A.G. BARR Annual Report 2010

FY2010 Annual Report · A.G. BARR

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A.G. BARR p.l.c.
Annual Report and Accounts
January 2010

Business Review
02 Chairman’s Statement
04 Business Review
14 Financial Review

Corporate and Social Responsibility
21 Corporate and Social Responsibility
36 Board of Directors
38 25 Years Service Awards

Accounts
40 Directors’ Report
43 Statement on Corporate Governance
47 Directors’ Remuneration Report
53 Independent Auditor’s Report

to the Members of A.G. BARR p.l.c.
54 Consolidated Income Statement and
Statement of Comprehensive Income

55 Statement of Changes in Equity
57 Statements of Financial Position
58 Cash Flow Statements
59 Accounting Policies
66 Notes to the Accounts
94 Review of Trading Results

Our Brands
IRN-BRU, Rubicon, Strathmore, Tizer,
Simply, KA, D’N’B, St. Clement’s, Findlays,
Abbott’s, Barr Brands, Vitsmart, Taut.

Partnership Brands
Orangina, Snapple, Rockstar.

Head Ofﬁ ce
01 Cumbernauld

Regional Ofﬁ ce
05 Middlebrook
11 Wembley

Sales Branch
04 Newcastle
06 Moston
07 Shefﬁ eld
09 Wednesbury
12 Walthamstow

Factory
01 Cumbernauld
02 Forfar
03 Pitcox
08 Mansﬁ eld
10 Tredegar

Distribution Depot
01 Cumbernauld

Financial Highlights

Key Performance Indicators

201,410

total sales generated

18.7%

increase in sales year on year

20.8%

proﬁ t before exceptional items

Turnover growth

Return on capital employed

2010

2009

18.7%

2010

19.2%

14.4%

2009

16.0%

Gross margin

EBITDA margin

2010

2009

51.3%

2010

49.9%

2009

Operating proﬁ t margin

Free cash flow (£m)

2010

2009

14.8%

2010

13.6%

2009

18.7%

18.1%

17.9

18.0

Building Momentum
We’ve built our business by consistently
delivering great tasting, high-quality products
at great value. Our future aim is to provide
a growing and increasingly diverse consumer
base with brands that deliver taste, quality
and value across a wide portfolio.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Chairman’s
Statement

R.G. Hanna Chairman

“ I know that the strong results
for the year to January 2010
were built on a solid base and
I am conﬁ dent that we are well
placed to maintain the momentum
in the business into the future.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Shareholders will be well aware of the current difﬁ cult economic
climate and the resultant challenges such an environment brings.
I believe it is a great tribute to our management teams that I
am able to report, in my ﬁ rst year as chairman, continuing strong
growth and a real momentum for the future.

The ﬁ nancial performance of the business, as described in detail
in the business and ﬁ nancial review, has been driven by strong
revenue growth with turnover in the year increasing by 18.7% to
£201.4m. Like for like sales excluding the impact of the Rubicon
acquisition and the 53rd week in 2008/09 increased by 10.6%.
Continuing focus on costs and efﬁ ciencies produced a proﬁ t before
tax, before exceptional items, of £27.9m, an increase of 20.8%.

The Rubicon acquisition in 2008 was partially funded by debt.
Good trading and diligent cash management have reduced net
debt from £31.3m last year to £22.1m at the end of January 2010.
Our balance sheet remains strong.

During the year a one for two share split was approved. After
adjusting for the share split, basic earnings per share increased
by 5% to 46.8p (2009: 44.6p).

Consequently the board is pleased to recommend a ﬁ nal dividend
of 16.85p to give a total dividend of 23.1p an increase of 10% on
the prior year.

Prospects
It remains clear that to maintain and develop our competitive
position we need to continue to invest in our major assets of
people, brands and operating infrastructure and we are doing
so in each area. Extra resources are being provided to enhance
our long standing commitment to training and development and
we are also benchmarking our performance against the Investors
in People standard.

The development of our brands is an ongoing and vital focus
of attention. We are also extending and strengthening the sales
execution effort in support of that.

During the year we announced a further investment of £10m
in production capacity at Cumbernauld and the planned closure
of our Mansﬁ eld site. Rationalisation is always difﬁ cult and in this
case will result in the loss of a number of jobs staffed by people
who have many years service with the Company.

Within primary logistics we are planning a new approach which
will improve our ﬂ exibility and overall operational performance.

The new ﬁ nancial year has started well with sales ahead of last
year. Our enthusiasm has to be tempered with caution, however,
given the challenging overall economic and consumer outlook.

I know that the strong results for the year to January 2010 were
built on a solid base and I am conﬁ dent that we are well placed
to maintain the momentum in the business into the future.

R.G. Hanna Chairman

£27.9m

proﬁ t before tax excluding
exceptional items and
impairment charges

Chairman’s Statement

Business
Review

Roger White Chief Executive

“ The smooth integration of the
Rubicon business with its growth
potential combined with our
strong core portfolio of national
and regional brands have created
a business with increased growth
momentum and potential.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

“ This strong ﬁ nancial
performance reﬂ ects the
continued drive to deliver
top line sales growth at the
same time as strenuous
efforts are made to control
and reduce costs across
the business.”

Business Review
In the 52 week period ending 30 January 2010 A.G. BARR
has substantially outperformed the U.K. soft drinks market.
The combination of signiﬁ cant growth in our existing core
business and a full 12 months of accelerating sales in the
Rubicon brand have delivered full year sales revenue of
£201.4m. This equates to growth, taking out the impact of the
53rd week in 2009, of 21.0%. Stripping out the further effects
of the Rubicon acquisition, like for like sales grew by a very
healthy 10.6% in the period.

The business has gained signiﬁ cant momentum over the past
12 months building on the solid foundations set over past years.
Pre-tax proﬁ t, excluding exceptional items, increased by 20.8%
to £27.9m from £23.1m. This strong ﬁ nancial performance reﬂ ects
the continued drive to deliver top line sales growth at the same
time as strenuous efforts are made to control and reduce costs
across the business. This consistent approach in combination
with the positive impact of the Rubicon business has increased
operating margins by 1.2% in the period.

The Rubicon business has been successfully integrated over
the course of the last ﬁ nancial year. I am pleased to report that
the integration was successfully delivered with only £0.1m of
exceptional restructuring costs which is well below our original
expectations. Importantly during this integration process we
have maintained sales momentum in both core Barr brands and
in Rubicon. The acquisition of Rubicon has to date exceeded
all of our pre-acquisition expectations.

The net debt position of the Group has continued to improve and
as at 30 January 2010 stood at £22.1m, a reduction of 29.5% on
the prior year end position. This position reﬂ ects our continuing
effort to improve cash management and capital efﬁ ciency across
the business.

£201.4m

revenue for the year

Business Review

In November 2009 we announced further manufacturing
investment plans and restructuring of both our operating platform
and supply chain. These plans include a £10m investment at
the Cumbernauld site in production capacity, the outsourcing of
a portion of our primary supply chain and the consequential closure
of our Mansﬁ eld site. Following extensive employee consultation we
have now commenced the investment programme which will stretch
across 2010/11 and into early 2011/12. As a consequence of this we
are recognising signiﬁ cant exceptional costs of £2.9m related to this
plan in our 2009/10 ﬁ nancial performance. In addition we have a
further £0.5m of exceptional charges outwith the Mansﬁ eld position.

The board has proposed a ﬁ nal dividend of 16.85p which
represents an increase in the total dividend of 10% on the previous
year reﬂ ecting the continued ﬁ nancial strength of the business
and our continued conﬁ dence in the future.

The Market
The U.K. soft drinks market, in contrast to the prior year’s volume
decline of over 2%, increased by 1% in volume terms and by
2% in value terms in the 52 week period ending 23 January 2010.
The difﬁ cult economic environment appears to have had limited
impact on the overall soft drinks market and carbonates in
particular have continued to show good growth across the year.

Consumers have continued to purchase a wide repertoire of
soft drinks and have maintained a preference for established
product groups that deliver both quality and value. Retailer
branded soft drinks have not increased their share of the market,
perhaps reﬂ ecting the competitive nature of pricing and promotion
across the category as a whole.

Category growth has continued to be driven by the strong
performance of carbonates. All sectors within carbonates
performed strongly with the fastest growth coming from the
energy sector. Still sports drinks have recovered some ground
with volume up 2% but at the expense of value, which has
declined by 3%, reﬂ ecting the increasingly competitive price
environment in this sector.

The water market has improved in the period posting 5% volume
growth and 2% value growth – this performance has gained
momentum across the year.

The soft drinks category has once again demonstrated its ability
to deliver growth in volume and in value terms despite difﬁ cult
macro economic conditions. The landscape remains competitive
but consumers continue to respond well to both existing brands
and products and to well executed innovation.

Strategy
Our platform for sustained proﬁ table growth is based on the
following key areas of strategic focus which remain consistent
with prior years:

· Core brands and markets
· Portfolio development
· Route to market
· Partnerships
· Efﬁ cient operations
· People development
· Sustainability

Underpinning our excellent ﬁ nancial performance in the last
12 months has been our drive to build momentum across our key
brands. We have grown revenue by improving sales fundamentals
through our many sales channels and have continued to develop
brands that are differentiated and have growing levels of appeal
to increased numbers of consumers. All of this has been achieved
by delivering quality, service and value both to our customers
and ultimately to consumers.

The development of our sustainability and social agenda has
continued across the year with much work throughout the Company
to eliminate waste, improve recycling and to develop products
and packaging which have a reduced impact on the environment.
Of particular note has been our continued reduction in PET usage
in our bottles which has reduced by 6% on average – removing the
requirement for around 300 tonnes of PET per annum. In addition
we are now utilising 25% recycled PET in all our Strathmore bottles.
This drive towards increased sustainability which we see as simply
good business will continue to be at the heart of our future plans.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Mrs Peart (62)
has been a fan
of IRN-BRU for
over 40 years!

IRN-BRU continued to
grow throughout the U.K.
with a broad range of pack
formats and an increasing
level of distribution across
all channels.

Core Brands and Markets
The development of our core brands and markets received
much of our focus across 2009/10. Over the period we have seen
excellent growth across our key brands as we look to appeal
to more people, more often, in more areas across the market.

Our two major reporting segments are:

· Carbonates
· Still drinks and water

Both of these segments outperformed the market. Still drinks
and water, which has historically been the smaller segment within
our business, made some signiﬁ cant progress over the ﬁ nancial
year 2009/10. The year on year underlying growth in this segment
was boosted by the addition of Rubicon stills volume. Our still
drinks and water business now represents 22.4% of our total
sales mix.

Carbonates has also continued to grow strongly, recording
a 10.1% year on year increase in value, well ahead of the market.

Within the carbonates segment, IRN-BRU, which is lapping an
incredibly strong prior year revenue performance (+8%), continued
to deliver strong growth of 5%. Particularly encouraging is
the performance in England and Wales where we have grown
volume share by 20% in the period. This growth has been driven
by improvements in distribution and is evenly spread across the
territory and in a number of channels.

The growth of the IRN-BRU brand was underpinned by substantial
marketing investment including sports based sponsorships such
as the Scottish Football League and Rugby League in England.
In tandem with sponsorship we have increased marketing spend
above and through the line with the main creative execution in
the period being the IRN-BRU Musical TV advert. We continued
our focus towards value added promotional activity with a further
IRN-BRU free glass campaign in the summer in addition to
numerous on-pack promotional activities across the year. IRN-BRU
continues to grow and develop as a brand and continues to offer
signiﬁ cant further growth opportunities.

Business Review

World Record Breaker
In support of “Homecoming Scotland”
the IRN-BRU Can Clan Event held on
13 September 2009 staged live music and
a spectacular, world record breaking cancan
by a crowd of 9,600 fans at Glasgow Green.

Spot the Difference
A very successful ‘Sugar Free’ advertising
campaign helped to drive a positive
performance for Diet IRN-BRU with the
campaign being awarded three advertising
awards including best outdoor campaign.

Ofﬁ cial Soft Drink
IRN-BRU is the Ofﬁ cial Soft Drink of
Rugby League and Rugby Super League.
An estimated 2 million fans attend the games
with a further 5 million viewing the IRN-BRU
sponsored coverage on Sky Sports.

22.4%

total sales mix
represented by our still
drinks and water business

In 2008/09 we saw the BARR Range of ﬂ avoured carbonates start
to gain some momentum and last year that growth accelerated
with sales revenue increasing by 33%. This was driven by
solid performance in existing outlets and further signiﬁ cant rises
in distribution delivered across the year. New ﬂ avour additions
and additional pack formats also delivered excellent incremental
growth and our ﬁ rst signiﬁ cant piece of above the line marketing
investment in sponsorship of STV teatime programme “The Hour”
cemented our position in the core Scottish market. Further growth
through the Barr brand in England and Wales is anticipated in the
future. The total regional range continues to grow and develop and
will continue to feature strongly in our commercial growth plans.

The Rubicon brand following our integration efforts is now ﬁ rmly
established within our core brand portfolio. The brand in both still
and carbonated formats has performed strongly across the year.
The integration process was delivered without disrupting sales
momentum and the beneﬁ t of placing the Rubicon brand into our
sales system and under our commercial management has delivered
sales growth ahead of our initial expectations. The addition
of the new watermelon ﬂ avour and the upweighting of consumer
marketing activity including signiﬁ cant sampling and PR around
“Mango Week” have built on the already strong growth momentum.
As we progress with the development of the Rubicon brand
and begin to develop the consumer marketing plans we believe
there is signiﬁ cant further opportunity to grow and develop this
exciting brand.

Rubicon has added signiﬁ cant weight and diversity to our still
portfolio which has grown considerably and it now represents
a signiﬁ cant share of our total sales revenue. The wider still brands
have continued to make very good progress with Simply and
St. Clement’s juices and juice drinks jointly increasing revenue by
6%. Simply Fruity in particular which plays to the value conscious
shopper has continued to deliver strong growth.

The water category has recovered some ground over the
course of 2009, the second half of the year especially saw
growth with improved late summer weather in the south of
the country. Strathmore revenue adjusting for the 53rd week in
2008/09 was broadly ﬂ at, although encouragingly the second
half performance was 5% ahead of the prior year. Our continued
support of and focus on the brand as well as our move back into
ﬂ avoured waters has helped maintain performance despite our
decision to exit from some low margin contracts in the period.
We are delighted to have renewed our contractual position with
Matthew Clarke in late 2009. This contract was originally struck
in 2006 in conjunction with the Strathmore business acquisition
and reached the end of its three year duration in 2009. We remain
optimistic regarding the category and Strathmore’s position within
it and anticipate building on the momentum of the second half
into next year.

“ Rubicon has added
signiﬁ cant weight
and diversity to our
still portfolio which
has grown considerably
and it now represents
a significant share of
our total sales revenue.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Sam (13)
loves the taste of
Guava Rubicon, it’s
his current favourite!

Rubicon is the leading
range of exotic juice drinks
in the market made with
the ﬁ nest exotic fruits.

Portfolio Development
The development of our portfolio has in the last 12 months been
mainly focused on our core brands and the integration and growth
of the Rubicon brand. The introduction of ﬂ avour extensions, pack
format changes and pack size changes have driven signiﬁ cant
growth. We elected to scale back our developments and
investment in the Taut and Vitsmart brands over the course of the
last ﬁ nancial year – this approach has worked to our advantage
with difﬁ cult market conditions in still sports drinks and difﬁ culty
in establishing the consumer proposition within the very new
enhanced water category.

It remains our belief that further development of our core brands
will bring the greatest immediate beneﬁ t and we have an exciting
programme of innovation planned for 2010 which also includes
products outside our existing category coverage. Our portfolio
development plans will continue to take account of the current
and forecast near term consumer trends and outlook – keeping
close to the consumer remains our key objective.

Route to Market
We are building our business from a solid base with multiple routes
to market and our focus is on developing the skills, competence
and systems to manage and develop these multiple routes to
market. We have continued to invest in sales execution and have
widened that investment to include further development of our
teams in food service and vending.

Our work to strengthen and develop our direct to store operations
and our impulse business in general has continued; the beneﬁ ts
of prior year investment in people and systems are now feeding
through to performance improvements in this important sector.

Business Review

National Mango Week
Support for Rubicon’s National Mango Week
in May included a new TV commercial backed
up by support across all trade channels.

The Latest Addition
Rubicon Watermelon became the latest
addition to the brand. It was launched
mid summer in 288ml and 1 litre supported
by nationwide sampling and TV advertising.

Loyal Consumers
With an already strong core ethnic
base our summer sampling programmes
at a range of events this year managed
to introduce over 500,000 consumers
to Rubicon’s range of exotic juice drinks.

46%

of ethnic consumers
now drink Rubicon

(source: TNS August 2009)

Partnerships
We have strengthened and developed our key partnerships
across 2009/10 to ensure solid foundations in all of these
important relationships as we go forward.

We have agreed a new and extended agreement with Rockstar Inc
related to the production and sale of the Rockstar brand in Great
Britain and Eire. The new 10 year agreement ensures the long-term
commitment of both sides to building the Rockstar brand giving
both parties the certainty to continue to invest in the growth of this
exciting brand.

In the period the Orangina business was sold by Lion Capital to
Suntory the Japanese consumer goods company. Last year we
concluded our new franchise agreement with the Orangina Group
that extended our partnership to 31 December 2014 and as such
we look forward to continuing to develop the Orangina brand in
the U.K. under its new ownership.

Sales of IRN-BRU in Russia through our partnership with Pepsi
Bottling Group (PBG) have, in common with all consumer goods
in Russia, suffered in the extreme economic downturn that hit
that territory. Our volume sales to PBG were down 8.3% in the
year. In addition to the difﬁ cult economic environment IRN-BRU
performance in 2008/09 was excellent making 2009/10 a difﬁ cult
year on a comparative basis. However in the ﬁ nal quarter the
local sales declines ﬂ attened out and consumer behaviour began
to recover.

Our overall export sales in 2009/10 have grown by 31% with
the inclusion of the Rubicon export sales business which is
particularly strong in Scandinavia. With increased scale in export
markets and a wider portfolio we hope to generate higher levels
of overall growth in the future, notwithstanding any challenges
in individual markets.

Our partnership relationships on the supply side, in particular our
materials supply, especially ingredients and packaging, continues
to develop well. Our overall joint objectives related to risk, quality,
efﬁ ciency and reducing our environmental impact remain the
basis of these partnerships.

“ We have strengthened
and developed our
key partnerships across
2009/10 to ensure solid
foundations in all of these
important relationships
as we go forward.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Gez (34)
has always preferred
Orangeade from the
BARR Range.

BARR Range continues to
go from strength to strength
with a comprehensive range
of ﬂ avours available in six
different pack formats.

Efﬁ cient Operations
Our operational activities across 2009/10 have focused
on continuous improvement, the integration of the Rubicon
operational activities, the planning of further capacity investment in
Cumbernauld, the outsourcing of some logistics functions and the
consequential closure of the Mansﬁ eld site planned for early 2011.

We have successfully integrated all of the Rubicon production
activity into our operational footprint. Over the last year this has
delivered improvements in cost and efﬁ ciencies at the Tredegar
site. We continue to make investments at Tredegar to increase
capacity and reduce costs. In tandem with this we reviewed
our supply chain requirements and are following an outsourcing
approach to allow us to fully consolidate our deliveries to major
customers. This will see our storage and distribution operations
at Mansﬁ eld closing and the Rubicon operations, which are
already outsourced, switching to another outsourced provider.
It is anticipated this switch will take place over the course of
summer 2010.

During the year we have also carried out a wide ranging
review of our production assets and future requirements. As a
consequence, we announced in November 2009 our intention
to close the Mansﬁ eld production site and invest in increased
production capacity at Cumbernauld. Following a period of
extensive consultation it was conﬁ rmed that the entire Mansﬁ eld
site will close in early 2011 and the investment programme at
Cumbernauld commenced in late January 2010.

The whole team at the Mansﬁ eld site have worked hard to improve
the site efﬁ ciencies over the past few years following investment
in production equipment. Despite their endeavours and success,
the requirement for further investment in the infrastructure of the
Mansﬁ eld site, coupled with the decision to outsource part of
our logistics, have contributed to the operationally and ﬁ nancially
driven decision to close the site. This decision in no way reﬂ ects
the quality or endeavour of all of those who continue to work
diligently for the Company at the Mansﬁ eld site. We are working
closely with all of those impacted by these changes to ensure
as much support as possible is given to them over the coming
12 months in the run up to the planned closure.

Business Review

Strength in Depth
Our BARR Range continues to go from
strength to strength with a comprehensive
range of ﬂ avours available in a variety
of pack formats.

On ‘The Hour’
Our ﬁ rst ever Barr Brand TV sponsorship
is of STV’s family orientated lifestyle show
‘The Hour’. Hosted by leading TV presenter
Stephen Jardine, the show goes out live ﬁ ve
days a week at 5pm.

BARR’S ORIGINALS 330ml
Building on the successful launch of
BARR’S ORIGINALS in 750ml glass bottles
the previous year we introduced a range
of 330ml cans at the start of 2009.

£4m

incremental sales achieved
by BARR Range in 2009

Our overall capital spend in the period has been lower than
originally anticipated, impacted by the consultation regarding
the Mansﬁ eld closure plans. Despite signiﬁ cant capital spend
associated to this project we expect our overall spend across
the three ﬁ nancial years ending January 2010, 2011 and 2012 will
be broadly in line with our previous anticipated capital spend.
However the phasing of the spend will be weighted towards
next year.

We are now entering a year of signiﬁ cant operational change
across the business with all of the increased risk that it brings.
However we are conﬁ dent that the team is well proven in dealing
with signiﬁ cant operational change and anticipate only minimal
resultant impact to our performance.

People
As the momentum has grown in the business so too have our
people developed to meet the challenges and demands that this
growth has presented. The progress the business has made is as
a consequence of the efforts of all individuals and teams who have
delivered exceptional performance across the business for which
we are very grateful. It is difﬁ cult to single any individuals or groups
out but the successful integration of the Rubicon business is worthy
of a special mention – a speciﬁ c thanks to all of those involved.

We continue to ensure Health and Safety is at the forefront of all
our team’s thinking across the business and once again during
last year further efforts have gone into training, communication
and auditing of all our working procedures.

Over the course of the last ﬁ nancial year we have embarked
on the Investors in People (IIP) standard. This assessment of our
performance across a number of people related activities allows
us the opportunity to benchmark our performance as well as
helping facilitate further improvements. We have completed a
number of the IIP reviews and to date I am pleased to report very
good progress towards our goal of achieving the standard across
all of our sites, which is expected to be completed in late 2010.

Our corporate social responsibility and sustainability agenda
has made good progress on all fronts, building momentum on the
work of the previous year. It is particularly pleasing to report our
progress in relation to waste and recycling, highlighted in the CSR
report, which spans the whole organisation in manufacturing,
supply chain and all ofﬁ ce locations.

“ The progress the business
has made is as a consequence
of the efforts of all individuals
and teams who have delivered
exceptional performance across
the business for which we are
very grateful.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Khalid (40)
stocks everyone’s
favourites in his
Edinburgh store.

We have developed
a portfolio of quality
products which appeal
to a broad spectrum
of people throughout
the country.

Summary
The difﬁ cult macro economic climate did not materially impact
the soft drinks market which has shown some positive growth
especially in the second half of the year. A.G. BARR has
signiﬁ cantly outperformed the total market and seen its brands
build momentum across our key channels and customers.

The smooth integration of the Rubicon business with its growth
potential combined with our strong core portfolio of national
and regional brands have created a business with increased
growth momentum and potential. The investments we have
made in our sales execution, systems and infrastructure and
those we are planning for our asset base in the next phase of our
development should position us well to maintain the momentum
we are currently enjoying.

The strong platform for growth created over recent years has
given us the opportunity to ﬂ ourish even in difﬁ cult times and
looking forward our revenue growth opportunities, cost control
ethos, enhanced asset base and strong balance sheet give us
conﬁ dence to face the challenges of our dynamic and competitive
market place.

Roger White Chief Executive

Business Review

Comprehensive Range
We have developed a range of products
which comply with the new schools
regulations and can now offer a broad
choice of great tasting drinks including
St. Clement’s Squeeze, a sparkling 50%
juice 50% water drink.

Strathmore Twist
With a hint of natural fruit ﬂ avour with no
artiﬁ cial ﬂ avours or sweeteners Strathmore
provides a great tasting alternative to the
range. Supported by Scottish TV advertising
we have achieved sales of over 3,000,000
500ml bottles to date.

Launching a Rockstar
Over 30,000,000 Rockstar 500ml cans
have been sold since we launched the
brand in the U.K. in October 2008. We have
also continued to develop the range with the
launch of Rockstar Original 250ml, Rockstar
Original 710ml resealable can and Rockstar
Cola 500ml – the ﬁ rst U.K. energy cola drink.

10 year

extension to our existing
production and distribution
deal with our partners
Rockstar Inc, USA

Financial
Review

Alex Short Finance Director

“ During the year operating
margins increased a full
percentage point from
13.6% to 14.8%.”

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Financial Review
Proﬁ t before tax for the year ended 30 January 2010 rose to
£24.5m, an increase on the prior year of 5.3%, however this
was after charging exceptional items of £3.4m. Normalised
proﬁ t before tax (pre exceptional items) increased to £27.9m,
an increase of 20.8%.

EBITDA (pre exceptional items) increased by 22.7% to
£37.7m, representing an improved EBITDA margin of 18.7%,
previously 18.1%.

In the ﬁ nancial period A.G. BARR signiﬁ cantly outperformed
the U.K. soft drinks market, delivering full year sales of £201.4m,
an increase of 18.7% on the prior year. The increase was seen
across both the still drinks and water (stills) and carbonates
segments. £17.2m of the growth in revenue was delivered through
the stills segment which was fuelled by the inclusion of a full year’s
trading of the Rubicon brand. Stills now account for 22.4% of our
total revenue, up from 16.5% in the prior year.

Our core brands performed well, growing volume share, particularly
in England and Wales. Across the U.K. our share of carbonates,
excluding mixers, increased by 6% and in England and Wales
share increased by 20% (Source: A C Nielsen). This was achieved
whilst also delivering growth in the average price per litre paid
by consumers (Source: A C Nielsen Scantrack Data to 23/01/10).

Margins
At the beginning of the ﬁ nancial year, the business faced
the prospect of increasing raw material costs principally as a
consequence of a weak Sterling relative to both the US Dollar
and the Euro. In conjunction with the delivery of double digit
sales growth, the team made strenuous efforts to protect
operating margins through successful delivery of modest price
increases and tight control of operating costs. This has resulted
in an improvement in our gross margin from 49.9% to 51.3%.

During the year we continued to see the beneﬁ ts of previous
operational restructuring programmes and improvements within
our manufacturing and distribution activities. The integration
of the Rubicon business resulted in a number of redundancies
across Finance, HR and general administrative support functions.
These activities, together with general efﬁ ciency improvements,
helped offset inﬂ ationary cost pressures and have allowed the
Group to further invest in sales execution and brand building,
without impacting operating margins.

During the year operating margins (before exceptional items)
increased a full percentage point from 13.6% to 14.8%.

