TIDMBAG
RNS Number : 6305W
Barr(A.G.) PLC
28 April 2016
A.G. BARR p.l.c. (the "Company")
28 April 2016
Annual Report and Accounts and Notice of Annual General
Meeting
Following the release on 29 March 2016 of the Company's
financial results for the year ended 30 January 2016 (the "Final
Results Announcement"), the Company announces it has today
published its annual report and accounts for the year ended 30
January 2016 (the "Annual Report and Accounts").
The Annual Report and Accounts contains the notice convening the
Company's one hundred and twelfth annual general meeting (the
"AGM") (the "Notice of AGM"). The AGM will be held at the offices
of KPMG LLP, 191 West George Street, Glasgow G2 2LJ on Wednesday, 1
June 2016 at 11.00 a.m.
A copy of the Annual Report and Accounts, which includes the
Notice of AGM, is available to view on the Company's website:
www.agbarr.co.uk
In accordance with Disclosure and Transparency Rule 6.3.5(2)(b),
additional information is set out in the appendices to this
announcement.
The Final Results Announcement included a set of condensed
financial statements and a fair view of the development and
performance of the business and the position of the Company.
A copy of the Annual Report and Accounts, including the Notice
of AGM, together with a copy of the proxy form in relation to the
AGM will be submitted to the National Storage Mechanism and will
shortly be available for inspection at
www.morningstar.co.uk/uk/nsm
Appendices
Where used in the following appendices, the term "Group" means
the Company together with its subsidiaries.
Appendix A: Directors' responsibility statement
The following directors' responsibility statement is extracted
from the Annual Report and Accounts (page 85):
Directors' statement pursuant to the Disclosure and Transparency
Rules
Each of the directors, whose names and functions are set out on
pages 46 to 47 of this report, confirm that, to the best of their
knowledge:
-- the financial statements, prepared in accordance with IFRSs
as adopted by the EU, give a true and fair view of the assets,
liabilities and financial position of the Group and parent Company
and of the consolidated profit;
-- the Annual Report and Accounts includes a fair review of the
development and performance of the business and the position of the
Group and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties faced by the Group; and
-- the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Company's performance, business
model and strategy.
Appendix B: A description of the principal risks and
uncertainties that the Company faces
The following description of the principal risks and
uncertainties that the Company faces is extracted from the Annual
Report and Accounts (pages 42 - 45):
Risk management approach
The Board is responsible for the Group's risk management and
internal control systems and for reviewing their effectiveness,
supported by the Audit Committee and the Risk Committee. A risk
management framework is in place which sets out the ongoing
processes for the identification, assessment and management of
risks, and for their ongoing monitoring and review. The Board has
defined its risk appetite in a number of key areas for the business
- this sets out the relative level of risk that the Group is
prepared to seek or accept in the pursuit of its strategic
objectives. The aim is to ensure that the risks taken by the Group
fall within its defined risk appetite.
Effective risk management is essential to enable us to achieve
our operational and strategic objectives and deliver long-term
value creation. During the reporting period we have continued to
focus on embedding a culture of risk management throughout the
organisation which will contribute towards successful strategy
execution.
Robust risk assessment
The risk management framework sets out a systematic approach to
risk management which is designed to identify risks to the
business, regardless of source. Once identified, risks are assessed
according to the likelihood and impact of the risk occurring and an
appropriate risk response is determined in line with the Group's
risk appetite. Risks are re-assessed based on the strength of the
mitigating controls implemented. The implementation of risk
mitigation plans is subject to ongoing monitoring and review. A
risk scoring matrix is used to ensure that a consistent approach is
taken across the business at both a corporate and functional level.
This risk assessment and review process is documented in the
appropriate risk register. The Group's risk register is reviewed
quarterly by the Risk Committee and by the Board and the Audit
Committee twice each year.
Risk control assurance
Internal audit work is undertaken by an independent organisation
who develop an annual internal audit plan having reviewed the
Group's risk register and following discussions with the external
auditors, management and members of the Audit Committee.
During the year the Audit Committee has reviewed reports
covering the internal audit work. This has included assessment of
the general control environment, identification of any control
weaknesses and quantification of any associated risk, together with
a review of the status of mitigating actions. The Audit Committee
has also received reports from management in relation to specific
risk items together with reports from external auditors, who
consider controls to the extent necessary to form an opinion as to
the truth and fairness of the financial statements.
The Group's internal control and risk management systems are
designed to manage rather than eliminate the risk of failure to
achieve business objectives and can provide only reasonable but not
absolute assurance against material misstatement or loss.
The report of the Audit Committee can be found on page 58.
