A.G. BARR Annual Report 2016

FY2016 Annual Report · A.G. BARR

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STRATEGIC REPORT
I am pleased to present A.G. Barr p.l.c.’s
Annual Report for the year ended
30 January 2016. The report provides
an overview of our business model and
a comprehensive review of our strategy,
its execution, our financial performance
and information on how we govern
our business.

We have delivered a creditable financial
performance over the past 12 months
and, through continued investment in
our strong and flexible business model,
I believe we are well placed to continue
to deliver consistent long-term
shareholder value.

ROGER WHITE
CHIEF EXECUTIVE

STRATEGIC REPORT
Performance at a glance

02-45
02

Chairman’s introduction

Business model

Chief Executive’s review

Strategy

Strategy in action

Key performance indicators

Financial review

Risk management

CORPORATE
GOVERNANCE
Board of Directors

Directors’ report

Corporate governance report

Audit committee report

Directors’ remuneration report

Directors’ statement

46-85
46

86-142

ACCOUNTS
Independent auditor’s
report to the members
of A.G. Barr p.l.c. only

Consolidated income statement

Statement of
comprehensive income

Statement of changes in equity

Statements of financial position

Cash flow statements

Notes to the accounts

Review of trading results

Notice of annual
general meeting

134

135

WE ARE A GROWTH
DRIVEN, BRANDED
CONSUMER GOODS
BUSINESS, DELIVERING
LONG-TERM SUSTAINABLE
VALUE. WE BUILD GREAT
TASTING BRANDS THAT
PEOPLE LOVE, OFFERING
THEM CHOICE AND
ENJOYMENT.

PERFORMANCE AT A GLANCE

STRONG FROM
THE INSIDE OUT

OVER THE COURSE OF THE LAST 12 MONTHS THE BUSINESS HAS
DELIVERED SUBSTANTIAL CHANGE DESIGNED TO SUPPORT THE
LONG-TERM DELIVERY OF SHAREHOLDER VALUE. WE DELIVERED
A ROBUST FINANCIAL PERFORMANCE ACROSS THE GROUP
DESPITE CHALLENGING CONSUMER MARKET CONDITIONS AND
THE SCALE AND COMPLEXITY OF OUR CHANGE ACTIVITY.

FINANCIAL HIGHLIGHTS
See pages 34 and 35, 106 and 125 for the definitions of these measures.

REVENUE

£258.6m

-0.9%

PROFIT BEFORE TAX

£41.3m

+7%

EBITDA MARGIN

19.5%

+3.7%

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTOUR BUSINESS
Established over 140 years ago in Scotland, we are a
FTSE 250 business operating across the UK and with
a growing international presence.

Enhancing our portfolio, we also operate long-term
successful partnerships, complementing our own range
of products with global brands ROCKSTAR and
SNAPPLE in the UK and beyond.

At our core, we are a successful branded soft drinks
business, building a diverse and differentiated portfolio
of great tasting brands that people love.

We make it our business to understand what our
consumers want.

Whether it’s our iconic IRN-BRU, launched in 1901 and
still going strong today, our market leading RUBICON
exotic fruit juice drinks, or our pure, clear Scottish spring
water STRATHMORE, our brands offer people a choice
of great tasting products and bring exciting innovation
to the market.

But we’re not just about soft drinks – with the addition
of FUNKIN we have moved into the cocktail mixer
segment, broadening and strengthening our portfolio
with a unique and exciting market leading brand in
a growing market.

Employing almost 1,000 people across 10 UK locations,
we are proud to be a sustainable business that listens
to our consumers, builds lasting customer relationships,
takes care of our employees, gives something back
to our communities and works to minimise our
environmental impact.

NET DEBT

£11.3m

REPORTED EARNINGS PER SHARE

FULL YEAR DIVIDEND PER SHARE

29.63p

+14%

13.33p

+10%

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CHAIRMAN’S INTRODUCTION

CHANGE FOR
A STRONGER
FUTURE

Over the course of the last 12 months the business has
delivered substantial change designed to support the
long-term delivery of shareholder value. We delivered
a robust financial performance across the Group despite
challenging consumer market conditions and the scale
and complexity of our change activity.

Whilst we have continued to invest in the long-term
health of the business, we have also maintained strong
capital disciplines. We exit the year with a strong balance
sheet, providing us with the flexibility to exploit growth
opportunities as they arise and to maintain our
progressive dividend policy.

Overall in the period we maintained our market share
and, importantly, we have continued to invest in
developing our brands for the long-term.

During the year we made further progress in the
development of our portfolio. I am pleased to report
that the Funkin business acquired in 2015 continued its
expected growth momentum under our ownership and
we plan to further develop the Funkin brand to ensure
it continues to meet our acquisition expectations.

Our relationships with our key partners, Rockstar and
Dr Pepper Snapple Group, with the Snapple brand,
continued to progress with further growth and the
development of new brand flavours and formats. In
addition we have made significant progress in our
ambition to extend our international footprint, building
a growing and differentiated portfolio of brands to
compete in our selected markets.

At the core of our development activity is our drive to
reformulate and realign our portfolio to meet rapidly
changing consumer preferences. I am pleased with
our progress in this area, further details of which will
be covered within this report.

DIVIDEND
The Board is pleased to recommend a final dividend of
9.97p per share to give a total dividend for the full year
of 13.33p per share, a full year increase of 10.0% on the
prior year.

PEOPLE
I would like to take this opportunity to thank the whole
team across the Group for their hard work and diligence
in what has been a demanding year.

I was pleased to welcome David Ritchie to our Board in
April 2015. David has made a very positive impact and
brings a wealth of experience and insight which will
support the business going forward.

We expect to further strengthen our Board across the
next year as we strive to develop an even more balanced
and effective team.

PROSPECTS
The business is in good shape to navigate through the
challenges that exist across the market. The combination
of strong foundations and a motivated and experienced
management team, capable of both adapting and then
successfully executing our strategy, ensures we are well
positioned to further grow and develop our business
across 2016 and beyond.

JOHN NICOLSON
CHAIRMAN

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORT “OVERALL IN THE PERIOD WE
MAINTAINED OUR MARKET
SHARE AND, IMPORTANTLY,
WE HAVE CONTINUED TO
INVEST IN DEVELOPING OUR
BRANDS FOR THE LONG-TERM.”
JOHN NICOLSON, CHAIRMAN

2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016BUSINESS MODEL

SIMPLE,
EFFECTIVE,
PROFITABLE

WE MAKE

WE MOVE

We pride ourselves on our effective manufacturing
capabilities, producing high quality products across
our well invested and efficient production sites, in
Cumbernauld, Forfar and our new state of the art facility
at Milton Keynes. From sourcing our raw materials across
the globe, to designing our packaging materials, we strive
for continuous improvements, keep safety at the forefront
of all we do, and invest accordingly to ensure we produce
the best tasting products as efficiently as possible.

With a fleet of more than 100 vehicles, and long standing
relationships with our key distribution partners, we strive
to deliver a great service to all our customers, from the
biggest food service customer to the smallest local shop.
Operating across multiple routes to market, we have a well
established and efficient distribution network, with our
Direct Store Delivery channel in particular setting us apart,
by offering a tailored and personal service to thousands
of independent retailers across the UK.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTWE ARE A GROWTH DRIVEN, BRANDED
CONSUMER GOODS BUSINESS, DELIVERING
LONG-TERM SUSTAINABLE VALUE.

This simple but effective approach is supported by strong
partnerships, talented people and responsible actions.
Our business model has proven successful for more than 140 years
and continues to create and deliver value in all that we do.

WE BUILD GREAT TASTING BRANDS THAT
PEOPLE LOVE, OFFERING THEM CHOICE
AND ENJOYMENT.

OUR BUSINESS MODEL IS SIMPLE,
EFFECTIVE AND PROFITABLE.

WE MARKET

WE SELL

Listening carefully to our consumers is paramount and by
doing so we have developed a diverse and differentiated
brand portfolio of great tasting products to satisfy their
needs and offer choice. And when it comes to marketing
and building our brands we like to have some fun, appealing
to our broad range of consumers, whether that’s through
national TV campaigns, digital media, sponsorship or
supporting local community events.

Building long lasting relationships with our customers
across all our key markets is fundamental to our business.
Whether it’s a multiple grocer, a wholesaler, a regional
restaurant group or a local independent retailer, we work
collaboratively with all our customers to understand their
businesses and find winning consumer propositions in a
practical, fun and profitable way.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CHIEF EXECUTIVEʼS REVIEW

“WE HAVE DELIVERED A
CREDITABLE FINANCIAL
PERFORMANCE IN WHAT
HAS ULTIMATELY BEEN
A SUCCESSFUL BUT
CHALLENGING YEAR
FOR THE BUSINESS.”
ROGER WHITE, CHIEF EXECUTIVE

STRATEGIC REPORTA.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016BUILDING AN
EVEN STRONGER
BUSINESS

We have delivered a creditable financial performance
in what has ultimately been a successful but challenging
year for the business.

The markets we operate in have seen significant levels
of change and volatility and the consumers in our core
UK business have continued to develop their tastes,
habits and preferences for products, shopping and
communication, at real pace. Although we recognised
the changes in our marketplace some time ago, we have
accelerated our actions over the last 12 months to ensure
we are set to meet the challenges now and in the future.

ͽ In the reporting period we maintained overall market
share in UK soft drinks and total Group revenue was
£258.6m (2015: £260.9m).

ͽ Statutory profit before tax increased from £38.6m to

£41.3m, an increase of 7.0%.

ͽ Adjusted* profit before interest and tax increased

by 7.0% from £39.8m to £42.6m.

ͽ Operating margins advanced once again as we
maintained a tight control of our cost base.
ͽ Business Process Redesign implemented

and stabilised.

ͽ Further significant capital investment across our

supply chain footprint.

ͽ We also benefited from the inclusion of a strong profit
performance from the Funkin business in its first year
of our ownership.

MARKET PERFORMANCE
The UK soft drinks market has not yet appeared to
benefit from the improvement in underlying consumer
purchasing power. Using data from our new data provider
IRI (IRI Marketplace data to 31 January 2016) we can see
the impact of general price deflation, poor summer
weather and retail competition feeding through into
the overall soft drinks category performance.

The market was down in value terms by 1.8% with volume
flat. Within this performance carbonates were down
c.1.5% in both value and volume, and stills, although
slightly up in volume terms, were down 2.0% in value.

The growth driver in overall soft drinks was once again
water, offset by significant value declines in fruit juice,
dilutables, sports drinks and some areas of carbonates.
At a channel level, soft drinks performance was
influenced by deflation and poor weather, the latter
having a marked impact on the impulse channel.
Previously much of the market growth has been
delivered by the significant growth in carbonated energy,
however this subsector only grew by 1% in volume terms
and was flat in value in the period.

The market has seen growth in brands which appeal to
consumers’ changing lifestyles and preferences – sugar
free products, lower sugar brands and premium products,
such as those within mixers, have continued to
outperform the overall category.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CHIEF EXECUTIVEʼS REVIEW CONTINUED

INTERNATIONAL

30%

PORTFOLIO

8.8%

PEOPLE

78%

REVENUE GROWTH OF ALMOST 30%
ACROSS OUR INTERNATIONAL BUSINESS

8.8% REDUCTION IN AVERAGE
CALORIFIC CONTENT OF COMPANY
OWNED BRANDS IN THE LAST
FOUR YEARS

78% POSITIVE ENGAGEMENT SCORE
FROM OUR “YOUR VOICE MATTERS”
EMPLOYEE SURVEY

Our portfolio continues to develop to meet these market
challenges and opportunities. We are well positioned to
benefit from the high levels of loyalty to our existing
brands along with the opportunities to further drive the
distribution of our differentiated portfolio of increasingly
relevant brands.

Our core brands have stood up well in the market
despite the difficulties of the weather and the challenges
related to our internal change agenda, which hampered
our performance during the summer period. We are
particularly pleased that we have been able to capitalise
on the growing cocktail consumption trend with our
successful and market leading Funkin product portfolio.

STRATEGY UPDATE
The fundamentals of our strategy remain in place, having
served us well in the creation of long-term shareholder
value. However, we continue to evolve and develop
specific areas of focus within our overall strategy. In
particular, we have prioritised the development of
our portfolio into further consumption occasions,
as demonstrated by the development of the Funkin
business and brand. Similarly, the realignment of our
portfolio to respond to changes in consumer attitudes
and preferences will see a significant amount of our
effort and focus in the coming period.

We have created a select and differentiated portfolio to
develop in our chosen international focus markets and
we expect to see continued growth in this area of the
business. During the period our international business
grew revenue by almost 30% on last year and would
have grown by over 40% if measured on a constant
currency basis. Our push to develop outside the UK
core market is also allowing us to build stronger, more
significant relationships with our chosen partners,
Rockstar and Dr Pepper Snapple Group. We expect to
create increasingly significant growth opportunities in
both our core UK market and in our selected international
territories as we go forward.