Interest
A net interest cost of £1.9m was reported in the ﬁ nancial period.
This is best represented by the table below:

Eliminating the effect of the Rubicon acquisition and adjusting
for the 53rd week, included in the prior ﬁ nancial year, like for like
sales increased by 10.6%.

Finance income
Finance costs
Interest related to Group borrowings

£000s

All subcategories within the product portfolio delivered year on
year growth in sales revenue with the exception of water. Whilst
water revenues were slightly down on the prior year, our focus
on cost control and improvements to sales mix led to increased
margin from the water category.

The signiﬁ cant corporate activity in 2008/09 related to the
acquisition of Groupe Rubicon Ltd. In the ﬁ nancial year to
30 January 2010, our attention turned to the integration of the
Rubicon business onto the A.G. BARR platform. The integration
has been successfully delivered with restructuring costs of £0.1m,
signiﬁ cantly below our original expectations. Top line growth
of the Rubicon brand has been above expectation and whilst
the acquisition was earnings enhancing in the prior year, we are
pleased to report that the acquisition was ROIC (return on invested
capital) enhancing in its ﬁ rst full year within A.G. BARR.

£000s
117
(1,624)
(1,507)

(371)

(1,878)

Pensions interest due on
deﬁ ned beneﬁ ts obligation
Expected return on scheme assets

(3,995)
3,624

Total ﬁ nance cost

The interest cost included the full year effect of interest charges
amounting to £1.6m, following the acquisition of Groupe Rubicon
Ltd, offset to a small extent by £0.1m of interest income on cash
balances. A further £0.4m is reported through the interest line,
being the difference between interest costs associated with the
deﬁ ned beneﬁ t pension scheme deﬁ cit relative to the expected
return on scheme assets.

In order to manage the Group’s exposure to interest rate
movements, the Company entered into a three year interest rate
Swap with RBS during 2008. In accordance with IAS 39 we have
continued to elect to hedge account for this transaction with any
resulting volatility in interest movements being reﬂ ected through
the balance sheet rather than through the income statement.
During the year the mark to market fair value of the cash ﬂ ow
hedge reserve improved from £(1.4m) to £(1.0m).

30%

decrease in net
debt year on year

Financial Review

Taxation
The tax charge of £6.5m represents an effective tax charge
of 26.6%. The effective tax rate as reported in the accounts
for the previous year was 26.4%.

Earnings per Share (EPS)
Basic EPS for the period was 46.84p, up 5.1% on the same period
last year.

Dividends
The board is recommending a ﬁ nal dividend of 16.85p per share to
give a total dividend for the year ending 30 January 2010 of 23.10p.
This represents an increase of 10% compared to the prior year.

Balance Sheet Review
The Group’s balance sheet remains strong with net assets
increasing from £92.7m to £100.5m, mostly driven by an increase
in current assets, notably cash and trade receivables.

The Group has banking facilities with RBS totalling £70.0m,
of which £40.0m is a ﬁ ve year term loan maturing July 2013,
with the balance funded by a three year revolving credit facility
of £30.0m, expiring July 2011. During the ﬁ nancial year, a further
£5.0m of debt was repaid in line with the ﬁ ve year facility
agreement, with £8.0m due to be repaid in the ﬁ nancial year
ending 29 January 2011.

Leverage and interest cover are comfortably within the required
covenant levels.

In line with both the requirements of IAS 36 and our accounting
policies, the Group undertook an impairment review of all tangible
and intangible assets during the year. This review concluded that
no impairment of intangible assets was required. The review did
however identify a potential impairment relating to the value of the
Atherton site, an asset held for sale; consequently an impairment
loss of £0.5m has been recognised in the period. A further £1.0m
of plant and equipment has been impaired in light of the decision
to close the Mansﬁ eld site.

Capital Expenditure
Capital expenditure during the period amounted to £5.3m.
This was lower than previous years and also lower than
guidance. The position was impacted by the need to conclude
the consultation process regarding the Mansﬁ eld site closure
and the decision to proceed down the route of contract leasing
of Company cars, which have traditionally been purchased.
A further £2.5m of expenditure was approved by the board
during the period for assets that had not been received by
the year end.

The £5.3m compares very favourably with capital expenditure in
the year ended 31 January 2009, which was reported at £10.6m.
The latter however included the purchase of the “Campsie”
warehousing site at Cumbernauld and the purchase of the
Rubicon manufacturing facility and adjoining property at Tredegar.
Together, these items amounted to £4.9m.

Signiﬁ cant projects include the purchase of a replacement tunnel
pasteuriser for the canning line at Cumbernauld, expenditure to
provide 500ml canning capability at Cumbernauld, initial deposits
for the Cumbernauld capacity increases and commercial vehicles
for the Scottish direct sales organisation. On the information
technology side, expenditure has included the upgrading of our
business intelligence capability through the installation of a data
warehouse, further expansion of the CRM system to include the
telesales operation in Scotland, an upgrade to our ERP platform
and a complete refresh of our PC population.

We are entering a year of signiﬁ cant operational change in 2010
and based on current plans we are anticipating capital investment
in 2010/11 of £11.0m. It is anticipated that there will be limited impact
on the underlying 2010/11 ﬁ nancial performance with operating cost
beneﬁ ts associated with the investment feeding through in ﬁ nancial
year 2011/12.

Thereafter, we expect capital investment to more closely match
depreciation which is currently £7.5m per annum. These estimates
exclude the potential sale of the Atherton and Mansﬁ eld sites
together with the potential sale of any residual Mansﬁ eld plant.
The estimate also excludes the potentially signiﬁ cant capital
cost associated with the purchase of a wind turbine for the
Cumbernauld site.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

“ We are entering a year
of signiﬁ cant operational
change in 2010 and based
on current plans we
are anticipating capital
investment in 2010/11
of £11.0m.”

10.6%

like for like
sales increase

16.0%

increase in our
share of carbonates
in England and Wales

£37.7m

EBITDA

Current Assets and Liabilities
Current assets increased in the period from £51.2m to £59.5m,
the most signiﬁ cant elements being the increase in cash and
cash equivalents and trade and other receivables. The current
recessionary environment has required vigilant management
of our working capital throughout the year.

Inventories increased by 10% to £16.0m, reﬂ ecting increased
levels of trading but also a requirement to build inventory ahead
of the installation of the new pasteuriser on the canning line, to
take account of increasing volumes of fruit-based carbonated
products. Despite this build up of inventory, the average inventory
holding period reduced by three days.

Trade and other receivables increased by £3.0m as a result
of higher levels of trading and the timing of the year end. In the
year, average debtor days again reduced from 52 to 49 days,
this represents a reduction of eight days or 14% when compared
to the position two years ago.

Trade and other payables rose by £0.8m, again reﬂ ecting the
timing of the year end but the position was also impacted by
the timing of a supplier payment of £2.5m immediately prior to
the year end. Eliminating the effect of this payment, the average
payment period reduced by ﬁ ve days.

We are continuing to market the Atherton site which is surplus
to our operating requirements.

The overall level of liabilities reduced by £2.9m, despite
the inclusion of restructuring provisions of £1.9m relating
to the Mansﬁ eld site closure.

Return on capital employed for the period increased to 19.2%
(previously 16.0%), reﬂ ecting the increase in operating proﬁ t relative
to a fairly ﬂ at asset base.

Financial Review

Cash Flow and Net Debt
Free cash ﬂ ow generated in the period was £17.9m, in line with
the prior year.

Our ﬁ nancial position remains strong as we continue to see the
beneﬁ ts of improved turnover translating into improved operating
proﬁ ts and strong cash ﬂ ows.

Throughout the year we have maintained tight controls over
working capital, taxation payable has returned to more normal
levels following a previous overpayment in 2008 and the Group
has continued to make additional contributions to the deﬁ ned
beneﬁ t pension scheme of £2.6m.

The free cash ﬂ ow position also includes the impact of a full year’s
interest costs associated with the Groupe Rubicon acquisition
although this is more than offset by reduced capital expenditure
which was £5.3m lower than the prior year.

As at 30 January 2010 the Group’s net debt position was £22.1m,
being the closing cash position of £10.9m net of the borrowings
of £33.0m. This represents a net debt: EBITDA ratio of just over
0.6 times, with interest cover in excess of 19.6 times. This is a
signiﬁ cant reduction on the prior year net debt position of £31.3m.

Exceptional Items
In January we conﬁ rmed the closure of the Mansﬁ eld
production site. This is expected to take place in early 2011,
with the outsourcing of a proportion of our primary logistics
functions proceeding over the course of 2010. This step
constitutes the ﬁ nal piece in the integration of the Rubicon
business with the cessation of existing in-house storage and
distribution operations at the Mansﬁ eld site and the exit from
existing Rubicon third party logistics operations.

This signiﬁ cant change will coincide with a project to increase
capacity at the Cumbernauld site, creating operating capacity
that will absorb all current PET packaged products from the
Mansﬁ eld factory and allow for projected future growth.

During the ﬁ nancial period ended 30 January 2010, we have
provided £2.9m for exceptional charges relating to this closure,
and anticipate an additional £0.5m of dual running costs in the
ﬁ nancial year 2010/11.

A further £0.5m of exceptional charges have been recorded in
the ﬁ nancial period, reﬂ ecting the costs incurred as part of the
Rubicon integration (£0.1m), together with the well documented
impact of the recession on property prices, which has led us to
impair the valuation of the Atherton site, an asset currently held
for sale.

Pensions
During the year, the Company continued to operate two pension
plans, being the A.G. BARR p.l.c. (2005) Deﬁ ned Contribution
Pension Scheme and the A.G. BARR p.l.c. (2008) Pension and Life
Assurance Scheme. The latter is a deﬁ ned beneﬁ t scheme based
on ﬁ nal salary which also includes a deﬁ ned contribution section
for pension provision to new executive entrants. The assets of
both schemes are held separately from those of the Company
and are invested in managed funds.

Under IAS 19, the net pension deﬁ cit at the year end stood
at just under £5.9m, representing a deterioration of £0.9m when
compared to the deﬁ cit of £5.0m reported last year. The area
of pensions has seen tremendous volatility during the year,
with the increase in deﬁ cit largely reﬂ ecting the fall in corporate
bond yields, partially offset by the higher than expected return
on assets and the deﬁ cit contributions paid by the Company
during the year. Future price inﬂ ation expectations are consistent
with the prior year. The main section of the deﬁ ned beneﬁ t scheme
was closed to new entrants on 5 April 2002 and the executive
section closed on 14 August 2003.

The last formal actuarial valuation was undertaken as at April 2008
and was completed during the year. The results of the valuation
indicated that the deﬁ cit recovery plan was performing as expected.
The pension trustees and the Company have therefore agreed to
maintain the deﬁ cit contributions at the current level.

Share Price and Market Capitalisation
At a General Meeting of the Company held on 18 September
2009 the shareholders authorised the subdivision of each of the
Company’s existing ordinary shares into two ordinary shares of
12.5 pence nominal value each. The share subdivision doubled
the number of ordinary shares in issue.

At 30 January 2010, following the subdivision, the closing share
price for A.G. BARR p.l.c. was £7.92. The Group is a member of the
FTSE250, with a market capitalisation of £308.0m at the period end.

During the year the Company continued to fund the purchase
of shares by the trustees of the Company’s various employee
beneﬁ t trusts to satisfy the ongoing requirements of maturing
share schemes.

Alex Short Finance Director

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Key Performance Indicators
The principal key performance indicators used by management
in assessing the performance of the Group, in addition to the
income statement, are as follows:

Turnover growth
The increase in value of revenue recorded in the period relative
to the prior period.

Average realised price
The average revenue per case sold.

Interest cover
The ratio of EBITA (EBITDA less depreciation) relative to ﬁ nance
charges in respect of the relevant period.

Net debt / EBITDA
The ratio of aggregate amount of all obligations in respect of
period end consolidated gross borrowings to reported EBITDA.

Market growth
A C Nielsen market growth summaries reported in terms of
volume and value by major product category and geography.

Gross margin
Revenue less material costs and production related costs,
divided by revenue.

Market share
A C Nielsen market share summaries reported in terms of volume
and value by major brand and geography.

Operating proﬁ t margin
Operating proﬁ t before exceptional items and before the deduction
of interest and taxation, divided by revenue.

Market price per litre
A C Nielsen market scantrack data of retail price per litre reported
by major brand and geography.

Proﬁ t margin
Operating proﬁ t before exceptional items and before the deduction
of taxation, divided by revenue.

Reportable accidents
The moving average total of reportable accidents in a period
together with the number of lost time accidents and near misses.

EBITDA margin
EBITDA (deﬁ ned as proﬁ t on ordinary activities before tax less
exceptional items, adding back interest, depreciation, amortisation
and impairment) divided by revenue.

Free cash ﬂ ow
Net cash ﬂ ow excluding the movements in borrowings, shares,
dividend payments and non cash exceptional items.

Return on capital employed / Return on invested capital
Operating proﬁ t before exceptional items as a percentage
of invested capital. Invested capital is deﬁ ned as period end
non-current plus current assets less current liabilities excluding
all balances relating to any ﬁ nancial instruments, interest bearing
liabilities and cash or cash equivalents.

Financial Review

In addition to ﬁ nancial risks the Group’s results could
be materially affected by:

Risks Relating to the Group
· A decline in the sales of certain key brands
· Adverse publicity in relation to the Group

or its brands

· Consolidation or reduction of the customer base
· Failure or unavailability of the Group’s

operational infrastructure

· Interruption in, or change in the terms of,

the Group’s supply of packaging and raw materials

· Failure in IT systems
· Inability to protect the intellectual property

rights associated with current and future brands

· Litigation or changes in legislation including changes

in accounting principles and standards

Risks Relating to the Market
· Changes in consumer preferences,
perception or purchasing behaviour

· Poor economic conditions and weather
· Changes in regulatory requirements
· Actions taken by customers
· Actions taken by competitors

Principal Risks and Uncertainties
There is an ongoing process in place for identifying,
evaluating and managing the signiﬁ cant risks faced by the
Group, which has operated throughout the ﬁ nancial year.
This process involves quarterly assessment 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 manage the risk.

The Group’s risk management framework is designed to
support this process and is the responsibility of the Finance
Director. The risk framework governs the management and
control of both ﬁ nancial and non-ﬁ nancial risks.

Internal audit is undertaken by an independent ﬁ rm of
chartered accountants 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 period the Audit Committee has reviewed reports
covering the work undertaken as part of the annual internal
audit plan. This has included assessment of the general
control environment, identiﬁ cation of control weaknesses,
quantiﬁ cation 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 speciﬁ c 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 ﬁ nancial 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 Group’s activities also expose it to a variety of ﬁ nancial
risks which include market risk (including foreign exchange
risk, interest rate risk and commodity price risk), credit risk
and liquidity risk. Financial risks are reviewed and managed
by the Treasury Committee whose remit and authority levels
are set by the board.

The Treasury Committee’s remit focuses on the unpredictability
of ﬁ nancial markets and seeks to minimise potential related
adverse effects on the Group’s ﬁ nancial performance.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Corporate and
Social Responsibilty

“ We take our Corporate Social
Responsibility very seriously
and see it as a key part of the
future success of our business.”

Corporate Social Responsibility
is one of our seven core areas
of business focus.

Our Corporate Social Responsibility
activities cover ﬁ ve key areas:

· Environment
· Quality
· Marketplace
· Workplace
· Community

40%

reduction in energy
usage since 2004

30%

reduction in CO2 emissions
from manufacturing by 2020

60%

projected electricity for
Cumbernauld site generated
from wind power, with zero
CO2 emissions

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Corporate Social Responsibility
As CSR sponsor I am pleased to report good progress has
been made against the targets identiﬁ ed throughout the business
over this reporting period; we will be aiming to make further
improvements in our performance across 2010 as we further
endorse good CSR practices across all parts of the business.

Environment
Our Environmental Strategy
In 2009 our environmental plans were updated to align our
strategy with the targets laid down in the British Soft Drinks
Association (BSDA) Sustainability Strategy. The scope includes
climate change, waste & packaging, water and transport.

We are making our internal targets more challenging each year
and as a consequence our resources and efforts in this area will
be scaled up accordingly to meet and exceed these challenges
in the future.

Andrew Memmott
Operations Director and Chair of the Environmental Committee

Our approach is to:
· monitor, evaluate and manage the key environmental
impacts of our business activities: climate change,
waste, packaging design, water usage, and transport;
· set and review environmental targets locally and within

our speciﬁ c business goals;

· set plans to achieve these targets;
· consider all environmental impacts when making

investment decisions; and

· maintaining our BS EN ISO 14001 accreditation.

Environmental Policy and ISO 14001
We are committed to the prevention of pollution and continual
improvement of our environmental performance in line with
all relevant environmental legislation and other self-imposed
requirements.

Following the integration of the Rubicon business, our Tredegar
site will be audited against the ISO 14001 standards in May 2010,
aligning the site to A.G. BARR environmental goals.

“ Our environment
management system
extends beyond our
manufacturing sites.”

Corporate and Social Responsibility

Our Environmental Targets and 2009/10 Progress Update

Objective

Target

2009/10 Progress

Achieve a 30% reduction in CO2 emissions
from manufacturing by 2020, compared
to 1990 levels.

Achieve a minimum 2% year on year
improvement across the manufacturing sites.

6% year on year improvement achieved.

Send zero manufacturing waste to landﬁ ll
from 2015.

All manufacturing sites to achieve zero waste
to landﬁ ll by 2013.

Mansﬁ eld achieved status.

Improve the sustainability of all our packaging.

Successful implementation of packaging
weight reduction initiatives.

2 litre and 330ml PET bottle weights reduced
by 5%.

Year on year increase in the use of recycled
materials in our packaging materials.

25% rPET introduced across speciﬁ c brands.

Achieve a 30% reduction in waste water
volumes by 2020 compared to 2007 levels.

Achieve a minimum 3% year on year
improvement across the manufacturing sites.

4% year on year improvement achieved.

Reduce the external impacts of transport
by 20% by 2012 compared with 2002.

Achieve a minimum 2% year on year
improvement in ﬂ eet MPG performance.

2% year on year improvement achieved.

Implementation of a vehicle CO2 emissions
reduction programme.

7% reduction in company car CO2 emissions.

Environmental Organisation
The environmental committee has played an important role in
developing a consistent approach to monitoring performance
against our environmental targets and managing the environmental
activities across the different production sites. The objective
of this committee is to maintain business focus on the delivery
of our environmental targets.

Quarterly updates on the progress against these targets
are reported to the board of directors.

Operations Director

Environmental Committee

Mansﬁ eld Site

Tredegar Site

Cumbernauld Site

Forfar Site

Logistics

Climate Change
A.G. BARR aims to achieve a 30% reduction in CO2 emissions
from manufacturing by 2020 as compared to 1990 levels.

All sites improved their performance against this index in 2009/10
with Forfar and Mansﬁ eld production sites providing the biggest
contribution with a 16% and 13% reduction respectively.

These improvements have been achieved through a combination
of investment in both training and employee awareness of
energy efﬁ ciency measures, together with improvements related
to speciﬁ c capital projects.

During 2009, energy efﬁ cient lighting and compressors have been
commissioned at Forfar, and a heating conservation programme
has been successfully implemented.

An energy monitoring system was installed at our Cumbernauld
site, which has our largest electricity consumption. This has
enabled investigation of energy usage in far greater detail
and contributed to a 3% reduction in energy usage per litre
of product produced.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Environmental Targets
Transport:

20%

Reduce the overall impacts
of our transport by 20%
by 2012 compared to 2002.

Waste:

Zero

Send zero manufacturing waste
to landﬁ ll from 2015 and improve
the sustainability of our packaging.

Water:

30%

Reduce our waste water volumes
(i.e. water not contained in the product)
by 30% by 2020 compared to 2007.

In addition Cumbernauld invested £34K retroﬁ tting energy
efﬁ cient controls to one of its three high pressure compressors
used within the bottle blowing process. Once the success criteria
of this initiative has been met, a roll out programme will be
instigated on the remaining high pressure compressors across
the business.

Our environment management system extends beyond our
manufacturing sites. In 2009/10 the England direct to store delivery
(EDSD) depots achieved an absolute energy reduction of 16.1%,
contributing to an overall reduction in energy usage by over 40%
since 2004.

Manufacturing Energy Usage:

e
n
n
o
T
/
h
W
k

150

140

130

120

110

100

2004

2005

2006

2007

2008

2009

EDSD Energy Usage:

1800000

1600000

1400000

1200000

1000000

800000

600000

400000

200000

h
W
k

2004

2005

2006

2007

2008

2009

Corporate and Social Responsibility

Working closely with our packaging supplier, the Strathmore glass
bottle range has been redesigned to enable a 7% weight reduction
with no detected impact on the quality of packaging to consumers.

This lightweighting project will remove 252 tonnes of glass
per annum, which is equivalent to 1.2 million 330ml Strathmore
glass bottles. Sampling and testing of the three speciﬁ c bottles
is well underway and it is planned that the lightweighted designs
will be introduced from May 2010 onwards.

In addition to the savings from glass lightweighting, moving
Strathmore glass bottles to the returnable plastic layer
pads already used in other parts of the business will remove
approximately 52 tonnes of corrugate from the supply chain.

Our decision to move to a sole supply contract for our Strathmore
glass bottles has allowed us to remove over 100,000 road miles
per annum associated with the delivery of the glass bottles from
the supply base to Forfar.

The use of recycled materials within our packaging materials has
made progress in two key areas across 2009 as described below.

Trials have been successfully completed using 25% recycled
PET (rPET) in our Strathmore PET range, our Tizer and Rubicon
500ml bottles and 2010 will see the continued use of rPET in these
bottles whilst exploring the opportunities of further extending the
use of rPET across our other bottles.

Layer pads are used within speciﬁ c pallet builds to provide
stability in transit during transportation to our customers.
Switching to the use of recycled layer pads across all our
sites has saved 235 tonnes/annum of virgin corrugate board.

To support us in improving the sustainability of our packaging
we have recently become the ﬁ rst new Scottish signatory of
WRAP’s Courtauld Commitment Phase 2, supported by Zero
Waste Scotland, and as such will contribute to:

· reducing the weight, increasing recycling rates and increasing
the recycled content of all grocery packaging, as appropriate.
The aim is to reduce the carbon impact of grocery packaging
by 10% by the end of 2012, against a 2009 baseline;

· reducing U.K. household food and drink wastes by 4% by the end

of 2012, based on a 2009 baseline;

· reducing grocery product and packaging waste in the supply

chain by 5% by the end of 2012, against a 2009 baseline.
This includes both solid and liquid wastes.

Future Sustainable Operational Plans
In October 2008 we submitted a planning application for
the installation of a 2MW wind turbine at our Cumbernauld
site. Planning consent was granted in May 2009 subject to
satisfactory mitigation of objections raised regarding RADAR
and telecommunications issues.

Whilst working with the relevant bodies to resolve these
objections, we have simultaneously erected a 60m high wind
monitoring mast to collect data to better understand the wind
resource at the site. In anticipation of positive outcomes to our
outstanding issues we expect to proceed to full ﬁ nancial review
of capital required and revenue savings associated with this
investment in 2010.

Waste and Packaging
A.G. BARR aims to send zero manufacturing waste to landﬁ ll
from 2015 and improve the sustainability of all our packaging.

Signiﬁ cant progress has been made over a number of years
to reduce the quantity of waste we send to landﬁ ll through
the introduction of waste recycling programmes.

Mansﬁ eld became the ﬁ rst site within the business to send
zero waste to landﬁ ll; this was achieved in November 2009.
The Mansﬁ eld site had regularly been achieving recycling rates
of between 85% and 95% but continued to push on to the ‘zero
waste’ target. To achieve this they send the remaining waste
to a local Material Recycling Facility (MRF) who sort the waste
and send only the residual un-recyclable fraction to the nearby
Energy from Waste (EfW) plant. It is anticipated our other sites
will achieve similar success within the next two years.

Sustainable Packaging
Our strategy to improve sustainable packaging is two fold,
(i) packaging material reduction and (ii) increased use of
recycled materials.

The key focus areas in 2009/10 have been overcoming technical
challenges to enable us to reduce further the weight of our plastic
and glass packaging. We have achieved signiﬁ cant steps forward
and we have a weight reduction implementation programme
in place with further plans to continue this progress in 2010.

Extensive internal and consumer trials have been completed with
our 2 litre PET and 330ml bottles and a roll-out plan to lightweight
these bottles was implemented in December. These two initiatives
reduce the amount of PET used across these bottles by 5%.

The investment plans in place at Cumbernauld for 2010 allow us
to continue our PET lightweighting programme. Our 2 litre, 500ml
and 250ml PET bottles produced from the site will all see design
changes during 2010, which will deliver a further 8% reduction
in PET usage across these speciﬁ c bottles.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

planned reduction
in PET usage across
2 litre, 500ml and
250ml PET bottles

1.2m

equivalent reduction
in number of 330ml
glass bottles through
lightweighting project

1st

new Scottish signatory
of the WRAP Courtauld
Commitment Phase 2

Water Usage
A.G. BARR aims to achieve a 30% reduction in waste water
volumes by 2020 compared to 2007 levels.

Water is a precious resource and we are continually working
to improve the efﬁ ciency of how we use it. The key index is the
ratio between the total amount of water we use to the amount
of water that is used to produce the product we ﬁ ll.

Manufacturing Water Usage:

t
c
u
d
o
r
P
e
r
t
i
L
/

r
e
t
a
W
s
e
r
t
i
L

2.1

2.0

1.9

1.8

1.7

1.6

1.5

1.4

1.3

1.2

2004

2005

2006

2007

2008

2009

A 4% year on year improvement has been made through 2009
in this area in addition to the signiﬁ cant progress already made
over many years. All sites have contributed to this with particular
beneﬁ ts being derived from enhanced borehole water controls
systems at both Strathmore and Mansﬁ eld.

The Cumbernauld site currently collects the efﬂ uent discharge from
the factory to allow controlled discharge from the site. 2010 will see
an in depth feasibility study take place using best practice within
the efﬂ uent treatment industry to develop techniques to reduce
the environmental impact of this discharge. This will support the
continuous improvement programmes in place to conserve water.

Sustainable Logistics
A.G. BARR aims to reduce the external impacts of transport
by 20% by 2012 compared with 2002.

Our ﬂ eet of 128 vehicles serve two purposes, the 11 HGV’s provide
for the delivery of customer orders to their own regional distribution
centres and ﬁ nished stock to our own direct delivery depots in
England, while 117 LGV’s within our direct delivery depots service a
diverse range of customers from corner shops to garage forecourts.

Corporate and Social Responsibility

“ We recognise that
the talent and skills
of our workforce are
vital to the Company’s
continuing success.”

Driver education continues to play an important part in delivering
improved driving characteristics and reduced miles per gallon
(MPG). This is supported by the programme of vehicle replacement
which will roll on into 2010 with the delivery of at least 17 new
vehicles, providing reduced emissions and improved MPG.
We continue to search for improvements and efﬁ ciency gains
across logistics. We are trialling an electric vehicle based at
our Walthamstow site which is helping to set the potential future
direction, as well as contributing to a 4.9 tonnes reduction in CO2
emissions across the ﬂ eet.