Principal risks and uncertainties
The Board has carried out a robust, systematic assessment of the
principal risks facing the Group during the period, including those
which would threaten its business model, future performance,
solvency or liquidity. The principal risks as determined by the
Board are listed in the table below, together with corresponding
mitigating actions. This is not intended to be an exhaustive list
of all risks and uncertainties that may arise.
Principal risks and uncertainties
Risks relating to the Group
Risk Impact Mitigating Actions
------------------------------ ------------------------------- -----------------------------------------
Changes in consumer Consumers may decide The Group offers a broad range
preferences, perception to purchase and consume of branded products across a
or purchasing behaviour alternative brands range of flavours, subcategories
or and markets which offer choice
spend less on soft to the end consumer.
drinks.
Changing consumer attitudes and
behaviours are monitored on an
ongoing basis and inform our
brand plans and new product development.
============================== =============================== =========================================
Changing consumer Consumers may decide Externally, we are responding
attitudes towards to purchase and consume as a soft drinks industry to
sugar/government intervention alternative brands the increased focus of the media
on sugar or spend less on soft and government on sugar through
drinks. the British Soft Drinks Association.
The Group offers a broad range
of branded products, many of
which are low sugar or sugar
free. We continue to progress
reformulation projects to reduce
sugar levels in our products.
Our new product development activity
is focused on development of
lower calorie products and our
marketing programmes incorporate
our lower calorie choices.
============================== =============================== =========================================
Adverse publicity Adverse publicity Our risk management process is
in relation in relation to the designed to identify and monitor
to the soft drinks soft drinks industry, events that may impact the Group
industry, the Group the Group or its brands as a result of adverse publicity
or its brands could have an adverse and to ensure that controls are
impact on the Group's in place to manage these risks.
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reputation, consumer
consumption patterns, We liaise with relevant industry
sales and operating bodies who work with government
profits. and policy makers.
Nutritional information is shown
on all of our products and we
have signed up to the UK Government's
front-of-pack nutritional labelling
scheme.
Processes are in place to ensure
compliance with health and safety
legislation and ethical working
standards and these are regularly
reviewed by the Board and management
committee. Quality standards
are well defined, implemented
and monitored. A Corporate Social
Responsibility Committee is in
place, with a clearly defined
and communicated Corporate Social
Responsibility Policy. The Group
maintains and develops ISO 9001
and 14001 systems and BRC standards
which are subject to annual external
audits, with any non-conformances
addressed in a timely manner.
============================== =============================== =========================================
Failure to maintain Failure to maintain The Group offers a broad range
customer relationships appropriate customer of brands that it manufactures
or take account of relationships or a and distributes through a variety
changing market dynamics reduction in the customer of trade channels and customers.
base could have an Performance is monitored closely
adverse impact on by the Board and management committee
the Group's sales by trade channel and customer
and operating profits. as appropriate. This includes
monitoring of metrics which review
brand equity strength, financial
and operational performance.
The Group focuses on delivering
high quality products and invests
heavily in building brand equity.
We work closely in partnership
with our customers on an ongoing
basis. Members of the senior
management team meet with key
customers throughout the year.
============================== =============================== =========================================
Inability to protect Failure to protect The Group invests considerable
the Group's intellectual the Group's intellectual effort in proactively protecting
property rights property rights could its intellectual property rights,
result in a loss of for example through trademark
brand value. and design registrations and
vigorous legal enforcement as
and when required.
============================== =============================== =========================================
Failure of the Group's A catastrophic failure Assets within the Group are proactively
operational infrastructure of the Group's major managed and maintained. Risk
production or distribution assessments are carried out on
facilities could lead a regular basis and appropriate
to a sustained loss actions taken. Robust business
in capacity or capability. continuity plans are in place
and are regularly tested.
============================== =============================== =========================================
Loss of continuity The loss of continuity There is a robust supplier selection
of supply of major of supply of major process in place. Supplier performance
raw materials raw material ingredients is monitored on an ongoing basis
and/or packaging materials and audits are undertaken for
could impact our ability major suppliers. Multiple sources
to manufacture, with of supply are sourced wherever
an adverse impact possible. Commodity risks are
on the Group's sales reviewed and managed by the procurement
and operating profits. team and reviewed by the Treasury
and Commodity Committee. Contingency
measures are in place and are
tested regularly.
============================== =============================== =========================================
Loss of product integrity A loss of product Appropriate risk assessments
integrity in the manufacturing are carried out on a regular
supply chain could basis and robust quality controls
lead to a product and processes are in place to
withdrawal or recall. maintain the high quality of
our products. Product recall
procedures are tested regularly.