The development of our existing soft drinks portfolio
will continue to be a key area of our strategic focus.
To ensure success in the UK market we are focusing our
marketing efforts on our “lower” and “no” sugar products
and are substantially reducing the sugar content of our
portfolio to reflect consumers’ changing preferences.
We have already made significant progress in this area,
reducing the average calorific content of our Company
owned portfolio by 8.8% in 4 years, and we anticipate the
scale of this change to accelerate over the next year as
we reduce our overall exposure to high sugar products
where appropriate. We remain convinced that our
decisive actions, and the progress we have made to
date, demonstrate that we are playing an important part
in addressing the complex and very important UK
consumer health issues.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORT “WE ARE WELL PLACED TO CONTINUE OUR DELIVERY OF
CONSISTENT LONG-TERM SHAREHOLDER VALUE BASED
ON OUR PROVEN SOLID BUSINESS FUNDAMENTALS,
OUR BALANCE SHEET STRENGTH AND CAPACITY AND
OUR ABILITY TO FLEX AND DEVELOP OUR STRATEGY
TO MAXIMISE OUR LONG-TERM GROWTH POTENTIAL.”

Motivated and engaged employees are at the heart of
our successful business and I am pleased to report that
employee engagement levels, as measured in our latest
employee engagement survey, are steadfastly industry
leading. Across the business, our functional and site
teams have worked both effectively and safely across
the last 12 months to ensure we continue to deliver for
our customers.

SUMMARY
The second half of the last financial year saw our sales
and financial performance recover as we stabilised our
operating platform following a very significant level of
investment and consequential change across the
summer of 2015. I am confident that our investments in
the business, not just in 2015 but over the last few years,
will benefit us greatly as we look forward and face the
market challenges over the coming years.

Although the details of the Chancellor’s proposed soft
drinks levy are still to be consulted upon, we believe
our combination of brand strength, ongoing product
reformulation and consumer driven innovation will allow
us to minimise the financial impact on the business at the
proposed point of implementation in April 2018. Based
on the Government’s currently proposed metrics, should
a levy be introduced, we expect at least two thirds of our
portfolio will be lower or no sugar, and would therefore
be levy free at that time. For the balance of our portfolio,
which would attract a levy, we anticipate that brand
loyalty and consumer preference will drive continued
demand. We will, of course, play an active role in the
consultation between the Government and the soft
drinks industry on the proposed levy, and are fully
committed to working towards an outcome that benefits
consumers, shareholders and other stakeholders.

We are well placed to continue our delivery of consistent
long-term shareholder value based on our proven solid
business fundamentals, our balance sheet strength and
capacity and our ability to flex and develop our strategy
to maximise our long-term growth potential.

ROGER WHITE
CHIEF EXECUTIVE

* Adjusting for discontinued business, income received in the prior year
associated with the termination of the Orangina franchise and one-off
transaction fees incurred in the year ended January 2016.

BUSINESS IMPROVEMENT

£12m

INVESTMENT IN BUSINESS PROCESS
REDESIGN PROJECT

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY

DELIVERING
LONG-TERM
VALUE

OUR STRATEGIC PRIORITIES ARE TO:

CONNECT WITH
CONSUMERS

BUILD OUR
BRANDS

Consumer insight drives our business. Our
consumers are growing in number, location
and diversity and we ensure that we take
the time to listen, to understand their needs
and to offer them a choice of great tasting,
high quality products.

We are brand owners and builders, offering
a diverse and differentiated portfolio of
products that people love. With our own
powerful brands, complementary franchise
partner brands, and a strong track record
of bringing successful innovation to the
market, we seek to build brand awareness,
grow our brand equity and outperform
the market.

UNDERSTAND
OUR CUSTOMERS

Building and maintaining long lasting and
successful customer relationships, across
multiple routes to market, is central to our
business. We work closely with our
customers to develop joint plans which
allow us to share in success. We pride
ourselves on our ability to turn these
shared plans into effective actions,
supporting our customers with excellent
in-store activation of our brand led
activities, and delivering the highest
possible levels of service.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTOUR OVERARCHING
BUSINESS STRATEGY
IS TO DELIVER LONG-
TERM SUSTAINABLE
VALUE IN ALL THAT
WE DO.

DEVELOP
PARTNERSHIPS

DRIVE
EFFICIENCY

With strong ambitions, both within the UK
and internationally, we recognise the
advantages that working in partnership
can deliver. By working closely with others,
whether that be brand franchise partners,
international distributors or 3rd party
logistics providers, we develop
complementary relationships that deliver
shared benefits and support our
growing business.

We continually strive for efficiency across
our business, ensuring strong financial
controls are in place while also investing
for growth. As our business develops,
we are committed to driving continuous
improvement across our processes and
technology. As an asset backed business
we drive operational improvements,
flexibility and efficiency through our
expansionary capital investment
programme, equipping us with some
of the industry’s most advanced
operational capability.

ACT WITH
RESPONSIBILITY

We believe that how we act reflects
who we are. We take our responsibilities
seriously and aim to be a sustainable
and responsible business that listens to our
consumers, takes care of our people, works
to minimise our environmental impact and
gives something back to the communities
we serve.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION

STRONG
CONSUMER
CONNECTION

THE MARKETS IN WHICH WE
OPERATE HAVE SEEN A NUMBER
OF SIGNIFICANT DEVELOPMENTS
OVER THE PAST YEAR, WITH
CONSUMERS’ TASTES AND
BEHAVIOURS CONTINUING
TO EVOLVE AND CHANGE.

Innovation continues to play a central role in our
portfolio development, satisfying our consumers’ needs
for great tasting and exciting new products, and we
delivered a strong innovation programme across 2015.

Our core soft drinks business generated more than £7m
of incremental revenue in 2015 through new flavours,
limited editions, new pack sizes and new formats,
responding to the ever increasing consumer preference
for differentiation, newness and lower sugar options.

Energy drinks continues to be a category driven by
consumer demand for fresh and innovative new product
development. With a strong reputation and proven track
record for bringing exciting innovation to the market
through our Rockstar energy drink brand, we continued
this strategy in 2015, introducing consumers to both new
flavours and new experiences, contributing to a further
successful year of growth for Rockstar.

The cocktail market continues to grow at pace, and is
particularly attuned to consumer trends across the food
and drink category. Our Funkin business delivered a
very successful innovation programme across the year,
responding with speed and agility to meet fast evolving
consumer tastes in the cocktail market. In addition to
a complete rebranding exercise across all formats, we
introduced 5 new Funkin Pro syrup flavours to the market
in 2015 to meet the growing demand for premium and
niche new products, reinforcing Funkin’s position as the
market leader in the cocktail mixer segment.

NEW FUNKIN SYRUPS
Leading the way in cocktail mixer innovation, our creative
new range of Funkin syrups introduced new and exciting
flavours to the mixologist’s toolkit.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTBARR LIMITED EDITION
With more than 1 million units sold, our
limited edition Barr flavour “Tropicoola”
drove engagement and excitement across
the summer of 2015.

EVOLVING
TASTES

THE MARKETS IN WHICH WE OPERATE
HAVE SEEN A NUMBER OF SIGNIFICANT
DEVELOPMENTS OVER THE PAST YEAR,
WITH CONSUMERS’ TASTES AND
BEHAVIOURS CONTINUING TO
EVOLVE AND CHANGE.

ROCKSTAR INNOVATION
With zero sugar, our new Rockstar Punched Pure
Zero delivers the full on Punched Guava taste and
packs a 100% energy punch.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORT
STRATEGY IN ACTION CONTINUED

BUILDING
STRONG
BRANDS

OUR BRAND PORTFOLIO
PERFORMED WELL IN THE
FACE OF THE DIFFICULT
MARKET CONDITIONS
ACROSS 2015 AS WELL AS
THE SPECIFIC CHALLENGES
WE EXPERIENCED WHILE
DELIVERING A SIGNIFICANT
INTERNAL CHANGE
PROGRAMME.

IRN-BRU SPECIAL TARTAN PACKS
Our 2015 IRN-BRU marketing programme got off to a fantastic
start with our special edition 2L tartan packs. Engaging digital
and social media content generated excitement around the
initiative which saw sales of the special tartan packs reach
almost 670,000 cases.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTOVERALL WE MAINTAINED OUR
SHARE OF THE TOTAL SOFT DRINKS
MARKET AND WE HAVE CONTINUED
TO INVEST IN THE LONG-TERM
HEALTH OF ALL OUR CORE BRANDS.

IRN-BRU
IRN-BRU delivered a resilient performance, growing
its share of the “other flavour carbonates” category in
the period. IRN-BRU’s position in Scotland remains
extremely strong, supported by some exciting and
unique marketing initiatives including special edition
tartan packs and our “Made in Scotland from Girders”
anniversary campaign.

However our significant growth potential for the IRN-BRU
brand lies in England & Wales. We set out in 2015 to
increase brand awareness in the “rest of the UK” and our
“Gets you Through” campaign has played a central role
in delivering this strategy. The campaign saw IRN-BRU
advertised on a national basis for the first time, through
both TV and digital channels, and delivered a significant
increase in consumer brand awareness. This national
strategy is supported further by our football sponsorship
programme – IRN-BRU is the only FMCG brand with UK
wide reach across 114 football communities.

IRN-BRU Sugar Free continues to grow in popularity,
aligned to the increasing consumer trend towards lower
and no sugar products, and now accounts for more
than 1 in 3 IRN-BRU purchases. IRN-BRU Sugar Free
increased its share of the UK carbonates market, up
2% value (as measured by IRI Markeplace data).

BRU-PLANET
Our BRU-PLANET initiative, which offered 2 lucky winners the
holiday of a lifetime, engaged consumers across the whole of
the UK and generated our highest ever number of entries for
an on pack offer.

IRN-BRU NATIONAL TV CAMPAIGN
Our IRN-BRU “Gets you Through” campaign went national in 2015
with 2 new adverts released across the UK to an overwhelmingly
positive consumer reaction. Our biggest national advertising
investment to date, the campaign generated more than 228
million views on TV, video on demand and social media.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

RUBICON MANGO MONTH
Rubicon’s Mango Month has become a regular
feature on the exotic juice calendar. The initiative
heralds the arrival of the new season mangoes in
May, with on pack offers driving distribution and
building the Rubicon brand.

RUBICON NATIONAL TV CAMPAIGN
Our new “Believe in Beach” campaign introduced the
Rubicon brand to a more mainstream audience through
TV, video on demand and social media. The campaign
generated record social media results for Rubicon, with
4.3 million Facebook views and 6 million video views.

EXOTICS – RUBICON AND KA
The fruit juice market performance across the past
12 months has been weak, with value declining 6%
(as measured by IRI Marketplace data). Rubicon’s
performance has been broadly in line with the market,
however Rubicon carbonates has proved to be more
resilient to the challenging market conditions. Despite
this difficult environment we have continued to invest
in the brand equity and remained focused on our brand
strategy. Our “It’s a Family Thing” campaign reinforced
the brand’s position as a favourite with ethnic consumers
while our “Believe in Beach” campaign developed the
Rubicon brand as a mainstream offering through a new
national TV advert.

KA MUSIC SPONSORSHIP
The KA Rated Awards recognise and award urban music talent.
Our 2015 event welcomed 900 attendees and was watched
by an audience of 25,000 via live streaming. With 10 awards
presented and 6 urban music performances the event was
a #1 trending topic on Twitter in the UK.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTSTRATHMORE TWIST REBRAND
Our Strathmore Twist packaging was refreshed in September
2015 and brought into line with the core water range. With a
much more contemporary feel the new design has a sense
of energy, fitting with Strathmore’s “Do More” proposition.

BARR XTRA COLA OUTDOOR CAMPAIGN
Barr’s biggest and boldest outdoor campaign
hit Scotland in Summer 2015 communicating
the full cola taste and no sugar credentials
of Barr Xtra Cola.

FUNKIN
Within a growing cocktail market, the Funkin brand has
performed extremely well thanks to its market leading
position, quality products, strong execution and exciting
innovation, with UK sales in particular delivering a strong
performance. Consumer dynamics remain very positive
with cocktail distribution increasing. Innovation within the
category is one of the keys to success and with an exciting
innovation pipeline for 2016 we look forward to even
greater brand development across the next 12 months.

STRATHMORE AND BARR
The overall category performance in soft drinks was
once again driven by growth in water. Total Strathmore
volumes increased across the year, but in the current
deflationary market, value declined slightly. However
sparkling water delivered a strong performance.

2015 was a year packed full of Strathmore sports
sponsorships, from Scottish Rugby to the World
Gymnastics Championships, driving strong consumer
engagement, increasing brand visibility and reinforcing
the Strathmore “Do More” initiative to encourage
healthier and more active lifestyles.

