TIDMBAG

RNS Number : 0520L

Barr(A.G.) PLC

23 April 2015

23 April 2015

A.G. BARR p.l.c.

(the "Company")

Annual Report and Accounts and Notice of Annual General Meeting

Following the release on 24 March 2015 of the Company's financial results for the year ended 25 January 2015 (the "Final Results Announcement"), the Company announces it has today published its annual report and accounts for the year ended 25 January 2015 (the "Annual Report and Accounts").

The Annual Report and Accounts contains the notice convening the Company's one hundred and eleventh 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, 27 May 2015 at 9.30 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 78):

Directors' statement pursuant to the Disclosure and Transparency Rules

Each of the directors, whose names and functions are set out on pages 38 to 39 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 26 - 29):

Principal Risks and Uncertainties

The responsibility for risk management across the Group resides with the Board. The Board uses a risk framework which is designed to support the process for identifying, evaluating and managing both financial and non-financial risks.

There is an ongoing process in place for identifying, evaluating and managing the significant risks faced by the Group, which has operated throughout the year. The Group's risk management framework is designed to support this process, giving visibility and control of both financial and non-financial risks. This process involves review of the Group's risk register by the Audit Committee. In line with best practice, the register includes an assessment of the impact and likelihood of each risk together with the controls in place to mitigate the risk.

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 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 control weaknesses and quantification of any associated risk together with a review of the status of actions to mitigate these risks.

The Audit Committee has also received reports from management in relation to specific risk items together with reports from external auditors, who consider controls only to the extent necessary to form an opinion as to the truth and fairness of the financial statements. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and it must be recognised that it can only provide reasonable and not absolute assurance against material misstatement or loss.

The directors confirm that they have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity.

The risks and corresponding mitigation set out below represent the principal uncertainties that the Board believes may impact the Group's ability to deliver effectively its strategy.

Risks Relating to the Group

 
                                                         Mitigating 
Risk                          Impact                      Actions 
----------------------------  -------------------------  -------------------------------------- 
Adverse publicity             Adverse publicity          It remains the Group's policy 
 in relation to                in relation to             to ensure that we operate 
 the Group or                  the Group or               within the boundaries of 
 its brands.                   its brands could           compliance in the areas of 
                               have an adverse            legislation, health and safety 
                               impact on the              and ethical working standards 
                               Group's reputation,        and these are regularly reviewed 
                               consumer consumption       by the Board and management 
                               patterns, sales            committee. The Group maintains 
                               and operating              and develops ISO 9001 and 
                               profits.                   14001 systems which are subject 
                                                          to annual external audits 
                                                          with any non-conformances 
                                                          actioned in a timely manner. 
 
                                                          Within the Group there is 
                                                          a clearly defined and communicated 
                                                          Corporate Social Responsibility 
                                                          Policy. Quality standards 
                                                          are well defined, implemented 
                                                          and measured. 
 
                                                          The Group offers a range 
                                                          of branded products many 
                                                          of which are low calorie 
                                                          or sugar free. Nutritional 
                                                          information is shown on all 
                                                          of our products and we have 
                                                          signed up to the U.K. Government's 
                                                          package labelling arrangements. 
----------------------------  -------------------------  ---------------------------------------- 
Failure or non-availability   The Group would            Assets within the Group are 
 of the Group's                be affected if             proactively managed whether 
 operational infrastructure.   there was a catastrophic   this be intangible brand 
                               failure of its             assets, plant and equipment, 
                               major production           people or IT systems. Robust 
                               or distribution            disaster recovery and incident 
                               facilities which           management plans exist and 
                               led to a sustained         are formally tested. Contingency 
                               loss in capacity           measures are in place and 
                               or capability.             are regularly tested. 
----------------------------  -------------------------  ---------------------------------------- 
Failure of the                The maintenance            IT assets within the Group 
 Group's Information           and development            are proactively managed and 
 Technology systems.           of Information             procedures exist that support 
                               Technology systems         rapid and clean recovery. 
                               may result in              Robust disaster recovery 
                               systems failures,          and incident management plans 
                               including cyber            exist and are formally tested. 
                               security breaches          Contingency measures are 
                               which may adversely        in place and are regularly 
                               impact the Group's         tested. 
                               ability to operate. 
----------------------------  -------------------------  ---------------------------------------- 
Inability to                  Failure to maintain        The Group invests considerable 
 protect the intellectual      the Group's intellectual   effort in proactively protecting 
 property rights               property rights            the intellectual property 
 associated with               could result               rights associated with its 
 current and future            in the value               current and future brands, 
 brands.                       of our brands              through trademark registration 
                               being eroded.              and vigorous legal enforcement 
                                                          as and when required. 
----------------------------  -------------------------  ---------------------------------------- 
Interruption                  The packaging              The Group adopts centralised 
 to, or significant            and raw material           purchasing arrangements to 
 change in the                 components that            ensure the best possible 
 terms of, the                 the Group uses             terms are negotiated. 
 Group's supply                for the production 
 of packaging                  of its soft drink          Contingency measures exist 
 and raw materials.            products are               and are tested regularly. 
                               largely commodities 
                               that are subject           Supplier performance is reviewed 
                               to price and               on a monthly basis and audits 
                               supply volatility          are undertaken for major 
                               that could have            suppliers. Overall commodity 
                               an adverse impact          risks are reviewed and managed 
                               on the Group's             by the purchasing and operations 
                               sales and operating        teams and reviewed by the 
                               profits.                   Treasury Committee whose 
                                                          remit and authority levels 
                                                          are set by the Board. 
 
