription fees 289,644 289,644 309,486
Herd Book entry fees 1,577,316 1,577,316 1,579,321
Herd Book services and sundry income 283,282 283,282 227,480
Journal advertising 39,469 39,469 34,917
Livestock events (599) (599) 443,258
Other Society services 13,638 13,638 5,284
Pre-2017 classifcation fees (56,764) (56,764) 837
Catalogue and herd brochure services - - (82)
Breeder awards 130,793 130,793 31,627
Re-issue, transfer fees and fnes 48,662 48,662 60,950
Total 2020 2,325,441 2,325,441 2,693,078
Total 2019 2,693,078 2,693,078

6. INCOME FROM OTHER TRADING ACTIVITIES

Unrestricted Total Total
funds funds funds
2020 2020 2019
£ £ £
The Cattle Information Service Limited 7,079,575 7,079,575 7,024,092
National Bovine Data Centre Limited 1,291,186 1,291,186 1,310,809
8,370,761 8,370,761 8,334,901
Total 2019 8,334,901 8,334,901
7. INVESTMENT INCOME
Unrestricted Total Total
funds funds funds
2020 2020 2019
£ £ £
Rents receivable* 108,952 108,952 151,865
Dividends from listed investments 34,652 34,652 36,907
Interest receivable - - 295
143,604 143,604 189,067
Total 2019 189,067 189,067

*All the remaining tenancies at Scotsbridge House were terminated during 2020 in preparation for the sale.

Annual Report & Accounts For the year ended 31 December 2020

27

8. EXPENDITURE ON RAISING FUNDS

Cattle Information Services Limited and National Bovine Data Centre

Unrestricted Total Total
funds funds funds
2020 2020 2019
£ £ £
Cost of sales 3,529,946 3,529,946 3,317,138
Admin expenses 888,130 888,130 976,118
Admin staf costs 2,870,134 2,870,134 2,827,466
Depreciation 163,646 163,646 166,407
7,451,856 7,451,856 7,287,129
Total 2019 7,287,129 7,287,129

9. ANALYSIS OF EXPENDITURE ON CHARITABLE ACTIVITIES

Summary by fund type

Unrestricted Total Total
funds funds funds
2020 2020 2019
£ £ £
Holstein Society Services 2,567,023 2,567,023 3,352,408
Total 2019 3,352,408 3,352,408

10. ANALYSIS OF EXPENDITURE BY ACTIVITIES

Summary by fund type

Summary by fund type
Activities
undertaken Total Total
directly funds funds
2020 2020 2019
£ £ £
Holstein Society Services 2,567,023 2,567,023 3,352,408
Total 2019 3,352,408 3,352,408
Analysis of direct costs
Total Total
funds funds
2020 2020 2019
£ £ £
Staf costs 1,243,697 1,243,697 1,232,070
Depreciation 221,430 221,430 209,231
Research and business development 32,816 32,816 77,740
Testing parentage 207,769 207,769 162,800
Livestock shows 41,532 41,532 676,483
Journal printing and circulation 137,553 137,553 153,719

Annual Report & Accounts For the year ended 31 December 2020

28

10. ANALYSIS OF EXPENDITURE BY ACTIVITIES (CONTINUED)

Analysis of direct costs

Analysis of direct costs
Facilities management and utilities 120,960 120,960 144,802
Telephone 41,089 41,089 43,974
Postage and stationery 75,396 75,396 84,799
Computer maintenance 176,560 176,560 180,944
IT development charges 3,319 3,319 (2,692)
Field staf 22,541 22,541 65,607
Audit fees 16,900 16,900 15,000
Governance costs 10,104 10,104 50,672
Bank charges 12,898 12,898 19,094
Donations 100 100 -
Marketing and publicity 45,801 45,801 45,961
Professional fees and charges 118,043 118,043 155,438
Hire of equipment and vehicles 38,515 38,515 36,766
Total 2020 2,567,023 2,567,023 3,352,408
Total 2019 3,352,408 3,352,408

11. AUDITORS’ REMUNERATION

2020 2019
£ £
Fees payable to the Charity’s auditor for the audit of the Charity’s annual 15,450 15,000
accounts
Fees payable to the Charity’s auditor in respect of: 13,130 12,750
Audit of subsidiary accounts
All non-audit services not included above 2,320 2,250

12. STAFF COSTS

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Wages and salaries 3,454,246 3,403,067 994,507 988,464
Social security costs 376,510 369,168 136,289 134,655
Pension costs 283,075 287,301 112,901 108,951
4,113,831 4,059,536 1,243,697 1,232,070

Included in the above is a severance payment of £30,704 (2019: £9,371) relating to the redundancies of 2 members of staff (2019: 1).