A substantial review of our Company car provision in 2009 has
seen us move from capital purchase to contract hire and has led
to setting a CO2 emissions upper limit signiﬁ cantly lower than the
previous policy, a change that has already delivered a 7% reduction
in the CO2 emissions related to these vehicles.

Quality
Our sites continue to be monitored through certiﬁ cation to the
Quality Management System, BS EN ISO 9001, and the British
Retail Consortium’s Global Food Standard is applied at all our
production sites, demonstrating our commitment to food safety.
Our requirements, in order to comply with both of these standards,
and those of the Environmental Management Standard, BS EN
ISO 14001, are documented in a single integrated system.

All food safety and quality systems depend upon identifying
the risks and potential hazards. Our HACCP (Hazard Analysis
and Critical Control Point) system fulﬁ ls this role. It provides clear
guidance as to what needs to be speciﬁ ed, measured, monitored
and audited. These speciﬁ cations and on-line measurement data
are audited daily and retained until past the end of the products’
shelf lives.

We maintain a trained auditing team at each production site
to ensure quality is maintained. In addition to internal audits,
an annual supplier audit schedule is prepared and the team
carries out detailed audits to provide an extra level of control.

After ﬁ ve years of continued reduction of our index of complaints
per million units produced, this year has seen an slight increase
in this key performance indicator (KPI). A thorough root cause
analysis of the events behind this increase has been undertaken,
and the system improvements implemented have strengthened
our product release procedures providing the conﬁ dence that
we will reverse the increase in 2010.

Procurement
We operate a consistent, clear and ethical purchasing
strategy which has been developed in accordance with
professional purchasing standards of integrity, professionalism,
transparency and fairness.

Purchasing staff act in accordance with the personal ethical
code of the Chartered Institute of Purchasing & Supply.

We seek to execute best practice in our supplier relationships,
including encouraging and developing supplier operations
to meet high standards.

Continuity of material supply remains a key objective and
developing strong working relationships with our supply base
is paramount in delivering this. Our supply strategy has been
evolved carefully with appropriate consideration of risk for
key materials and services where sole supply positions exist.

Our auditing programme focuses on both large and small
suppliers and continues to provide assurance of their compliance
to our standards both technically and in terms of ethical and
social responsibility.

Our supplier approval process focuses upon the attainment
of recognised quality and environmental standards as well as
development of robust disaster recovery plans and appropriate
human rights and labour standard policies.

We continue to require our suppliers to maintain the GM-free
status of our raw materials.

Marketplace
Health and Wellbeing
All our soft drinks can be enjoyed as part of a balanced diet and
a healthy lifestyle. A.G. BARR provides a comprehensive range
of soft drinks to offer a wide choice of drinks for all ages.

This allows our consumers to enjoy the soft drink that suits their
individual needs and tastes. Our soft drinks are available in a
wide range of pack sizes both for their convenience and to help
exercise portion control.

The deployment of GDA (Guideline Daily Amount) labelling
on our packs provides information to consumers on the content
of our drinks, enabling them to make informed choices.

Advertising
A.G. BARR fully complies with both the letter and the spirit of the
codes of practices set out by the Advertising Standards Authority
(ASA) in the Broadcast Committee of Advertising Practice (BCAP)
codes for broadcast advertising and the Committee of Advertising
Practice (CAP) code for non-broadcast advertising.

Corporate and Social Responsibility

Workplace
We recognise that the talent and skills of our workforce are vital
to the Group’s continuing success. We aim to attract, retain and
develop high calibre people, promoting a culture in which they are
motivated to succeed and their performance is both recognised
and rewarded. Health and Safety is a key priority for the Group,
ensuring that our employees are provided with a safe and healthy
working environment.

Reportable Accidents
The year to January 2010 has seen a slight increase in the number
of reportable accidents to 17, with two of the accidents related
to the extreme weather conditions at delivery points. The safety
programmes agreed for all sites have ensured that the severity of
reportable accidents continues to drop and was within the severity
target set for the year.

Number of Reportable Accidents:

Health and Safety
Safety is led from the top with the A.G. BARR board of directors
monitoring Company performance. The Safety Executive, chaired
by the Finance Director and advised by the Health and Safety
Manager, develops safety policies and strategy. The Management
Safety Committee implements and reviews compliance with
policies and procedures and the local safety committees ensure
local implementation of Company safety procedures and practices.

2009/10

2008/09

2007/08

2006/07

A.G. BARR Health and Safety structure

A.G. BARR Board

Safety Executive

Management Safety Committee

Site Safety Committees

Reportable Accident Severity Rating:

2009/10

2008/09

2007/08

2006/07

To complete one of our key safety initiatives at the main site
at Cumbernauld a bespoke safety DVD was produced this year
for the manufacturing operation. We now have a set of safety
DVDs highlighting the hazards and control measures in place for
the manufacturing, logistics and delivery operations. The DVDs
will complement our comprehensive safety induction to ensure
we remain proactive in accident prevention.

Reportable Accident Cause:

Slips – 6 (34%)

Manual Handling – 3 (18%)

Contact Injury – 4 (24%)

Trips and Falls – 4 (24%)

The main type of accidents in 2009/10 were due to slip, trip and
fall accidents. Although none of these types of accidents had a
high severity our safety inspector and risk management process
has continued to address these hazards.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

66%

of employees have
attended internal
training programmes

of employees
have gained formal
qualiﬁ cations under
our stewardship

of our profits are utilised
in supporting charities,
good causes and
community activities

Health and Safety Audits
Our audit programme is split across 17 locations and most are
now in their third year of the audit cycle. All sites audited this year
have managed to improve their audit score by demonstrating
more effective safety leadership, following best practice risk
management principles and complying with the Company safety
guidance note standards.

Employees
All our people are encouraged to develop through a range of
activities including project work, coaching and off the job training.
Each employee has their own agreed Personal Development Plan
detailing their planned learning and development activities to help
them develop their potential to the full.

66% of employees have attended internal training programmes
covering a wide range of topics such as Management Skills,
Personal Development and Health and Safety. In addition, 21%
of employees have attended external training courses with 5%
of attendees gaining formal qualiﬁ cations under our stewardship
during the year.

Apprenticeships
The year ahead will see the extension of our apprenticeship
programme to our Strathmore facility in Forfar, building
on the current apprenticeship arrangements in place at our
Cumbernauld site.

Reward and Recognition
By benchmarking our pay and beneﬁ ts against other companies
we ensure that our reward systems are competitive. We also
link business and performance to our individual reward systems,
motivating our people to perform to high standards and to
contribute to the business’s success.

In the past year we have introduced total reward statements for
all employees which bring together an individual’s complete pay
and beneﬁ ts elements into a single, easily understood document.
We continue to operate numerous share related employee beneﬁ t
plans such as SAYE and AESOP which both encourage share
ownership and act as a component part of the reward schemes.

Corporate and Social Responsibility

The limited edition
Strathmore Spring
Water bottle helped
raise £20,000 for
The Prince’s Trust.

“ We continued to support
the work of The Trust by
investing in a number of their
community programmes
across the U.K.”

Community
The Prince’s Trust
A.G. BARR’s partnership with The Trust entered its second year
in 2009. The Trust helps 14 to 30 year olds get a job who are
in or leaving care, struggling at school, are unemployed or have
been in trouble with the law. It has become the U.K.’s leading
youth charity, offering a range of opportunities including training,
personal development, business start-up support, mentoring
and advice.

We continued to support the work of The Trust by investing
in a number of their community programmes across the U.K.
with a particular focus on Scotland.

Strathmore Spring Water and The Trust teamed up to launch
a competition to design an image for a limited edition 500ml
Strathmore Spring Water bottle to be sold exclusively in branches
of Starbucks.

This initiative raised £20,000 for The Trust, with 5p from each
limited edition bottle sold being donated by us to the charity.

The competition, open to all Prince’s Trust businesses, not only
offered the winning entrant the chance to see their design on
approximately 500,000 bottles of Strathmore Spring Water but
also provided a fantastic prize of a workshop with a top design
consultancy who would help to take the winning business to the
next level.

The winner, Mark Notton, has launched his design business
Studio2v (web address: www.studio2v.com) with the support of
The Trust in the last 12 months and now has more than 25 clients
and his own premises.

The Prince’s Trust – helping to change young lives. For more
information go to www.princes-trust.org.uk

Other Charitable Organisations
We supported a number of other large charitable organisations
in 2009/10 in addition to assisting many thousands of community
groups, charities and good causes with donations of Barr soft
drinks products and merchandise in order to help them raise
much needed funds.

During 2009/10 we contributed an equivalent of 1% proﬁ t in
supporting charities, good causes and community activities,
a combination of cash, product and employee time.

Corporate and Social Responsibility

Community Support
Lenzie Academy, Lenzie, East Dumbartonshire
In December 2009 we signed an Enterprise in Education
Partnership Agreement with Lenzie Academy, one of East
Dumbartonshire’s leading schools. The Partnership Agreement
is part of the Scottish Government’s Determined to Succeed
strategy for developing enterprise in education. The strategy’s
aim is to instil an enterprising attitude in today’s young people
and A.G. BARR will now be fully involved in helping Lenzie
Academy to achieve this.

Sporting Heroes for the Future
Since 2005 we have supported the Daily Record’s Sporting Heroes
for the Future campaign, which aims to support sporting talent
and promote sport and health in local communities in Scotland.
In 2009 we provided funding for kits and equipment to six cycling
and four swimming clubs located across Scotland.

TAUT 100 helps young athletes
TAUT, in partnership with Sports Aid, invested in a scheme to help
gifted young athletes’ progress in their sports in 2009.

Our employees are engaged in a range of learning activities with
pupils including work experience placements, mock interviews,
presentations from the Company’s human resources and
international teams together with visits to our Cumbernauld site
to view the Company’s state of the art manufacturing, distribution
and warehousing facilities.

Ronald Hanna said at the launch of the partnership,
“The Enterprise in Education Partnership is extremely worthwhile
and we are delighted to be part of it. I’m impressed by the
commitment of Lenzie Academy through their pupils and staff
and by how much learning and fun they have extracted from the
ﬁ rst project “The Food and Drink Challenge”.

Together we have got off to a great start and we look forward
to participating fully in the other projects that are planned’’.

Westﬁ eld Primary School, Cumbernauld
We continue working with Westﬁ eld Primary School, the primary
school local to our Cumbernauld site, as part of our local
partnership agreement with the school which involves our staff
working with the pupils to support enterprise projects taking
place within the school.

We also continue to support a number of other community
organisations local to our sites.

The TAUT 100 scheme, run by Sports Aid, selected 100 gifted
young athletes who are just outside lottery funding. The selection
criteria was based on performance and results within their
sport but also ensured that a variety of sports and geographical
locations were represented. From the 100 short listed athletes
a monthly winner was chosen to receive a cash prize and,
from the 12 monthly winners in 2009, an overall winner received
a further signiﬁ cant cash prize.

Scottish Enterprise Project EDGE
In 2009 we again participated in “Project EDGE”. Now in its ﬁ fth
year, Encouraging Dynamic Global Entrepreneurs is delivered
by Scottish Enterprise, bringing together students from leading
Scottish Universities, ﬁ fth year school pupils from across the
west of Scotland and international students from universities
in the United States, Poland, Canada and China.

We hosted 12 students in two teams who worked on speciﬁ c
projects for both our Commercial and Operations functions.

For further information about our corporate social responsibility
activities, please check the Corporate Responsibility section of
our website www.agbarr.co.uk

A.G. BARR p.l.c.

Annual Report and Accounts 2010

“ We aim to attract, retain
and develop high calibre
people, promoting a
culture in which they are
motivated to succeed and
their performance is both
recognised and rewarded.”

Top left:
Ronald Hanna, Chairman of A.G. BARR with
Lenzie Academy Head Teacher Roderick McLelland,
Councillor Una Walker, Convener of Education from
East Dunbartonshire Council and School Captains
Stuart Gray and Rosie McKean.

Left:
Philip Aspinall – Badminton
TAUT 100 March 2009 winner.

Bottom left:
Roger White and Alex Short presenting the team at
the Moston branch with their Investors in People award.

Board of Directors

Alex B.C. Short (42)
B.A. (Hons), ACMA
Joined the Company as
ﬁ nance director in June 2008.

Jonathan D. Kemp (38)
B.A. (Hons)
Joined the Company in 2003
as commercial director.

W. Robin G. Barr (72)
C.A.
Joined the Company in 1960.
Appointed director in 1964
and chairman in 1978. Retired
as chairman and appointed
non-executive director in 2009.

Roger A. White (45)
M.A. (Hons)
Joined the Company in 2002 as
managing director. Appointed
chief executive in 2004.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Ronald G. Hanna (67)
C.A.
Joined the Company in 2003
as a non-executive director.
Appointed chairman in 2009.
Currently chairman of both
Bowleven plc and Troy Income
& Growth Trust plc.

Andrew L. Memmott (45)
BSc, MSc.
Joined the Company’s Project
Engineering Team in June 1990.
Appointed operations director
in 2008.

James S. Espey (66)
B. Com., M.B.A., Ph.D.
Joined the Company in 1999
as a non-executive director.
Currently a director of Whyte
& Mackay and The Last Drop
Distillers Ltd.

Jonathan Warburton (52)
Joined the Company in
2009 as a non-executive
director. Currently chairman
of Warburtons Ltd and
a non-executive director
of Samworth Brothers Ltd.

Board of Directors

25 Years
Service Awards

Ian Johnson
Supply Chain
Planning Manager

Allan Hayes
Business Development
Manager

Kevin Addy
Warehouse Operative

Kevin Hodgson
Service Driver

Alan Short
Service Driver

Kate Goodwin
Business Development
Executive

Stephen Thomson
Senior Sales
Development Manager

Scott McDowall
Trunker Driver

Julie Sargison
Planning Manager

Lesley Taylor
Wages Clerk

Graham Widdowson
Sanitiser / Yard Chargehand

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Accounts
January 2010

40 Directors’ Report
43 Statement on Corporate Governance
47 Directors’ Remuneration Report
53 Independent Auditor’s Report

to the Members of A.G. BARR p.l.c.

54 Consolidated Income Statement and
Statement of Comprehensive Income

55 Statement of Changes in Equity
57 Statements of Financial Position
58 Cash Flow Statements
59 Accounting Policies
66 Notes to the Accounts
94 Review of Trading Results

Directors’ Report

The directors are pleased to present their report and the consolidated
ﬁ nancial statements of the Company and its subsidiaries for the 52
weeks (2009: 53 weeks) ended 30 January 2010.

Principal activities
The Group trades principally as a manufacturer, distributor and seller
of soft drinks.

Company number
The Company’s registration number is SC005653.

Business review
A detailed review of the Group’s activities and of future plans is
contained within the Chairman’s Statement on pages 2 to 3, the
Business and Financial Review on pages 4 to 20 and the Corporate
and Social Responsibility report on pages 21 to 34.

The information contained in those sections fulﬁ ls the requirements
of the Business Review, as required by Section 417 of the Companies
Act 2006, and should be treated as forming part of this Directors’ report.

Results and dividends
The Group’s proﬁ t after tax for the ﬁ nancial year ended 30 January
2010 attributable to equity shareholders amounted to £17.948m
(2009: £17.075m).

An interim dividend for the current year of 6.25p (2009: 5.80p) per
ordinary share was paid on 23 October 2009.

The ﬁ nal proposed dividend of 16.85p (2009: 15.20p) will be posted
on 3 June 2010 if approved at the Company’s annual general meeting
(‘AGM’) on 24 May 2010.

The directors have taken advantage of the exemption available under
s408 of the Companies Act 2006 and have not presented an income
statement for the Company. The Company’s proﬁ t for the year was
£13.348m (2009: £16.077m).

Directors
The following were directors of the Company during the ﬁ nancial year
ended 30 January 2010:

· R.G. Hanna
· R.A. White
· A.B.C. Short
· J.D. Kemp
· A.L. Memmott
· W.R.G. Barr
· J.S. Espey
· J. Warburton (appointed 16 March 2009)

On 26 May 2009, W.R.G. Barr stepped down as executive chairman
of the board and was appointed a non-executive director. R.G. Hanna,
previously a non-executive director, was appointed non-executive
chairman on 26 May 2009.

Subject to the Company’s Articles of Association (the ‘Articles’)
and any relevant legislation, the directors may exercise all of the
powers of the Company and may delegate their power and discretion
to committees.

The Articles give the directors power to appoint and remove directors.
Under the terms of reference of the Nomination Committee, any
appointment must be recommended by the Nomination Committee
for approval by the board. The Articles require directors to retire and
submit themselves for election at the ﬁ rst AGM following appointment
and to retire no later than the third AGM after the AGM at which they
were last elected or re-elected.

In accordance with Article 82 of the Articles, R.G. Hanna will retire
at the AGM on 24 May 2010 and, being eligible, offers himself for
re-election. Following the completion of his one year contract as a
non-executive director, the re-appointment of J.S. Espey on 1 April
2010 falls to be conﬁ rmed. J.S. Espey has a one year contract from
his date of re-appointment. Their biographical details are set out on
pages 36 and 37 of this report.

Directors’ interests
The directors’ interests in ordinary shares of the Company are shown
within the Directors’ Remuneration Report on page 52. No director
has any other interest in any shares or loan stock of the Company
or any Group company.

Other than service contracts, no director had a material interest in any
contract to which the Company, or any Group company, was a party
during the year.

Directors’ third party indemnity provisions
As at the date of this report, indemnities are in force between the
Company and each of its directors under which the Company has
agreed to indemnify each director, to the extent permitted by law,
in respect of certain liabilities incurred as a result of carrying out their
role as a director of the Company. The directors are also indemniﬁ ed
against the costs of defending any criminal or civil proceedings or any
claim in relation to the Company or brought by a regulator as they are
incurred provided that where the defence is unsuccessful the director
must repay those defence costs to the Company. The Company’s total
liability under each indemnity is limited to £5.0m for each event giving
rise to a claim under that indemnity. The indemnities are qualifying
third party indemnity provisions for the purposes of the Companies Act
2006. In addition, the Company maintained a Directors’ and Ofﬁ cers’
liability insurance policy throughout the ﬁ nancial year and has renewed
that policy.

Research and development
The Group undertakes research and development activities to update
and expand its range of products in order to develop new and existing
products. Expenditure during the year on research and development
amounted to £437,000 (2009: £262,000).

Political donations and political expenditure
Neither the Company nor any of its subsidiaries have made any
political donations or incurred any political expenditure in the year.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Charitable donations
During the year the Company entered into fundraising activities
for the Prince’s Trust. Further details of the work are included within
the Corporate and Social Responsibility Report on page 21.

The total of the Company’s direct donations for charitable
purposes (cash donations to charity) during the year was £169,640
(2009: £113,000). Further donations of products were made
to community programmes.

Land and buildings
The directors are of the opinion that there is no signiﬁ cant difference
between the market value and the book value of the Group’s land
and buildings as at 30 January 2010.

Post balance sheet events
Any post balance sheet events requiring disclosure are included
in note 29 to the accounts.

Employee involvement
Using regular brieﬁ ng procedures, managers keep employees at
all levels informed about matters affecting the Company’s policy,
progress and people. Twice yearly, the brieﬁ ng includes a report
on trading results. In addition to this, a bi-annual internal magazine,
‘The Quencher’, is distributed to all employees.

Consultation with employees or their representatives takes place twice
a year so that employees’ views may be taken into account when the
Company is making decisions that are likely to affect their interests.

All qualifying employees are entitled to join the Savings Related
Share Option Scheme and the All-Employee Share Ownership Plan.

Employment of disabled persons
Applications for employment by disabled persons are always fully
considered bearing in mind the respective qualiﬁ cations and abilities
of the applicants concerned. In the event of employees becoming
disabled every effort is made to ensure that their employment will
continue. The Group’s policy is that the training, career development
and promotion of disabled persons are, as far as possible, identical
to those of other employees.

Payment policy and practice
The Group’s policy is to make payment in accordance with the terms
agreed with suppliers when satisﬁ ed that the supplier has provided the
goods or services in accordance with the agreed terms and conditions.

Trade payables days for the year ended 30 January 2010 were
16 days (31 January 2009: 28 days) based on the ratio of Company
trade payables (note 20) at the end of the year to the amounts invoiced
during the year to suppliers.

Substantial shareholdings
As at 22 March 2010, the Company had been notiﬁ ed under Rule 5
of the Financial Services Authority’s Disclosure and Transparency
Rules of the following signiﬁ cant holdings of voting rights in its shares.

A signiﬁ cant shareholding is deﬁ ned as 3.00% by the Financial Services
Authority’s Listing Rules.

Number of

% of
ordinary shares voting rights

Nature
of holding

Caledonia Investments Plc
Lindsell Train Ltd
Speirs & Jeffrey Portfolio
Management Limited
Speirs & Jeffrey Client
Nominees Limited

3,417,000
3,357,568

8.78
8.63

Direct
Indirect

2,263,540

5.82

Direct

1,855,024

4.77

Direct

Relations with shareholders
The Company has regular discussions with and brieﬁ ngs for analysts
and institutional shareholders. The chief executive and ﬁ nance director
normally meet with major shareholders twice annually and brief the
next board meeting on their discussions. All shareholders, including
private investors, have an opportunity to participate in questions and
answers with the board on matters relating to the Company’s operation
and performance at the AGM.

Share capital
As at 30 January 2010 the Company’s issued share capital comprised
a single class of ordinary shares of 12.5 pence each. All of the
Company’s issued ordinary shares are fully paid up and rank equally
in all respects. The rights attaching to the shares are set out in the
Articles. Note 27 to the ﬁ nancial statements contains details of the
ordinary share capital and this note should be treated as forming part
of this report.

On a show of hands at a general meeting of the Company every
holder of ordinary shares present in person or by proxy and entitled
to vote shall have one vote and, on a poll, every member present in
person or by proxy and entitled to vote shall have one vote for every
ordinary share held. The Notice of AGM gives full details of deadlines
for exercising voting rights in relation to resolutions to be passed at
the AGM. All proxy votes are counted and the numbers for, against
or withheld in relation to each resolution are announced at the AGM
and published on the Company’s website after the meeting. Subject
to the relevant statutory provisions and the Articles, shareholders are
entitled to a dividend where declared and paid out of proﬁ ts available
for such purposes.

There are no restrictions on the transfer of ordinary shares in the
Company other than:

· those which may from time to time be applicable under existing

laws and regulations (for example, insider trading laws).

· pursuant to the Listing Rules of the Financial Services Authority,
whereby certain directors and employees of the Company require
the approval of the Company to deal in the Company’s ordinary
shares and are prohibited from dealing during close periods.

At 30 January 2010 the Company had authority, pursuant to the
shareholders’ resolution of 26 May 2009, to purchase up to 10% of
its issued share capital. This authority will expire at the conclusion
of the 2010 AGM. It is proposed that this authority be renewed at the
2010 AGM, as detailed in the Notice of AGM.

Directors’ Report

Directors’ Report continued

At 30 January 2010 Robert Barr Limited, as trustee of the Group
Employee Beneﬁ t Trust, the Savings Related Beneﬁ t Trust and the
Long Service Award Trust (the ‘Trustee’), held 1.35% of the issued
share capital of the Company in trust for the beneﬁ t of the executive
directors and employees of the Group. As at 30 January 2010,
the trustees of the Proﬁ t Linked Share Plan (the ‘PLSP Trustees’)
held 0.30% of the issued share capital of the Company in trust for
the beneﬁ t of the executive directors and employees of the Group.
A dividend waiver is in place in respect of the Trustee’s and the
PLSP Trustees’ holdings. The voting rights in relation to these shares
are exercised by the Trustee or the PLSP Trustees, as the case may
be, who may vote or abstain from voting the shares as they see ﬁ t.

Under the rules of the All-Employee Share Ownership Plan (the ‘Plan’),
eligible employees are entitled to acquire shares in the Company.
Details of the Plan are set out on page 47. Plan shares are held in trust
for participants by Equiniti Share Plan Trustees Limited (the ‘Trustees’).
Voting rights are exercised by the Trustees on receipt of participants’
instructions. If a participant does not submit an instruction to the
Trustees, no vote is registered. In addition, the Trustees do not vote
any unawarded shares held under the Plan as surplus assets. As at
30 January 2010 Equiniti Share Plan Trustees Limited held 1.49% of the
issued share capital of the Company.

The Executive Share Option Scheme (‘ESOS’) was approved
by shareholders at the AGM held on 19 May 2003 and amended
by resolution of the shareholders at the AGM held on 26 May 2009
but to date no options have been awarded.

The Company is not aware of any agreements between shareholders
that may result in restrictions on the transfer of securities or on
voting rights.

Change of control
As disclosed in the Directors’ Remuneration Report, under certain
conditions the notice period for executive directors may increase from
one year to two years in the event of a takeover of or by the Company
or a Company reconstruction.

All of the Company’s share incentive plans contain provisions relating
to a change of control of the Company. Full details of these plans are
provided in the Directors’ Remuneration Report on pages 47 to 52.
The Company’s banking facilities may, at the discretion of the lender,
be repayable upon a change of control.

Articles of association
The Company’s Articles may only be amended by a special resolution
at a general meeting of shareholders. At the 2010 AGM, a special
resolution will be put to shareholders proposing amendments to the
Articles principally to give effect to certain provisions of the Companies
(Shareholder Rights) Regulations 2009.

Financial risk management
Information on the exposure of the Group to certain ﬁ nancial risks and
on the Group’s objectives and policies for managing each of the Group’s
main ﬁ nancial risk areas is detailed in the Financial risk management
disclosure in note 25.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Contracts of signiﬁ cance
There were no contracts of signiﬁ cance as deﬁ ned by Listing Rule 9.8
subsisting during the ﬁ nancial year.

Going concern
The Group’s business activities, together with the factors likely to affect
its future development, performance and position are set out in the
Business Review on pages 4 to 13. The ﬁ nancial position of the Group,
its cash ﬂ ows, liquidity position and borrowing facilities are described
in the Financial Review on pages 14 to 20.

After making the appropriate enquiries, the directors have concluded
that the Group will be able to meet its term loan obligations and will
continue to generate positive free cash ﬂ ow for the foreseeable future
and therefore have a reasonable expectation that the Company and
the Group overall have adequate resources to continue in operational
existence for the foreseeable future and, accordingly, consider it
appropriate to adopt the going concern basis in preparing the annual
report and accounts.

Directors’ statement as to disclosure of information to auditors
So far as each director is aware, there is no relevant audit information
(as deﬁ ned by the Companies Act 2006) of which the Company’s
auditors are unaware. Each director has taken all steps that ought to
be taken by a director to make themselves aware of and to establish
that the auditors are aware of any relevant audit information.

Auditors
The Audit Committee has responsibility delegated from the board
for making recommendations on the appointment, reappointment,
removal and remuneration of the external auditors. During the year,
the Group’s external audit was tendered, as a result of which the
Audit Committee recommended to the board that KPMG Audit plc
be appointed as auditors of the Group. The change of external
auditors was subsequently unanimously approved by shareholders
at the 2009 AGM.