                                                          Together with the operations 
                                                          team, the Treasury Committee's 
                                                          remit focuses on the unpredictability 
                                                          of the cost of supply and 
                                                          seeks to minimise potential 
                                                          related adverse effects on 
                                                          the Group's financial performance 
                                                          through either forward purchasing 
                                                          or hedging known commodity 
                                                          requirements. 
----------------------------  -------------------------  ---------------------------------------- 
Financial Risks.              The Group's activities     Our underlying objective 
                               expose it to               is to secure budgeted exchange 
                               a variety of               rates and thereby reduce 
                               financial risks            the volatility through our 
                               which include              cost of goods. Financial 
                               market risk (including     risks are reviewed and managed 
                               medium term movements      by the Treasury Committee 
                               in exchange rates,         whose remit and authority 
                               interest rate              levels are set by the Board. 
                               risk and commodity         The Treasury Committee seeks 
                               price risk),               to minimise adverse effects 
                               credit risk and            on the Group's financial 
                               liquidity risk.            performance through hedging 
                                                          known currency exposures 
                                                          whilst reviewing the appropriateness 
                                                          of the interest rate hedging 
                                                          policy throughout the year. 
 
                                                          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. 
----------------------------  -------------------------  ---------------------------------------- 
Change programmes             A number of change         Appropriate governance structures 
 may not deliver               programmes designed        are put in place to provide 
 the benefits                  to improve the             the required frameworks to 
 intended.                     effectiveness              supervise, monitor, control, 
                               and efficiency             direct and manage change 
                               of the end to              programmes. 
                               end operating, 
                               administrative             These structures review the 
                               and financial              scope of change programmes 
                               systems and processes      and related project plans 
                               continue to be             and project resources, monitoring 
                               undertaken. There          progress against set deliverables. 
                               is a risk that             External support is utilised 
                               these programmes           when the Group is unable 
                               will not fully             to support the project solely 
                               deliver the expected       from internal resources. 
                               operational benefits 
                               within the timescales 
                               expected. There 
                               is also the risk 
                               that the change 
                               programmes lead 
                               to disruption 
                               to production, 
                               administrative 
                               and financial 
                               processes and 
                               could impact 
                               customer service 
                               and/or operating 
                               margins. 
----------------------------  -------------------------  ---------------------------------------- 
Increasing funding            The triennial              The Group's finance team 
 needs or obligations          valuation of               works closely with the Pension 
 in respect of                 the Group's defined        Scheme Investment Sub Committee 
 the Group's pension           benefit pension            and the Pension Trustees 
 scheme arrangements.          scheme may highlight       to ensure that an appropriate 
                               a worsening funding        Investment Strategy is in 
                               position that              place to fund future pension 
                               requires the               requirements at acceptable 
                               Group to invest            levels of risk. 
                               additional cash 
                               contributions 
                               or provide further 
                               assurance to 
                               cover future 
                               liabilities. 
----------------------------  -------------------------  ---------------------------------------- 
RISKS RELATING TO THE MARKET 
-------------------------------------------------------  ---------------------------------------- 
Acquisition strategy          Failure to deliver         A robust initial evaluation 
 fails to deliver              expected return            and diligence process exists 
 expected returns              could affect               which clearly outlines expectations 
 via either market             overall performance,       relative to agreed rates 
 performance or                net debt level,            of return and clearly identifies 
 under attainment              share price,               deliverables. 
 of targeted synergies.        management credibility 
                               and/or shareholder         Sensitivity analysis of the 
                               appetite for               key value drivers is also 
                               future acquisitions.       undertaken. 
 
                                                          A dedicated integration and 
                                                          project management team is 
                                                          established pre-completion 
                                                          and a 100 day plan established 
                                                          against which progress is 
                                                          actively monitored. 
 