The Barr range of flavoured carbonates has developed
further across 2015 with new innovation and limited
editions and an impactful outdoor advertising campaign
for Xtra Cola. The full range is now categorised as lower
or no sugar, following a considerable reformulation
programme, delivering increased choice across our
portfolio in response to changing consumer preferences.

NEW FUNKIN PACKAGING
In addition to an exciting and innovative new range of Funkin
Pro syrups introduced across 2015, the entire Funkin brand
underwent a full packaging rebrand, with a bolder and more
vibrant design redefining the brand identity.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

FUNKIN COCKTAILS ON THE MENU
Our Funkin team recently worked with a leading restaurant
chain to introduce cocktails into their restaurants for the first
time. Working together to create a tailored cocktail menu, and
delivering bespoke training to staff, the initial trial has proven
extremely successful and the concept will now be rolled out
to more than 50 outlets.

STRONG
CUSTOMER
RELATIONSHIPS

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTIN-STORE ACTIVIATION
Our sales teams take a huge amount of pride in working
with our customers to create fantastic in-store execution of
our brand activity. During our BRU-PLANET campaign, which
was our largest ever on-pack IRN-BRU promotion, we worked
with customers to create more than 1,200 in-store special
pack displays to increase visibility, drive sales and deliver
shared success.

The UK retail landscape continues to undergo a
considerable amount of change, with competition
between outlets and channels growing, and increasingly
overlapping, while retailers try to adapt to changing
shopper habits. It has never been more important for us
to work with our customers to develop winning strategies
and to ensure the highest possible levels of service to
ensure we remain a key partner and supplier.

We have continued to focus on driving our “go to market”
strategy across a wide platform, managing multiple
channels and increasingly diverse routes to market.

We have taken a number of actions across the year to
facilitate and enhance our customer relationships, from
growing the capability of our salesforce through learning
and development, to investing in new technology and
systems to facilitate better data provision and decision
making. These actions, combined with our pride in
our in-market execution and a genuine desire to work
in partnership with our customers, are essential
components in our objective to deliver shared success.

AND THE AWARD GOES TO...
In March 2015 we were delighted to be awarded the Bestway
“Supplier of the Year Award” for the third year in a row.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

STRONG
PARTNERSHIPS

NEW SNAPPLE BRANDING
Available in 7 delicious flavours our fresh new Snapple packaging
hides a little secret – under every cap is a fun fact. Did you know that
the peach was the first fruit to be eaten on the moon?

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTWe have further developed and enhanced our
partnerships across 2015, working collaboratively
to deliver shared success.

Rockstar has delivered another successful year of
growth. Innovation continues to play an important role
in the energy drink category, with consumers energised
and engaged by new and exciting product development,
a demand more than met across 2015 by Rockstar’s
strong innovation performance.

Rockstar’s unique and targeted brand activity is reaching
core consumers through music, gaming and action
sports events, all of which are building brand awareness,
loyalty and distribution. We are further developing our
relationship with Rockstar outside the UK and have
successfully expanded into a number of markets
across 2015.

Our 10 year agreement with the Dr Pepper Snapple
Group, which commenced in January 2015, is progressing
to plan. Our focus in the first year of this important
partnership has been on building brand awareness and
redeveloping the brand identity for the UK and Europe.
Snapple is now available in 12 European markets and,
with strong revenue growth in its first year, is poised
for even greater success across 2016.

In May we were delighted to confirm a long-term licence
agreement with the Moscow Brewing Company to
manufacture, sell and distribute our IRN-BRU brand in
the Russian Federation. Moscow Brewing Company
is a leading Russian brewer who, in addition to the
management of their own brands, holds the licence
for a variety of premium soft drinks. With their well
established sales and distribution network, combined
with increased sales and marketing focus and
investment, we are confident that this is a partnership
which will deliver for IRN-BRU in Russia.

COOL NEW ROCKSTAR FREEZE
Delivering exciting new flavours and a
brand new sensation, our innovative Rockstar Freeze
range has already seen consumers buy a cool 3
million cans since its launch in September 2015.

IRN-BRU IN MOSCOW
In May 2015 we were delighted to partner with the
Moscow Brewing Company who, with state of the art facilities
on the outskirts of Moscow, and national distribution coverage,
will manufacture, sell and distribute our IRN-BRU brand in the
Russian Federation.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

STRONG DRIVE
FOR EFFICIENCY

OUR DRIVE FOR OPERATIONAL
EFFICIENCY AND CONTINUOUS
IMPROVEMENT CONTINUED
ACROSS 2015, DELIVERED THROUGH
A SERIES OF PROJECTS WITHIN OUR
FIT FOR THE FUTURE BUSINESS
IMPROVEMENT PROGRAMME.

Our capital investment programme progressed during
the year, with several large scale projects delivered
on time and to budget. We successfully transitioned
our carton packaging capability from our Tredegar site
to Milton Keynes, and are benefitting from the increased
efficiency provided by the new high speed carton
production lines. Our position in carton packaging format
has been further strengthened by the addition of new
resealable single serve carton capability, known as
“prisma” packs, responding to consumers’ increasing
desire for high quality products in premium packaging.

At the same time as increasing both our production
capability and capacity, we invested £6.7m in the
acquisition of 5.4 acres of additional land at Milton Keynes
in May last year. This included 1.54 acres on which we
have subsequently expanded our warehousing footprint
with a new 60,000 sq. ft. extension as well as a further
3.86 acres of land, adjacent to our existing site, to give
us additional future expansion options.

Our Business Process Redesign (BPR) project, with a
total investment of £11.9m, was a significant undertaking
for the business, effectively redefining all our core
business processes to industry best practice standard,
underpinned by a powerful and flexible new ERP system.
Such a large scale change project was not without its
challenges, from both an operational perspective and
in terms of the extent to which our people have had to
adapt to completely new ways of working, but with the
business now fully stabilised we can benefit from an
industry leading, modern and scalable platform capable
of supporting our growth ambitions.

We also announced a further £5m investment in new,
high speed glass bottle filling capability at our
Cumbernauld facility. While this change has led to the
end of our returnable glass bottle scheme, this investment
will double the efficiency of our glass filling capability,
will provide us with the flexibility to offer new glass
formats across our product range, facilitates the in-house
production of our franchise brand Snapple, and secures
the future supply of our iconic 750ml glass bottle,
ensuring that loyal fans can continue to enjoy their
favourite flavours in glass, well into the future.

NEW PREMIUM “PRISMA” PACK
Our new 330ml resealable “prisma” cartons provide us
with exciting brand development and innovation opportunities
in a growing premium pack format.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTNEW MILTON KEYNES
WAREHOUSE
At 60,000 sq. ft., our new
Milton Keynes warehouse
increases our capacity by
60% with the addition of
8,000 new pallet spaces.

FIT FOR
THE FUTURE

£5M NEW GLASS PRODUCTION LINE
We know how much our consumers love the taste of their favourite soft drink flavours in
our iconic 750ml glass bottles. The investment in new high speed glass filling capability at
our Cumbernauld factory ensures that our loyal glass bottle fans can continue to enjoy their
favourite soft drinks, exactly as they are, for many years to come, as well as facilitating
exciting brand development opportunities in 2016 and beyond.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

STRONG
SENSE OF
RESPONSIBILITY

OMJ! – NO ADDED SUGAR!
With 50% fruit juice and no added sugar, OMJ! was
co-created by 60 pupils in England & Wales, meets
strict government guidelines for schools and tastes
amazing. Available in both still and lightly sparkling
varieties, it counts as one of your five a day and
comes in four delicious flavours.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORT“DO MORE” WITH STRATHMORE
Strathmore was proud to sponsor a host of sporting activities
across 2015, from the World Gymnastic Championships to
the Mountain Bike World Cup, and through the “Do More”
Strathmore campaign we are playing our part in raising
awareness of the benefits of a healthy and more active lifestyle.

OUR RESPONSIBILITY AGENDA
IS NOT A STANDALONE AREA OF
FOCUS, IT IS INTEGRAL TO HOW
WE DO BUSINESS.

We have always been driven to do the right thing, whether
for our consumers, our people, our environment or our
communities, a value firmly embedded in all our activities.

OUR CONSUMERS
Consumer attitudes to health and wellbeing are
translating into changing consumer behaviours and we
have continued to respond to the increasing demand
for greater choice and for healthier products.

Lower and no sugar products now account for around
40% of our portfolio and, through a combination of
reformulation, increased investment in the marketing
and promotion of lower sugar drinks, as well as the
introduction of innovative new products, we have
reduced the average calorific content of our Company
owned brands by 8.8% in just 4 years.

We have ambitious plans in place to further this progress
and we will play our part in delivering the soft drink
industry’s 5 year calorie reduction target of 20% by
2020, communicated by the British Soft Drinks
Association last year.

We know that our consumers are more interested in their
health and wellbeing than ever before. We are taking
active steps to raise consumers’ awareness of the
benefits of a healthy and more active lifestyle through
the power of our Strathmore brand. Through our
extensive sports sponsorship programme and our
“Do More” Strathmore campaign, we are playing our
part in motivating, encouraging and inspiring consumers
to lead healthier lives.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

OUR PEOPLE
The safety of our employees is paramount and that
means continuing to reinforce good safety management
practices as well as raising awareness of improved ways
of thinking and working. In 2015 we saw a 37.5% year on
year improvement in RIDDOR reportable accidents and
a 44.4% reduction in lost time accidents. This significant
improvement in safety performance reflects the priority
that is given to safety across the business as evidenced
through our “near miss” reporting initiative which saw
over 1,900 preventative safety conversations conducted
across the year.

The strength of our business lies in the strength of our
talented and dedicated people. We wouldn’t be the
innovative, creative and successful Company we are
today without the people who work for us. With a
strong performance focused culture we invest in the
development of all our people, supporting them to build
their competency, capability and leadership.

In its second year, we received an impressive 83%
response rate to our Your Voice Matters employee
engagement survey, with almost 800 people taking
the time to share their views and opinions. We were
delighted to achieve a 78% overall engagement score,
and with the insight provided by external benchmarked
data, as well as our own year on year comparisons, we
have developed both corporate and team level action
plans for the year ahead to build further on our areas
of strength and make progress on our areas
for improvement.

We believe in creating the right environment for our
people to learn and develop, enhancing each individual’s
potential as well as developing future leaders. High
performing teams and individuals working collaboratively
and innovatively lead to greater business performance
and we have invested in a range of learning and
development programmes across 2015. From a new
Sales & Marketing competency framework rolled out
to 180 of our commercial colleagues, to 3 new
leadership programmes developed for our Supply Chain
management population, we have delivered over 7,000
hours of learning across our workforce in support of each
employee’s Personal Development Plan.

We recognise the value of a diverse workforce and
are committed to treating all employees fairly and with
respect. In support of our behavioural framework,
“Barr Behaviours”, we have recently updated our
recruitment practices, introducing improvements
designed to ensure that new people joining the business
are selected based on their abilities and their potential to
enhance our business performance in line with our culture
and values, regardless of their race, age, gender, disability
or sexual orientation.

Gender split

Male
Female

Total

Board and
Company
Secretary

8
2

Senior
Managers

All
employees

73
22

700
263

963

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTSUPPORTING NEW
WAYS OF WORKING
We made a significant investment in
learning across 2015 to support our
Business Process Redesign (BPR)
project. With the introduction of brand
new technology and ways of working
across the business, we delivered
155 face-to-face courses to 1,024
employees over a 5 week period, and
saw 876 online courses, all of which
resulted in an impressive overall
learning feedback score of 97%.

YOUR VOICE MATTERS EMPLOYEE SURVEY
We were delighted to achieve a 78% overall engagement score
in this year’s Your Voice Matters engagement survey:

ͽ 87% of our employees said that they understand how the
work they do contributes to the success of the business.
ͽ 79% of our people said that working for the Company makes

them want to do the best work they can.

ͽ 81% of the workforce said that they feel a strong sense

of loyalty to the business and our brands.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

OUR ENVIRONMENT
Our environment and natural resources are precious
and we take our environmental responsibilities seriously,
continuing to strive for opportunities to improve our
sustainability, whether through our energy use, our water
and waste control or our general environmental impact.

Climate Change Agreements are part of a package
of government measures designed to encourage
UK business to save energy and reduce carbon
dioxide emissions.

Although our CO2 emissions remain similar to last year,
the intensity ratio has increased, in part as a result of
varying production outputs, as well as through increased
hygiene activity to maintain our high quality standards.
However, we are ahead of our Climate Change
Agreement commitment and continue to increase
the amount of carbon banked year on year.