Annual Report & Accounts For the year ended 31 December 2020

29

12. STAFF COSTS (CONTINUED)

The average number of persons employed by the Group during the year was as follows:

Group Group
2020 2019
No. No.
Employees (including casual and part-time staf) 120 120

Included in the average number of employees are 10 (2019: 14) employees who were not employed on a full-time basis throughout the reporting period.

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2020 2019
No. No.
In the band £60,001 - £70,000 - 1
In the band £70,001 - £80,000 1 -
In the band £100,001 - £110,000 1 1

The key management personnel of the Charitable Company comprise of the Chief Executive Officer and the Chief Financial Officer. The total employee benefits (including pension contributions and employer’s national insurance) amounted to £219,435 (2019: £211,986).

The key management personnel of the Group comprise of those listed on page 16. The total employee benefits of those listed on page 16 amounted to £580,296 (2019: £567,967).

13. TRUSTEES’ REMUNERATION AND EXPENSES

During the year ended 31 December 2020, expenses totalling £6,856 were reimbursed or paid directly to 13 trustees (2019 £50,672 to 17 trustees). These expenses relate to the payment or reimbursement of travel and subsistence in relation to attendance at meetings of the trustees, at meetings of trustees of subsidiary companies and other management activities.

Holstein UK trustees do not receive remuneration for their time.

14. INTANGIBLE ASSETS

Group and Charity Website /
application
development.
costs £
Cost
At 1 January 2020 1,080,827
At 31 December 2020 1,080,827
Amortisation
At 1 January 2020 556,370
Charge for the year 216,166
At 31 December 2020 772,536
Net book value
At 31 December 2020 308,291
At 31 December 2019 524,457

Annual Report & Accounts For the year ended 31 December 2020

30

15. TANGIBLE FIXED ASSETS

Group Freehold Plant and Promotional
property machinery equipment Total
£ £ £ £
Cost or valuation
_A_t 1 January 2020 8,312,386 2,868,760 16,783 11,197,929
Additions - 64,586 - 64,586
At 31 December 2020 8,312,386 2,933,346 16,783 11,262,515
Depreciation
At 1 January 2020 30,494 2,421,104 9,125 2,460,723
Charge for the year - 168,912 - 168,912
At 31 December 2020 30,494 2,590,016 9,125 2,629,635
Net book value
At 31 December 2020 8,281,892 343,330 7,658 8,632,880
At 31 December 2019 8,281,892 447,656 7,658 8,737,206
Charity Freehold Ofce Computer Promotional
property equipment equipment equipment Total
£ £ £ £ £
Cost or valuation
At 1 January 2020 8,312,386 429,983 130,488 16,783 8,889,640
Additions - - 3,716 - 3,716
At 31 December 2020 8,312,386 429,983 134,204 16,783 8,893,356
Depreciation
At 1 January 2020 30,494 429,983 117,968 9,125 587,570
Charge for the year - - 5,266 5,266
At 31 December 2020 30,494 429,983 123,234 9,125 592,836
Net book value
At 31 December 2020 8,281,892 - 10,970 7,658 8,300,520
At 31 December 2019 8,281,892 - 12,520 7,658 8,302,070

The Group and Charity

The freehold land and buildings at Scotsbridge House and Speir House were revalued at £7,565,000 and £600,000 respectively. The Scotsbridge House valuation is based on trustees’ valuation. Speir House valuation was undertaken by Towler Shaw Roberts LLP, Chartered Surveyors, on 1 December 2015. The historical cost of the properties were £352,948 and £762,386 respectively.

Charity

The Charity has a legal charge in place with Barclays Bank PLC, secured against the land and buildings held at Scotsbridge House, Rickmansworth, Hertfordshire.

Annual Report & Accounts For the year ended 31 December 2020

31

16. INVESTMENT PROPERTY

16. INVESTMENT PROPERTY
Group Freehold
investment
property
£
Valuation
At 1 January 2020 2,000,000
At 31 December 2020 2,000,000
Charity Freehold
investment
property
£
Valuation
At 1 January 2020 2,000,000
At 31 December 2020 2,000,000

The investment properties residing at the Scotsbridge House site were revalued at £2,000,000 based upon valuations produced by Gibbs Gillespie Estate Agents, Surveyors and Valuers on 16 January 2019. The historical cost of the properties was £411,295 (2019: £411,295).