                                                          Finally, a six monthly review 
                                                          of performance relative to 
                                                          the acquisition model is 
                                                          undertaken. 
----------------------------  -------------------------  ---------------------------------------- 
Failure to take               A decline in               The Group offers a range 
 account of changing           sales of key               of brands that it manufactures 
 market dynamics.              brands or a failure        and distributes through a 
                               to renew trading           cross section of trade channels 
                               agreements on              and retailers. Performance 
                               favourable terms           is monitored closely by the 
                               or reduction               Board and management committee. 
                               in the customer            This includes monitoring 
                               base could have            and tracking of metrics which 
                               an adverse impact          review brand equity strength, 
                               on the Group's             together with monitoring 
                               sales and operating        of financial and operational 
                               profits.                   performance. 
 
                                                          The Group focuses on delivering 
                                                          high quality products and 
                                                          invests heavily in building 
                                                          brand equity. Contact is 
                                                          maintained with all of the 
                                                          Group's major customers through 
                                                          regular sales force interaction 
                                                          and members of the senior 
                                                          management team meet with 
                                                          key customers throughout 
                                                          the year. 
----------------------------  -------------------------  ---------------------------------------- 
Changes in consumer           Consumers may              The Group offers a range 
 preferences,                  decide to purchase         of branded products across 
 perception or                 and consume alternative    a range of flavours, subcategories 
 purchasing behaviour.         brands or spend            and geographies which offer 
                               less on soft               choice to the end consumer. 
                               drinks. 
                                                          Changing consumer preferences 
                                                          are reviewed annually by 
                                                          the Board with reference 
                                                          to qualitative and quantitative 
                                                          research. 
 
                                                          Spontaneous and prompted 
                                                          brand awareness levels are 
                                                          monitored in order to measure 
                                                          any changes in consumer knowledge 
                                                          of brands and/or changes 
                                                          in brand equity strength. 
----------------------------  -------------------------  ---------------------------------------- 
Changes in regulatory         Changing legislation       The Group proactively engages 
 requirements.                 may impact our             with the relevant authorities, 
                               ability to market          including the British Soft 
                               or sell certain            Drinks Association, The Food 
                               products or could          Standards Agency and the 
                               cause the Group            General Counsel of Scotland 
                               to incur additional        to ensure full participation 
                               costs or liabilities       in the future development 
                               that could adversely       of and compliance with relevant 
                               affect its business.       legislation. 
 
                                                          It remains the Group's policy 
                                                          to ensure that employees 
                                                          are aware of their responsibilities 
                                                          and all applicable regulatory 
                                                          requirements. Formal training 
                                                          sessions are undertaken throughout 
                                                          the year. 
 
                                                          An audit against changing 
                                                          legislative requirements 
                                                          is undertaken annually by 
                                                          the in house legal team. 
----------------------------  -------------------------  ---------------------------------------- 
Potential impact              Changes to legislation     The impact of changes to 
 of taxation changes.          may vary the               the taxation legislation 
                               taxation levels            is reviewed regularly. 
                               associated with 
                               the sale or consumption    The Group will seek to remain 
                               of soft drinks             commercially competitive 
                               which could impact         by passing on any resulting 
                               sales and operating        cost differential through 
                               profits.                   price amendments to customers. 
----------------------------  -------------------------  ---------------------------------------- 
 

Appendix C: Related party transactions

The following related party transactions are extracted from the Annual Report and Accounts (pages 124 - 125):

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 
-----------------------  --------------------  --------------------- 
                              2015       2014        2015       2014 
                            GBP000     GBP000      GBP000     GBP000 
-----------------------  ---------  ---------  ----------  --------- 
 
Rubicon Drinks Limited      40,095     37,268      52,349     52,692 
-----------------------  ---------  ---------  ----------  --------- 
Findlays Limited                 -          -         128        148 
-----------------------  ---------  ---------  ----------  --------- 
 

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 19) and to subsidiary companies (Note 21) are balances due by and due to dormant subsidiary companies.

 
                                                      Amounts due 
                          Amounts owed by related      to related 
                                  parties                parties 
-----------------------  -------------------------  ---------------- 
                                 2015         2014     2015     2014 
                               GBP000       GBP000   GBP000   GBP000 
-----------------------  ------------  -----------  -------  ------- 
 
Rubicon Drinks Limited              -            -   51,074   40,948 
-----------------------  ------------  -----------  -------  ------- 
Findlays Limited                    -            -    2,962    2,476 
-----------------------  ------------  -----------  -------  ------- 
 

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:

 
                                      2015     2014 
                                    GBP000   GBP000 
---------------------------------  -------  ------- 
 
Salaries and short term benefits     3,356    2,601 
---------------------------------  -------  ------- 
Pension and other costs                347      339 
---------------------------------  -------  ------- 
Share-based payments                    19       30 
---------------------------------  -------  ------- 
                                     3,722    2,970 
---------------------------------  -------  ------- 
 

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 GBP503,756 (2014: GBP393,886) for administration services in respect of the retirement benefit plans. At the year end GBPnil (2014: 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

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