NEW WIND TURBINE AT CUMBERNAULD
In November 2015 we unveiled a new 70m tall wind turbine that
will part power our Cumbernauld factory, providing up to 8% of
the total electricity used on site; the equivalent of powering up
to 280 homes*. As well as generating environmental benefits for
our site, the wind turbine will also support the local community
with an estimated £120,000 being donated to local good causes
over the life of the turbine, through an employee charity
nomination initiative.

* Based on 2014 average household usage figure of 4000 kW per hour.

STRATEGIC REPORTA.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016We continue to carefully manage our waste and water
outputs and delivered a positive performance across
2015. We are delighted to confirm that more than 99%
of our waste was sorted and sent for recycling or energy
recovery, meaning less than 1% of our factory waste was
sent to landfill.

As an essential component of our products, we are
vitally aware of the importance of managing water as
a resource. This year our water consumption has seen
a small increase from 1.51 to 1.67 litres per litre of
product, however this increase is attributable to the
commissioning of our new carton production lines at
Milton Keynes, and we expect to see a reduction in
water consumption in the year ahead.

AG BARR PLC GHG EMISSIONS IN TONNES CO2e
2015-16

2014-15

Scope 1
Scope 2
Intensity Ratio*

5,421
11,698
37.22

5,399
12,123
39.36

* Intensity ratio is kg of CO2e per 1000 litres of product produced.

CAN RECYCLING SCHEME
Through our support of the Every Can Counts scheme, a unique
‘out-of-home’ recycling programme for aluminium cans, we
encouraged an estimated 1 million revellers to recycle empty
drinks cans at the world famous Nottinghill Carnival in August.
The highly visible recycling exchange gave out a free can of KA
“KAnival Krush” in return for a bag of empty cans for recycling.
The empty cans were placed into segregated bins ready to be
recycled after the event.

REDUCED CARBON FOOTPRINT
Our £5m investment in new high speed glass filling capability
at our Cumbernauld factory will allow us to decommission the
returnable glass bottle washing equipment, which accounts for
more than 80% of our current glass line’s carbon footprint, and
will save over 1.5 million litres of water each year, almost enough
water to fill an Olympic swimming pool.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGY IN ACTION CONTINUED

OUR COMMUNITY
We have always supported and worked closely with
the communities in which we operate and, as we grow
as a business, our community engagement is just as
important to us as ever. By providing financial, in kind,
practical and employee volunteering support to charities,
good causes and community groups, we continued to
support our local, national and international communities
across 2015.

In the last 12 months we continued to work with national
UK charities such as The Prince’s Trust, international
charities such as the British Asian Trust, as well as
supporting a number of local community and charity
organisations who work in areas close to our sites. We
are increasingly focusing our community investment on
promoting physical activity and healthy lifestyles with a
particular emphasis on community and charity road races
and were pleased to provide over 500,000 bottles of
Strathmore water to a variety of events across 2015.

Our Site Community Fund provides employees, at each
of our sites, with the opportunity to support charities and
community organisations which are important to them as
teams or as individuals and we are extremely proud that
so many of our employees continued to nominate good
causes as well as supporting and engaging in initiatives
throughout the year, helping groups and charities carry
on their valuable work.

SUPPORTING THE BRICK BY BRICK APPEAL
In 2012 the Prince & Princess of Wales Hospice in Glasgow
launched its “Brick by Brick Appeal” to raise £21m to build a new
purpose built hospice and bring 21st century hospice care to the
people of Glasgow. As a long time supporter of the hospice we
pledged our support and were delighted when the hospice
recently confirmed that our direct corporate and employee
fundraising efforts raised £74,000 for their appeal in the last
3 years.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTKEEPING SCOTLAND BEAUTIFUL
In 2015 we announced a new partnership with Keep Scotland
Beautiful in support of the Clean Up Scotland mass engagement
campaign. The campaign aims to change long-term behaviour
and attitudes in Scotland by making littering unacceptable. It
encourages people across the country to sign the pledge and
become anti-litter champions in their local communities. Our
employees undertook a community litter pick around our
Cumbernauld headquarters.

INSPIRING YOUNG PEOPLE TO HELP THEMSELVES
The Prince’s Trust supports 13 to 30 year olds who are
unemployed, struggling at school or at risk of exclusion,
helping young people develop key skills, confidence and
motivation, to enable them to move into work, education
or training.

As part of our support of the 2015 programme, we helped
a group of young people create their own unique and
original IRN-BRU Christmas cards, the sale proceeds of
which were reinvested back into The Prince’s Trust.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016KEY PERFORMANCE INDICATORS

ASSESSING
PERFORMANCE

THE PRINCIPAL KEY PERFORMANCE
INDICATORS USED BY MANAGEMENT
IN ASSESSING THE PERFORMANCE
OF THE GROUP ARE AS FOLLOWS:

REVENUE

£258.6m

-0.9%

GROSS MARGIN

46.8%

+87bps

PROFIT BEFORE TAX

OPERATING PROFIT MARGIN

£41.3m

+7.0%

16.3%

260.9

258.6

300

200

100

2015

2016

46.0

46.8

2015

2016

38.6

41.3

2015

2016

16.1

16.3

2015

2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTPERFORMANCE HIGHLIGHTS

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

GROSS MARGIN
Gross profit before exceptional items divided by revenue.

PROFIT BEFORE TAX
Profit before tax and after exceptional items.

FREE CASH FLOW
Net cash flow excluding the movements in borrowings,
expansionary capex, shares, dividend payments and
non-cash exceptional items.

RETURN ON CAPITAL EMPLOYED
Operating profit before exceptional items as a
percentage of invested capital. Invested capital is
defined as period end non-current plus current assets
less current liabilities excluding all balances relating to
any provisions, financial instruments, interest-bearing
liabilities and cash or cash equivalents.

OPERATING PROFIT MARGIN
Operating profit before exceptional items and before the
deduction of interest and taxation, divided by revenue.

DIVIDEND PER SHARE
Dividend payable in respect of the financial year.

EBITDA MARGIN
EBITDA (defined as profit on ordinary activities before tax
less exceptional items, adding back interest, depreciation,
amortisation and impairment), divided by revenue.

EBITDA MARGIN

19.5%

FREE CASH FLOW

£28.2m

RETURN ON
CAPITAL EMPLOYED

18.8%

18.8

19.5

2015

2016

40.7

28.2

2015

2016

24.0

18.8

2015

2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016 “WE HAVE CONTINUED
OUR BUSINESS STRATEGY
OF FOCUSING ON LONG-
TERM SUSTAINABLE
PROFIT GROWTH.”
STUART LORIMER, FINANCE DIRECTOR

FINANCIAL REVIEW

A.G. BARR

STRATEGIC REPORTA.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016UNDERLYING
RESILIENCE

Unless otherwise stated the following is based on
results for the 53 week period ended 30 January
2016. Comparatives are for the 52 week period ended
25 January 2015.

Our 2015/16 performance reflects the combination
of a challenging external commercial environment,
disappointing summer weather and the implementation
of our business process redesign project which disrupted
customer service during the summer period, when
2014/15 comparatives benefited from considerably
better weather and a well executed Glasgow 2014
Commonwealth Games campaign. It is a testament to the
commitment of our people and the underlying resilience
of the business model that we have been able to deliver
a creditable performance in the year.

While certain brands experienced volume under-
performance, and general market deflation resulted
in lower net sales, our focus on sustained cost control
and commodity risk management underpinned our
performance and improved margins. Our robust business
model, combined with the integration of our newly
acquired Funkin cocktail business, delivered profit
before tax of £41.3m, 7.0% ahead of the prior year.
On an adjusted* basis, profit before tax and interest
was £42.6m, an increase of 7.0% on the prior year.

KEY PERFORMANCE METRICS
ͽ Net revenue down 0.9% to £258.6m (2015: £260.9m).
ͽ Gross margin up 87 bps to 46.8%.
ͽ Net margin up 14 bps to 16.3%.
ͽ Net debt of £11.3m.
ͽ Earnings per share (EPS) increasing 14% to 29.63
pence per share (2015: 26.00 pence per share).

ͽ Proposed final dividend of 9.97p per share

(2015: 9.01p) to give a proposed total dividend for the
year of 13.33p per share, an increase of 10.0% over
the prior year.

In a difficult economic environment we have continued
our business strategy of focusing on long-term
sustainable profit growth through margin improvement,
driven by brand growth and cost discipline. Our strong
cash generation has supported the funding of our Funkin
acquisition, investment in our core asset base and the
continuation of our progressive dividend policy.

SEGMENT PERFORMANCE
In a competitive market, our overall carbonates
business delivered share gains (as measured by IRI)
in a deflationary environment. Adjusted* year-on-year
revenue from carbonates declined 3.1% (£6.1m), with
favourable product mix partially offsetting price deflation
and volume decline. Our flagship IRN-BRU brand held
market share and our partnership brand, Rockstar,
continues to grow both overall volume and value share.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016FINANCIAL REVIEW CONTINUED

The still drinks and water segment experienced modest
volume growth (excluding the discontinued Findlays
water cooler business) but was negatively impacted by
general market deflation and price repositioning of our
Sun Exotic brand.

The Others segment is dominated by the first time
inclusion of our newly acquired Funkin cocktail mixer
business in 2015/16 and by the discontinued Orangina
and Findlay businesses in 2014/15. Funkin is performing
well in a growing market. All areas of its business, syrups,
purees and mixers, grew volume and value resulting
in overall strong revenue and margin growth for the
business which remains well on track with the acquisition
business case.

MARGINS
Carbonates gross margins, stripping out the effect of
discontinued Orangina sales, benefited from favourable
commodity pricing and supply chain savings and
improved 1.3pp to 52%. Margins in the stills business
were impacted as promotional pricing pressure and
Rubicon availability challenges in the summer offset very
positive growth in the Snapple brand following our new
franchise agreement.

Adjusted* gross profit increased by £2.5m, delivering
a 0.5% increase in gross margin to 46.9%.

We remain risk aware and constantly review the
outlook on commodity costs, locking in pricing when we
consider it optimal from a risk management perspective.
We enter 2016 with good coverage across all our core
commodity requirements.

Below gross profit, administration and distribution costs
were broadly flat reflecting our continued focus on cost
control and supply chain efficiencies.

Profit benefited from the contribution from the Funkin
business and improved process controls which enabled
our trade receivables and inventory provisions to be
reduced. Operating margin increased from 16.1% to 16.3%.

INTEREST
Net finance charges, totalling £0.8m, are £0.6m higher
than the prior year due to the notional (non cash) interest
costs related to the final salary pension scheme deficit
which, on an IAS19 basis, increased from £0.1m at
January 2014 to £18.3m at January 2015. As at January
2016, the reported deficit was £12.9m.

The constituent elements of the interest charge comprised:

Finance income
Finance costs

Interest related to Group

borrowings

Finance costs related to pension

Net finance costs

2016
£m

0.1
(0.2)

(0.1)
(0.7)

(0.8)

2015
£m

0.1
(0.3)

(0.2)
–

(0.2)

TAXATION
The tax charge of £7.0m is £1.6m lower than the prior
year and represents an effective tax rate of 17.1%.
This is a decrease of 5.2pp from the prior year and
reflects the change in corporation tax rates in the year
from 21% to 20% and the impact on deferred tax resulting
from the future reduction in the corporation tax rates to
18% in 2020.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORT “IT IS A TESTAMENT TO THE
COMMITMENT OF OUR PEOPLE
AND THE UNDERLYING RESILIENCE OF
THE BUSINESS MODEL THAT WE HAVE
BEEN ABLE TO DELIVER A CREDITABLE
PERFORMANCE IN THE YEAR.”

The movement from a net cash position as at January
2015 (£10.3m) to a net debt position as at January 2016
(£11.3m) primarily reflects the Funkin acquisition (£17.5m)
and the continued capital investment in land,
warehousing and production capabilities.

In the year ahead, capital expenditure is anticipated to
continue at a similar level with the completion of several
key expansion projects, including our new flexible glass
line in Cumbernauld and the warehouse expansion at
Milton Keynes.

We remain well financed with significant facility
headroom and a low level of balance sheet leverage.

BALANCE SHEET
The Group’s balance sheet strengthened over the 12
month period ended 30 January 2016 with net asset
growth of over 15% to £180.1m. The acquisition of Funkin
Limited, significant expansionary capital expenditure
and a £5.4m IAS19 pension deficit reduction were the
main drivers.

The key balance sheet highlights can be summarised as:
ͽ Non-current assets increased by over £32m as we
reflected the Funkin acquisition and completed
our Company wide business process redesign
implementation as well as the next phase of our
Milton Keynes investment.

ͽ Our expansion plans continued with the acquisition

of land and the subsequent warehouse build at Milton
Keynes and the new glass line in Cumbernauld, which
will enable us to bring Snapple brand production
in-house during 2016.

ͽ Successful sale of our Tredegar site.
ͽ Inventory reduced by £1.1m (6.6%), as the prior year
inventory build in advance of the Tredegar site
closure was unwound.