17. FIXED ASSET INVESTMENTS

17. FIXED ASSET INVESTMENTS
Listed
Group investments
£
Cost or valuation
At 1 January 2020 1,490,240
Additions 318,435
Disposals (271,851)
Revaluations 84,431
At 31 December 2020 1,621,255
Net book value
At 31 December 2020 1,621,255
At 31 December 2019 1,490,240

32 Annual Report & Accounts For the year ended 31 December 2020

17. FIXED ASSET INVESTMENTS (CONTINUED)

Investments
in subsidiary Listed
Charity companies investments Total
£ £ £
Cost or valuation
At 1 January 2020 765,985 1,490,240 2,256,225
Additions - 318,435 318,435
Disposals - (271,851) (271,851)
Revaluations - 84,431 84,431
At 31 December 2020 765,985 1,621,255 2,387,240
Net book value
At 31 December 2020 765,985 1,621,255 2,387,240
At 31 December 2019 765,985 1,490,240 2,256,225

18. ANALYSIS OF LISTED INVESTMENTS

18. ANALYSIS OF LISTED INVESTMENTS
2020 2019
£ £
Corporate bonds - fxed interest 202,955 254,244
Equities - listed UK 367,452 396,812
Equities - listed international 715,824 633,627
Property and alternatives 335,024 205,557
1,621,255 1,490,240

19. STOCKS

19. STOCKS
Group Group
2020 2019
£ £
Laboratoryconsumables 145,305 221,796

20. DEBTORS

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Due within one year
Trade debtors 1,473,668 1,451,725 581,143 608,080
Amounts owed by Group undertakings - - 2,165,940 1,598,263
Other debtors 41,414 67,973 32,179 58,701
Prepayments and accrued income 433,815 239,182 322,157 111,541
1,948,897 1,758,880 3,101,419 2,376,585

Annual Report & Accounts For the year ended 31 December 2020 33

21. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Bank overdrafts - 4,720 - 4,720
Trade creditors 472,662 595,585 202,557 232,065
Amounts owed to Group undertakings - - 3,329,884 1,657,855
Other taxation and social security 665,423 346,455 96,934 44,468
Other creditors 55,152 54,167 26,561 26,854
Accruals and deferred income 107,090 68,545 59,879 42,922
1,300,327 1,069,472 3,715,815 2,008,884
Resources deferred during the year 20,343 - 20,343 -

GROUP AND CHARITY

The bank overdrafts are secured by a cross guarantee between the Charity and Group Companies.

CHARITY

The Charity has a legal charge in place with Barclays Bank PLC, secured against the land and buildings held at Scotsbridge House, Rickmansworth, Hertfordshire.

22. STATEMENT OF FUNDS

Statement of funds - current year

Statement of funds - current year
Balance at 31
Balance at 1 Gains/ December
January 2020 Income Expenditure Losses 2020
£ £ £ £ £
Unrestricted funds
Free Reserves 5,304,707 2,563,707 (2,516,465) 92,845 5,444,794
Non-Charitable Subsidiaries 1,393,394 8,448,937 (7,502,414) - 2,339,917
Revaluation reserve 7,598,360 - - - 7,598,360
14,296,461 11,012,644 (10,018,879) 92,845 15,383,071

Statement of funds - prior year

Balance at 31
Balance at 1 Gains/ December
January 2019 Income Expenditure Losses 2019
£ £ £ £ £
Unrestricted funds
Free Reserves 5,552,979 2,908,141 (3,352,407) 195,994 5,304,707
Non-Charitable Subsidiaries 345,624 8,334,900 (7,287,130) - 1,393,394
Revaluation reserve 7,598,360 - - - 7,598,360
13,496,963 11,243,041 (10,639,537) 195,994 14,296,461

Annual Report & Accounts For the year ended 31 December 2020

34

23. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Analysis of net assets between funds current period

Analysis of net assets between funds current period
Unrestricted Total
funds funds
2020 2020
£ £
Tangible fxed assets 8,632,880 8,632,880
Intangible fxed assets 308,291 308,291
Fixed asset investments 1,621,255 1,621,255
Investment property 2,000,000 2,000,000
Current assets 4,120,972 4,120,972
Creditors due within one year (1,300,327) (1,300,327)
Total 15,383,071 15,383,071

Analysis of net assets between funds prior period

Analysis of net assets between funds prior period
Unrestricted Total
funds funds
2019 2019
£ £
Tangible fxed assets 8,737,206 8,737,206
Intangible fxed assets 524,457 524,457
Fixed asset investments 1,490,240 1,490,240
Investment property 2,000,000 2,000,000
Current assets 2,614,030 2,614,030
Creditors due within one year (1,069,472) (1,069,472)
Total 14,296,461 14,296,461

24. RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING ACTIVITIES

FLOW FROM OPERATING ACTIVITIES
Group Group
2020 2019
£ £
Net income for the period (as per Statement of Financial Activities) 1,086,610 799,498
Adjustments for:
Depreciation charges 168,912 173,503
Amortisation charges 216,166 202,135
Revaluation on investments (84,431) (168,231)
Dividends, interests and rents from investments (143,604) (189,067)
Proft on the sale of investments (8,414) -
Decrease/(increase) in debtors 76,491 (9,709)
Increase in debtors (190,017) (89,003)
Increase/(decrease) in creditors 230,855 (248,358)
Net cash provided by/(used in) operating activities 1,352,568 470,768