The auditors, KPMG Audit plc, have indicated their willingness to
continue in ofﬁ ce, and a resolution proposing their reappointment will
be proposed at the 2010 AGM.

Corporate governance
The Company’s statement on Corporate Governance is included in
the Corporate Governance Report on pages 43 to 46 of this report.

Annual general meeting
The Company’s AGM will be held at 9.30am on 24 May 2010 at the
ofﬁ ces of KPMG, 191 West George Street, Glasgow G2 2LJ. The Notice
of the AGM is set out in a separate circular which has been sent to all
shareholders with this report.

By order of the board

J.A. Barr
Company Secretary
22 March 2010

Statement on Corporate Governance

The board
The Company is led by a strong and experienced board which brings
a depth and diversity of expertise to the leadership of the Company.
The board of directors (the ‘board’) currently has eight members,
comprising four executive directors, the non-executive chairman,
two independent non-executive directors and one non-independent
non-executive director. Brief biographical details of the directors are
set out on pages 36 and 37.

The roles of chairman and chief executive are separate and there is
a clear division of responsibilities between those roles. The chairman
leads the board and ensures the effective engagement and contribution
of all non-executive and executive directors. The chief executive has
responsibility for all Group businesses and acts in accordance with
the authority delegated from the board.

The board considers that J.S. Espey is independent, notwithstanding
the fact that he has served on the board for more than nine years.
The board does not consider that a director’s tenure necessarily reduces
his ability to act independently and, following performance evaluations,
believes that J.S. Espey is independent in character and judgement and
that there are no relationships or circumstances which are likely to affect
his judgement. The board considers that J. Warburton is independent
and that the relationships and circumstances set out in provision A.3.1
of the revised Combined Code on Corporate Governance as issued
by the Financial Reporting Council in June 2008 (the ‘Code’) do not
apply. The board considers that, on appointment, the chairman was
independent for the purposes of provision A.3.1 of the Code. J.S. Espey
is the senior independent director.

Role of the board
The board determines the strategic direction of the Group and reviews
operating, ﬁ nancial and risk performance. There is a formal schedule
of matters reserved for the board, including approval of the Group’s
annual business plan, the Group’s strategy, acquisitions, disposals
and capital expenditure projects above certain thresholds, all
guarantees, treasury policies, the ﬁ nancial statements, the Company’s
dividend policy, transactions involving the issue or purchase of
Company shares, borrowing powers, appointments to the board,
alterations to the memorandum and articles of association, legal actions
brought by or against the Group above certain thresholds, and the
scope of delegations to board committees, subsidiary boards and
the management committee. Responsibility for the development
of policy and strategy and operational management is delegated to
the executive directors and a management committee, which includes
six senior managers as at the date of this report.

Board performance evaluation
During the year, the chairman carried out a performance evaluation
of the board, the board committees and each of the directors. As in
previous years, this was an internal exercise led by the chairman of
the board, who conducted a detailed and comprehensive evaluation
process by a combination of written survey questionnaires followed
by a series of discussions. The outcome of these evaluations showed
that directors were positive about the performance and process of the
board and the board committees. The practice of separate Company
strategy discussions outwith the normal board meeting schedule was
welcomed by the directors last year and this practice has continued
in the current year.

R.G. Hanna holds directorships with a number of companies. In addition
to his role as chairman of the Company, he is chairman of Bowleven plc
and Troy Income & Growth Trust plc (formerly Glasgow Income Trust
plc). The board does not consider that R.G. Hanna’s other commitments
have any impact on his ability to discharge his duties as chairman of
the Company effectively.

The chairman is pleased to conﬁ rm that, following formal performance
evaluation of the directors, all of the directors’ performances continue
to be effective and the directors offering themselves for re-election at
the AGM continue to demonstrate commitment to the role of director,
including commitment of time for board meetings and committee
meetings and any other relevant duties.

The Articles require directors to retire and submit themselves for election
at the ﬁ rst AGM following appointment and to retire no later than the
third AGM after the AGM at which they were last elected or re-elected.

Details of directors’ remuneration and interests in shares of the
Company are given in the Directors’ Remuneration Report on pages
47 to 52.

Independent professional advice
Directors can obtain independent professional advice at the Company’s
expense in performance of their duties as directors. None of the
directors obtained independent professional advice in the period under
review. All directors have access to the advice and the services of the
Company Secretary. The non-executive directors have access to senior
management of the business.

Training and development
On appointment to the board, directors are provided with a full, formal
and tailored programme of induction, to familiarise them with the
Group’s businesses, the risks and strategic challenges the Group faces,
and the economic, competitive, legal and regulatory environments in
which the Group operates. A programme of strategic and other reviews,
together with other training provided during the year, ensures that
directors continually update their skills, their knowledge and familiarity
with the Group’s businesses, and their awareness of sector, risk,
regulatory, legal, ﬁ nancial and other developments to enable them to
fulﬁ l effectively their role on the board and committees of the board.

Statement on Corporate Governance

Statement on Corporate Governance continued

Meetings and attendance
Board meetings are scheduled to be held twelve times each year.
Between these meetings, as required, additional board meetings may
be held to progress the Company’s business.

Audit Committee
The Audit Committee currently consists of three non-executive
directors: W.R.G. Barr, J.S. Espey and J. Warburton (who joined
on 26 May 2009). The Audit Committee is chaired by J.S. Espey.

The Audit Committee meets with executive directors and management,
as well as privately with the external and internal auditors.

In the current year the Audit Committee has:

· monitored the ﬁ nancial reporting process;
· monitored the statutory audit of the annual and consolidated accounts;
· reviewed and advised the board on the integrity of the Group’s

interim and annual ﬁ nancial statements and announcements relating
to the Group’s ﬁ nancial performance;

· reviewed the control of the Group’s ﬁ nancial and business risks;
· discussed and agreed the nature and scope of the work to
be performed by the external auditors and internal auditors;

· reviewed the results of this audit work and the response

of management;

· reviewed the effectiveness of the Group’s system of internal
control (including ﬁ nancial, operational, compliance and risk
management controls) and the appropriateness of the Group’s
whistle-blowing procedures;

· monitored and reviewed the effectiveness of the Group’s internal

audit activities;

· made recommendations to the board on the appointment,

reappointment, removal and remuneration of the external auditors
and monitored the performance of the auditors; and

· reviewed the non-audit services provided to the Group by the

external auditors and monitored and assessed the independence
of both the external and internal auditors.

The Audit Committee has ensured that both the board and the
external auditors have safeguards in place to prevent the compromise
of the auditors’ independence and objectivity. The external auditors
also reported regularly to the Audit Committee on the actions that they
have taken to comply with professional and regulatory requirements
and current best practice in order to maintain their independence.

The Audit Committee reviews the auditors’ independence annually and
ensures that they comply with the Auditing Practices Board’s Ethical
Standards. At the year end meeting to review the annual report and
accounts the Audit Committee formally considers the level of non-audit
services and fees provided by the Group’s auditors. The detail and
level of fees are fully discussed and the Audit Committee is satisﬁ ed
that there is no risk to the objectivity and independence of the external
audit arising from the level of non-audit fees. Any services to be provided
by the external auditors above a level set by the Audit Committee must
be approved in advance by the Audit Committee.

In advance of all board meetings the directors are supplied with
detailed and comprehensive papers covering the Group’s operating
functions. Members of the management team attend and make
presentations as appropriate at meetings of the board. The Company
Secretary is responsible to the board for the timeliness and quality
of information provided to it. The chairman holds meetings with the
non-executive directors during the year without the executive directors
being present.

Attendance at board and committee meetings in year
to 30 January 2010:

Nomination
Committee
Maximum 15 Maximum 5 Maximum 4 Maximum 2

Audit Remuneration
Committee

Committee

Board

Executive
R.A. White
A.B.C. Short
J.D. Kemp
A.L. Memmott

Non-executive
R.G. Hanna
W.R.G. Barr
J.S. Espey
J. Warburton*

15
15
12
12

12
14
11
8

–
–
–
–

2
4
5
3

–
–
–
–

4
4
4
4

–
–
–
–

2
2
2
1

* J. Warburton was appointed to the board on 16 March 2009, the Remuneration
Committee on 26 March 2009, and the Audit Committee and Nomination
Committee on 26 May 2009. J. Warburton could have attended a maximum of
14 board meetings, 4 Remuneration Committee meetings, 4 Audit Committee
meetings and 1 Nomination Committee meeting.

Conﬂ icts of Interest
The Articles were amended at the 2009 AGM to allow the board
to authorise potential conﬂ icts of interest that may arise from time
to time, subject to certain conditions. The Company has established
appropriate conﬂ icts authorisation procedures, whereby actual or
potential conﬂ icts are regularly reviewed and authorisations sought
as appropriate. From the period since the 2009 AGM to the date
of this report, these procedures have been followed and have
operated effectively.

Committees of the board
The terms of reference of the principal committees of the board –
Audit, Remuneration and Nomination – are available on request from
the Company secretarial department.

Those terms of reference have been reviewed in the current year
and are reviewed at least annually. The work carried out by the Audit
and Nomination Committees in discharging their responsibilities
is summarised below. The work carried out by the Remuneration
Committee is described within the Directors’ Remuneration Report
on pages 47 to 52.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Details of the amounts paid to the external auditors during the year
for audit and other services are set out in note 2 to the ﬁ nancial
statements. The external auditors report their audit results to the
Audit Committee, including a summary of the signiﬁ cant accounting
and auditing issues, internal control ﬁ ndings and a summary of audit
differences identiﬁ ed. The Audit Committee would consider any
disagreements in accounting treatment between management and
the external auditors, should any arise.

At the beginning of each year, an internal control plan is developed
by the internal auditors with reference to the signiﬁ cant risks
contained within the Company risk register and identiﬁ ed controls.
The Audit Committee receives updates on the internal control
workplan regularly throughout the year.

The external auditors do not place any direct reliance on the work
undertaken by the internal auditors due to the nature of the scope and
the timing of their work. In addition to the standing members of the
Audit Committee and representatives from the external and internal
auditors, A.B.C. Short, the ﬁ nance director, routinely attends.

Nomination Committee
The Nomination Committee currently consists of R.G. Hanna,
W.R.G. Barr, J.S. Espey and J. Warburton (who joined on 26 May
2009). The Committee is chaired by R.G. Hanna. The Committee
leads the process for making appointments to the board, ensures
that there is a formal, rigorous and transparent procedure for the
appointment of new directors to the board, reviews the composition
of the board through a full evaluation of the skills, knowledge and
experience of directors, and ensures plans are in place for orderly
succession for appointments to the board and to other senior executive
management positions. No external search consultancy or open
advertising process was used in the appointment of J. Warburton
to the board, who was identiﬁ ed by the Nomination Committee as
a candidate who had outstanding breadth of commercial experience
in the fast-moving consumer goods sector.

Treasury Committee
The Treasury Committee consists of R.A. White, A.B.C. Short
and senior members of the ﬁ nance and purchasing departments.
The Treasury Committee reviews purchase requirements in foreign
currencies and implements foreign exchange hedging to reduce
the risk of foreign exchange exposure and provide certainty over
the value of non-domestic purchases in the short to medium term.
The Treasury Committee also uses ﬁ nancial instruments to hedge the
Group’s exposure to interest rate ﬂ uctuations. Further details of the
work carried out by the Treasury Committee are contained within
the Financial Review on pages 14 to 20.

Internal control
The board has overall responsibility for the Group’s internal control
systems and annually reviews its effectiveness, including a review
of ﬁ nancial, operational, compliance and risk management controls.
The implementation and maintenance of the risk management and
internal control systems are the responsibility of the executive directors
and other senior management. The systems are designed to manage
rather than eliminate the risk of failure to achieve business objectives,
and provide reasonable, but not absolute, assurance against material
misstatement or loss.

The board has reviewed the effectiveness of the internal control
systems, including controls related to ﬁ nancial, operational and
reputational risks identiﬁ ed by the Group, in accordance with the
Code for the period from 31 January 2009 to the date of approval
of this annual report.

No signiﬁ cant failings or weaknesses were identiﬁ ed during this
review. Had any failings or weaknesses been identiﬁ ed then the
board would have taken the action required to remedy them.

At the Audit Committee meeting on 21 January 2010, following a
review and evaluation of the controls and systems in place, the Audit
Committee concluded that the Group has a sound system of internal
controls in place.

The board conﬁ rms that there is an ongoing process, embedded
in the Group’s integrated internal control systems, allowing for the
identiﬁ cation, evaluation and management of signiﬁ cant business
risks, as well as a reporting process to the board. The board requires
the departments within the Company to undertake at least an annual
review to identify new or potentially under-managed risks. The results
of these reviews are reported to the board via the Audit Committee.
This process has been in place throughout the current year and up
to the date of the approval of this annual report and it accords with
the Turnbull guidance.

Following a review of the internal control processes, further
improvements were identiﬁ ed and have been put into place during
the course of the year.

The three main elements of the Group’s internal control system,
including risk identiﬁ cation, are as follows:

The board
The board has overall responsibility for the Group’s internal control
systems and exercises this through an organisational structure
with clearly deﬁ ned levels of responsibility and authority as well
as appropriate reporting procedures.

The board usually meets at twelve scheduled board meetings each
year and has a schedule of matters that are brought to it, or its duly
authorised committees, for decision aimed at maintaining effective
control over strategic, ﬁ nancial, operational and compliance issues.
This structure includes the Audit Committee which, with the ﬁ nance
director, reviews the effectiveness of the internal ﬁ nancial and
operating control environment.

Financial reporting
There is a comprehensive strategic planning, budgeting and
forecasting system with an annual operating plan approved by the
board. Monthly ﬁ nancial information, including trading results, cash
ﬂ ow statements, statement of ﬁ nancial position and indebtedness,
is reported.

The board and the management committee review their business
and ﬁ nancial performance against the prior year’s budget and forecast.

Statement on Corporate Governance

Statement on Corporate Governance continued

Audits and reviews
The key internal risks identiﬁ ed in the Group are subject to regular
audits or reviews by the internal auditors. This role is fulﬁ lled by an
external professional services ﬁ rm who are independent from the
board and the Company.

The review of the internal auditors’ work by the Audit Committee and
monitoring procedures in place ensure that the ﬁ ndings of the audits
are acted upon and subsequent reviews conﬁ rm compliance with any
agreed action plans.

The board conﬁ rms that there has been an independent internal audit
function in place for the year.

Combined Code compliance
The Company is committed to the principles of corporate governance
contained in the Code. A copy of the Code is available on the Financial
Reporting Council’s website, www.frc.org.uk

Each of the provisions of the Code has been reviewed and, where
necessary, steps have been taken to ensure that the Company is in
compliance with all of those provisions as at the date of this report.
The directors consider that the Company has complied throughout
the year ended 30 January 2010 with the provisions set out in section 1
of the Code, except in relation to provisions A.3.2, B.1.6, B.2.1 and C.3.1.

The board comprises three independent non-executive directors and
four executive directors. In addition, W.R.G. Barr is a non-executive
director although he is not considered by the board to be independent.
The composition of the Company’s Remuneration Committee and Audit
Committee does not, at present, comply with the recommendations
of the Code. Following a performance evaluation, the directors believe
that the board, the Remuneration Committee and the Audit Committee
are currently able to discharge their respective duties and obligations
successfully. The board is mindful of its obligations under the Code
and regularly reviews the composition of the board and its committees
to ensure that each is able to effectively and successfully discharge
its duties.

Provision B.1.6 of the Code recommends that executive directors’
contracts contain a maximum notice period of one year. As disclosed
in the Directors’ Remuneration Report, in the event of a takeover of
or by the Company or a Company reconstruction the notice period of
the executive directors reverts to two years in certain circumstances.
The Remuneration Committee considers that, given the shareholding
structure of the Company, this condition is appropriate in order to attract
and retain high calibre executive directors.

Statement of directors’ responsibilities
The directors are responsible for preparing the annual report
and the Group and Company ﬁ nancial statements in accordance
with applicable law and regulations.

Company law requires the directors to prepare ﬁ nancial statements
for each ﬁ nancial year. Accordingly, the directors have prepared
the Group and Company ﬁ nancial statements in accordance with
International Financial Reporting Standards (‘IFRSs’) as adopted
by the European Union and applicable law. Under company law
the directors must not approve the ﬁ nancial statements unless they
are satisﬁ ed that they give a true and fair view of the state of affairs
of the Group and the Company and of the proﬁ t or loss of the Group
for that period. In preparing these ﬁ nancial statements, the directors
are required to:

· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable

and prudent;

· state whether they have been prepared in accordance with IFRSs

as adopted by the European Union;

· prepare the ﬁ nancial statements on the going concern basis

unless it is inappropriate to presume that the Group and Company
will continue in business.

The directors are responsible for keeping adequate accounting records
that are sufﬁ cient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the ﬁ nancial position
of the Company and the Group and enable them to ensure that
the ﬁ nancial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and the Group and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.

Directors’ statement pursuant
to the Disclosure and Transparency Rules
Each of the directors, whose names and functions are set out on pages
36 and 37 of this report conﬁ rm that, to the best of their knowledge:

· the ﬁ nancial statements, prepared in accordance with IFRSs as

adopted by the EU, give a true and fair view of the assets, liabilities,
ﬁ nancial position and proﬁ t or loss of the Group and Company; and
· the Business Review on pages 2 to 34 includes a fair review of the
development and performance of the business and the position of
the Group and Company, together with a description of the principal
risks and uncertainties that they face.

A copy of the ﬁ nancial statements is placed on the Company’s website,
www.agbarr.co.uk. The maintenance and integrity of this website is
the responsibility of the directors. Legislation in the U.K. governing
the preparation and dissemination of ﬁ nancial statements may differ
from legislation in other jurisdictions.

By order of the board

J.A. Barr
Company Secretary
22 March 2010

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Statement on Corporate Governance

Directors’ Remuneration Report

Remuneration Committee
During the year, the Remuneration Committee (the ‘Committee’)
comprised the following non-executive directors:

· J.S. Espey (Committee chairman)
· W.R.G. Barr (appointed 26 May 2009)
· R.G. Hanna
· J. Warburton (appointed 26 March 2009)

Remit
The Committee is responsible for determining all aspects of executive
directors’ remuneration and for monitoring the remuneration of senior
management. The Committee is also responsible for recommending
the remuneration of the chairman to the board. No director makes a
decision relating to their own remuneration. Individual directors leave
the meeting when their own remuneration is being discussed. The full
terms of reference of the Committee are available from the Company
on application to the Company secretarial department.

Advisers
The Committee has access to professional advice, both inside
and outside the Company, and consults with the chief executive.
During the year, advice was obtained from Mercer Limited who provided
advice on retirement beneﬁ ts and administered the Group’s deﬁ ned
beneﬁ t and deﬁ ned contribution pension schemes.

Remuneration policy
The ongoing policy of the Committee is to reward the executive
directors in line with the current remuneration of directors in
comparable businesses taking into consideration the advice of
independent beneﬁ t consultants in order to recruit, motivate and
retain high quality executives within a competitive marketplace.

Consistent with this policy, the beneﬁ t packages awarded to
executive directors are intended to be competitive and comprise a
mix of performance and non-performance related elements designed
to incentivise directors and align their longer term interests with those
of shareholders.

In the year to 30 January 2010, a signiﬁ cant proportion of the executive
directors’ remuneration was performance related through the annual
performance bonus and share awards pursuant to the LTIP. During the
year, the performance related elements of the remuneration package
amounted to approximately one third of the total executives’ package
(2009: approximately one third).

The executive directors’ remuneration consists of the following elements:

Base salary and beneﬁ ts
Basic salaries and beneﬁ ts in kind are reviewed within the policy
each year. Basic salaries are reviewed each year to take account
of movements in the marketplace and individual contribution.

Annual bonus
This scheme is available to create focus within the senior executives,
including executive directors, on the annual ﬁ nancial performance
of the Group. It is principally based on Proﬁ t Before Tax (excluding
exceptional items); the Committee’s view is that this is the most
appropriate performance measure since it represents a key short-term
operational driver of the business. A maximum of 75% of each executive
director’s base salary is currently payable in cash under the scheme.

There have been no changes to the policy from the preceding year
and no departures from the policy in the current year. The current
policy is expected to continue in place through the next ﬁ nancial year.

Long-Term Incentive Plan (‘LTIP’)
This scheme was approved by shareholders at the AGM held
on 19 May 2003 and amended by resolution of the shareholders
at the AGM held on 26 May 2009. It is available to reward executive
directors if the average earnings per share (‘EPS’) of the three years
running up to and including the year of calculation exceeds the average
EPS of the three years preceding that period, both being adjusted for
Retail Price Index, by 10% or more. No part of an award vests if EPS
growth is less than 10% above RPI growth over the three year period.
20% – 99.9999% of an award vests on a sliding scale where EPS
growth exceeds RPI growth by 10% or more but by less than 32.5%.
100% of an award vests where EPS growth exceeds RPI growth by
32.5% or more. The maximum value of any award of shares is 100%
of basic salary.

The revised vesting conditions for the LTIP scheme, as outlined
above, were approved by shareholders at the AGM on 26 May 2009.
The revised vesting conditions applied to outstanding awards under
the scheme as well as to new awards. The total amount which may
vest under outstanding awards and the maximum potential award for
each existing award holder was not altered as a result of the revised
vesting conditions.

The LTIP performance conditions were chosen to align executive
directors’ share awards to Company performance over a three year
period, thereby aligning the interests of the directors with those
of the shareholders.

In addition to the above elements of remuneration, there are two
further elements which are available to all qualifying employees:

All-Employee Share Ownership Plan (‘AESOP’)
The AESOP is HMRC approved and the executive directors
participate in both sections of the scheme, which is open
to all qualifying employees.

The partnership share element provides that for every three shares
that a participant purchases in the Company, up to a maximum
contribution of £125 per month, the Company will purchase one
matching share. The matching shares purchased are held in trust
in the name of the individual.

There are various rules as to the period of time that the shares must
be held in trust but after ﬁ ve years the shares can be released tax free
to the participant.

The free share element allows participants to receive shares to the value
of a common percentage of their earnings, related to the performance
of the Group. The maximum value of the annual award is £3,000 and
the shares awarded are held in trust for ﬁ ve years.

Directors’ Remuneration Report

Directors’ Remuneration Report continued

Under the terms of this scheme, the matching shares will be
forfeited if the participant leaves the employment of the Company
within three years of the award. All other partnership, matching and
free shares must be removed from the trust if employment with the
Company ceases.

Savings Related Share Option Scheme (‘SAYE’)
The SAYE is HMRC approved and is available to all qualifying
employees, including executive directors. It is based on a ﬁ ve year
savings contract which provides the participant with an option
to purchase shares after ﬁ ve years at a discounted price ﬁ xed
at the time the contract is taken out, or earlier as provided by
the scheme rules. No performance conditions require to be met
by any participant in order to exercise their option under the SAYE.

Executive Share Option Scheme 2010 (‘ESOS 2010’)
It is proposed that a new ESOS 2010 be adopted at the 2010 AGM,
details of which are set out in the Notice of AGM.

Pension schemes
Executive directors are all members of the A.G. BARR p.l.c. (2008)
Pension and Life Assurance Scheme. The scheme has a deﬁ ned
beneﬁ t section and a deﬁ ned contribution section. The deﬁ ned
beneﬁ t section was closed to new entrants from 14 August 2003.

Details of the entitlements accruing to the three directors who are
currently members of the deﬁ ned beneﬁ t section are detailed in the
table on page 51. The contributions paid to the deﬁ ned contribution
section in respect of three directors are disclosed on page 51.

Non-executive directors’ remuneration
The remuneration of non-executive directors is determined by
the board within the limits set by the Articles and reviewed annually.
Non-executive directors received remuneration for their services
during the year as disclosed in the table of directors’ detailed
emoluments on page 49. The non-executive directors do not
participate in any of the Company’s share option schemes,
share award schemes, or bonus schemes. With the exception
of W.R.G. Barr, the non-executive directors do not participate
in the Company’s pension schemes.

Directors’ service contracts
Executive directors are appointed on rolling contracts which do
not have a set termination date. An executive director’s contract
will terminate following either the Company or the executive
director giving the other requisite notice that they wish to terminate
an executive director’s contract.

It is the Company’s current policy that executive directors’ service
contracts have a notice period of not normally more than one year.
The service contract for each of the executive directors provides for
a notice period of one year except during the six months following
either a takeover of or by the Company or a Company reconstruction.
Under these conditions and certain circumstances the notice period
reverts to two years for each of the executive directors. The Committee
considers that, given the shareholding structure of the Company,
this condition is appropriate in order to attract and retain high calibre
executive directors.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Non-executive directors are appointed for an initial period of three
years. It is the Company’s current policy that non-executive directors
may serve a maximum of three consecutive three-year terms.
Thereafter, they are reappointed annually. Their service contracts
are terminable by either the Company or the directors themselves
upon three months’ notice. The terms and conditions of appointment
of the non-executive directors are available for inspection at the
Company’s registered ofﬁ ce during business hours and at the AGM.

The executive and non-executive directors have no contractual
entitlement to compensation payments in the event of loss of ofﬁ ce
other than those related to their period of notice.

Details of the service contracts of the executive directors and of the
letters of appointment for the non-executive directors are as follows:

Effective
date of contract

Notice period
required from
director

Notice period
required from
Company

Executive
R.A. White
A.B.C. Short
J.D. Kemp
A.L. Memmott

Non-executive
W.R.G. Barr
R.G. Hanna
J.S. Espey*
J. Warburton

30 September 2002
28 May 2008
11 October 2003
1 March 2008

26 May 2009
26 May 2009
1 April 2009
16 March 2009

6 months
6 months
6 months
6 months

3 months
3 months
3 months
3 months

1 year
1 year
1 year
1 year

3 months
3 months
3 months
3 months

* J.S. Espey’s term of appointment comes to an end on 31 March 2010.
It is anticipated that J.S. Espey’s appointment will be continued for a
further period of one year subject to his re-election at the forthcoming AGM.

Performance review
The graph below shows the Company’s Total Shareholder Return
(‘TSR’) performance against the FTSE 250 excluding investment trusts
over the past ﬁ ve years. In the opinion of the board, the FTSE 250
excluding investment trusts is the most appropriate index against
which the TSR of the Company should be measured because
it represents a broad equity market index in which the Company
is a constituent member.

n
r
u
t
e
R

r
e
d
o
h
e
r
a
h
S

a
t
o
T

250

200

150

100

2005

2006

2008
2007
Year to January

2009

2010

A.G. BARR

FTSE 250 Excluding Investment Trusts

Directors’ detailed emoluments
This section of the remuneration report is audited.

Executive
R.A. White
J.D. Kemp
A.B.C. Short
A.L. Memmott

Non-executive
W.R.G. Barr
R.G. Hanna
J.S. Espey
J. Warburton

Salary
and fees
£000

Beneﬁ ts
in kind
£000

Annual
bonus
£000

302
175
194
139

65
79
35
31
1,020

9
4
11
22

36
–
–
–
82

241
135
150
110

–
–
–
–
636

2010
Total
£000

552
314
355
271

101
79
35
31
1,738

2009
Total
£000

501
298
249
203

124
35
35
–
1,445

Beneﬁ ts in kind include the provision of a company car and fuel. No director waived emoluments in respect of the years ended 30 January 2010
or 31 January 2009. No amount was paid by way of expense allowance which was chargeable to U.K. income tax or paid to or receivable
by any director in respect of qualifying services.