============================== =============================== =========================================
Failure of critical A failure of critical IT assets within the Group are
IT systems IT systems could result proactively managed and procedures
in a loss of key systems, exist that support rapid and
business interruption, clean recovery. Robust business
lost sales or lost continuity plans and contingency
production. measures are in place and are
regularly tested.
============================== =============================== =========================================
Financial Risks The Group's activities Our underlying objective is to
expose it to a variety secure budgeted exchange rates
of financial risks and thereby reduce the volatility
which include market through our cost of goods. Financial
risk (including medium risks are reviewed and managed
term movements in by the Treasury and Commodity
exchange rates, interest Committee, which seeks to minimise
rate risk and commodity adverse effects on the Group's
price risk), credit financial performance through
risk and liquidity hedging known currency exposures
risk. throughout the year.
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The Group's finance team reviews
cash flow forecasts throughout
the year, with headroom against
banking covenants assessed regularly.
The finance team uses external
tools to assess credit limits
offered to customers, manages
trade receivable balances vigilantly
and takes prompt action on overdue
accounts. The Group's financial
control environment is subject
to review by both internal and
external audit. Internal audit's
focus is to work with and challenge
management to ensure an appropriate
control environment is maintained.
============================== =============================== =========================================
Viability Statement
In accordance with provision C.2.2 of the UK Corporate
Governance Code 2014, the directors have assessed the viability of
the Company over a three year period to January 2019, taking
account of the Group's current position and the Group's principal
risks, as detailed in the Strategic Report. Based on this
assessment, the directors have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the three year period to January
2019.
In making this statement, the directors have considered the
resilience of the Group in severe but plausible scenarios, taking
account of its current position and prospects, the principal risks
facing the business and how these are managed. This assessment has
considered the potential impact of these risks on the Company's
business model, future performance, solvency and liquidity over the
three year period. The following three principal risks were
selected for enhanced stress testing: changing consumer
preferences, loss of product integrity and major raw material
supply disruption. These are the principal risks assessed to have
the highest probability of occurrence or the most severe impact;
they were stress tested both individually and in combination,
taking account of the Group's current position, the Group's
experience of managing adverse conditions in the past and the
mitigating actions available to the business. A reverse stress test
was also performed, allowing the Board to assess scenarios and
circumstances that would render its business model unviable and
enabling the identification of potential business vulnerabilities
and the development of appropriate mitigating actions.
The Board selected the period of three years as an appropriate
period for the Company's viability statement for the following
reasons:
-- The Company operates on a three year business cycle; and
-- Management currently use three year forecasts as part of the
business planning process and capital investment cycle.
Appendix C: Related party transactions
The following related party transactions are extracted from the
Annual Report and Accounts (pages 131 - 132):
Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation. Details of transactions between the Company and
related parties are as follows:
Sales of goods and Purchase of
services goods and services
----------------------- -------------------- ---------------------
2016 2015 2016 2015
GBPm GBPm GBPm GBPm
----------------------- --------- --------- ---------- ---------
Rubicon Drinks Limited 40.3 40.1 52.4 52.3
Funkin Limited 0.5 - - -
Findlays Limited - - - 0.1
======================= ========= ========= ========== =========
The amounts disclosed in the table below are the amounts owed to
and due from subsidiary companies that are trading subsidiaries.
The difference between the total of these balances and the amounts
disclosed as amounts due by (note 20) and to subsidiary companies
(note 22) are balances due by and due to dormant subsidiary
companies.
Amounts due
Amounts owed by related to related
parties parties
----------------------- ------------------------- -------------
2016 2015 2016 2015
GBPm GBPm GBPm GBPm
----------------------- ------------ ----------- ------ -----
Rubicon Drinks Limited - - 62.2 51.1
Funkin Limited 0.5 - - -
Findlays Limited - - 2.9 3.0
======================= ============ =========== ====== =====
Compensation of key management personnel
The remuneration of the executive directors and other members of
key management (the management committee) during the year was as
follows:
2016 2015
GBPm GBPm
--------------------------------- ----- -----
Salaries and short term benefits 3.3 3.4
Pension and other costs 0.5 0.3
Share-based payments 0.1 -
================================= ===== =====
3.9 3.7
================================= ===== =====
The Directors' Remuneration Report can be found on pages 61 to
84.
Retirement benefit plans
The Group's retirement benefit plans are administered by an
independent third party service provider. During the year the
service provider charged the Group GBP0.3m (2015: GBP0.5m) for
administration services in respect of the retirement benefit plans.
At the year end GBPnil (2015: GBPnil) was outstanding to the
service provider on behalf of the retirement benefit plans.
END.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSSEMSWAFMSEIL
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