ͽ Trade payables reduced by £13.7m. Prior year

payables were distorted by large capital creditors
while the 53 week year in 2015/16 resulted in month
end supplier payments occurring before the year end.

ͽ ROCE was 18.8% reflecting the investment in

Funkin Limited.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016FINANCIAL REVIEW CONTINUED

Free cash flow statement

Operating profit
Depreciation and amortisation
EBITDA

Decrease/(Increase) in inventories
Decrease/(Increase) in receivables
(Decrease)/Increase in payables
Movement in pension liability
Share-based payment costs
Exceptional cash items
Loss/(Gain) on sale of property, plant and equipment
Net operating cash flow

Net interest
Taxation
Cash flow from operations

Maintenance capex
Capex proceeds
Free cash flow

Expansionary capex
Dividends
Acquisition of subsidiary (net of cash acquired)
Acquisition of intangible assets
Net purchases of shares by employee benefit trusts
Loans (Repaid)/received (incl arrangement fees)
Cash flow from financing

Net (Decrease)/increase in cash

Opening cash and cash equivalents
Closing cash and cash equivalents
Borrowings

Closing net (debt)/cash

2016
£m

42.1
8.4
50.5

1.8
0.6
(15.8)
(0.7)
0.5
(1.0)
0.2
36.1

(0.2)
(6.8)
29.1

(1.8)
0.9
28.2

(12.9)
(14.3)
(15.7)
(4.8)
(2.0)
2.4
(47.3)

(19.1)

25.3
6.2
(17.5)

(11.3)

2015
£m

42.1
7.0
49.1

(0.7)
(4.4)
9.6
(0.9)
0.9
(1.7)
(0.1)
51.8

(0.2)
(7.0)
44.6

(4.5)
0.6
40.7

(7.0)
(13.1)
–
(7.1)
(1.0)
(0.1)
(28.3)

12.4

12.9
25.3
(15.0)

10.3

CASH FLOW
The business remains highly cash generative with
EBITDA of £50.5m (up 2.9%), representing an EBITDA
margin of 19.5%.

Working capital movements have been impacted by
the incorporation of Funkin which has increased the
movements in inventory, receivables and payables.

Despite a stock build to support the downtime
associated with the glass line installation at
Cumbernauld, overall inventories have decreased,
a result of the reduction of the prior year’s increased
inventory (put in place to mitigate risk ahead of the now
completed Tredegar site closure) and the improved stock
management enabled by our new business processes
and systems.

Receivables are marginally above the prior year as a
result of strong last quarter sales and the extra week of
trading in the current year. Our aged debt remains in line
with previous years.

2015/16 has witnessed a significant increased cash
outflow within payables as the phasing of supplier
payments at the end of the current year combined
with an unusually high level of opening capital payables
brought forward from the prior year. We continue to
pay suppliers on time and in full.

The Group utilises its cash appropriately and with care.
More than £19m was invested in long-term assets (both
infrastructure investment and the business process
redesign) and £14.3m was distributed in dividends to
our shareholders.

Shares with a net value of £2.0m were purchased on behalf
of various employee benefit trusts to satisfy the ongoing
requirements of the Group’s employee share schemes.

The Group closed the year with a net debt position
of £11.3m, £6.8m of cash offset by £18.1m of bank
borrowings including overdrafts. The Group has
sufficient banking facilities at its disposal to meet
expected future requirements.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTcurrently in consultation with the pension Trustee and
membership on a proposal to close this scheme to future
accrual during 2016.

SHARE PRICE AND MARKET
CAPITALISATION
At 30 January 2016 the closing share price for A.G. BARR
p.l.c. was £5.28, a reduction of 15.5% on the closing
January 2015 position. The Group is a member of the
FTSE 250, with a market capitalisation of £617m at the
year end.

STUART LORIMER
FINANCE DIRECTOR

Given the current low debt, the benign outlook for short
term interest rates and the expectation of continued
strong free cash generation, no interest rate hedging
activity has taken place during the period.

EXCEPTIONAL ITEMS
The Group had no exceptional items in the year.
Prior year reorganisations (including the closure of our
Tredegar operation) were completed successfully in the
year with cost in line with provisions created in prior
periods. One-off transaction fees totalling £0.8m, relating
to the successful Funkin acquisition and other smaller
projects, have been included within operational
overheads and have not been treated as exceptional
items. The exceptional cash items for the year ended
30 January 2016 reflect redundancy costs included in
the exceptional items charged in the year ended
25 January 2015.

PENSIONS
The Group continues to operate two pension plans,
being the A.G. BARR p.l.c. (2005) Defined Contribution
Pension Scheme and the A.G. BARR p.l.c. (2008) Pension
and Life Assurance Scheme. The latter is a defined
benefit scheme based on final salary, which also
includes a defined contribution section for pension
provision to senior managers.

The defined benefit scheme is closed to new entrants.
As at the end of January 2016 the IAS19 valuation of the
scheme was a deficit of £12.9m, a £5.4m improvement
from the prior year. The reduction in the deficit was
driven by changing financial assumptions.

The pension scheme commitments and risk position are
under continual review as part of the Group’s ongoing
strategic risk management. While the Group believes
that the overall pension deficit is supportable, we are

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016RISK MANAGEMENT

IDENTIFYING,
EVALUATING AND
MANAGING RISK

RISK MANAGEMENT APPROACH
The Board is responsible for the Group’s risk management
and internal control systems and for reviewing their
effectiveness, supported by the Audit Committee and
the Risk Committee. A risk management framework is
in place which sets out the ongoing processes for the
identification, assessment and management of risks, and
for their ongoing monitoring and review. The Board has
defined its risk appetite in a number of key areas for the
business – this sets out the relative level of risk that the
Group is prepared to seek or accept in the pursuit of its
strategic objectives. The aim is to ensure that the risks
taken by the Group fall within its defined risk appetite.

Effective risk management is essential to enable us
to achieve our operational and strategic objectives
and deliver long-term value creation. During the
reporting period we have continued to focus on
embedding a culture of risk management throughout
the organisation which will contribute towards successful
strategy execution.

ROBUST RISK ASSESSMENT
The risk management framework sets out a systematic
approach to risk management which is designed to
identify risks to the business, regardless of source. Once
identified, risks are assessed according to the likelihood
and impact of the risk occurring and an appropriate risk
response is determined in line with the Group’s risk
appetite. Risks are re-assessed based on the strength of
the mitigating controls implemented. The implementation
of risk mitigation plans is subject to ongoing monitoring
and review. A risk scoring matrix is used to ensure that a
consistent approach is taken across the business at both
a corporate and functional level. This risk assessment
and review process is documented in the appropriate
risk register. The Group’s risk register is reviewed
quarterly by the Risk Committee and by the Board
and the Audit Committee twice each year.

RISK CONTROL ASSURANCE
Internal audit work is undertaken by an independent
organisation who develop an annual internal audit plan
having reviewed the Group’s risk register and following
discussions with the external auditors, management and
members of the Audit Committee.

During the year the Audit Committee has reviewed
reports covering the internal audit work. This has
included assessment of the general control environment,
identification of any control weaknesses and
quantification of any associated risk, together with
a review of the status of mitigating actions. The Audit
Committee has also received reports from management
in relation to specific risk items together with reports
from external auditors, who consider controls to the
extent necessary to form an opinion as to the truth
and fairness of the financial statements.

The Group’s internal control and risk management
systems are designed to manage rather than eliminate
the risk of failure to achieve business objectives and can
provide only reasonable but not absolute assurance
against material misstatement or loss.

The report of the Audit Committee can be found on
page 58.

PRINCIPAL RISKS AND UNCERTAINTIES
The Board has carried out a robust, systematic
assessment of the principal risks facing the Group
during the period, including those which would threaten
its business model, future performance, solvency or
liquidity. The principal risks as determined by the Board
are listed in the table below, together with corresponding
mitigating actions. This is not intended to be an exhaustive
list of all risks and uncertainties that may arise.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTPRINCIPAL RISKS AND UNCERTAINTIES
RISKS RELATING TO THE GROUP

Risk

Impact

Mitigating Actions

Changes in consumer
preferences, perception
or purchasing behaviour

Consumers may decide
to purchase and consume
alternative brands or
spend less on soft drinks.

Changing consumer attitudes
towards sugar/government
intervention on sugar

Consumers may decide to
purchase and consume
alternative brands or spend
less on soft drinks.

Adverse publicity in relation
to the soft drinks industry, the
Group or its brands

Adverse publicity in relation
to the soft drinks industry, the
Group or its brands could have
an adverse impact on the
Group’s reputation, consumer
consumption patterns, sales
and operating profits.

Failure to maintain customer
relationships or take account of
changing market dynamics

Failure to maintain appropriate
customer relationships or a
reduction in the customer base
could have an adverse impact
on the Group’s sales and
operating profits.

The Group offers a broad range of branded products across a range of flavours,
subcategories and markets which offer choice to the end consumer.

Changing consumer attitudes and behaviours are monitored on an ongoing basis
and inform our brand plans and new product development.

Externally, we are responding as a soft drinks industry to the increased focus of the
media and government on sugar through the British Soft Drinks Association.

The Group offers a broad range of branded products, many of which are low sugar
or sugar free. We continue to progress reformulation projects to reduce sugar levels
in our products. Our new product development activity is focused on development
of lower calorie products and our marketing programmes incorporate our lower
calorie choices.

Our risk management process is designed to identify and monitor events that may
impact the Group as a result of adverse publicity and to ensure that controls are in
place to manage these risks.

We liaise with relevant industry bodies who work with government and policy makers.

Nutritional information is shown on all of our products and we have signed up to the
UK Government’s front-of-pack nutritional labelling scheme.

Processes are in place to ensure compliance with health and safety legislation and
ethical working standards and these are regularly reviewed by the Board and
management committee. Quality standards are well defined, implemented and
monitored. A Corporate Social Responsibility Committee is in place, with a clearly
defined and communicated Corporate Social Responsibility Policy. The Group
maintains and develops ISO 9001 and 14001 systems and BRC standards which
are subject to annual external audits, with any non-conformances addressed in
a timely manner.

The Group offers a broad range of brands that it manufactures and distributes
through a variety of trade channels and customers. Performance is monitored closely
by the Board and management committee by trade channel and customer as
appropriate. This includes monitoring of metrics which review brand equity
strength, financial and operational performance.

The Group focuses on delivering high quality products and invests heavily in building
brand equity. We work closely in partnership with our customers on an ongoing basis.
Members of the senior management team meet with key customers throughout
the year.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016RISK MANAGEMENT CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISKS RELATING TO THE GROUP CONTINUED

Risk

Impact

Mitigating Actions

Inability to protect the Group’s
intellectual property rights

Failure to protect the Group’s
intellectual property rights could
result in a loss of brand value.

The Group invests considerable effort in proactively protecting its intellectual
property rights, for example through trademark and design registrations and vigorous
legal enforcement as and when required.

Failure of the Group’s
operational infrastructure

Loss of continuity of supply
of major raw materials

Loss of product integrity

Failure of critical IT systems

Financial Risks

A catastrophic failure of the
Group’s major production or
distribution facilities could lead
to a sustained loss in capacity
or capability.

The loss of continuity of supply
of major raw material ingredients
and/or packaging materials
could impact our ability to
manufacture, with an adverse
impact on the Group’s sales
and operating profits.

A loss of product integrity in
the manufacturing supply chain
could lead to a product
withdrawal or recall.

A failure of critical IT systems
could result in a loss of key
systems, business interruption,
lost sales or lost production.

The Group’s activities expose it
to a variety of financial risks which
include market risk (including
medium term movements in
exchange rates, interest rate risk
and commodity price risk), credit
risk and liquidity risk.

Assets within the Group are proactively managed and maintained. Risk assessments
are carried out on a regular basis and appropriate actions taken. Robust business
continuity plans are in place and are regularly tested.

There is a robust supplier selection process in place. Supplier performance is
monitored on an ongoing basis and audits are undertaken for major suppliers.
Multiple sources of supply are sourced wherever possible. Commodity risks are
reviewed and managed by the procurement team and reviewed by the Treasury and
Commodity Committee. Contingency measures are in place and are tested regularly.

Appropriate risk assessments are carried out on a regular basis and robust quality
controls and processes are in place to maintain the high quality of our products.
Product recall procedures are tested regularly.

IT assets within the Group are proactively managed and procedures exist that
support rapid and clean recovery. Robust business continuity plans and contingency
measures are in place and are regularly tested.

Our underlying objective is to secure budgeted exchange rates and thereby reduce
the volatility through our cost of goods. Financial risks are reviewed and managed
by the Treasury and Commodity Committee, which seeks to minimise adverse effects
on the Group’s financial performance through hedging known currency exposures
throughout the year.