From April 2009 salary sacriﬁ ce was introduced by the Company. Members that joined this arrangement no longer pay contributions to the
pension scheme but receive a lower taxable salary. All four executive directors participated in this arrangement from April 2009 to the year end.

W.R.G. Barr was appointed a non-executive director on 26 May 2009 after retiring from the role of executive chairman. The comparative
remuneration ﬁ gures for the year to 31 January 2009 have been included in the non-executive section of the table. The ﬁ gures for the year
to 30 January 2010 include four months’ salary and beneﬁ t in kind as an executive director and his fees as a non-executive director.

AESOP free shares
The following awards were made under the AESOP free shares to the executive directors:

Director

Share price
on date
of award
Pence

At 31
January
2009
Number

Date
of award

Shares
awarded
Number

Shares
vested
Number

Shares
lapsed
Number

At 30
January
2010
Number

Valued
vested
£000

Vesting date

R.A. White
J.D. Kemp
A.L. Memmott

22 June 2009
22 June 2009
22 June 2009

629.5
629.5
629.5

–
–
–

476
476
476

(476)
(476)
(476)

–
–
–

3
3
3

22 June 2009
22 June 2009
22 June 2009

The share price disclosed in the AESOP free shares table is the value of the shares after the share subdivision. The number of shares awarded
is double the award made on 22 June 2009 to reﬂ ect the share subdivision (note 27).

Directors’ Remuneration Report

Directors’ Remuneration Report continued

Directors’ interests in the Long-Term Incentive Plan
Shares awarded to the executive directors under the LTIP are as follows:

Director

R.A. White

J.D. Kemp

A.B.C. Short

A.L. Memmott

Restated Restated
share price
at 31
January
on date
of award
2009
Number
Pence

Date of award

Shares
awarded
Number

Shares
vested
Number

Shares
lapsed
Number

At 30
January
2010
Number

Valued
vested
£000

01 April 2006
20 April 2007
18 April 2008
05 October 2009

28 October 2008
28 October 2008
05 October 2009

22 October 2008
18 April 2008
05 October 2009

509.2
666.5
575.0
861.0

559.5
561.5
861.0

559.5
575.0
861.0

39,162
33,094
39,552
–

20,938
17,694
22,248
–

20,000
24,720
–

15,000
16,068
–

–
–
–
40,501

–
–
–
22,782

–
–
25,313

–
–
18,522

(17,624)
–
–
–

(21,538)
–
–
–

(9,422)
–
–
–

(11,516)
–
–
–

–
–
–

–
33,094
39,552
40,501

–
17,694
22,248
22,782

20,000
24,720
25,313

15,000
16,068
18,522

108
–
–
–

58
–
–
–

–
–
–

Year

2009
2010
2011
2012

2010
2011
2012

Vesting date

30 April 2009
30 April 2010
30 April 2011
30 April 2012

30 April 2010
30 April 2011
30 April 2012

The number of shares awarded and the share price on the date of the award have been restated for each of the awards presented to reﬂ ect
the share subdivision that took place during the year (see note 27). The number of shares vested and the number of shares lapsed in the year
are stated as if the share subdivision had taken place on 1 February 2009.

The LTIP awards vest shortly after the relevant year end date. The award is ﬁ nalised after the year end accounts are prepared and the relevant
performance conditions can be measured. The vesting date disclosed has been estimated to be 30 April of the relevant year.

There have been no variations in the terms and conditions of the scheme interests in the year.

Directors’ share options
The options of the executive directors, all held under the SAYE, at 30 January 2010 over the ordinary share capital of the Company were as follows:

Restated
options
as at 31
January
2009
Number

3,406
550

3,406

3,406
550

Options
Options
granted exercised
during
the year
Number

during
the year
Number

Options
lapsed
during
the year
Number

Options
as at 30 Restated
exercise
January
price
2010
Pence
Number

Market
value at
date of
exercise
Pence

Date
from which
exercisable

Expiry date

–
–

–

–
–

–

–
–

–

–
–

3,406
550

3,406

3,406
550

388
488

388

388
488

–
–

–

–
–

01 August 2010
01 August 2012

01 February 2011
01 February 2013

01 August 2010

01 February 2011

01 August 2010
01 August 2012

01 February 2011
01 February 2013

R.A. White

J.D. Kemp

A.L. Memmott

The closing share price for the Company was 792p. The highest and lowest prices during the year were 595p and 949p respectively.

The options as at 30 January 2010 and the exercise price have been restated to reﬂ ect the share subdivision that took place during the year
(see note 27).

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Directors’ Pensions
All executive directors are members of the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme (the ‘Scheme’) on a contributory basis.
Their dependants are eligible for dependants’ pensions and the payment of a lump sum in the event of death in service. Where the Scheme
provides a pension on a deﬁ ned beneﬁ t basis, Final Pensionable Salary is used to determine the director’s pension entitlement. Where beneﬁ ts
are provided on a deﬁ ned contribution basis, the beneﬁ ts depend on the director’s accumulated fund. Lump sum life assurance cover is provided
at four times Pensionable Salary.

The pension entitlements earned by the directors during the year calculated in accordance with the requirements of the U.K. Listing Authority
listing rules and the Companies Act 1995 were as follows:

Increase in
accrued pension
during the year
net of inﬂ ation
£000

Total accrued Transfer value
pension of net increase
in year, net
of member
contributions
£000

entitlement
at 30
January 2010
£000

Value
of accrued
pension at 31
January 2009
£000

Value
of accrued
pension at 30
January 2010
£000

Total change in
value during
year, net
of member
contributions
£000

W.R.G. Barr
R.A. White
A.L. Memmott

7
7
4

239
53
33

136
83
51

4,273
485
379

4,381
634
451

108
144
72

During the year to 30 January 2010 W.R.G. Barr retired on 30 May 2009 and elected to receive a tax free cash sum of £423,575.
The value of beneﬁ ts at 30 January 2010 represents the transfer value of his accrued beneﬁ ts to date of retirement.

A.L. Memmott ceased his accrual under the deﬁ ned beneﬁ t plan on 1 March 2008. His accrued beneﬁ t retains a link to his ﬁ nal pensionable
salary. The accrued pension entitlement is the amount that the director would receive if he retired at the year end.

The transfer value has been calculated on the basis of actuarial advice in accordance with the Occupational Pension Schemes (Transfer Values)
Amendment Regulations 2008. The ﬁ gures showing the transfer value of net increase in accrued pension include an allowance for the costs
of providing death in service beneﬁ ts. The change in the amount of the transfer value during the year is made up of the following elements:

(a) transfer value of the increase in accrued pension;
(b) change in the transfer value of accrued pension at the start of the year due to ageing; and
(c) the impact of any change in the economic or mortality assumptions underlying the transfer value basis.

Directors pay contributions as required by the Scheme and these amounts are offset in calculating the values shown in columns headed
Transfer value of net increase in year and Total change in value in year. From April 2009 salary sacriﬁ ce was introduced. Members that joined
this arrangement no longer pay contributions to the Scheme.

The transfer value of the accrued entitlements represent the value of assets that the Scheme would need to transfer to another pension
provider on transferring the Scheme’s liabilities in respect of the directors’ pension beneﬁ ts. They do not represent sums payable to individual
directors and, accordingly, have been excluded from the remuneration table.

The Company paid contributions to the deﬁ ned contribution section of the Scheme during the year in respect of the following members:

J.D. Kemp
A.L. Memmott
A.B.C. Short

Contributions paid

2010
£

34,950
35,367
49,041

2009
£

24,550
22,640
25,333

During the year the Group introduced a salary sacriﬁ ce arrangement under which a salary reduction was made and members no longer pay
contributions to the Scheme. This has resulted in an increase in the contributions paid by the Company in this year.

Directors’ Remuneration Report

Directors’ Remuneration Report continued

Gains made by directors
The aggregate value of gains realised on the exercise of share options and awards in the year to 30 January 2010 was £166,062 under the LTIP
(31 January 2009: £840,768 under the LTIP and SAYE).

Interests in shares
The interests of directors in the ordinary share capital at 30 January 2010 are as follows:

Executive
R.A. White
J.D. Kemp
A.B.C. Short
A.L. Memmott

Non-executive
W.R.G. Barr
J.S. Espey
R.G. Hanna
J. Warburton

2010

2009

Beneﬁ cial Non-beneﬁ cial

97,255
42,745
6,284
9,006

–
–
642,983
–

86,096
36,406
6,000
8,246

–
–
619,482
–

2,504,608
22,000
50,000
1,500

3,377,070
–
–
–

2,504,608
22,000
50,000
1,500*

3,376,236
–
–
–

* The beneﬁ cial shareholding for J. Warburton is his beneﬁ cial shareholding on the date of his appointment on 16 March 2009.

The 2009 interests in shares have been restated to reﬂ ect the effect of the share subdivision that took place during the year (note 27).

There have been the following changes notiﬁ ed in the directors’ shareholdings between 30 January 2010 and 22 March 2010: A.B.C. Short
an increase in beneﬁ cial holding of 8,454 shares and an increase in non-beneﬁ cial holding of 3,262 shares, R.A. White an increase in beneﬁ cial
holding of 40 shares, A.L. Memmott an increase in beneﬁ cial holding of 6,350 shares and J.D. Kemp an increase in beneﬁ cial holding of 39 shares.

On behalf of the board
J.A. Barr
22 March 2010
Company Secretary

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Directors’ Remuneration Report

Independent Auditor’s Report to the Members of A.G. BARR p.l.c.

We have audited the ﬁ nancial statements of A.G. BARR p.l.c. for the
year ended 30 January 2010 set out on pages 54 to 93. The ﬁ nancial
reporting framework that has been applied in their preparation
is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the EU and, as regards the parent Company
ﬁ nancial statements, as applied in accordance with the provisions
of the Companies Act 2006.

This report is made solely to the 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
Company’s members those matters we are required to state to them
in an auditor’s 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 Company and the Company’s members, as a body,
for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Responsibilities Statement
set out on page 46, the directors are responsible for the preparation
of the ﬁ nancial statements and for being satisﬁ ed that they give a
true and fair view. Our responsibility is to audit the ﬁ nancial statements
in accordance with applicable law and International Standards on
Auditing (U.K. and Ireland). Those standards require us to comply with
the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
· the part of the Directors’ Remuneration Report to be audited

has been properly prepared in accordance with the Companies
Act 2006; and

· the information given in the Directors’ Report for the ﬁ nancial

year for which the ﬁ nancial statements are prepared is consistent
with the ﬁ nancial statements.

Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
· adequate accounting records have not been kept by the parent

Company, or returns adequate for our audit have not been received
from branches not visited by us; or

· the parent Company ﬁ nancial statements and the part of the

Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or

· certain disclosures of directors’ remuneration speciﬁ ed by law

are not made; or

· we have not received all the information and explanations we require

for our audit.

Under the Listing Rules we are required to review:
· the directors’ statement, set out on page 42, in relation to going

concern; and

Scope of the audit of the ﬁ nancial statements
A description of the scope of an audit of ﬁ nancial statements is
provided on the APB’s web-site at www.frc.org.uk/apb/scope/UKP.

· the part of the Corporate Governance Statement relating to the
Company’s compliance with the nine provisions of the June 2008
Combined Code speciﬁ ed for our review.

Opinion on ﬁ nancial statements
In our opinion:
· the ﬁ nancial statements give a true and fair view of the state of the
Group’s and of the parent Company’s affairs as at 30 January 2010
and of the Group’s proﬁ t for the year then ended;

· the Group ﬁ nancial statements have been properly prepared

in accordance with IFRSs as adopted by the EU;

· the parent Company ﬁ nancial statements have been properly
prepared in accordance with IFRSs as adopted by the EU and
as applied in accordance with the provisions of the Companies
Act 2006; and

· the ﬁ nancial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and, as regards
the Group ﬁ nancial statements, Article 4 of the IAS Regulation.

Craig Anderson
Senior Statutory Auditor
for and on behalf of:

KPMG Audit Plc, Statutory Auditor
Chartered Accountants
191 West George Street
Glasgow
G2 2LJ
22 March 2010

Independent Auditor’s Report to the Members of A.G. BARR p.l.c.

Consolidated Income Statement

Revenue
Cost of sales

Gross proﬁ t

Operating expenses
Operating proﬁ t

Finance income
Finance costs
Proﬁ t before tax

Tax on proﬁ t

Proﬁ t attributable to equity holders

Earnings per share (p)
Basic earnings per share
Diluted earnings per share

Dividends
Dividend per share paid (p)
Dividend paid (£000)
Dividend per share proposed (p)
Dividend proposed (£000)

Before
exceptional
items
£000

Note

2010

Exceptional
items
£000

Before
exceptional
items
£000

Total
£000

2009

Exceptional
items
£000

201,410
(98,153)

103,257

(73,497)
29,760

117
(1,995)
27,882

–
–

–

201,410
(98,153)

169,698
(84,962)

103,257

84,736

(3,432)
(3,432)

–
–
(3,432)

(76,929)
26,328

117
(1,995)
24,450

(61,682)
23,054

1,062
(1,037)
23,079

(7,462)

960

(6,502)

(6,134)

20,420

(2,472)

17,948

16,945

–
–

–

130
130

–
–
130

–

130

Restated
44.22
43.74

Restated
0.34
0.34

53.29
52.89

(6.45)
(6.40)

46.84
46.49

21.45
8,250
16.85
6,559

4,5

6
6

8
8

9
9
9
9

Total
£000

169,698
(84,962)

84,736

(61,552)
23,184

1,062
(1,037)
23,209

(6,134)

17,075

Restated
44.56
44.08

Restated
19.80
7,604
15.20
5,916

Statement of Comprehensive Income

Group

Company

Note

2010
£000

2009
£000

2010
£000

2009
£000

Proﬁ t after tax

17,948

17,075

13,348

16,077

Other comprehensive income
Actuarial loss on deﬁ ned beneﬁ t pension plans
Effective portion of changes in fair value of cash ﬂ ow hedges
Current tax movements on items taken directly to equity
Deferred tax movements on items taken directly to equity
Other comprehensive income for the period, net of tax

(3,498)
419
–
1,322
(1,757)

(62)
(1,374)
193
(63)
(1,306)

(3,498)
419
–
1,322
(1,757)

(62)
(1,374)
193
(63)
(1,306)

Total comprehensive income attributable to equity holders of the parent

16,191

15,769

11,591

14,771

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Consolidated Income Statement and
Statement of Comprehensive Income

Statement of Changes in Equity

Group

At 31 January 2009

Movement in cash ﬂ ow hedge
Actuarial loss on deﬁ ned beneﬁ t pension plans
Deferred tax on items taken directly to equity
Proﬁ t for the period
Total comprehensive income for the period

Share
capital
£000

4,865

–
–
–
–
–

Company shares purchased for use by employee beneﬁ t trusts
Proceeds on disposal of shares by employee beneﬁ t trusts
Recognition of share-based payment costs
Transfer of reserve on share award
Dividends paid
At 30 January 2010

–
–
–
–
–
4,865

Share
premium
account
£000

905

–
–
–
–
–

–
–
–
–
–
905

At 26 January 2008

4,865

905

Movement in cash ﬂ ow hedge
Actuarial loss on deﬁ ned beneﬁ t pension plans
Current tax on items taken directly to equity
Deferred tax on items taken directly to equity
Proﬁ t for the period
Total comprehensive income for the period

–
–
–
–
–
–

–
–
–
–
–
4,865

–
–
–
–
–
–

–
–
–
–
–
905

Share
options
reserve
£000

Cash ﬂ ow
hedge
reserve
£000

Retained
earnings
£000

Total
£000

716

–
–
343
–
343

–
–
763
(227)
–
1,595

964

–
–
–
(80)
–
(80)

–
–
341
(509)
–
716

(1,374)

87,553

92,665

419
–
–
–
419

–
–
–
–
–
(955)

–
(3,498)
979
17,948
15,429

(1,632)
772
–
227
(8,250)
94,099

419
(3,498)
1,322
17,948
16,191

(1,632)
772
763
–
(8,250)
100,509

–

78,044

84,778

(1,374)
–
–
–
–
(1,374)

–
–
–
–
–
(1,374)

–
(62)
193
17
17,075
17,223

(1,481)
862
–
509
(7,604)
87,553

(1,374)
(62)
193
(63)
17,075
15,769

(1,481)
862
341
–
(7,604)
92,665

Statement of Changes in Equity

Statement of Changes in Equity continued

Company

At 31 January 2009

Movement in cash ﬂ ow hedge
Actuarial loss on deﬁ ned beneﬁ t pension plans
Deferred tax on items taken directly to equity
Proﬁ t for the period
Total comprehensive income for the period

Share
capital
£000

4,865

–
–
–
–
–

–
–
–
–
–
4,865

Share
premium
account
£000

905

–
–
–
–
–

–
–
–
–
–
905

Share
options
reserve
£000

Cash ﬂ ow
hedge
reserve
£000

Retained
earnings
£000

Total
£000

716

–
–
343
–
343

–
–
763
(227)
–
1,595

(1,374)

84,575

89,687

419
–
–
–
419

–
–
–
–
–
(955)

–
(3,498)
979
13,348
10,829

(1,632)
772
–
227
(8,250)
86,521

419
(3,498)
1,322
13,348
11,591

(1,632)
772
763
–
(8,250)
92,931

At 26 January 2008

4,865

905

964

–

76,064

82,798

–
–
–
–
–
–

–
–
–
–
–
4,865

–
–
–
–
–
–

–
–
–
–
–
905

–
–
–
(80)
–
(80)

–
–
341
(509)
–
716

(1,374)
–
–
–
–
(1,374)

–
–
–
–
–
(1,374)

–
(62)
193
17
16,077
16,225

(1,481)
862
–
509
(7,604)
84,575

(1,374)
(62)
193
(63)
16,077
14,771

(1,481)
862
341
–
(7,604)
89,687

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Statement of Changes in Equity

Statements of Financial Position

Non-current assets
Intangible assets
Property, plant and equipment
Financial instruments
Investment in subsidiaries

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classiﬁ ed as held for sale

Total assets

Current liabilities
Borrowings
Trade and other payables
Provisions
Current tax

Non-current liabilities
Borrowings
Deferred income
Financial instruments
Deferred tax liabilities
Retirement beneﬁ t obligations

Capital and reserves attributable to equity shareholders
Called up share capital
Share premium account
Share options reserve
Cash ﬂ ow hedge reserve
Retained earnings (restated)

Group

Company

Note

2010
£000

2009
£000

2010
£000

2009
£000

10
11
12
14

15
16

18
20
21

18
22
12
23
26

76,416
55,902
27
–
132,345

16,041
30,157
10,926
2,400
59,524

76,807
58,861
33
–
135,701

14,528
27,139
6,680
2,864
51,211

9,881
53,790
27
61,081
124,779

11,810
31,908
9,804
2,400
55,922

10,020
56,861
33
61,081
127,995

10,107
25,565
5,517
2,864
44,053

191,869

186,912

180,701

172,048

8,000
31,836
1,962
3,928
45,726

24,739
76
1,024
13,940
5,855
45,634

4,865
905
1,595
(955)
94,099
100,509

5,000
30,978
80
2,857
38,915

32,665
144
1,477
16,057
4,989
55,332

4,865
905
716
(1,374)
87,553
92,665

8,000
42,565
1,962
2,127
54,654

24,739
72
1,024
1,426
5,855
33,116

4,865
905
1,595
(955)
86,521
92,931

5,000
32,432
80
2,077
39,589

32,665
72
1,477
3,569
4,989
42,772

4,865
905
716
(1,374)
84,575
89,687

Total equity and liabilities

191,869

186,912

180,701

172,048

The ﬁ nancial statements on pages 54 to 93 were approved by the board of directors and authorised for issue on 22 March 2010
and were signed on its behalf by:

R.G. Hanna
Chairman

A.B.C. Short
Finance Director

Statements of Financial Position

Cash Flow Statements

Operating activities
Proﬁ t before tax
Adjustments for:
Interest receivable
Interest payable
Depreciation of property, plant and equipment
Impairment of plant and machinery
Impairment of assets classiﬁ ed as held for sale
Fair value adjustment to ﬁ nancial instruments
Amortisation of intangible assets
Impairment of intangible assets
Share options costs
Gain on sale of property, plant and equipment
Government grants written back
Operating cash ﬂ ows before movements in working capital

(Increase)/decrease in inventories
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net decrease in retirement beneﬁ t obligation
Cash generated by operations

Tax on proﬁ t paid
Net cash from operating activities

Investing activities
Refund of payment for/(acquisition) of subsidiaries
Acquisition of intangible assets
Purchase of property, plant and equipment
Proceeds on sale of property, plant and equipment
Interest received
Net cash used in investing activities

Financing activities
New loans received
Loans repaid
Bank arrangement fees paid
Purchase of ﬁ nancial instrument
Purchase of Company shares by employee beneﬁ t trusts
Proceeds from disposal of Company shares by employee beneﬁ t trusts
Dividends paid
Interest paid
Net cash used in ﬁ nancing activities

Group

Company

Note

2010
£000

2009
£000

2010
£000

2009
£000

24,450

23,209

17,987

21,826

6
6
11
11
17

10
10

(117)
1,995
7,494
1,031
464
(6)
391
–
763
(35)
(68)
36,362

(1,889)
(3,234)
2,863
(3,003)
31,099

(6,226)
24,873

216
–
(5,358)
62
114
(4,966)

5,000
(10,000)
–
–
(1,632)
772
(8,250)
(1,551)
(15,661)

(1,062)
1,037
7,018
–
–
82
340
284
341
(13)
(28)
31,208

1,038
1,976
(468)
(2,996)
30,758

(2,142)
28,616

(58,694)
(140)
(10,639)
161
1,041
(68,271)

54,500
(16,500)
(366)
(114)
(1,482)
862
(7,604)
(860)
28,436

(107)
2,052
6,931
1,031
464
(6)
139
–
763
(30)
–
29,224

(1,703)
(6,559)
12,102
(3,003)
30,061

(5,412)
24,649

216
–
(5,049)
85
104
(4,644)

5,000
(10,000)
–
–
(1,632)
772
(8,250)
(1,608)
(15,718)

(1,038)
1,065
6,697
–
–
82
255
284
341
(13)
–
29,499

2,175
83
2,880
(2,996)
31,641

(1,711)
29,930

(60,876)
(140)
(10,553)
138
1,017
(70,414)

54,500
(16,500)
(366)
(114)
(1,482)
862
(7,604)
(888)
28,408

Net increase/(decrease) in cash and cash equivalents

4,246

(11,219)

4,287

(12,076)

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

6,680
10,926

17,899
6,680

5,517
9,804

17,593
5,517

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Cash Flow Statements

Accounting Policies

General information
A.G. BARR p.l.c. (‘the Company’) and its subsidiaries (together
‘the Group’) manufacture, distribute and sell soft drinks.

Interpretations effective in 2010
The Group has adopted the following new and amended IFRSs
in the ﬁ nancial statements:

The Group has manufacturing sites in the U.K. and sells mainly
to customers in the U.K. but does have some international sales.

· IFRS 7 Financial instruments – Disclosures (amendment)

(effective 1 January 2009)

The Company is a public limited company incorporated and domiciled
in Scotland. The address of its registered ofﬁ ce is Westﬁ eld House,
4 Mollins Road, Cumbernauld G68 9HD.

The Company has its primary listing on the London Stock Exchange.

Summary of signiﬁ cant accounting policies
The principal accounting policies applied in the preparation of these
consolidated ﬁ nancial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.

Basis of preparation
The consolidated and parent Company ﬁ nancial statements of
A.G. BARR p.l.c. have been prepared in accordance with International
Financial Reporting Standards (‘IFRS’) as endorsed by the EU.
They have been prepared under the historical cost convention.

The directors have adopted the going concern basis in preparing
these accounts for the reasons set out in note 31.

The preparation of ﬁ nancial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are signiﬁ cant to the consolidated ﬁ nancial statements, are disclosed
in the accounting policies on page 65.

The directors have taken advantage of the exemption available under
s.408 of the Companies Act 2006 and have not presented an income
statement for the Company.

The amendment requires enhanced disclosures about fair value
measurement and liquidity risk. In particular, the amendment
requires disclosure of fair value measurements by level of a fair
value measurement hierarchy. As the change in accounting policy
only results in additional disclosures, there is no impact on earnings
per share.

· IAS 1 (revised) Presentation of ﬁ nancial statements

(effective 1 January 2009)

The revised standard has resulted in a number of changes in
presentation and disclosure, most signiﬁ cantly changing the
title of the Statement of Recognised Income and Expense to
the Statement of Comprehensive Income, changing the title
the Balance Sheet to Statement of Financial Position and the
introduction of the Statement of Changes in Equity as a primary
statement. None of these changes has affected earnings
per share.

· IFRS 2 (amendment) Share-based payment

(effective 1 January 2009)

This amendment deals with vesting conditions and cancellations.
It clariﬁ es that vesting conditions are service conditions and
performance conditions only. Other features of a share-based
payment are not vesting conditions. These features, along with
market based vesting conditions, would need to be included in the
grant date fair value for transactions with employees and others
providing similar services; they would not impact the number
of awards expected to vest or valuation thereof subsequent to
grant date. All cancellations, whether by the entity or by other parties,
should receive the same accounting treatment. The amendment
has not had a material impact on the Group or Company’s
ﬁ nancial statements.

· IFRS 8 Operating Segments (effective 1 January 2009)
IFRS 8 requires the Group to determine and present operating
segments based on the information that internally is provided
to the Management Committee, who is the Group’s chief operating
decision maker. Previously operating segments were determined
and presented in accordance with IAS 14 Segment Reporting.
Comparative segment information has been re-presented in
conformity with the transitional requirements of IFRS 8. Since
the change in accounting policy only impacts presentation and
disclosure aspects there is no impact on earnings per share.

