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.
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The company news service from the London Stock Exchange
END
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