The Group’s finance team reviews cash flow forecasts throughout the year, with
headroom against banking covenants assessed regularly. The finance team uses
external tools to assess credit limits offered to customers, manages trade receivable
balances vigilantly and takes prompt action on overdue accounts. The Group’s
financial control environment is subject to review by both internal and external audit.
Internal audit’s focus is to work with and challenge management to ensure an
appropriate control environment is maintained.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STRATEGIC REPORTVIABILITY STATEMENT

In accordance with provision C.2.2 of the UK Corporate
Governance Code 2014, the directors have assessed
the viability of the Company over a three year period
to January 2019, taking account of the Group’s current
position and the Group’s principal risks, as detailed in
the Strategic Report. Based on this assessment, the
directors have a reasonable expectation that the
Company will be able to continue in operation and meet
its liabilities as they fall due over the three year period
to January 2019.

In making this statement, the directors have considered
the resilience of the Group in severe but plausible
scenarios, taking account of its current position and
prospects, the principal risks facing the business and how
these are managed. This assessment has considered the
potential impact of these risks on the Company’s
business model, future performance, solvency and
liquidity over the three year period. The following three
principal risks were selected for enhanced stress testing:
changing consumer preferences, loss of product integrity
and major raw material supply disruption. These are the
principal risks assessed to have the highest probability of
occurrence or the most severe impact; they were stress
tested both individually and in combination, taking

account of the Group’s current position, the Group’s
experience of managing adverse conditions in the past
and the mitigating actions available to the business.
A reverse stress test was also performed, allowing the
Board to assess scenarios and circumstances that would
render its business model unviable and enabling the
identification of potential business vulnerabilities and the
development of appropriate mitigating actions.

The Board selected the period of three years as an
appropriate period for the Company’s viability statement
for the following reasons:
ͽ The Company operates on a three year business

cycle; and

ͽ Management currently use three year forecasts as
part of the business planning process and capital
investment cycle.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016BOARD OF DIRECTORS

JOHN R. NICOLSON
B.A. (HONS)
CHAIRMAN

ROGER A. WHITE
M.A. (HONS)
CHIEF EXECUTIVE

STUART LORIMER
BAcc. (HONS), C.A. M.C.T.
FINANCE DIRECTOR

JONATHAN D. KEMP
B.A. (HONS)
COMMERCIAL DIRECTOR

Stuart was with Diageo for 22 years
in a range of roles and countries,
ultimately as the FD for Diageo’s
Global Supply Operation.

Term of Office
Joined the Company as Finance
Director in January 2015.

External Appointments
None.

Jonathan has had a successful career
in various commercial roles within
Procter and Gamble.

Term of Office
Joined the Company in 2003 as
Commercial Director.

External Appointments
None.

Roger is a member of the Board of
Management and Executive Council
and is a past President of the British
Soft Drinks Association. Previously
held numerous senior positions in
food group Rank Hovis McDougall.
Scottish PLC Chief Executive of the
year in 2010. Honorary Doctorate
University of Edinburgh 2014.

Term of Office
Joined the Company in 2002 as
Managing Director. Appointed
Chief Executive in 2004.

External Appointments
Non-Executive Director of
Troy Income & Growth Trust.

John’s career was spent with ICI,
Unilever, Fosters Brewing Group,
Scottish & Newcastle PLC, and latterly
as President Americas for Heineken
NV. He held various positions in
Marketing and Sales before moving
into Corporate Development and then
General Management.

Term of Office
Joined the Company in 2013 as a
Non-Executive Director. Appointed
Chairman January 2015.

External Appointments
Non-Executive Director of Stocks
Spirits Group PLC, Deputy Chairman
of CCU SA (Chile) and Non-Executive
Director of North American
Breweries Inc.

Committee Membership
Nomination Committee (Chair)
Remuneration Committee.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEW. ROBIN G. BARR
C.A.
NON-EXECUTIVE
DIRECTOR

Robin is a past President
of the British Soft Drinks
Association.

Term of Office
Joined the Company in 1960.
Appointed Director in 1964
and Chairman in 1978. Retired
as Chairman and appointed
Non-Executive Director
in 2009.

External Appointments
None.

Committee Membership
Audit Committee
Nomination Committee
Remuneration Committee.

PAMELA POWELL
B.A., M.B.A.
NON-EXECUTIVE
DIRECTOR

DAVID J. RITCHIE
B.A. (HONS), A.C.A.
NON-EXECUTIVE
DIRECTOR

Pam was formerly Group
Director of Strategy and
Innovation at SABMiller plc,
SVP Global Personal Care
at Coty Beauty Inc, and VP
Skincare and Global Brand
Director Dove at Unilever plc.

Term of Office
Joined the Company in 2013
as a Non-Executive Director.

External Appointments
Non-Executive Director
of Premier Foods plc.

Committee Membership
Audit Committee
Nomination Committee
Remuneration Committee.

David is a qualified Chartered
Accountant and is Chief
Executive of Bovis Homes
Group PLC (Bovis). He joined
Bovis in 1998 from KPMG as
Group Financial Controller
becoming Group Finance
Director in 2002 and Chief
Executive in 2008.

Term of Office
Joined the Company
in April 2015 as Non-
Executive Director.

External Appointments
CEO of Bovis Homes
Group PLC.

Committee Membership
Audit Committee
Nomination Committee
Remuneration Committee
(Chair).

ANDREW L. MEMMOTT
BSc, MSc.
SUPPLY CHAIN
DIRECTOR

Andrew joined the
Company following three
years with Cooperative
Wholesale Society.

Term of Office
Joined the Company’s Project
Engineering Team in June
1990. Appointed Operations
Director in 2008.

External Appointments
None.

MARTIN A. GRIFFITHS
L.L.B. (HONS), C.A.
SENIOR INDEPENDENT
NON-EXECUTIVE
DIRECTOR

A Chartered Accountant,
Martin is a former Chairman
of the Scottish Finance
Directors Group and a former
Director of Troy Income &
Growth Trust plc, Trainline
Holdings Limited, RoadKing
Infrastructure (HK) Limited
and Citybus (HK) Limited.
He is also a former Senior
Independent Non-Executive
Director of Robert Walters plc
and was young Scottish
Finance Director of the
year in 2004.

Term of Office
Joined the Company in 2010
as a Non-Executive Director.

External Appointments
CEO of Stagecoach Group,
Co-Chairman of Virgin Rail
Group Holdings Limited,
Virgin Trains East Coast and
Chairman of Rail Delivery
Group Limited.

Committee Membership
Audit Committee (Chair)
Nomination Committee
Remuneration Committee.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REPORT

The directors present their report and the audited consolidated financial statements of the Group for the 53 weeks (2015: 52 weeks) ended
30 January 2016.

STRATEGIC REPORT
The Companies Act 2006 requires the directors to present a review of the business during the year to 30 January 2016 and of the position
of the Group at the end of the financial year, together with a description of the principal risks and uncertainties faced. The Strategic Report
can be found on pages 02 to 45 and is incorporated by reference into this Directors’ Report.

CORPORATE GOVERNANCE STATEMENT
The Disclosure and Transparency Rules require certain information to be included in a corporate governance statement in the Directors’
Report. Information that fulfils the requirements of the corporate governance statement can be found in the Corporate Governance Report
on pages 53 to 57 and is incorporated by reference into this Directors’ Report.

RESULTS AND DIVIDENDS
The Group’s profit after tax for the financial year ended 30 January 2016 attributable to equity shareholders amounted to £34.3m
(2015: £30.0m).

An interim dividend for the current year of 3.36p (2015: 3.11p) per ordinary share was paid on 16 October 2015.

The final proposed dividend of 9.97p (2015 final dividend: 9.01p) per ordinary share will be paid on 10 June 2016 if approved at the
Company’s annual general meeting on 1 June 2016 (‘AGM’).

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 profit for the year was £22.8m (2015: £20.6m).

DIRECTORS
The following were directors of the Company during the financial year ended 30 January 2016:
ͽ J.R. Nicolson
ͽ R.A. White
ͽ S. Lorimer
ͽ J.D. Kemp
ͽ A.L. Memmott
ͽ W.R.G. Barr
ͽ M.A. Griffiths
ͽ P. Powell
ͽ D.J. Ritchie (appointed 1 April 2015)

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 first annual general meeting following appointment and to retire no later than the third annual general
meeting after the annual general meeting at which they were last elected or re-elected. However, in order to comply with the UK Corporate
Governance Code, all directors will submit themselves for re-election at the AGM. Biographical details of the Board are set out on pages 46
and 47 of this report.

DIRECTORS’ INTERESTS
Information regarding the directors’ interests in ordinary shares of the Company is provided in the Directors’ Remuneration Report on
page 61. No director has any other interest in any shares or loan stock of any Group company.

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

There have been the following changes notified in the directors’ shareholdings between 30 January 2016 and 29 March 2016: S. Lorimer
an increase in beneficial holding of 75 shares and a decrease in non-beneficial holding of 13,880 shares, R.A. White an increase in beneficial
holding of 74 shares, A.L. Memmott an increase in beneficial holding of 74 shares, J.D. Kemp an increase in beneficial holding of 74 shares
and W.R.G. Barr an increase in beneficial holding of 75 shares.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEDIRECTORS’ 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 indemnified 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 Officers’ liability insurance policy throughout the financial year and has
renewed that policy.

As at the date of this report, indemnities are in force between the Company and each of the directors of the corporate trustee of the
A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme under which the Company has agreed to indemnify each director, to the extent
permitted by law, in respect of certain liabilities incurred in connection with the corporate trustee’s activities as a trustee of such scheme.

RESEARCH AND DEVELOPMENT
The Group undertakes research and development activities in order to develop its range of new and existing products. Expenditure during
the year on research and development amounted to £1.1m (2015: £1.1m).

POLITICAL DONATIONS AND POLITICAL EXPENDITURE
No Group company made any political donations or incurred any political expenditure in the year (2015: £nil).

POST BALANCE SHEET EVENTS
Relevant post balance sheet events requiring disclosure are included in Note 33 to the accounts.

EMPLOYEE INVOLVEMENT
The Group is committed to engaging employees at all levels regarding matters which affect them and the performance of the Group. This is
achieved in a number of ways, including the use of regular briefing procedures, which twice yearly include a report on trading results. Regular
communication meetings are held to keep employees up to date with Group performance. Consultation meetings also take place when the
Company is making decisions that are likely to affect employees’ interests, at which employee representatives’ views are taken into account.
In addition to this, the Group’s intranet site provides up-to-date information regarding the Group’s activities.

All qualifying employees are entitled to join the Savings Related Share Option Scheme (‘SAYE’) and the All-Employee Share Ownership Plan
(‘AESOP’). Details of these share schemes are provided below.

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 a participant purchases in the Company, up to a current maximum
contribution of £150 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 five 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 currently £3,600 and the shares awarded are held in trust for five years.

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 partnership, matching and free shares must be removed from the trust if employment with the Company ceases.

SAYE
The SAYE is HMRC approved and is available to all qualifying employees, including executive directors. It is based on a five year savings
contract which provides the participant with an option to purchase shares after five years at a discounted price fixed 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.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REPORT CONTINUED

EMPLOYMENT OF DISABLED PERSONS
Applications for employment by disabled persons are always fully considered bearing in mind the qualifications 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.

SUBSTANTIAL SHAREHOLDINGS
As at 30 January 2016, the Company had been notified under Rule 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules
of the following interests in the Company’s ordinary share capital:

Lindsell Train Limited (discretionary clients)

Caledonia Investments plc

Neptune Investment Management

Number of shares

14,321,850

9,457,500

5,646,710

% of voting
rights

12.27

8.10

4.84

Type of
holding

Indirect

Direct

As at 29 March 2016, the Company had been notified under Rule 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules
of the following interest in the Company’s ordinary share capital:

Neptune Investment Management

Number of shares

5,826,806

% of voting
rights

5.01

Type of
holding

Direct

Otherwise, the position remains the same as at 29 March 2016 as it did at 30 January 2016.

RELATIONS WITH SHAREHOLDERS
The Company has regular discussions with and briefings for analysts, investors and institutional shareholders. The Chief Executive and
Finance Director normally meet with major shareholders twice annually in order to develop an understanding of their views and brief the next
Board meeting on their discussions. All directors have the opportunity to attend these meetings. At the AGM, 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.

SHARE CAPITAL
As at 30 January 2016 the Company’s issued share capital comprised a single class of ordinary shares of 4 1/6 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 28 to the financial statements contains details of the ordinary share capital.

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 profits available for such purposes.

There are no restrictions on the transfer of ordinary shares in the Company other than:
ͽ those which may from time to time be applicable under existing laws and regulations (for example, insider trading laws); and
ͽ pursuant to the Listing Rules of the Financial Conduct 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 2016 the Company had authority, pursuant to the shareholders’ resolution of 27 May 2015, to purchase up to 10% of its issued
ordinary share capital. This authority will expire at the conclusion of the 2016 AGM. It is proposed that this authority be renewed at the 2016
AGM, as detailed in the Notice of AGM.