Accounting Policies

Accounting Policies continued

Interpretations effective in 2010 but not relevant to the Group
The following standards are mandatory for accounting periods
beginning on or after 1 January 2009 but have had no impact
on the Group:

· IAS 23 (Amendment) Borrowing costs
· Amendments to IAS 32 Financial instruments:

Presentation and IFRS 7 Financial instruments: Disclosures

· Amendments to IAS 32 and IAS 1 – Puttable ﬁ nancial

instruments and obligations arising on liquidation

· IAS 39 (Amendment) Financial instruments:

Recognition and measurement: Eligible Hedged Items

· IFRIC 13 Customer loyalty programmes
· IFRIC 16 Hedges of a net investment in a foreign operation

Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the Group
The following standards and amendments to existing standards
have been published and are mandatory for the Group’s accounting
periods beginning after 1 January 2010 unless otherwise stated,
but the Group has not early adopted them. They will be applied
from 31 January 2010 and are not expected to have a material effect
on the Group’s ﬁ nancial statements:

· IAS 27 (revised) Consolidated and separate ﬁ nancial statements

(effective from 1 July 2009)

· IFRS 3 (revised) Business combinations (effective

for accounting periods beginning on or after 1 July 2009)

· IFRIC 17 Distribution of non-cash assets to owners

(effective on or after 1 July 2009)

· IFRIC 18 Transfer of assets to customers

Changes in accounting polices
Company shares held by employee beneﬁ t trusts
The retained earnings ﬁ gure at 31 January 2009 has been restated
to include the value of the Company’s own shares held for use by
employee beneﬁ t trusts. Previously the purchased value of the shares
held by the employee beneﬁ t trusts was disclosed as a separate line
on the statement of ﬁ nancial position (previously known as the balance
sheet). The inclusion of the balance within retained earnings is to bring
the reporting in to line with common practice. The restatement has
reduced the retained earnings ﬁ gures and previously presented own
shares held ﬁ gure as follows:

As at 30
January 2010
£000

As at 31
January 2009
£000

Reduction in Company shares
held by employee beneﬁ t trusts
Reduction in retained earnings

3,885
3,885

3,258
3,258

Given that the adjustment affects only revenue reserves the directors
consider that the presentation of a restated opening comparative
statement of ﬁ nancial position is not necessary.

Earnings per share
A share subdivision of the Company’s issued and to be issued share
capital was approved at a general meeting on 18 September 2009.
This resulted in double the number of shares being in issue after
the subdivision.

As a result of the change in the number of shares in issue and in line
with the requirements of IAS 33 Earnings per share, the earnings per
share ﬁ gures for the year to 31 January 2009 have been restated as
if the subdivision had taken place at 28 January 2008, the ﬁ rst day
of that ﬁ nancial year.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Consolidation – Subsidiaries
Subsidiaries are entities over which the Group has the power to
govern the ﬁ nancial and operating policies generally accompanying a
shareholding of more than one half of the voting rights so as to obtain
beneﬁ ts from its activities. Subsidiaries are consolidated from the date
on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.

The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an acquisition
is measured as the fair value of the assets given, equity instruments
issued and liabilities incurred or assumed at the date of exchange,
plus costs directly attributable to the acquisition. Identiﬁ able assets
acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest.
Currently there are no minority interests in any of the entities within
the Group. The excess of the cost of acquisition over the fair value
of the Group’s share of the identiﬁ able net assets acquired is recorded
as goodwill.

Inter-company transactions, balances and unrealised gains or
losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by
the Group.

Revenue recognition
Revenue is the net invoiced sales value exclusive of value added tax
of goods and services supplied to external customers during the year.
Sales are recorded based on the price speciﬁ ed in the sales invoices,
net of any agreed discounts.

Revenue is recognised when the signiﬁ cant risks and rewards of
ownership of the goods have passed to the buyer and the amount
can be measured reliably. Sales related discounts and rebates
are calculated based on the expected amounts necessary to meet
the claims of the Group’s customers in respect of these discounts
and rebates.

Segment reporting
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components and for which discrete
ﬁ nancial information is available. An operating segment’s operating
results are reviewed regularly by the management committee (as
chief operating decision maker) to make decisions about resources
to be allocated to the segment and assess its performance.

Segment results that are reported to the management committee
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Segment reporting
for the Group is made to the gross proﬁ t level for the operating
segments but no segment reporting is made for further expenditure
or for the assets and liabilities of the Group. The assets and liabilities
of the Group are reported as Group totals and no reporting of these
balances is recorded at a segment level. As a result all of the Group’s
assets and liabilities are unallocated items and no reconciliation
of segment assets to the Group’s total assets is prepared.

Foreign currency translation
(a) Functional and presentation currency items included in the

ﬁ nancial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which
the entity operates (‘the functional currency’). The consolidated
ﬁ nancial statements are presented in £ Sterling which is the
Company’s functional and the Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured.

Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement in the same line
in which the transaction is recorded.

Exceptional items
As permitted by IAS 1 Presentation of ﬁ nancial statements, an item
is treated as exceptional if it is considered unusual by its nature and
scale and is of such signiﬁ cance that separate disclosure is required
for the ﬁ nancial statements to be properly understood.

Accounting Policies

Accounting Policies continued

Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the net identiﬁ able assets
of the acquired subsidiary at the date of acquisition. Goodwill
on acquisitions of subsidiaries is included in intangible assets.
Goodwill is tested annually for impairment and carried at cost less
accumulated impairment charges. Impairment charges on goodwill
are not reversed. Goodwill is allocated to cash-generating units
for the purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating units
that are expected to beneﬁ t from the business combination in which
the goodwill arose.

An intangible asset acquired as part of a business combination
is recognised outside of goodwill if the asset is separable or
arises from contractual or other legal rights and its fair value can
be measured reliably.

Brands
Separately acquired brands are recognised at cost at the date of
purchase. Brands acquired in a business combination are recognised
at fair value at the acquisition date. Brands acquired separately
or through a business combination are assessed at the date of
acquisition as to whether they have indeﬁ nite life. The assessment
includes whether the brand name will continue to trade and the
expected lifetime of the brand. All brands acquired to date have
an indeﬁ nite life. The brands are reviewed annually for impairment,
being carried at cost less accumulated impairment charges.

The fair value of a brand at the date of acquisition is based on
the Relief from Royalties method which is a valuation model based
on discounted cash ﬂ ows.

Customer relationships
Customer relationships acquired in a business combination are
recognised at fair value at the acquisition date. The customer
relationships have a ﬁ nite useful life and are carried at cost
less accumulated amortisation. Amortisation is calculated using
the straight-line method over the expected life of the customer
relationship.

The closing balance in the current year represents the carrying
value of the customer relationships acquired during the acquisitions
of the Strathmore Water business and Groupe Rubicon Limited.

The fair value of the customer relationships at the acquisition date
is based on the Multiple Excess Earnings Method (‘MEEM’) which
is a valuation model based on discounted cash ﬂ ows. The useful
lives of customer relationships are based on the churn rate of the
acquired portfolio and are up to 10 years corresponding to a yearly
amortisation of between 10% and 33%.

Water rights
Water rights represent the cost of purchasing the water rights at
Pitcox. This is the source of the Findlays Mineral Water. As the rights
give indeﬁ nite access to the water source the rights have been given
an indeﬁ nite life and are tested annually for impairment and are
carried at cost less accumulated impairment losses.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Property, plant and equipment
Land and buildings comprise mainly factories, distribution sites and
ofﬁ ces. All property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the assets.

Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is
probable that future economic beneﬁ ts associated with the item will
ﬂ ow to the Group and the cost of the item can be measured reliably.
The carrying amount of the replaced part is derecognised. All other
repairs and maintenance are charged to the income statement during
the ﬁ nancial period in which they are incurred.

Depreciation is calculated using the straight-line method to
allocate the cost to the residual values of the related assets using
the following rates:

· Buildings 1%
· Leasehold buildings Term of lease
· Plant, equipment and vehicles 10% to 33%

The assets’ residual values and useful lives are reviewed, and adjusted
if appropriate, at each year end date.

An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.

Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised within
administration expenses in the income statement.

Leases
Leases in which a signiﬁ cant portion of the risks and rewards of
ownership are retained by the lessor are classiﬁ ed as operating
leases. The Group has two properties accounted for under an
operating lease. Payments made under operating leases (net of
any incentives received from the lessor) are charged to the income
statement on a straight-line basis over the period of the lease.

Impairment of non-ﬁ nancial assets
Assets that have an indeﬁ nite useful life are not subject to
amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable.

An impairment charge is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identiﬁ able cash
ﬂ ows (cash-generating units). Non-ﬁ nancial assets other than
goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at each reporting date.

Non-current assets classiﬁ ed as held for sale
Non-current assets are classiﬁ ed as held for sale when their carrying
amount is to be recovered principally through a sale transaction and
a sale is considered highly probable. They are stated at the lower
of carrying amount and fair value less costs to sell if their carrying
amount is to be recovered principally through a sale transaction
rather than through continuing use.

Financial instruments
Classiﬁ cation
The Group classiﬁ es its ﬁ nancial instruments in the following categories:

· at fair value through proﬁ t or loss
· loans and receivables

The classiﬁ cation depends on the purpose for which the ﬁ nancial
instruments were acquired. Management determines the classiﬁ cation
of its ﬁ nancial instruments at initial recognition.

Financial assets at fair value through proﬁ t or loss
Financial assets at fair value through proﬁ t or loss are derivatives
designated as such on initial recognition.

Loans and receivables
Loans and receivables are non-derivative ﬁ nancial assets with ﬁ xed
or determinable payments that are not quoted in an active market.
They are included in current assets as they all have a maturity less
than 12 months after the year end date.

The Group’s loans and receivables comprise trade and other receivables
and cash and cash equivalents in the statement of ﬁ nancial position.

Recognition and measurement
Purchases and sales of ﬁ nancial assets are recognised on the trade
date – the date on which the Group commits to purchasing the asset.

Financial assets carried at fair value through proﬁ t or loss are initially
recognised at fair value with related transaction costs expensed in
the income statement. Financial assets are derecognised when the
rights to receive cash ﬂ ows from the investments have expired or
have been transferred and the Group has transferred substantially
all risks and rewards of ownership.

The Group assesses at each year end date whether there is objective
evidence that a ﬁ nancial asset or a group of ﬁ nancial assets is impaired.
Gains or losses arising from changes in the fair value of the ﬁ nancial
assets at fair value through proﬁ t or loss category are presented in the
income statement within administration expenses in the period in which
they arise.

Impairment testing of trade receivables is described in note 16.

Non-derivative ﬁ nancial liabilities
Financial liabilities are recognised initially on the trade date at
which the Group becomes a party to the contractual provisions
of the instrument.

The Group’s non-derivative ﬁ nancial liabilities comprise borrowings
and trade and other payables. Such ﬁ nancial liabilities are recognised
initially at fair value less any directly attributable transaction costs.
The Group derecognises a ﬁ nancial liability when its contractual
obligations are discharged or cancelled or expire.

Derivative ﬁ nancial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair
value. The method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging instrument and,
if so, the nature of the item being hedged. The Group has entered into
an interest rate hedge on the loan liability. This has been designated
as a cash ﬂ ow hedge.

The Group documents at the inception of the transaction the
relationship between hedging instruments and hedged items, as well
as its risk management objectives and strategy for undertaking various
hedging transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly effective
in offsetting changes in fair values or cash ﬂ ows of hedged items.

The fair values of the derivative instrument used for hedging purposes
are disclosed in note 12. Movements on the hedging reserve in
shareholders’ equity are shown in the statement of changes in equity.
The full fair value of a hedging derivative is classiﬁ ed as non-current
when the remaining hedged item is more than 12 months and as
current when the remaining maturity of the hedged item is less than
12 months.

Cash ﬂ ow hedge
The effective portion of changes in the fair value of derivatives that
are designated and qualify as cash ﬂ ow hedges are recognised in
equity. The gain or loss relating to the ineffective portion is recognised
immediately in the income statement within administration expenses.

Amounts accumulated in equity are recycled in the income statement
in the periods when the hedged item affects proﬁ t or loss. The gain
or loss relating to the effective portion of interest rate swaps hedging
variable rate borrowings is recognised in the income statement within
Finance costs. The gain or loss relating to the ineffective portion is
recognised in the income statement within administration expenses.
When a hedging instrument expires or is sold, or when a hedge
no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in equity and is
recognised when the forecast transaction is ultimately recognised
in the income statement.

Accounting Policies

Accounting Policies continued

Inventories
Inventories are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary
course of the business less the estimated costs of completion and
selling expenses.

The cost of inventories is based on the ﬁ rst-in ﬁ rst-out principle
and includes expenditure incurred in acquiring the inventories and
bringing them to their existing location and condition. This includes an
appropriate share of overheads based on normal operating activity.

Trade receivables
Trade receivables are recognised initially at fair value. As trade
receivables are not interest bearing subsequent measurement
is at initial fair value less provision for impairment.

A provision for impairment of trade receivables is established when
there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivables.
The amount of the provision is the difference between the asset’s
carrying amount and the estimated cash ﬂ ows. The carrying amount
of the asset is reduced through the use of a bad debt provision account
and the amount of the loss is recognised in the income statement
within administration expenses. When a trade receivable is uncollectable
it is written off against the bad debt provision.

Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call
with banks and other short-term highly liquid investments with original
maturities of three months or less.

Company shares held by employee beneﬁ t trusts
Share capital is purchased to satisfy the liability of various employee
share schemes and is held in trust. The amount of the consideration
paid, including directly attributable costs, is recognised as a change
in equity. Purchased shares are classiﬁ ed as Company shares
held by employee beneﬁ t trusts and presented as a deduction from
retained earnings.

Trade and other payables
Trade and other payables are not interest bearing and are stated
at cost.

Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are classiﬁ ed according to the repayment
terms of the facility. All payments due within 12 months of the year
end date are classiﬁ ed as current liabilities.

Deferred income
Government grants in respect of capital expenditure are treated
as deferred credits and a proportion of the grants based on the
depreciation rate for the related property, plant and equipment
is credited each year to the income statement.

Current and deferred income tax
Tax on the proﬁ t or loss for the year comprises current and deferred tax.

Current tax is charged in the income statement except where it relates
to tax on items recognised directly in equity, in which case it is charged
to equity.

Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantively enacted at the year end
date and any adjustment to tax payable in respect of previous years.

Deferred tax is provided in full using the liability method, providing for
temporary differences between the tax bases of assets and liabilities
and their carrying amounts in the consolidated ﬁ nancial statements.

The following temporary differences are not provided for:

· the initial recognition of goodwill;
· differences relating to investments in subsidiaries to the extent

that they will probably not reverse in the foreseeable future.

Where the carrying value of the asset is to be recovered through both
use and subsequent disposal, a single tax base is attributed to that
asset resulting in a single temporary difference being recognised.

Deferred tax is determined using tax rates and laws that have been
enacted or substantively enacted by the year end date and are
expected to apply when the related deferred tax asset is realised or
the deferred tax liability is settled. A deferred tax asset is recognised
only to the extent that it is probable that future taxable proﬁ ts will be
available against which the asset can be utilised. Deferred tax assets
are reduced to the extent that it is no longer probable that the related
tax beneﬁ t will be realised.

Employee beneﬁ ts
Retirement beneﬁ t plans
The Group operates three pension schemes as detailed in note 26.
The schemes are generally funded through payments to trustee-
administered funds, determined by periodic actuarial calculations.
The Group has both deﬁ ned beneﬁ t and deﬁ ned contribution plans.

Deﬁ ned contribution pension plans
A deﬁ ned contribution plan is a pension plan under which the Group
pays ﬁ xed contributions into a separate entity. Obligations for
contributions are recognised as an expense in the income statement
as they fall due. The Group has no further payment obligations once
the contributions have been paid.

Deﬁ ned beneﬁ t pension plans
A deﬁ ned beneﬁ t plan is a pension plan that is not a deﬁ ned
contribution plan. Typically deﬁ ned beneﬁ t plans deﬁ ne an amount
of pension beneﬁ t that an employee will receive on retirement, usually
dependent on one or more factors such as age, years of service
and compensation.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

The liability recognised in the statement of ﬁ nancial position in
respect of deﬁ ned beneﬁ t pension plans is the present value of the
deﬁ ned beneﬁ t obligation at the year end date less the fair value
of plan assets, together with adjustments for unrecognised past-
service costs. The deﬁ ned beneﬁ t obligation is calculated annually
by independent actuaries using the projected unit credit method.
The present value of the deﬁ ned beneﬁ t obligation is determined by
discounting the estimated future cash outﬂ ows using interest rates
of high quality corporate bonds that are denominated in the currency
in which the beneﬁ ts will be paid, and that have terms to maturity
approximating to the terms of the related pension liability.

Actuarial gains and losses that arise in calculating the Group’s
obligation in respect of a plan are recognised in full in the year in
which they occur through the Consolidated Statement of Changes
in Equity.

Share-based compensation
The Group issues equity-settled share-based payments to certain
employees. These are measured at fair value (excluding the effect
of non market-based vesting conditions) at the grant date. The fair
value determined at the grant date of the equity settled share-based
payment is expensed on a straight-line basis over the vesting period,
based on the Group’s estimate of the shares that will eventually vest
and adjusted for the effect of non market-based vesting conditions.
Fair value is measured using the Black-Scholes pricing model.

The Group also provides employees with the ability to purchase
the Company’s ordinary shares at a discount to the current market
value through the employees’ payroll. The Group records an expense
as the shares are purchased by the employee. The fair value of
the share-based payments is charged to the income statement
and credited to the share options reserve.

At each year end date, the entity revises its estimates of the number
of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates,
if any, in the income statement, with a corresponding adjustment to
the share options reserve.

On exercise the fair value is credited to retained reserves from the
share options reserve and any proceeds from the exercise are credited
to retained earnings.

A restructuring provision is recognised when the Group has approved a
detailed and formal restructuring plan which has been either announced
or has commenced. Future operating costs are not provided for.

Dividend distribution
Dividend distribution to the Company’s shareholders is recognised
as a liability in the Group’s ﬁ nancial statements in the period in which
the dividends are approved by the Company’s shareholders.

Key judgements and sources of estimation uncertainty
The preparation of ﬁ nancial statements requires management
to make judgements, estimates and assumptions that affect the
amounts reported for assets and liabilities as at the balance sheet
date and the amounts reported for revenues and expenses during
the year. Due to the nature of estimation the actual outcomes could
differ from those estimates.

Management have made the following judgements in applying the
Group’s accounting policies:

Interest rate swaption and cash ﬂ ow hedge (note 12)
The Group measures the interest rate swaption contract and the
cash ﬂ ow hedge contract at fair value at each balance sheet date.
The fair value represents the net present value of the difference
between the projected cash ﬂ ows at the swap contract rate and the
relevant interest rate for the period from the balance sheet date to
expiry date of the contract. The calculation uses estimates of present
value and future interest rates.

Retirement beneﬁ t obligations (note 26)
The determination of the deﬁ ned beneﬁ t pension scheme obligation
is based on assumptions determined with independent actuarial
advice. The assumptions used include discount rate, inﬂ ation, pension
increases, salary increases, the expected return on scheme assets
and mortality assumptions.

Impairment of goodwill and intangible assets with indeﬁ nite lives
(note 10)
Goodwill and intangible assets with indeﬁ nite lives must be tested
for impairment each year under IAS 36 Impairment of assets.
Determining whether there is any impairment requires an estimation
of the value in use of the cash-generating units to which the goodwill
or intangible asset has been allocated.

Proﬁ t-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and proﬁ t-
sharing, based on a formula that takes into consideration the proﬁ t
attributable to the Company’s shareholders after certain adjustments.

Value in use calculations require estimating the future cash ﬂ ows
expected to arise from the cash-generating unit along with
a suitable discount rate in order to calculate present value.

The Group recognises a provision where contractually obliged or
where there is a past practice that has created a constructive obligation.

Provisions
A provision is recognised if, as the result of a past event, the Group
has a present or legal constructive obligation that can be estimated
reliably and it is probable that an outﬂ ow of economic beneﬁ ts will be
required to settle the obligation.

Share-based payment costs (note 28)
The Group makes estimations and judgements in the valuation
of share-based payments. The assumptions made at the date of
granting the options include the dividend yield and the expected
outcome of meeting performance criteria. Due to the size of the
balances involved any variations to the estimates will not have a
signiﬁ cant effect on the costs recognised in the ﬁ nancial statements.

Fair value estimation
The carrying values of trade payables and trade receivables less
impairment provisions are assumed to approximate their fair values.

Accounting Policies

Notes to the Accounts

1 Segment reporting

The management committee has been identiﬁ ed as the chief operating decision-maker. The management committee reviews the Group’s
internal reporting in order to assess performance and allocate resources. The management committee has determined the operating segments
based on these reports.

The management committee considers the business from a product perspective. This has led to the operating segments identiﬁ ed in the table
below. The performance of the operating segments is assessed by reference to their gross proﬁ t.

12 months ended 30 January 2010

Total revenue
Gross proﬁ t

12 months ended 31 January 2009

Total revenue
Gross proﬁ t

Carbonates
£000

Still drinks
and water
£000

155,706
88,867

45,168
13,931

Carbonates
£000

Still drinks
and water
£000

141,368
77,178

27,945
7,251

Other
£000

536
459

Other
£000

385
307

Total
£000

201,410
103,257

Total
£000

169,698
84,736

There are no intersegment sales. All revenue is from external customers.

Other segments represent income from water coolers for the Findlays 19 litre water business, rental income for can vendors and other
soft drink related items such as water cups.

The gross proﬁ t from the segment reporting is reconciled to the total proﬁ t before income tax as shown in the consolidated income statement.

All of the assets of the Group are managed by the management committee on a central basis rather than at a segment level. As a result no
reconciliation of segment assets to the total assets ﬁ gure on the statement of ﬁ nancial position has been disclosed for any of the periods presented.

Each of the following items are included in the reportable segments costs and no adjustments are required in arriving at the costs included
in the consolidated primary statements:

Capital expenditure
Depreciation and amortisation
Impairment of intangible assets
Impairment of plant and equipment
Impairment of assets classiﬁ ed as held for sale

2010
£000

5,358
7,885
–
1,031
464

2009
£000

10,639
7,358
284
–
–

Capital expenditure comprises cash additions to property, plant and equipment (note 11). The capital expenditure in the year to 31 January 2009
includes additions resulting from acquisitions through business combinations (note 19).

The operating segments include segments which have been aggregated in accordance with IFRS 8.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Geographic segments
The Group operates predominately in the U.K. with some worldwide sales. All of the operations of the Group are based in the U.K.

U.K.
Rest of the world

All of the assets of the Group are located in the U.K.

Major customers
No single customer accounts for 10% or more of the Group’s revenue in either of the periods presented.

2 Proﬁ t before tax

The following items have been included in arriving at proﬁ t before tax:

Depreciation of property, plant and equipment
Proﬁ t on disposal of property, plant and equipment
Impairment of assets classiﬁ ed as held for sale
Fair value movements of ﬁ nancial instruments
Foreign exchange losses recognised
Research and development costs
Impairment of inventories
Amortisation of intangible assets
Impairment of intangible assets
Cost of inventories recognised in cost of sales
Government grants released
Operating lease rentals payable – property
Operating lease rentals payable – motor vehicles
Trade receivable (impairment reversal)/impairment
Share-based payment costs

2010
£000

199,397
2,013
201,410

2009
£000

168,161
1,537
169,698

2010
£000

7,494
(35)
464
(6)
237
437
34
391
–
98,153
(68)
307
18
(91)
763

2009
£000

7,018
(13)
–
82
146
262
701
340
284
84,962
(28)
197
–
333
341

Included within Administration expenses is the auditor’s remuneration, including expenses for audit and non-audit services.

The cost includes services from the Company’s auditor and its associates:

Statutory audit services
Fees payable in respect of the audit of parent Company and consolidated accounts
Audit of the Company’s subsidiaries pursuant to legislation

Non-audit services
Other services pursuant to legislation
All other services
Tax services

Fees in respect of the Group’s pension plans
Audit

2010
£000

2009
£000

70
5

18
5
84
107

79
33

24
–
77
101

Notes to the Accounts

Notes to the Accounts continued

3 Employees and directors

Average monthly number of people employed by the Group (including executive directors)
Production and distribution
Administration

Staff costs for the Group for the year

Wages and salaries
Social security costs
Share-based payments
Pension costs – deﬁ ned contribution plans
Pension costs – deﬁ ned beneﬁ t plans

4 Net operating expenses before exceptional items

Distribution costs
Administration costs

2010

2009

758
189
947

2010
£000

27,153
2,558
763
801
1,378
32,653

2010
£000

48,706
24,791
73,497

748
147
895

2009
£000

26,783
2,478
341
650
604
30,856

2009
£000

39,967
21,715
61,682

A.G. BARR p.l.c.

Annual Report and Accounts 2010

5 Exceptional items

Impairment of assets classiﬁ ed as held for sale
Redundancy cost for Group reorganisation
Redundancy provision/(release) of provision for production site closure
Environmental provision for site closure
Impairment of plant related to production site closure

2009
£000

–
–
(130)
–
–
(130)

2010
£000

464
84
1,820
66
998
3,432

An impairment charge of £464,000 has been recognised in the year for the write down of the Atherton production site which is held as an asset
available for sale. The site has continued to be marketed for sale in the year to 30 January 2010 and the latest offers have indicated that the
market value of the site was less than the carrying value in the statement of ﬁ nancial position. As a result of this difference the carrying value
has been written down to the market value.

During the year to 30 January 2010 the Group incurred £84,000 in relation to redundancy costs for the reorganisation following the acquisition
of Groupe Rubicon Limited in the year to 31 January 2009.

During the year to 30 January 2010 the Group announced the future closure of its Mansﬁ eld production site. This has resulted in the recognition
of a provision of £1,820,000 (note 21) in respect of the anticipated redundancy costs relating to the closure. These costs are anticipated to be
incurred over the 18 months to 31 July 2011 when the site is expected to cease production. The exceptional credit of £130,000 included within
the exceptional items for the year to 31 January 2009 is the release of a restructuring provision (see note 21) that is no longer required in relation
to the Atherton site, currently classiﬁ ed as an asset available for sale.

A further £66,000 (note 21) of environmental obligations have been included in the exceptional costs for the year to 30 January 2010 relating
to work that must be completed before the Group can leave the site.

As part of the closure plans for the Mansﬁ eld site a review has been carried out of the plant and equipment held at the site. Whilst the site will
continue to manufacture in the coming year plant and equipment has been identiﬁ ed as having a net book value in excess of its recoverable
amount. This has resulted in an impairment charge being made for £998,000 to reduce the plant and equipment to its recoverable amount.

6 Finance income

Interest receivable
Net ﬁ nance income relating to deﬁ ned beneﬁ t plan

Finance costs

Interest payable
Net ﬁ nance charge relating to deﬁ ned beneﬁ t plan
Amortisation of loan arrangement fees

2010
£000

117
–
117

2010
£000

(1,550)
(371)
(74)
(1,995)

2009
£000

976
86
1,062

2009
£000

(1,006)
–
(31)
(1,037)

Notes to the Accounts

Notes to the Accounts continued

7 Taxation

Group

Current tax
Current tax on proﬁ ts for the year
Adjustments in respect of prior years
Total current tax expense

Deferred tax
Origination and reversal of
temporary differences (see note 23)
Adjustments in respect of prior years
Total deferred tax expense

Total tax expense

Before
exceptional
items
£000

2010

Exceptional
items
£000

7,238
83
7,321

606
(465)
141

7,462

(24)
–
(24)

(936)
–
(936)

(960)

Before
exceptional
items
£000

2009

Exceptional
items
£000

5,700
(587)
5,113

1,021
–
1,021

6,134

–
–
–

–

Total
£000

7,214
83
7,297

(330)
(465)
(795)

6,502

Total
£000

5,700
(587)
5,113

1,021
–
1,021

6,134

In addition to the current tax expense charged to proﬁ t a current tax credit of £nil (2009: £193,000) has been recognised directly in equity.
The credit in 2009 was in respect of share-based payments. A deferred tax credit of £1,322,000 (2009: charge of £63,000) has been recognised
in equity (note 23).