Annual Report & Accounts For the year ended 31 December 2020 35

25. ANALYSIS OF CASH AND CASH EQUIVALENTS

Group Group
2020 2019
£ £
Cash in hand 2,026,770 633,354
Total cash and cash equivalents 2,026,770 633,354

26. ANALYSIS OF NET DEBT

26. ANALYSIS OF NET DEBT
At 1 January
2020		 Cash fow At 31
December 2020
£ £ £
Cash at bank and in hand 633,354 1,393,416 2,026,770
Bank overdrafts repayable on demand (4,720) 4,720 -
628,634 1,398,136 2,026,770

27. CAPITAL COMMITMENTS

At the year end the Charity had non-cancellable capital commitments of £1,035,000 relating to its new Head Office.

28. PENSION COMMITMENTS

The Group operates an occupational pension scheme providing money purchase benefits on a defined contribution basis. Employees who joined the money purchase pension scheme contract directly with the pension company, NOW: Pensions Ltd (previously Phoenix Life & Pension Ltd, ceased December 2020).

Contributions by the Group and employees are determined by the scheme rules. The Group acts as an agent in collecting and paying over employee pension contributions. Once the contributions have been paid, the Group, as employer, has no further obligations.

AUTOMATIC ENROLMENT

From 1 April 2015, the Charity and subsidiary, separately entered into a participation agreement with NOW: Pensions Ltd which ultimately allows the employees of the Charity and subsidiary to become members of NOW: Pensions Trust (Plan), which is a registered occupational pension scheme governed by the Trust Deed and Rules dated 29 November 2011 by which the Plan was established. NOW: Pensions Ltd is currently the Trust Manager and the Trustee of the Plan is currently NOW: Pension Trustee Ltd.

Plan Summary:

Accordingly, the Plan is capable of acting as an automatic enrolment scheme for the purposes of the Automatic Enrolment Laws. However, in order to act as an automatic enrolment scheme, it will also need to satisfy certain contribution requirements. The Charity and subsidiary will both be responsible for ensuring that those requirements are satisfied, and for giving any certificate which is required under the Automatic Enrolment Laws for that purpose.

Annual Report & Accounts For the year ended 31 December 2020

36

29. OPERATING LEASE COMMITMENTS

At 31 December 2020 the Group and the Charity had commitments to make future minimum lease payments under noncancellable operating leases as follows:

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Not later than 1 year 325,395 313,953 177,959 173,306
Later than 1 year and not later than 5 years 291,730 456,268 157,512 323,423
617,125 770,221 335,471 496,729

30. RELATED PARTY TRANSACTIONS

Annual Report & Accounts For the year ended 31 December 2020 37

31. PRINCIPAL SUBSIDIARIES

The following were subsidiary undertakings of the Charity:

Names Company
number		 Registered ofce
or principal place
of business		 Principal activity Class of shares Holding Included in
consolidation
The Cattle
Information
Service LTD
The Centre
for Dairy
Information LTD
National Bovine
Data Centre LTD		 SC144462
05409255
10052419		 9 Queens Road,
Aberdeen,
AB15 4YL
Speir House,
Staford Park 1,
Telford, Shropshire,
TF3 3BD
Speir House,
Staford Park 1,
Telford, Shropshire,
TF3 3BD		 Support activities
for animal
production and
data processing,
hosting and
related activities
Support activities
for animal
production
- currently
dormant
Support activities
for animal
production.		 Ordinary A
& Ordinary B
Limited by
guarantee and no
share capital.
Ordinary		 100%
100%
100%		 Yes
Yes
Yes

32. PRINCIPAL SUBSIDIARIES

Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:		 Proft (loss)/
surplus/ (defcit)
Net assets
Income
Expenditure
for the ear
(liabilities)
The fnancial results of the subsidiaries for the year were:


y
£
£
£
£
The Cattle Information Service LTD 7,103,157 6,036,475 1,066,682 1,832,666
The Centre for Dairy Information LTD - - -
(163,571)
National Bovine Data Centre LTD 1,382,208 1,387,763 (5,555) (387,647)

Annual Report & Accounts For the year ended 31 December 2020

38

MEASURE MONITOR MANAGE

A portfolio of products and expertise for your dairy business and herd

BROUGHT TO YOU BY THE HOLSTEIN UK GROUP

T: 01923 695200 l W: www.holstein-uk.org l E: info@holstein-uk.org Holstein UK, Speir House, Stafford Park 1, Telford, Shropshire TF3 3BD Company Registered No: 3674328 (England and Wales) l Charity No: 1072998