At 30 January 2016 Robert Barr Limited, as trustee of the General Employee Benefit Trust, the Savings Related Benefit Trust, the All-
Employee Share Ownership Plan Trust and the Long Service Award Trust (the ‘RBL Trustee’), held 1.01% of the issued share capital of the
Company in trust for the benefit of the executive directors and employees of the Group. As at 30 January 2016, Equiniti Share Plan Trustees
Limited (the ‘AESOP Trustee’) held 1.36% of the issued share capital of the Company in trust for participants in the AESOP.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEA dividend waiver is in place in respect of the RBL Trustee’s holdings under the Savings Related Benefit Trust and the Long Service Award
Trust. A dividend waiver is in place in respect of shares held by the AESOP Trustee and the RBL Trustee under the AESOP which have not
been appropriated to participants.

The voting rights in relation to the RBL Trustee’s shareholdings are exercised by the RBL Trustee, who may vote or abstain from voting the
shares as it sees fit in respect of shares which are unvested or have not been appropriated to employees.

Under the rules of the AESOP, eligible employees are entitled to acquire shares in the Company. Details of the AESOP are set out above.
AESOP shares which have been appropriated to participants are held in trust for those participants by the AESOP Trustee. Voting rights in
respect of shares which have been appropriated to participants are exercised by the AESOP Trustee on receipt of participants’ instructions.
If a participant does not submit an instruction to the AESOP Trustee, no vote is registered in respect of those shares. In addition, the AESOP
Trustee does not vote any unappropriated shares held under the AESOP as surplus assets.

The Executive Share Option Scheme (‘ESOS’) was approved by shareholders at the 2010 AGM. Approved Long Term Incentive Plan (‘ALTIP’)
awards comprising both a tax-approved option granted under the ESOS and a Long Term Incentive Plan award have been granted to
executive directors. ALTIP awards enable the participant and the Company to benefit from HMRC tax-approved option tax treatment in
respect of part of the award, without increasing the pre-tax value delivered to participants. Other than to enable the grant of ALTIP awards,
the Company has not granted awards to executive directors under the ESOS. Details of the ALTIP awards granted to executive directors are
set out on page 72.

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 R.A. White, J.D. Kemp and A.L. Memmott
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. 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. No amendments are proposed
to be made to the existing Articles at the 2016 AGM.

GREENHOUSE GAS EMISSIONS
Disclosures regarding greenhouse gas emissions required by The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations
2013 are included in the Strategic Report on page 31. This information is incorporated by reference into this Directors’ Report.

FINANCIAL RISK MANAGEMENT
Information on the exposure of the Group to certain financial risks and on the Group’s objectives and policies for managing each of the
Group’s main financial risk areas is detailed in the financial risk management disclosure in Note 26.

CONTRACTS OF SIGNIFICANCE
There were no contracts of significance as defined by Listing Rule 9.8 in existence during the financial year.

DISCLOSURE OF INFORMATION UNDER LISTING RULE 9.4.3R
The information required under Listing Rule 9.4.3R is provided in the Directors’ Remuneration Report on page 66.

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
Strategic Report on pages 02 to 45. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described
in the financial review on pages 37 to 41.

After making the appropriate enquiries, the directors have concluded that the Group will be able to meet its financial obligations 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 (being at least one year following the date of approval of this annual report) and,
accordingly, consider it appropriate to adopt the going concern basis in preparing the financial statements.

The Company’s viability statement is set out on page 45 of the Strategic Report.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REPORT CONTINUED

DIRECTORS’ STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR
So far as each director is aware, there is no relevant audit information (as defined by the Companies Act 2006) of which the Company’s
auditor is 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 auditor is aware of any relevant audit information.

AUDITOR
The Audit Committee has responsibility delegated from the Board for making recommendations on the appointment, reappointment, removal
and remuneration of the external auditor.

The auditor, KPMG LLP, has indicated its willingness to continue in office and a resolution to appoint KPMG LLP as auditor of the Company
and its subsidiaries, and to authorise the Audit Committee to fix their remuneration, will be proposed at the 2016 AGM.

ANNUAL GENERAL MEETING
The Company’s AGM will be held at 11.00am on 1 June 2016 at the offices of KPMG, 191 West George Street, Glasgow, G2 2LJ. The Notice of
the AGM is set out on pages 135 and 136 of this report. A description and explanation of the resolutions to be considered at the 2016 AGM is
set out on pages 137 to 141 of this report.

RECOMMENDATION TO SHAREHOLDERS
The Board considers that all the resolutions to be considered at the AGM are in the best interests of the Company and its shareholders as
a whole and unanimously recommends that you vote in favour of them.

By order of the Board

J.A. BARR
COMPANY SECRETARY
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCECORPORATE GOVERNANCE REPORT

CHAIRMAN’S INTRODUCTION

Dear Shareholder
I am pleased to present our Corporate Governance Report, which describes how the
main principles of the 2014 UK Corporate Governance Code have been applied during
the year. Information about the Board, its members and committees, and an overview of
the Company’s system of internal controls are included.

With the exception of the appointment of David Ritchie, our new non-executive director, there
were no changes to the Board during the year. David is the CEO of Bovis Homes Group PLC
and, as an experienced and successful CEO, brings a new and valuable perspective to our
already strong Board. We will continue to strengthen our Board over the course of the next 12
months and expect to bring further capability, competence and experience to our boardroom.

Further details of the Board’s composition are given on pages 46 and 47.

JOHN R. NICOLSON
CHAIRMAN
29 March 2016

THE BOARD
The Company is led by a strong and experienced board of directors (the ‘Board’) which brings a depth and diversity of expertise to the
leadership of the Company. The Board has an appropriate balance of skills, experience and knowledge of the Group to enable it to discharge
its responsibilities effectively. The Board currently has nine members, comprising four executive directors, the non-executive Chairman, three
independent non-executive directors and one non-independent non-executive director. Biographical details of the directors are set out on
pages 46 and 47.

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 Chairman also
ensures that Board meetings are underpinned by a culture of openness and challenge, with sufficient time made available to debate issues
arising. The Chief Executive has responsibility for all Group businesses and acts in accordance with the authority delegated from the Board.
The senior independent non-executive director, M.A. Griffiths, is available to shareholders if they have concerns which have not been
resolved via the normal channels of Chairman, Chief Executive, or the other executive directors, or where communication through such
channels would be inappropriate.

The Board considers that M.A. Griffiths, P. Powell and D.J. Ritchie are independent for the purposes of provision B.1.1 of the UK Corporate
Governance Code, issued by the Financial Reporting Council in September 2014 (the ‘Code’), and that the relationships and circumstances
set out in that provision which may appear relevant to the determination of independence do not apply. The Board considers that, on
appointment, the Chairman was independent for the purposes of provision A.3.1 of the Code. M.A. Griffiths fulfilled the role of senior
independent director during the year to 30 January 2016. In addition to his role as Chairman of the Company, J.R. Nicolson is a director of
Stocks Spirits Group plc, deputy chairman of Compania Cervecerias Unidas S.A. (Chile) and director of North American Breweries Inc. The
Board does not consider that J.R. Nicolson’s other commitments have any impact on his ability to discharge his duties as Chairman of the
Company effectively.

The Articles require directors to retire and submit themselves for election at the first annual general meeting following appointment and to
retire no later than the third annual general meeting after the annual general meeting at which they were last elected or re-elected. However,
in order to comply with the Code, all directors will submit themselves for re-election at the AGM.

Details of directors’ remuneration and interests in shares of the Company are given in the Directors’ Remuneration Report on pages 61 to 84.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE REPORT CONTINUED

ROLE OF THE BOARD
The Board is responsible for the long term success of the Group, determines the strategic direction of the Group and reviews operating,
financial 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, the financial
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 as at the date of this report includes the executive directors and nine senior managers.

BOARD PERFORMANCE EVALUATION
Every year the performance and effectiveness of the Board, its committees and individual directors is evaluated. This year the evaluation
process was carried out internally, having been externally facilitated during the year to January 2014. The process was led by the Chairman,
who conducted a detailed and comprehensive evaluation process using written survey questionnaires. The non-executive directors, led by
the senior independent director, carried out a performance evaluation of the Chairman, taking into account the views of the executive
directors. The results of the evaluation were shared with all members of the Board. Overall, it was noted that the Board and its committees
were operating in an effective manner and performing satisfactorily, with no major issues identified.

The Chairman is pleased to confirm that, following performance evaluation of the directors, all of the directors’ performances continue to be
effective and all of the directors continue to demonstrate commitment to the role of director, including commitment of time for Board
meetings and committee meetings and any other relevant duties.

INDEPENDENT PROFESSIONAL ADVICE
Directors can obtain independent professional advice at the Company’s expense in the 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 environment in
which the Group operates. A programme of strategic and other reviews, together with the 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, financial and other developments to enable them to fulfil effectively their role on the Board and committees of the Board.

MEETINGS AND ATTENDANCE
Board meetings are scheduled to be held seven times each year. Between these meetings, as required, additional Board meetings (and/or
Board committee meetings) may be held to progress the Company’s business. A part of each Board meeting is dedicated to the discussion
of specific strategy matters.

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.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEThe attendance of directors at scheduled Board and committee meetings in the year to 30 January 2016 was as follows:

Executive

R.A. White*

S. Lorimer**

J.D. Kemp

A.L. Memmott

Non-executive

J.R. Nicolson

W.R.G. Barr

M.A. Griffiths

D.J. Ritchie***

P. Powell

Board
Maximum 8

Audit
Committee
Maximum 4

Remuneration
Committee
Maximum 6

Nomination
Committee
Maximum 3

–

* R.A. White attended Board committee meetings during the year by invitation.
** S. Lorimer attended Audit Committee meetings during the year by invitation.
*** D.J. Ritchie was appointed to the Board and each of the Board committees on 1 April 2015 and could have attended a maximum of seven Board meetings, three Audit Committee

meetings, five Remuneration Committee meetings and two Nomination Committee meetings.

During the year, the Board also convened one additional Board meeting in relation to a corporate transaction. All of the directors who were
entitled to attend that Board meeting attended the meeting, with the exception of J.R. Nicolson.

CONFLICTS OF INTEREST
The Articles allow the Board to authorise potential conflicts of interest that may arise from time to time, subject to certain conditions. The
Company has established appropriate conflicts authorisation procedures, whereby actual or potential conflicts are regularly reviewed and
authorisations sought as appropriate. During the year, no such conflicts arose and no such authorisations were sought.

COMMITTEES OF THE BOARD
The terms of reference of the principal committees of the Board – Audit, Remuneration and Nomination – have been approved by the Board
and are available on the Company’s website, www.agbarr.co.uk.

Those terms of reference have been reviewed in the current year and are reviewed at least annually. The work carried out by the Nomination
Committee in discharging its responsibilities is summarised below. The work carried out by the Audit Committee is described within the Audit
Committee’s Report on pages 58 to 60. The work carried out by the Remuneration Committee is described within the Directors’
Remuneration Report on pages 61 to 84.

NOMINATION COMMITTEE
The Nomination Committee comprises J.R. Nicolson, W.R.G. Barr, M.A. Griffiths, P. Powell and D.J. Ritchie (appointed 1 April 2015). The
Nomination Committee is chaired by J.R. Nicolson. The Nomination Committee leads the process for making appointments to the Board
and ensures that there is a formal, rigorous and transparent procedure for the appointment of new directors to the Board. The remit of the
Nomination Committee also includes reviewing the composition of the Board through a full evaluation of the skills, knowledge and experience
of directors and ensuring plans are in place for orderly succession for appointments to the Board. The Nomination Committee also makes
recommendations to the Board on the membership of its committees.

The Nomination Committee is required, in accordance with its terms of reference, to meet at least once per year. The Nomination Committee
met three times during the year and, amongst other matters, considered and recommended the appointment of D.J. Ritchie to the Board and its
committees. In identifying a potential new non-executive director, the Nomination Committee retained the services of The Zygos Partnership,
an external search consultant. The Zygos Partnership has no other connection with the Company other than the provision of these services.

The Board recognises the importance of diversity to the success of the business and is firmly committed to giving due consideration to all
aspects of diversity, including gender diversity. Appointments to the Board are made on merit, against objective criteria, and with due regard
for the beneﬁts of diversity on the Board. Whilst no formal measurable objectives have been set for female representation at Board level,
the Board remains committed to the principles of gender diversity.

The disclosure relating to gender diversity within the Company is included in the Strategic Report on page 28.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCE REPORT CONTINUED

TREASURY COMMITTEE
The Treasury Committee consists of R.A. White, S. Lorimer and senior members of the finance, legal and procurement departments. The
Treasury Committee reviews purchase requirements in foreign currencies and implements strategies, including the use of foreign exchange
hedges, in order 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’s remit also includes the ability to utilise certain financial instruments in order to hedge the
Group’s exposure to interest rate fluctuations.