The tax on the Group’s proﬁ t before tax differs from the amount that would arise using the weighted average tax rate applicable to the proﬁ ts
of the consolidated Group as follows:

Proﬁ t before tax
Tax at 28%
Tax effects of:
Items that are not deductible in determining taxable proﬁ t
Deferred tax movement as a result of a change in tax rates
Net pension deduction
Share option permanent difference
Group relief
Interest rate hedge
Marginal relief
Current tax adjustment in respect of prior years
Deferred tax adjustment in respect of prior years
Other differences
Total current tax expense

The weighted average effective tax rate was 26.6% (2009: 26.4%).

2010
£000

24,450
6,846

168
–
–
(212)
–
–
–
83
(465)
82
6,502

2009
£000

23,209
6,499

561
64
(18)
(255)
(144)
29
(1)
(587)
–
(14)
6,134

A.G. BARR p.l.c.

Annual Report and Accounts 2010

8 Earnings per share

Basic earnings per share have been calculated by dividing the earnings attributable to equity holders of the parent by the weighted average
number of shares in issue during the year, excluding shares held by the employee share scheme trusts.

Proﬁ t attributable to equity holders of the Company (£000)
Weighted average number of ordinary shares in issue
Basic earnings per share (pence)

2010

Restated
2009

17,948
38,318,076
46.84

17,075
38,319,120
44.56

The weighted average number of ordinary shares in issue and the diluted weighted average number of ordinary shares in issue have been
restated for the year to 31 January 2009 following the share subdivision that took place during the year to 30 January 2010. This is in line with
the requirement of IAS 33 Earnings per share.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially
dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of
the Company’s ordinary shares during the year. The number of shares calculated as above is compared with the number of shares that would
have been issued assuming the exercise of the share options.

Proﬁ t attributable to equity holders of the Company (£000)

Weighted average number of ordinary shares in issue
Adjustment for share options
Diluted weighted average number of ordinary shares in issue
Diluted earnings per share (pence)

9 Dividends

Paid ﬁ nal dividend
Paid interim dividend

2010

Restated
2009

17,948

17,075

38,318,076
283,115
38,601,191
46.49

38,319,120
417,268
38,736,388
44.08

2010
per share

15.20p
6.25p
21.45p

Restated
2009
per share

14.00p
5.80p
19.80p

2010
£000

5,837
2,413
8,250

2009
£000

5,373
2,231
7,604

The dividend ﬁ gures per share for the year to 31 January 2009 have been restated to take into account the share subdivision that took place
during the year to 30 January 2010 (note 27). This share subdivision has had no impact on the total dividend paid by the Company.

The directors have proposed a ﬁ nal dividend in respect of the year ended 30 January 2010 of 16.85p per share amounting to a dividend
of £6,559,000. It will be paid on 4 June 2010 to shareholders who are on the Register of Members on 7 May 2010. This dividend is subject
to approval by shareholders at the annual general meeting and has not been included as a liability in these ﬁ nancial statements in line with
the requirements of IAS 10 Events after the Balance Sheet Date.

Notes to the Accounts

Notes to the Accounts continued

10 Intangible assets

Group

Cost
At 26 January 2008
Acquisitions recognised through business combinations
Adjustments to cost

Goodwill
£000

1,917
21,354
3

At 31 January 2009 and At 30 January 2010

23,274

50,276

Amortisation and impairment losses
At 26 January 2008
Amortisation for the year
Impairment recognised in the year

At 31 January 2009
Amortisation for the year

At 30 January 2010

Carrying amounts
At 30 January 2010

At 31 January 2009

Brands
£000

Customer
relationships
£000

Water
rights
£000

7,390
42,986
(100)

–
–
–

–
–

–

–
–
–

–
–

–

1,000
2,532
–

3,532

393
340
–

733
391

1,124

23,274

50,276

2,408

23,274

50,276

2,799

Total
£000

11,049
66,872
(97)

77,824

393
340
284

1,017
391

1,408

76,416

76,807

742
–
–

742

–
–
284

284
–

284

458

Customer relationships were intangible assets recognised on the acquisition of the Strathmore Water business and Groupe Rubicon Limited.
The amortisation charge represents the spreading of the cost over the expected period and have a further estimated life of two and nine
years respectively.

Company

Cost
At 26 January 2008
Adjustments to cost

At 31 January 2009 and At 30 January 2010

Amortisation and impairment losses
At 26 January 2008
Amortisation for the year
Impairment recognised in the year

At 31 January 2009
Amortisation for the year

At 30 January 2010

Carrying amounts
At 30 January 2010

At 31 January 2009

Goodwill
£000

Brands
£000

Customer
relationships
£000

Water
rights
£000

1,917
3

1,920

7,390
(100)

7,290

1,000
–

1,000

–
–
–

–
–

–

–
–
–

–
–

–

1,920

7,290

393
255
–

648
139

787

213

352

742
–

742

–
–
284

284
–

284

458

Total
£000

11,049
(97)

10,952

393
255
284

932
139

1,071

9,881

10,020

Customer relationships were intangible assets recognised on the acquisition of the Strathmore Water business. The amortisation charge
represents the spreading of the cost over the expected period and has a further estimated life of two years.

The amortisation costs for the year have been included in the administration costs for the two years presented.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

10 Intangible assets (continued)

Impairment tests for goodwill and brands
For impairment testing, goodwill and brands are allocated to the cash-generating unit (‘CGU’) representing the lowest level at which goodwill
is monitored for internal management purposes.

The aggregate carrying amounts of goodwill allocated to each CGU are:

At 30 January 2010

Rubicon operating unit
Strathmore operating unit
Findlays operating unit
Taut operating unit
Vitsmart operating unit

Total

At 31 January 2009

Rubicon operating unit
Strathmore operating unit
Findlays operating unit
Taut operating unit
Vitsmart operating unit

Total

Brands Water rights Customer lists
£000

£000

Goodwill
£000

21,036
1,902
–
318
18

42,986
7,000
–
–
290

–
–
458
–
–

458

23,274

50,276

2,408

76,416

Goodwill
£000

Brands
£000

Water rights Customer lists
£000

£000

Total
£000

66,217
9,115
458
318
308

Total
£000

66,469
9,254
458
318
308

2,195
213
–
–
–

2,447
352
–
–
–

21,036
1,902
–
318
18

42,986
7,000
–
–
290

23,274

50,276

–
–
458
–
–

458

2,799

76,807

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-tax cash ﬂ ow projections
based on ﬁ nancial budgets approved by management which cover a three year period. Cash ﬂ ows beyond the three years are extrapolated
using the growth rates stated below:

Key assumptions

Rubicon operating unit
Strathmore operating unit
Findlays operating unit
Taut operating unit

2010

Gross margin
%

Growth rate Discount rate Gross margin
%

2009

Growth rate Discount rate
%

40.46
32.10
55.00
35.00

2.25
–
(4.00)
2.25

8.66
8.66
8.66
8.66

38.18
30.01
46.90
33.33

2.25
–
(4.00)
2.25

8.63
8.63
8.63
8.63

The Rubicon operating unit can be further allocated across carbonates and still drinks when determining the CGU required for impairment testing.
No impairment was identiﬁ ed through this allocation.

The budgeted gross margin is based on past performance and management’s expectation of market development. The weighted average
growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax.

The discount rate reﬂ ects management’s estimate of pre-tax cost of capital. The estimated pre-tax cost of capital is a benchmark for the
Group provided by an independent third party with an additional risk premium of 2% added to reﬂ ect the risk relating to individual brands.

Advertising and promotional costs are included in the breakdown using latest annual budgets for the year to 29 January 2011 and projected
costs thereafter.

Sensitivity analysis was carried out on the above calculations to review possible levels of impairment after adjusting discount rates. At a discount
rate of 10% none of the CGUs were impaired.

The impairment of the water rights in the year to 31 January 2009 arose following declining volumes in the sales of Findlays water. The decline
was anticipated following the decision to change the focus for the Pitcox production site to the ﬁ lling of 19 litre water containers. No impairment
of any other assets relating to the Pitcox operation was required. No other class of asset other than the water rights was impaired.

Notes to the Accounts

Notes to the Accounts continued

11 Property, plant and equipment

Land and buildings

Freehold
£000

27,090
5,190
51
–
–

32,331

56
31
262
–

Long
leasehold
£000

Plant,
equipment
and vehicles
£000

Assets under
construction
£000

Total
£000

97,392
11,349
–
1,353
(2,706)

768
1,303
(1,710)
–
–

361

107,388

3,709
(464)
–
–

5,684
–
–
(1,866)

545
–
–
–
–

545

–
–
–
–

68,989
4,856
1,659
1,353
(2,706)

74,151

1,919
433
(262)
(1,866)

32,680

545

74,375

3,606

111,206

2,344
315
–

2,659
346
222
–
–

3,227

29,453

29,672

338
75
–

413
75
–
–
–

488

132

41,337
6,628
(2,510)

45,455
7,073
(222)
1,031
(1,748)

51,589

–
–
–

–
–
–
–
–

–

44,019
7,018
(2,510)

48,527
7,494
–
1,031
(1,748)

55,304

22,786

3,606

55,902

28,696

361

58,861

Group

Cost or deemed cost
At 26 January 2008
Additions
Transfer from assets under construction
Acquired through acquisition of business
Disposals

At 31 January 2009

Additions
Transfer from assets under construction
Transfer of assets between categories
Disposals

At 30 January 2010

Depreciation
At 26 January 2008
Amount charged for year
Disposals

At 31 January 2009
Amount charged for year
Transfer of assets between categories
Impairment of assets
Disposals

At 30 January 2010

Net book value
At 30 January 2010

At 31 January 2009

A.G. BARR p.l.c.

Annual Report and Accounts 2010

11 Property, plant and equipment (continued)

Land and buildings

Total
£000

95,346
10,932
–
(2,470)

Freehold
£000

27,053
5,190
51
–

32,294

28
13
262
–

Long
leasehold
£000

Plant,
equipment
and vehicles
£000

Assets under
construction
£000

394
–
–
–

394

–
–
–
–

67,131
4,439
1,659
(2,470)

768
1,303
(1,710)
–

70,759

361

103,808

1,217
451
(262)
(1,348)

3,701
(464)
–
–

4,946
–
–
(1,348)

32,597

394

70,817

3,598

107,406

2,340
314
–

2,654

343
222
–
–

223
69
–

292

69
–
–
–

40,032
6,314
(2,345)

44,001

6,519
(222)
1,031
(1,293)

3,219

361

50,036

–
–
–

–

–
–
–
–

–

42,595
6,697
(2,345)

46,947

6,931
–
1,031
(1,293)

53,616

29,378

29,640

102

20,781

3,598

53,790

26,758

361

56,861

Company

Cost or deemed cost
At 26 January 2008
Additions
Transfer from assets under construction
Disposals

At 31 January 2009

Additions
Transfer from assets under construction
Transfer of assets between categories
Disposals

At 30 January 2010

Depreciation
At 26 January 2008
Amount charged for year
Disposals

At 31 January 2009

Amount charged for year
Transfer of assets between categories
Impairment of assets
Disposals

At 30 January 2010

Net book value
At 30 January 2010

At 31 January 2009

At 30 January 2010 the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting
to £4,012,000 (2009: £143,000).

Included in the impairment of assets is a charge of £33,000 for equipment that had become obsolete. This has not been included in the exceptional
costs as the equipment does not form part of the equipment used at the Mansﬁ eld site.

Notes to the Accounts

Notes to the Accounts continued

12 Financial instruments

The ﬁ nancial instruments held by the Group and Company are categorised in the following tables:

Group
At 30 January 2010

Assets as per statement of ﬁ nancial position
Derivative ﬁ nancial assets
Trade and other receivables
Cash and cash equivalents
Total

Group
At 31 January 2009

Assets as per statement of ﬁ nancial position
Derivative ﬁ nancial assets
Trade and other receivables
Cash and cash equivalents
Total

Company
At 30 January 2010

Assets as per statement of ﬁ nancial position
Derivative ﬁ nancial assets
Trade and other receivables
Cash and cash equivalents
Total

Company
At 31 January 2009

Assets as per statement of ﬁ nancial position
Derivative ﬁ nancial assets
Trade and other receivables
Cash and cash equivalents
Total

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Assets at fair
Loans and value through
receivables proﬁ t and loss
£000

£000

–
30,157
10,926
41,083

27
–
–
27

Assets at fair
value through
Loans and
receivables proﬁ t and loss
£000

£000

–
27,139
6,680
33,819

33
–
–
33

Assets at fair
Loans and value through
receivables proﬁ t and loss
£000

£000

–
31,908
9,804
41,712

27
–
–
27

Assets at fair
value through
Loans and
receivables proﬁ t and loss
£000

£000

–
25,565
5,517
31,082

33
–
–
33

Total
£000

27
30,157
10,926
41,110

Total
£000

33
27,139
6,680
33,852

Total
£000

27
31,908
9,804
41,739

Total
£000

33
25,565
5,517
31,115

12 Financial instruments (continued)

Group
At 30 January 2010

Liabilities as per statement of ﬁ nancial position
Borrowings
Derivative ﬁ nancial liabilities
Trade and other payables
Total

Group
At 31 January 2009

Liabilities as per statement of ﬁ nancial position
Borrowings
Derivative ﬁ nancial liabilities
Trade and other payables
Total

Company
At 30 January 2010

Liabilities as per statement of ﬁ nancial position
Borrowings
Derivative ﬁ nancial liabilities
Trade and other payables
Total

Company
At 31 January 2009

Liabilities as per statement of ﬁ nancial position
Borrowings
Derivative ﬁ nancial liabilities
Trade and other payables
Total

Total
£000

33,000
1,024
28,914
62,938

Total
£000

38,000
1,477
28,249
67,726

Total
£000

33,000
1,024
39,644
73,668

Total
£000

38,000
1,477
29,903
69,380

Derivatives Other ﬁ nancial
liabilities at
used for
hedging amortised cost
£000

£000

–
1,024
–
1,024

33,000
–
28,914
61,914

Derivatives Other ﬁ nancial
used for
liabilities at
hedging amortised cost
£000

£000

–
1,477
–
1,477

38,000
–
28,249
66,249

Derivatives Other ﬁ nancial
used for
liabilities at
hedging amortised cost
£000

£000

–
1,024
–
1,024

33,000
–
39,644
72,644

Derivatives Other ﬁ nancial
used for
liabilities at
hedging amortised cost
£000

£000

–
1,477
–
1,477

38,000
–
29,903
67,903

The trade and other payables ﬁ gure presented excludes other taxes and social security costs as statutory liabilities do not fall under the deﬁ nition
of a ﬁ nancial instrument. Trade and other payables are detailed in note 20.

The hedging derivative is an interest rate swap and is accounted for under hedge accounting. The full fair value of a hedging derivative is classiﬁ ed
as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months. At 30 January 2010 and 31 January 2009
the ﬁ nancial instrument liability represented an interest rate swap relating to the outstanding borrowings at that date. The balance of the swap
was classiﬁ ed as a non-current asset in line with the expected maturity of the borrowings (see note 18).

No ineffectiveness from the interest rate swap was recognised in the income statement during the year.

The notional principal amounts of the outstanding interest rate swap contracts at 30 January 2010 were £25,830,000 (31 January 2009: £29,250,000).
The ﬁ xed interest rate was 4.57% and the ﬂ oating rate was LIBOR. Gains and losses recognised in the cash ﬂ ow hedge reserve on interest rate
swap contracts as of 30 January 2010 will be continuously released to the income statement until the repayment of the bank borrowing (see note 18).

Notes to the Accounts

Notes to the Accounts continued

12 Financial instruments (continued)

As the closing interest rate swap for both periods presented here is a liability there is no credit risk at the reporting date.

Cash and cash equivalents held by the Group have an original maturity of three months or less. The carrying amount of these assets
approximates to their fair values.

Fair value hierarchy
IFRS 7 requires all ﬁ nancial instruments carried at fair value to be analysed under the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data

All ﬁ nancial instruments carried at fair value are Level 2:

Derivative ﬁ nancial assets
Derivative ﬁ nancial liabilities

2010
£000

27
(1,024)

2009
£000

33
(1,477)

Fair values of ﬁ nancial assets and ﬁ nancial liabilities
The table below sets out the comparison between the carrying amounts and fair values of all of the Group’s ﬁ nancial instruments with the exception
of trade and other receivables and trade and other payables.

Financial assets

Current assets
Cash and cash equivalents
Swaptions
Total ﬁ nancial assets

Financial liabilities

Current liabilities
Borrowing

Non-current liabilities
Borrowings
Financial instruments
Total ﬁ nancial liabilities

Book value
2010
£000

Fair value
2010
£000

Book value
2009
£000

Fair value
2009
£000

10,926
27
10,953

6,680
33
6,713

Book value
2010
£000

Fair value
2010
£000

Book value
2009
£000

Fair value
2009
£000

8,000

5,000

25,000
1,024
34,024

24,281
1,024
33,305

33,000
1,477
39,477

33,012
1,477
39,489

The fair value of the current trade and other receivables and the current trade and other payables approximate their book value as none of the
balances are interest bearing.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

13 Financial assets at fair value through proﬁ t or loss

Group

Swaption

2010
£000

2009
£000

The swaption is an option to enter into an interest rate swap in two years. The swaption was purchased for £114,500 during the previous year
and has been valued at its market value at 30 January 2010 and 31 January 2009. The fair value of the swaption is taken to be its market value.

Changes in fair values of ﬁ nancial assets at fair value through proﬁ t or loss are included within administration expenses within the income statement.

14 Investment in subsidiary undertakings

Company

At start of year
Additions in year
At end of year

2010
£000

61,081
–
61,081

2009
£000

205
60,876
61,081

Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.

The principal subsidiaries are as follows:

Principal subsidiaries

Principal activity

Country of incorporation

Country of principal operations

Barr Leasing Limited
Findlays Limited
Rubicon Drinks Limited
Taut (U.K.) Limited

Central commercial activities
Natural mineral water bottler
Manufacture and distribution of soft drinks
Marketing of sports drinks

England
Scotland
England
England

U.K.
U.K.
U.K.
U.K.

A.G. BARR p.l.c. holds 100% of the equity and votes of the subsidiaries. All of the subsidiaries have the same year end as A.G. BARR p.l.c.
and have been included in the Group consolidation. The companies listed are those which materially affect the proﬁ t and assets of the Group.
A full list of the subsidiaries will be annexed to the next annual return of A.G. BARR p.l.c. to be ﬁ led with the Registrar of Companies.

15 Inventories

Returnable containers
Materials
Finished goods

Group

Company

2010
£000

717
4,565
10,759
16,041

2009
£000

688
4,037
9,803
14,528

2010
£000

685
1,841
9,284
11,810

2009
£000

642
845
8,620
10,107

At 30 January 2010 and 31 January 2009 there were no inventories included in the closing balance that were acquired as part of the business
combinations made in the year to that date. As such none of the acquired inventories are valued at sales value less costs to sell.

Notes to the Accounts

Notes to the Accounts continued

16 Trade and other receivables

Trade receivables
Less: provision for impairment of receivables
Trade receivables – net
Other receivables
Prepayments and accrued income
Amounts due by subsidiary companies

Group

Company

2010
£000

28,008
(687)
27,321
536
2,300
–
30,157

2009
£000

25,064
(778)
24,286
635
2,218
–
27,139

2010
£000

28,008
(687)
27,321
160
2,130
2,297
31,908

2009
£000

21,260
(633)
20,627
154
2,135
2,649
25,565

The fair values of the trade and other receivables are taken to be their book values less any provision for impairment as there are no interest
bearing debts. The amounts due by subsidiary companies are fully recoverable.

Based on past experience the Group believes that no impairment allowance is necessary in respect of trade receivables not past due.
98% (2009: 98%) of the closing trade receivables balance relates to customers that have a good track record with the Group.

The maximum exposure for both the Group and the Company to credit risk for trade receivables at the reporting date by type of customer was:

Major customers
Direct to store customers
Total

Group

Company

2010
£000

24,565
3,443
28,008

2009
£000

21,621
3,443
25,064

2010
£000

24,565
3,443
28,008

2009
£000

17,817
3,443
21,260

The Group’s and Company’s most signiﬁ cant customer, a U.K. major customer, accounts for £3,690,000 of the trade receivables carrying
amount at 30 January 2010 (2009: £3,070,000).

The ﬁ gures included in the following analysis for the rest of this note exclude the amounts due by subsidiary companies.

The ageing of the Group’s trade receivables and their related impairments at the reporting date for the Group was:

Group

Not past due
Past due 0 to 30 days
Past due 31 to 60 days
Past due 61+ days
Total

Gross
2010
£000

Impairment
2010
£000

Gross
2009
£000

Impairment
2009
£000

27,098
401
119
390
28,008

–
(178)
(119)
(390)
(687)

23,382
947
186
549
25,064

(66)
(118)
(45)
(549)
(778)

The ageing of the Company’s trade receivables and their related impairments at the reporting date for the Company was:

Company

Not past due
Past due 0 to 30 days
Past due 31 to 60 days
Past due 61+ days
Total

Gross
2010
£000

Impairment
2010
£000

Gross
2009
£000

Impairment
2009
£000

27,098
401
119
390
28,008

–
(178)
(119)
(390)
(687)

20,324
470
19
447
21,260

(66)
(118)
(10)
(439)
(633)

A.G. BARR p.l.c.

Annual Report and Accounts 2010

16 Trade and other receivables (continued)

The carrying amount of the Group and Company’s trade and other receivables are denominated in the following currencies:

Group and Company

U.K. Sterling
US Dollars
Euro

Group

Company

2010
£000

29,914
46
197
30,157

2009
£000

27,139
–
–
27,139

2010
£000

29,368
46
197
29,611

2009
£000

22,916
–
–
22,916

Movements in the Group and Company provisions for impairment of trade receivables were as follows:

At start of year
Net provision (utilised)/charged during the year
At end of year

Group

Company

2010
£000

778
(91)
687

2009
£000

445
333
778

2010
£000

633
54
687

2009
£000

445
188
633

The provision allowance in respect of trade receivables is used to record impairment losses unless the Group and Company are satisﬁ ed
that no recovery of the amount owing is possible. At that point the amounts are considered irrecoverable and are written off against the
trade receivable directly. Where trade receivables are past due an assessment is made of individual customers and the outstanding balance.
No provision is required in respect of amounts owed by subsidiary companies.

The creation and release of the trade receivables provision has been included within administration expenses in the income statement.

The other classes within trade and other receivables do not contain impaired assets.

The credit quality of the holder of the Cash at bank is AA(-) rated (2009: AA(-) rated).

17 Assets classiﬁ ed as held for sale

Opening land and buildings
Opening plant
Opening balance

Impairment of property during the year
Disposal of plant in year
Closing land and buildings

Group

Company

2010
£000

2,864
–
2,864

(464)
–
2,400

2009
£000

2,864
46
2,910

–
(46)
2,864

2010
£000

2,864
–
2,864

(464)
–
2,400

2009
£000

2,864
–
2,864

–
–
2,864

The Atherton production site was closed during the year to 26 January 2008. The land and buildings were classiﬁ ed as an asset held for sale.
The carrying value of the asset has been reduced to the current market value following a number of offers made to the Group during the year
to 30 January 2010 and on the basis of a formal independent valuation.

Despite the downturn in the property market, management are conﬁ dent based on indicators from interested parties that they will be able
to dispose of the property for proceeds in excess of the carrying value within 12 months of the year end.

There are no other assets or liabilities associated with the non-current assets held for sale other than a government grant of £59,000 held
in respect of the Atherton site (see note 22).

Notes to the Accounts

Notes to the Accounts continued

18 Borrowings

All of the Group’s borrowings are denominated in U.K. Sterling.

Group and Company

Current
Bank borrowings

Non-current
Bank borrowings
Total borrowings

2010
£000

2009
£000

8,000

5,000

25,000
33,000

33,000
38,000

A bank arrangement fee of £366,000 was incurred in arranging the borrowing facility. This is being amortised to the income statement
over the expected duration of the loan of ﬁ ve years. The amortisation charge is included in the ﬁ nance costs line in the income statement.

Non-current bank borrowings
Unamortised arrangement fee
Non-current bank borrowings disclosed in the statement of ﬁ nancial position

Bank borrowings are secured by the entire net assets of the Group.

The movements in the borrowings are analysed as follows:

Opening loan balance
Borrowings made
Repayments of borrowings
Closing loan balance

The carrying amounts and fair value of the borrowings are as follows:

Current
Non-current
Total borrowings

2010
£000

25,000
(261)
24,739

2010
£000

38,000
5,000
(10,000)
33,000

2009
£000

33,000
(335)
32,665

2009
£000

–
54,500
(16,500)
38,000

Carrying amount

Fair value

2010
£000

8,000
25,000
33,000

2009
£000

5,000
33,000
38,000

2010
£000

8,000
24,281
32,281

2009
£000

5,000
33,012
38,012

For the current borrowings the impact of discounting is not signiﬁ cant as the borrowings will be paid within 12 months of the year end date.
The carrying amount approximates their fair value.

The fair values of the non-current borrowings are based on cash ﬂ ows discounted using the current variable interest rate charged on the borrowings
of 1.17% and a discount rate of 3%.

The borrowings are scheduled to be repaid over the next three-and-a-half years under a payment schedule agreed with the lender. The amounts
due to be paid within one year are disclosed as current within the table above.

The maturity proﬁ le of the borrowings are as follows:

Less than one year
One to ﬁ ve years

A.G. BARR p.l.c.

Annual Report and Accounts 2010

2010
£000

8,000
25,000
33,000

2009
£000

5,000
33,000
38,000

19 Business combinations

Both Groupe Rubicon Limited and Taut International Limited combinations detailed below were made in the year to 31 January 2009.
There were no business combinations in the year to 30 January 2010.

(a) Groupe Rubicon Limited
On 29 August 2008 the Group acquired 100% of the share capital of Groupe Rubicon Limited, a manufacturer and distributor of branded
exotic juice drinks.

The acquisition had the following effect on the Group’s assets and liabilities at the acquisition date:

Rubicon brand
Customer relationships
Property, plant and equipment
Inventory
Trade debtors
Other debtors
Deferred tax asset/(liability)
Cash and cash equivalents
Trade creditors
Tax
Social security and other tax
Accrued expenses
Deferred government grants
Net assets acquired
Goodwill arising on acquisition
Total consideration, satisﬁ ed by cash

Acquiree’s
carrying amount
£000

Fair value
adjustment
£000

Fair value
£000

–
–
1,353
3,305
2,897
162
165
2,162
(1,060)
(635)
(357)
(1,043)
(100)
6,849

42,986
2,532
–
164
14
–
(12,745)
–
–
–
–
–
–
32,951

42,986
2,532
1,353
3,469
2,911
162
(12,580)
2,162
(1,060)
(635)
(357)
(1,043)
(100)
39,800
21,036
60,836

The total consideration for the acquisition of Rubicon included professional fees of £1,239,000. The above provisional values were included
in the Group ﬁ nancial statements for the year to 31 January 2009. There have been no fair value adjustments in the 12 months from the date
of acquisition and the above ﬁ gures are the ﬁ nal fair values for the acquisition.

