Donegal Investment Group plc

Annual

Report &

Financial

Statements

for the year ended 31 August 2022

Donegal Investment Group plc ('DIG') ('Group') reports its results for

the year ended 31 August 2022.

Contents

Financial Highlights

2

Board of Directors & Other Information

3

Chairman's Statement

4

Directors' Report

5

Corporate Governance Report

9

Corporate Social Responsibility Report

14

Report of the Remuneration Committee

15

Statement of Directors' Responsibilities

19

Independent Auditor's Report

20

Consolidated Statement of Profit or Loss

and Comprehensive Income

26

Consolidated Statement of Financial Position

28

Company Statement of Financial Position

30

Consolidated Statement of Changes in Equity

32

Company Statement of Changes in Equity

34

Consolidated Statement of Cash Flows

35

Company Statement of Cash Flows

37

Notes to the Consolidated Financial Statements

39

1

Financial Highlights

The Directors present their report and the audited financial statements for the year ended 31 August 2022. The comparative amounts relate to the 12 months ended 31 August 2021.

Financial Performance

The Group's seed potato business delivered a lower than expected performance for the year ended 31 August 2022. Group revenue decreased by 3% (€0.9m) to €25.2m - with higher production costs combined with weak pricing resulting in lower demand in the seed potato sector, the business delivered a segmental trading profit €0.6m, a decrease of €1.4m on the prior year.

The Group completed the sale of its speciality dairy business Nomadic Dairy Limited ("Nomadic") on 5 November 2021 with a profit on disposal of €13.1m. This includes the recognition of 80% of contingent consideration receivable of €3.0m, based on the fair value of the contingent consideration receivable which will ultimately be dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. Nomadic's financial performance for the period during which it was controlled by the Group, together with the profit on disposal, is classified as a discontinued operation in this year's results.

Further non-core asset disposals took place during the year with a number of property holdings sold which in aggregate generated net proceeds of €0.9m (€0.2m received post year-end), including the Oatfield site in Letterkenny.

Financial Position

The Group has a cash position, net of bank overdrafts and lease debt, of €2.9m at year end compared to a €3.7m net position at 31 August 2021 following the completion of the sale of Nomadic and the subsequent return of capital on 14 February 2022. The Group received net proceeds following the disposal of Nomadic of €16.7m. Please note an additional €3.3m in cash was held as an asset held for sale at 31 August 2021 and was also retained by the Group.

Return of Capital

Following approval by shareholders at the EGM on 11 February 2022, the Group completed the conversion and redemption of 1,306,497 ordinary shares of the Company at a price of €15.30 on the 14 February 2022. This resulted in a return of capital of €20.0m to our shareholders. The Group currently has issued share capital of 1,589,461 with 67,168 of those shares held as treasury shares.

Head Office

As announced on 1 March 2022, the Group Head Office in Ballyraine, Letterkenny was wound down in the year which resulted in the Group incurring a one-off cash cost of €1.6m with an exceptional charge of €0.7m being recorded in the year. This is the continuation of cost saving measures at a corporate level which, when completed, will have delivered annualised cost savings of €1m.

2

Board of Directors and Other Information

The Board of Directors of Donegal Investment Group plc currently comprises five Non-Executive Directors.

Non-Executive Directors

Geoffrey Vance (aged 71) is Chairman of Donegal Investment Group plc. He has served on the Board of Donegal Investment Group plc since its conversion from a society in 1989. Prior to this, he served for a number of years on the Committee of management of Donegal Co-operative Creameries Limited.

Patrick Kelly (aged 49) was appointed to the Board on 7 July 2004. He is the chairman of the audit committee. He is also vice chairman of the Irish Cattle Breeding Federation and a Board member of Progressive Genetics.

Henry McGarvey (aged 55) was appointed to the Board on 28 August 2013. Henry was previously Managing Director of Pramerica Systems Ireland Limited and is currently a Board member of the Western Development Commission. Previously, he worked in senior executive positions with Almarai in Saudi Arabia and Motorola and Accenture in Dublin.

Ian Ireland (aged 61) joined Donegal Investment Group plc in January 2005. Prior to that, he had spent over 20 years working in the food industry in Ireland and the UK.

Padraic Lenehan (aged 48) was appointed to the Board on 1 July 2015. Padraic joined Donegal Investment Group plc in 2008 as Financial Controller of its Dairy business, where he subsequently became Financial Controller of the merged Aurivo and Donegal Creameries milk business. In 2013 he returned to Donegal Investment Group plc as Finance Director. Prior to that, he worked for RTÉ, Accenture and in financial services in Dublin.

Secretary and registered office

  1. Lenehan Ballyraine Letterkenny Co Donegal

Independent auditor

KPMG

Chartered Accountants

1 Stokes Place

St. Stephen's Green

Dublin 2

Solicitors

Mason Hayes Curran

Barrow Street

Dublin 4

Eversheds Sutherland

Earlsfort Terrace

Dublin 2

Principal Bankers

Allied Irish Bank plc

Letterkenny

Co Donegal

Registered number

162921

3

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Donegal Investment Group plc published this content on 21 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 December 2022 07:06:08 UTC.