The balance of £216,000 due to be refunded from the vendor of Groupe Rubicon Limited at 31 January 2009 following the ﬁ nalisation of the net
assets acquired was received in the year to 30 January 2010.

(b) Taut International Limited
On 28 January 2008 the Group acquired 100% of the share capital of Taut International Limited, a group of companies specialising in the marketing
of sports drinks. The consideration was £1. A further £40,000 was incurred on legal fees.

The acquisition had the following effect on the Group’s assets and liabilities at the acquisition date:

Property, plant and equipment
Inventory
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Net liabilities acquired
Goodwill arising on acquisition
Total consideration, satisﬁ ed by cash

Acquiree’s
carrying amount
£000

Fair value
adjustment
£000

Fair value
£000

17
64
97
20
(381)
(183)

(17)
(21)
(33)
–
(24)
(95)

–
43
64
20
(405)
(278)
318
40

Taut (U.K.) Limited is a trading subsidiary of Taut International Limited. Taut (U.K.) Limited formed part of the acquisition detailed above. It has
tax losses of approximately £4,457,000. Under IFRS 3 a deferred tax asset should be recognised if A.G. BARR p.l.c. can use the unrelieved tax
losses. At the date of approval of these statements A.G. BARR p.l.c. was unable to conclude with reasonable certainty that the tax losses can be
utilised and therefore the Group has not recognised a deferred tax asset at the balance sheet date in respect of these losses. The unrecognised
deferred tax asset would be approximately £1,248,000.

Notes to the Accounts

Notes to the Accounts continued

20 Trade and other payables

Trade payables
Other taxes and social security costs
Accruals
Amounts due to subsidiary companies

Group

Company

2010
£000

4,644
2,922
24,270
–
31,836

2009
£000

7,848
2,729
20,401
–
30,978

2010
£000

4,618
2,921
24,121
10,905
42,565

2009
£000

7,545
2,529
19,188
3,170
32,432

The table below analyses the Group’s ﬁ nancial liabilities into the relevant maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash ﬂ ows.

At 30 January 2010

Borrowings
Trade payables
Accruals
Financial instruments

At 31 January 2009

Borrowings
Trade payables
Accruals
Financial instruments

Less than
one year
£000

Greater than
one year
£000

8,369
4,644
24,270
1,007
38,290

25,439
–
–
503
25,942

Less than
one year
£000

Greater than
one year
£000

5,112
7,848
20,401
675
34,036

35,291
–
–
1,013
36,304

Total
£000

33,808
4,644
24,270
1,510
64,232

Total
£000

40,403
7,848
20,401
1,688
70,340

As trade and other payables are non-interest bearing fair value is taken to be book value. Disclosures relating to borrowings are included
in note 18.

21 Provisions

Opening provision
Provision created during the year
Provision utilised during the year
Provision released during the year
Closing provision

Group

Company

2010
£000

80
1,886
–
(4)
1,962

2009
£000

284
–
(74)
(130)
80

2010
£000

80
1,886
–
(4)
1,962

2009
£000

284
–
(74)
(130)
80

The opening provision relates to the remaining expected restructuring costs, including consulting fees and employee termination costs following
the announcement made in the year to 27 January 2007 to close the Atherton factory. The remaining provision is expected to be utilised when
the site is sold.

The provision created in the year to 30 January 2010 is in respect of the closure of the Mansﬁ eld production site. The provision is for the expected
restructuring costs, including consulting fees, employee termination costs and environmental costs. The employee termination costs are based
on a detailed plan agreed between management and employee representatives. The closure and restructuring are expected to be complete by
31 July 2011. The closure date has not yet been ﬁ xed and production is expected to continue at Mansﬁ eld through the year to 29 January 2011.
The whole provision has been disclosed as a current liability as the majority of the provision is expected to be utilised in the year to 29 January 2011.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

22 Deferred income

At beginning of year
Acquired through business combination (note 19)
Credit to income statement
At end of year

Group

Company

2010
£000

144
–
(68)
76

2009
£000

72
100
(28)
144

2010
£000

72
–
–
72

2009
£000

72
–
–
72

The deferred income balance acquired in the year to 31 January 2009 is a government grant acquired as part of the Groupe Rubicon
acquisition (see note 19). All of the grants are being released over the expected lifetime of the assets that they were used to purchase.

Included in the closing balance is £59,000 (2009: £59,000) of a government grant received in respect of the Atherton production site.
Until the Atherton site was classiﬁ ed as an asset classiﬁ ed as held for sale the grant was amortised to the income statement over the
expected life of the site. The amortisation ceased at the date that the site was classiﬁ ed as held for sale as the site was no longer being
depreciated. The balance will be released to the income statement when the site is sold. The grant is not repayable to its issuer.

23 Deferred tax assets and liabilities

Group

At 26 January 2008
Charge to the income statement (note 7)
Credit/(charge) to equity
Deferred tax liability recognised on acquisition

At 31 January 2009

(Charge)/credit to the income statement (note 7)
Credit to equity

At 30 January 2010

Retirement
beneﬁ t obligations
£000

Share-based
payments
£000

Total deferred Accelerated tax
depreciation
£000

tax asset
£000

Total deferred
tax liability
£000

Net deferred
tax liability
£000

2,242
(863)
17
–

1,396

(737)
979

1,638

386
(50)
(80)
–

256

141
343

740

2,628
(913)
(63)
–

(5,021)
(108)
–
(12,580)

(2,393)
(1,021)
(63)
(12,580)

1,652

(17,709)

(16,057)

(596)
1,322

1,391
–

795
1,322

2,378

(16,318)

(13,940)

Company

At 26 January 2008
Charge to the income statement
Credit/(charge) to equity

At 31 January 2009

(Charge)/credit to the income statement
Credit to equity

At 30 January 2010

Retirement
beneﬁ t obligations
£000

Share-based
payments
£000

Total deferred Accelerated tax
depreciation
£000

tax asset
£000

Total deferred
tax liability
£000

Net deferred
tax liability
£000

2,242
(863)
17

1,396

(737)
979

1,638

386
(50)
(80)

256

141
343

740

2,628
(913)
(63)

(5,016)
(205)
–

(2,388)
(1,118)
(63)

1,652

(5,221)

(3,569)

(596)
1,322

1,417
–

821
1,322

2,378

(3,804)

(1,426)

No deferred tax asset is recognised in the statement of ﬁ nancial position for unused capital losses of £1,895,000 (2009: £1,908,000).

A further deferred tax asset of £1,248,000 (2009: £1,248,000) has not been recognised in respect of acquired tax losses in Taut (U.K.) Limited,
a subsidiary of Taut International Limited (see note 19).

Notes to the Accounts

Notes to the Accounts continued

24 Lease commitments

The total future minimum lease payments under non-cancellable operating leases are as follows for the Group and Company:

No later than one year
More than one year but not more than ﬁ ve years
Due beyond ﬁ ve years
Total lease commitments

2010
£000

599
1,449
757
2,805

2009
£000

343
197
–
540

During the year the Company entered into an operating lease for its Company car ﬂ eet. This has resulted in a decrease in capital expenditure
during the year and an increase in the lease commitments.

25 Financial risk management

Financial risk factors
The Group’s activities expose it to a variety of ﬁ nancial risks: market risk (including foreign exchange risk, cash ﬂ ow interest rate risk and price
risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of ﬁ nancial markets and
seeks to minimise potential adverse effects on the Group’s ﬁ nancial performance. The Group uses derivative ﬁ nancial instruments to hedge
certain risk exposures.

Risk management is carried out by the ﬁ nance department under policies approved by the board of directors. The Group ﬁ nance department
identiﬁ es, evaluates and manages ﬁ nancial risks in close co-operation with the Group’s operating units. The board provides guidance on
overall risk management including foreign exchange risk, interest rate risk, credit risk, use of derivative ﬁ nancial instruments and investment
of excess liquidity.

In addition treasury matters are dealt with by the Treasury Committee.

Market risk
Foreign exchange risk
The Group operates internationally. The Group primarily buys and sells in U.K. Sterling but does have some purchases and sales denominated
in US Dollars and Euros. For the year ended 30 January 2010 if Sterling had weakened/strengthened by 10% against the US dollar or Euro, with all
other variables held constant, there would have been a negligible effect on post tax proﬁ t (31 January 2009: negligible impact on post tax proﬁ t).

The Group periodically enters into forward option contracts to purchase Euros for known capital purchases where the value and volume
of the purchase is known.

Price risk
The Group is not exposed to equity securities price risk because no such investments are held by the Group. The Group is not exposed
to commodity price risk.

Cash ﬂ ow and fair value interest rate risk
As the Group has no signiﬁ cant interest-bearing assets, the Group’s income and operating cash ﬂ ows are substantially independent of changes
in market interest rates.

The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash ﬂ ow interest
rate risk. The Group manages its cash ﬂ ow interest rate risk by covering a signiﬁ cant proportion of its exposure using ﬂ oating-to-ﬁ xed interest
rate swaps. Such interest rate swaps have the economic effect of converting borrowings from ﬂ oating rates to ﬁ xed rates.

Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and ﬁ nancial institutions,
as well as credit exposures to major and direct to store customers, including outstanding receivables and committed transactions.

For banks and ﬁ nancial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. If major customers are
independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control processes assess the credit quality of the
customer, taking into account its ﬁ nancial position, past experience and other factors. Individual risk limits are set based on internal or external
ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to direct to store customers are
settled in cash or through invoicing.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Liquidity risk
Prudent liquidity risk management implies maintaining sufﬁ cient cash and marketable securities, the availability of funding through an adequate
amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses,
the Group maintains ﬂ exibility in funding by maintaining sufﬁ cient cash reserves and the availability of borrowing facilities.

Management monitors rolling forecasts of the Group’s liquidity reserve (which comprises undrawn borrowing facility and cash and cash
equivalents) on the basis of expected cash ﬂ ows. This is carried out at a Group level and involves projecting cash ﬂ ows for capital expenditure
and considering the level of liquid assets necessary to meet these.

Capital risk management
The Group deﬁ nes ‘capital’ as being net debt plus equity.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and maintain an appropriate
capital structure to balance the needs of the Group to grow, whilst operating with sufﬁ cient headroom within its bank covenants.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital
structure, the Group has a number of options available to it including modifying dividend payments to shareholders, returning capital to shareholders
or issuing new shares. In this way, the Group balances returns to shareholders between long-term growth and current returns whilst maintaining
capital discipline in relation to investing activities and taking any necessary action on costs to respond to the current environment.

The Group monitors capital on the basis of the net debt/EBITDA ratio. Net debt is calculated as being the net of cash and cash equivalents,
interest bearing loans and borrowings. The net debt position is discussed in the Financial Review on pages 14 to 20. The net debt/EBITDA ratio
enables the Group to plan its capital requirements in the medium term. The Group uses this measure to provide useful information to ﬁ nancial
institutions and investors. The Group believes that the current net debt/EBITDA ratio provides an efﬁ cient capital structure and an acceptable
level of ﬁ nancial ﬂ exibility.

For the year ended 30 January 2010 the net debt/EBITDA ratio was 0.6 times (2009: 1.0 times).

The Group monitors capital efﬁ ciency on the basis of the return on capital employed ratio (‘ROCE’).

26 Retirement beneﬁ t obligations

During the year the Company operated three pension schemes. The two main schemes are the A.G. BARR p.l.c. (2005) Deﬁ ned Contribution
Scheme and the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme. The latter is a deﬁ ned beneﬁ t scheme based on ﬁ nal salary
which also includes a deﬁ ned contribution section for the pension provision to new executive entrants.

The Company also operated a Group Personal Pension scheme for a limited number of Rubicon employees.

The assets of the schemes are held separately from those of the Company and are invested in managed funds. Full valuations of these schemes
were conducted as at 1 April 2008 using the attained age method.

The total assets of the schemes at valuation were £59,963,000.

The assumptions which have the most signiﬁ cant effect on the results of the valuations are those relating to the discount rate, rate of inﬂ ation,
real salary growth (above inﬂ ation) and life expectancy. For the purposes of the 1 April 2008 valuation it was assumed that the investment return
would be 1.85% per annum higher than the growth in pensionable pay. In the period after retirement it was assumed that the investment return
would be 0.6% per annum higher than the increase in pensions.

The deﬁ cit as at 1 April 2008 determined using the above assumptions was £10,300,000.

The valuation used for the deﬁ ned beneﬁ t scheme has been based on market conditions as at the Company year end. The full actuarial valuation
carried out at 1 April 2008 was updated to 30 January 2010 by a qualiﬁ ed independent actuary.

Notes to the Accounts

Notes to the Accounts continued

26 Retirement beneﬁ t obligations (continued)

Deﬁ ned beneﬁ t scheme
The Group operates a funded deﬁ ned beneﬁ t scheme for qualifying employees. Under the scheme, the employees are entitled to retirement
beneﬁ ts based on ﬁ nal pensionable pay. No other post-retirement beneﬁ ts are provided.

The amounts recognised in the statement of ﬁ nancial position are as follows:

Group and Company

Present value of funded obligations
Fair value of scheme assets
Liability recognised in the statement of ﬁ nancial position

The amounts recognised in the income statement are as follows:

Interest on obligation
Expected return on scheme’s assets
Net ﬁ nance expense/(income) relating to deﬁ ned beneﬁ t scheme (note 6)
Current service cost
Total cost recognised in the income statement

The current service charge has been included within administration costs in the income statement.

Changes in the present value of the deﬁ ned beneﬁ t obligation are as follows:

Opening deﬁ ned beneﬁ t obligation
Service cost
Interest cost
Actuarial losses/(gains)
Members’ contributions
Beneﬁ ts paid
Premiums paid
Closing deﬁ ned beneﬁ t obligation

2010
£000

74,217
(68,362)
5,855

2010
£000

3,995
(3,624)
371
1,007
1,378

2010
£000

62,102
1,007
3,995
9,388
167
(2,328)

74,217

(114)

In the year to 31 January 2009 the premiums paid were impacted by a fee paid by A.G. BARR p.l.c. on behalf of the scheme.

Changes in the fair value of the scheme’s assets are as follows:

Opening fair value of scheme assets
Expected return
Actuarial gains/(losses)
Employer’s contributions
Members’ contributions
Beneﬁ ts paid
Premiums paid
Closing deﬁ ned beneﬁ t obligation

2010
£000

57,113
3,624
5,890
4,010
167
(2,328)
(114)
68,362

2009
£000

62,102
(57,113)
4,989

2009
£000

3,855
(3,941)
(86)
690
604

2009
£000

65,970
690
3,855
(6,454)
551
(2,462)
(48)
62,102

2009
£000

57,961
3,941
(6,516)
3,686
551
(2,462)
(48)
57,113

In April 2009 salary sacriﬁ ce was introduced. Members who joined this arrangement no longer pay contributions to the scheme.
This has resulted in an increase in employer’s contributions and a decrease in members’ contributions in the year to 30 January 2010.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

2009
£000

(8,009)
(604)
3,686
(62)
(4,989)

2009
£000

2,501
(62)
2,439

2009
£000

2010
£000

(4,989)
(1,378)
4,010
(3,498)
(5,855)

2010
£000

2,439
(3,498)
(1,059)

2010
£000

26 Retirement beneﬁ t obligations (continued)

The analysis of the movement in the statement of ﬁ nancial position is as follows:

Opening net liability
Total expense recognised in the income statement
Employer’s contributions
Net actuarial losses recognised in the year
Closing net liability

Cumulative actuarial gains/(losses) are as follows:

Cumulative amount at start of year
Actuarial losses recognised in the year
Cumulative amount at end of year

Actual return on scheme assets

Principal assumptions
Financial assumptions

Discount rate
Expected return on scheme assets
Future salary increases
Inﬂ ation assumption

2010
£000

5.70%
6.25%
4.75%
3.50%

2009
£000

6.50%
6.70%
4.75%
3.50%

2008
£000

5.90%
6.70%
4.65%
3.40%

9,514

(2,575)

2007
£000

5.10%
5.80%
4.15%
2.90%

2006
£000

4.90%
6.50%
4.00%
2.75%

To develop the expected long-term rate of return on assets assumptions, the Company considered the current level of expected returns on
risk free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which
the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then
weighted based on the actual asset allocation and reduced to reﬂ ect estimated investment management expenses, to develop the expected
long-term rate of return on assets assumptions for the portfolio. This resulted in the selection of an assumption of 6.23% for the year ending
29 January 2011 (6.25% for the year ending 30 January 2010).

Notes to the Accounts

Notes to the Accounts continued

26 Retirement beneﬁ t obligations (continued)

Mortality assumptions
The mortality tables adopted in ﬁ nalising the fair value of the liabilities is PA92 (Year of birth) mc + 2 years.

The fair value at the year end dates is analysed as follows:

Equities
Bonds
Cash
Total market value of scheme assets

The history of the scheme is as follows:

Deﬁ ned beneﬁ t obligation
Scheme assets
Deﬁ cit

2010
£000

42,521
21,739
4,102
68,362

2010
£000

(74,217)
68,362
(5,855)

2009
£000

32,783
18,333
5,997
57,113

2009
£000

(62,102)
57,113
(4,989)

2008
£000

38,834
13,331
5,796
57,961

2008
£000

(65,970)
57,961
(8,009)

2007
£000

34,578
13,412
4,401
52,391

2007
£000

(68,475)
52,391
(16,084)

2006
£000

27,605
13,923
6,481
48,009

2006
£000

(64,257)
48,009
(16,248)

Sensitivity review
The sensitivity of the overall pension liability to changes in the weighed principle assumptions is:

Change in assumption

Impact on overall liabilities

Discount rate
Rate of inﬂ ation
Real salary growth (above inﬂ ation)
Life expectancy

Increase/decrease by 0.25%
Increase/decrease by 0.25%
Increase/decrease by 0.25%
Increase/decrease by 1 year

Decrease/increase liabilities by £3.1m
Increase/decrease liabilities by £1.7m
Increase/decrease liabilities by £0.9m
Increase/decrease liabilities by £1.9m

The Group expects to pay £4.1m of contributions to the deﬁ ned beneﬁ t scheme in the year to 29 January 2011, being £1.4m of future service
contributions and £2.7m of deﬁ cit recovery contributions.

The pension costs for the deﬁ ned contribution schemes are as follows:

Deﬁ ned contribution costs

2010
£000

801

2009
£000

650

A.G. BARR p.l.c.

Annual Report and Accounts 2010

27 Share capital

Group and Company

2010

2009

Authorised ordinary shares of 12.5p (2009: 25p) each
Issued and fully paid

–
38,922,926

–
4,865,366

24,000,000
19,461,463

6,000,000
4,865,366

The Company has one class of ordinary shares which carry no right to ﬁ xed income.

On 18 September 2009 a general meeting passed a resolution to subdivide the Company’s issued and to be issued share capital. Each ordinary
share of 25 pence was subdivided into two ordinary shares of 12.5p each. The subdivision doubled the number of ordinary shares in issue and the
board believes that the subdivision will improve liquidity and marketability of the ordinary shares.

At the annual general meeting held on 26 May 2009, the shareholders passed a resolution amending the Company’s Articles of Association
with effect from 1 October 2009. From this date onwards, the Company was no longer required to have an authorised share capital, in accordance
with the Companies Act 2006. As a result, the 2010 authorised ordinary shares ﬁ gure is nil.

During the year to 30 January 2010 the Company’s employee beneﬁ t trusts purchased 199,939 (2009: 124,576) shares. The total amount paid
to acquire the shares has been deducted from shareholders’ equity and included within retained earnings. At 30 January 2010 the shares held
by the Company’s employee beneﬁ t trusts represented 607,047 (2009: 296,229) shares at a purchased cost of £3,885,450 (2009: £3,257,607).

The number of shares purchased in the year to 31 January 2009 and held at that date have been restated to reﬂ ect the share subdivision that
took place in the year to 30 January 2010. The restatement reﬂ ects the position as if the share subdivision had taken place on 27 January 2008.

28 Share-based payments

As disclosed in the Directors’ Remuneration Report the Group runs a number of share award plans and share option plans:

· Savings Related Share Option Scheme which is open to all employees
· AESOP awards that are available to all employees
· LTIP options which are granted to executive directors

The share subdivision that was approved on 18 September 2009 resulted in doubling the number of options outstanding at that date and
halving the fair value of those options. The net result of these two changes had no impact on the charge recognised in the income statement
or the share-based payment balances included in the statement of ﬁ nancial position.

Savings Related Share Option Scheme (‘SAYE’)
All SAYEs outstanding at 30 January 2010 and 31 January 2009 have no performance criteria attached other than the requirement for the
employee to remain in the employment of the Company and to continue contributing to the plan. Options granted under the SAYE must
be exercised within six months of the relevant award vesting date.

The SAYE is open to all qualifying employees in employment at the date of inception of the scheme. Options are normally exercisable
after ﬁ ve years from the date of grant. The price at which options are offered is not less than 80% of the average of the middle-market price
of the ﬁ ve dealing days immediately preceding the date of invitation.

Notes to the Accounts

Notes to the Accounts continued

28 Share-based payments (continued)

The movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

2010

Average
exercise price

At start of the year*
Forfeited
Exercised
At end of the year

Options

613,762
(10,380)
(5,416)
597,966

2009

Restated
average
exercise price
in pence
per share

in pence
per share

Restated
options

438p
471p
399p
438p

686,296
(50,984)
(21,550)
613,762

436p
409p
328p
438p

* Following the share subdivision (see note 27) that occurred during the year the opening number of options has been doubled. The ﬁ gures for
the opening, forfeited and exercised options represent the share option movements had the share subdivision taken place on 27 January 2008.
This disclosure has been made to ease the understanding of the movements in the options at the year end.

None of the options listed above were exercisable at the respective year end dates. The outstanding options at the year end had exercise
prices of £3.88 and £4.88 (2009: £3.88 and £4.88).

The weighted average share price on the dates that options were exercised in the year to 30 January 2010 was £7.21.

The weighted average remaining contractual life of the outstanding share options at the year end is 2 years (2009: 3 years).

LTIP
During the year an award of shares was made to the executive directors as disclosed in the Directors’ Remuneration Report. The weighted
average fair value of the share awards made during the period was determined using the Black-Scholes valuation model. The signiﬁ cant inputs
to the model were as follows:

Date of grant

Number of instruments granted
Share price at date of grant
Contractual life in years
Dividend yield
Expected outcome of meeting performance criteria (at grant date)
Fair value determined at grant date

05 October 2009

107,118
861p
3
3.25%
70%
781p

AESOP
As described in the Directors’ Remuneration Report there are two elements to the AESOP.

The partnership share element provides that for every three shares that a participant purchases in A.G. BARR p.l.c., up to a maximum
contribution of £125 per month, the Company will purchase one matching share. The matching shares purchased are held in trust in the
name of the individual. There are various rules as to the period of time that the shares must be held in trust but after ﬁ ve years the shares
can be released tax free to the participant.

The second element of free shares allows participants to receive shares to the value of a common percentage of their earnings, related to
the performance of the Group. The maximum value of the annual award is £3,000 and the shares awarded are held in trust for ﬁ ve years.

29 Subsequent events
As disclosed in note 9 the directors propose that a ﬁ nal dividend of 16.85p per share will be paid to shareholders on 4 June 2010.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

30 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:

Rubicon Drinks Limited
Taut (U.K.) Limited
Findlays Limited
Barr Leasing Limited

Sales and
goods of services

Purchase of
goods and services

2010
£000

4,503
20
–
–

2009
£000

695
356
–
–

2010
£000

2,518
–
242
215

2009
£000

2,518
–
242
215

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 subsidiary companies (note 16)
and Amounts due to subsidiary companies (note 20) are balances due by dormant subsidiary companies.

Rubicon Drinks Limited
Taut (U.K.) Limited
Findlays Limited
Barr Leasing Limited

Amounts owed
by related parties

Amounts due
to related parties

2010
£000

–
1,090
–
285

2009
£000

926
668
–
–

2010
£000

8,122
–
1,282
–

2009
£000

1,800
–
965
296

Included in the balance due to Rubicon Drinks Limited is a loan of £2,420,000 (2009: £1,800,000). The loan was made during the year
to 31 January 2009. The interest charged on the loan is 1.5% above the Bank of England base rate.

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:

Salaries and short-term beneﬁ ts
Pension and other costs
Share-based payments

2010
£000

1,800
213
24
2,037

2009
£000

2,095
278
955
3,328

Retirement beneﬁ t plans
The Group’s retirement beneﬁ t plans are administered by an independent third party service provider. During the year the service provider charged
the Group £381,829 (2009: £505,249) for administration services in respect of the retirement beneﬁ t plans. At the year end £nil (2009: £nil) was
outstanding to the service provider on behalf of the retirement beneﬁ t plans.

31 Going concern

The directors are conﬁ dent that it is appropriate for the going concern basis to be adopted in preparing the ﬁ nancial statements. The statement
of ﬁ nancial position shows net assets of £100,509,000 and the Company has sufﬁ cient reserves to continue making dividend payments.
The liquidity and cash generation for the Group has continued to be very strong with the Group’s net debt position decreasing from £31,320,000
at 31 January 2009 to £22,074,000 at 30 January 2010.

Notes to the Accounts

Review of Trading Results

2010
£000

2009
£000

2008
£000

2007
£000

2006
£000

Revenue

201,410

169,698

148,377

141,876

129,760

Operating proﬁ t before exceptional items

29,760

23,054

20,389

18,334

16,940

Exceptional items

(3,432)

130

(468)

(2,761)

(533)

Operating proﬁ t after exceptional items

26,328

23,184

19,921

15,573

16,407

Interest receivable
Interest payable
Interest

Proﬁ t before tax

Tax on proﬁ t

Proﬁ t after tax

117
(1,995)
(1,878)

1,062
(1,037)
25

924
(12)
912

1,158
(377)
781

1,557
(583)
974

24,450

23,209

20,833

16,354

17,381

(6,502)

(6,134)

(3,995)

(3,163)

(5,128)

17,948

17,075

16,838

13,191

12,253

Earnings per share on issued share capital

Dividends recognised as an appropriation in the year

46.11

21.45

43.87

19.80

43.26

33.89

17.88

16.13

31.48

19.63

The earnings per share ﬁ gures for 2006 to 2009 have been restated to allow for the effect of the share subdivision that took place in the year
to 30 January 2010.

A.G. BARR p.l.c.

Annual Report and Accounts 2010

Review of Trading Results

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A.G. BARR p.l.c.
Westﬁ eld House
4 Mollins Road
Cumbernauld
G68 9HD

01236 852400
www.agbarr.co.uk

Registered Ofﬁ ce
Westﬁ eld House
4 Mollins Road
Cumbernauld
G68 9HD

Secretary
Julie A. Barr, M.A. (Hons.)
L.L.B. (Dip.), M.B.A.

Auditors
KPMG Audit plc
191 West George Street
Glasgow
G2 2LJ

Registrars
Equiniti Ltd
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

Registered Number
SC005653