INTERNAL CONTROL
The Board has overall responsibility for the Group’s internal control systems and annually reviews their effectiveness, including a review of
financial, 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 to provide reasonable, but not absolute, assurance against material
misstatement or loss.

The Board has reviewed the effectiveness of the Group’s risk management and internal control systems, including financial, operational and
compliance controls, in accordance with the Code for the period from 26 January 2015 to the date of approval of this annual report.

No significant failings or weaknesses were identified from this review during the year. Had any failings or weaknesses been identified then
the Board would have taken the action required to remedy them.

At the Audit Committee meeting on 14 January 2016, following a review and evaluation of the Group’s risk management and internal control
systems in place, the Audit Committee concluded that the Group has a sound system of risk management and internal controls in place.

The Board confirms that there is an ongoing process, embedded in the Group’s integrated internal control systems, allowing for the identification,
evaluation and management of significant risks, as well as a reporting process to the Board. This risk management process has been in place
throughout the year ended 30 January 2016 and up to the date of the approval of this annual report. The Board has carried out a robust,
systematic assessment of the principal risks facing the Group during the period, including those which would threaten its business model, future
performance, solvency or liquidity. Information on the Group’s risk management framework is set out in the Strategic Report on pages 42 to 45.

The three main elements of the Group’s internal control system 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
defined levels of responsibility and authority as well as appropriate reporting procedures.

The Board has a schedule of matters that are brought to it, or its duly authorised committees, for decision, aimed at maintaining effective
control over strategic, financial, operational and compliance issues.

This structure includes the Audit Committee which, with the Finance Director, reviews the effectiveness of the internal financial 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 financial information, including trading results, cash flow statement, statement of financial position and indebtedness, is reported.

The Board and the management committee review their business and financial performance against the prior year and against annual plans
approved by the Board.

AUDITS AND REVIEWS
The key internal risks identified in the Group are subject to regular audits or reviews by the internal auditors. This role is fulfilled by an external
professional services firm which is 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 findings of the audits
are acted upon and subsequent reviews confirm compliance with any agreed action plans.

The Board confirms that there has been an independent internal audit function in place for the year.

SHARE CAPITAL STRUCTURE
The share capital structure of the Company is set out in the Directors’ Report.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEUK CORPORATE GOVERNANCE 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 2016 with the provisions of the Code, except
as set out below.

Prior to 1 April 2015, the Board comprised four executive directors, the non-executive Chairman and two independent non-executive directors.
In addition, W.R.G. Barr was a non-executive director during the year although he is not considered by the Board to be independent. D.J.
Ritchie, an independent non-executive director, was appointed to the Board on 1 April 2015. Therefore, following D.J. Ritchie’s appointment,
the Board composition was the same with the exception that there were three independent non-executive directors. Accordingly, during the
year to 30 January 2016 the composition of the Board did not, at any time, comply with provision B.1.2 of the Code.

The composition of the Company’s Audit Committee did not comply with provision C.3.1 of the Code at all times during the year to 30 January
2016 due to the fact that this Committee did not, during the limited period 26 January 2015 to 31 March 2015, comprise at least three
independent non-executive directors. During this period, the Audit Committee comprised two independent non-executive directors and one
non-independent non-executive director. Following the appointment of D.J. Ritchie to the Audit Committee on 1 April 2015, the composition
of the Audit Committee complied with the Code in full.

The composition of the Company’s Remuneration Committee did not comply with provision D.2.1 of the Code at all times during the year to
30 January 2016 due to the fact that this Committee did not, during the limited period 26 January 2015 to 31 March 2015, comprise at least
three independent non-executive directors. During this period, the Remuneration Committee comprised two independent non-executive
directors, one non-independent non-executive director and the Chairman of the Company. In addition, at the request of the Board, J.R.
Nicolson continued to chair the Remuneration Committee following his appointment as Chairman of the Company on 1 January 2015 until the
recruitment of a new independent non-executive director with the capability to replace him in that capacity could be completed. In this regard,
D.J. Ritchie was appointed to the Remuneration Committee on 1 April 2015 and replaced J.R. Nicolson as Chairman of the Remuneration
Committee with effect from 1 July 2015. Following these appointments, the composition of the Remuneration Committee complied with the
Code in full.

The composition of the Company’s Nomination Committee did not comply with provision B.2.1 of the Code at all times during the year to
30 January 2016 due to the fact that this Committee did not, during the limited period 26 January 2015 to 31 March 2015, comprise a majority
of independent non-executive directors. During this period, the Nomination Committee comprised two independent non-executive directors,
one non-independent non-executive director and the Chairman of the Nomination Committee. Following the appointment of D.J. Ritchie to
the Nomination Committee on 1 April 2015, the composition of this Committee complied with the Code in full.

Provision D.1.5 of the Code recommends that executive directors’ contracts contain a maximum notice period of one year. As disclosed in the
Directors’ Remuneration Report, the service contracts with R.A. White, J.D. Kemp and A.L. Memmott provide for a notice period of 12 months
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 directors are entitled to a liquidated damages payment equal to the director’s basic salary at termination plus the
value of all contractual benefits for a two year period. Given the size of the Company and the sector dynamics at the time these directors
were recruited, the Remuneration Committee considered this provision appropriate in order to attract and retain high calibre executive
directors. As disclosed in the Directors’ Remuneration Report, this provision will continue to be honoured as a contractual commitment made
to these directors; however this provision was not included in S. Lorimer’s service contract and will not be included in service contracts with
other new executive directors appointed in future.

A copy of the financial statements has been 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 UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.

By order of the Board

J.A. BARR
COMPANY SECRETARY
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016AUDIT COMMITTEE REPORT

COMPOSITION
The Audit Committee comprises four non-executive directors: M.A. Griffiths, W.R.G. Barr, P. Powell and D.J. Ritchie. D.J. Ritchie was appointed
to the Audit Committee during the year. The Audit Committee is chaired by M.A. Griffiths. The Board is satisfied that M.A. Griffiths has recent
and relevant financial experience as required by provision C.3.1 of the Code. Biographical details relating to each of the committee members
are shown on page 47.

MEETINGS
The Audit Committee met four times during the year. The meetings are attended by the committee members and, by invitation, the Finance
Director, the Central Financial Controller, the Company Secretary and representatives from the external and internal auditors. The Audit
Committee regularly meets with executive directors and management, as well as privately with the external and internal auditors.

ROLE AND RESPONSIBILITIES
The primary role of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities. This includes:
ͽ monitoring the integrity of the annual and interim financial statements and formal announcements relating to the Group’s financial

performance and reviewing any significant financial reporting judgements and disclosures which they contain;

ͽ reporting to the Board on the appropriateness of the Group’s accounting policies and practices;
ͽ reviewing and monitoring the effectiveness of the Group’s internal control and risk management systems;
ͽ reviewing and monitoring the effectiveness of the internal audit function and management’s responsiveness to any findings and

recommendations;

ͽ reviewing and monitoring the appropriateness of the Group’s whistle-blowing and anti-bribery procedures;
ͽ making recommendations to the Board in relation to the appointment and removal of the external auditor and approving its remuneration

and terms of engagement;

ͽ reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process;
ͽ reviewing the policy on the engagement of the external auditor to supply non-audit services; and
ͽ reporting to the Board on how it has discharged its responsibilities.

ACTIVITIES OF THE AUDIT COMMITTEE
During the year the Audit Committee has:
ͽ reviewed and discussed with the external auditor the key accounting considerations and judgements reflected in the Group’s results for

the six month period ended 25 July 2015;

ͽ reviewed and agreed the external auditor’s audit strategy memorandum in advance of its audit for the year ended 30 January 2016;
ͽ discussed the report received from the external auditor regarding its audit in respect of the year ended 30 January 2016, which report

included comments on its findings on internal control and on the disclosure of risks and a statement on its independence and objectivity;
ͽ received and reviewed reports from management regarding their approach to key accounting considerations and judgements in the half

year and full year financial statements;

ͽ reviewed the half year and full year financial statements;
ͽ received reports on the operation of the Group’s Risk Committee;
ͽ reviewed the Group’s risk register and the Group’s principal risks, together with the systems and processes for mitigating those risks;
ͽ discussed and agreed the nature and scope of the work to be performed by the external and internal auditors;
ͽ reviewed the results of this audit work and the response of management to matters raised;
ͽ reviewed the effectiveness of the Group’s risk management and internal control systems (including financial, operational, compliance

and risk management controls);

ͽ reviewed the appropriateness of the Group’s whistle-blowing procedures;
ͽ reviewed the effectiveness of the Group’s anti-bribery systems and controls;
ͽ received reports from internal audit covering various aspects of the Group’s operations, controls and processes;
ͽ reviewed the Group’s delegated authority limits;
ͽ made a recommendation to the Board on the reappointment of the internal auditor;
ͽ made recommendations to the Board on the reappointment and remuneration of the external auditor and monitored the performance

of the auditor;

ͽ monitored and reviewed the performance of the internal auditor and the effectiveness of the Group’s internal audit activities;
ͽ reviewed its policies on the supply of non-audit services by the external auditor and on the employment of former employees of the

Group’s external auditor;

ͽ reviewed the non-audit services provided to the Group by the external auditor and monitored and assessed the independence of both

the external and internal auditors; and

ͽ reviewed the performance of the Audit Committee and its terms of reference.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCESIGNIFICANT AREAS
The significant matters and key accounting judgements considered by the Audit Committee during the year were:
ͽ The carrying value of brand support accruals: judgement is required when ascertaining the level of accrual required in relation to

promotions and brand support campaigns that span the year end, or where settlement has not been fully and finally settled by the year end,
or which relate to prior years. During the year the Audit Committee received presentations from members of the senior management team
on the commercial investment process. It also received and considered reports from management on the level of accruals at the half year
and at the year end. The Audit Committee was content that there were no issues arising.

ͽ The valuation of inventory: the valuation of inventory is judgemental due to the volatile nature of raw material commodity prices and,

as the Group uses standard costing, changes in production levels can lead to purchase price variances which require to be accounted
for correctly. During the year the Audit Committee considered and was satisfied with reports from the internal auditor and management
regarding the controls operating in relation to inventory management at the Milton Keynes site. The Audit Committee discussed and
challenged management’s judgements in relation to inventory valuation and considered reports from the external auditor on this area
and were satisfied that inventory valuations were reasonable.

OTHER AREAS
Other matters considered by the Audit Committee during the year were:
ͽ UK Corporate Governance Code: the Audit Committee considered the new requirements under the 2014 Code, including the requirement

to draft a viability statement which assesses the prospects of the Group over an appropriate period.

ͽ Accounting for the Funkin acquisition: during the year the Audit Committee considered and was satisfied with the Company’s approach

to accounting for the Funkin acquisition.

ͽ Business Process Redesign (“BPR”) implementation: the Audit Committee considered and was satisfied with reports from the internal and

external auditors and management related to the BPR implementation.

ͽ Restatement of segment reporting: the Audit Committee considered i) a misstatement in segment reporting in the annual report for the

year to 25 January 2015; and ii) the alignment of internal management reporting and statutory reporting following the implementation of
a new enterprise resource planning system during the six months to 25 July 2015 and was satisfied with the restated figures and
explanatory notes contained in the interim report for the six months to 25 July 2015 in relation thereto.

The Audit Committee receives regular presentations from members of the senior management team. During the year, the Audit Committee
has considered presentations from representatives of the management team on the supply of raw materials, commercial investment, product
quality and the treasury function.

EXTERNAL AUDIT
The Group’s external auditor is KPMG LLP. The Audit Committee reviews the external auditor’s performance, independence and objectivity
annually. The Audit Committee ensures that procedures are in place to safeguard the external auditor’s independence and objectivity. The
external auditor reports regularly to the Audit Committee on the actions that it has taken to comply with professional and regulatory
requirements and current best practice in order to maintain its independence and objectivity.

The Group has a policy in place which ensures that the provision of non-audit services by the external auditor does not impair the auditor’s
independence or objectivity. Where fees for any non-audit project are expected to exceed £50,000, the prior approval of the Chairman of
the Audit Committee and the Finance Director is required. Where fees for non-audit projects are in aggregate expected to exceed £150,000,
the prior approval of the Audit Committee is required. Details of the amounts paid to the external auditor during the year for audit and non-
audit services are set out in Note 3 to the financial statements. Whilst fees for non-audit services were approximately 1.4 times those for
audit services, the Audit Committee considered the nature and level of non-audit services provided and was satisfied that the objectivity
and independence of the external auditor were not affected by the non-audit work undertaken. A significant proportion of the non-audit fees
during the year were for services provided in relation to corporate finance transactions, and the remainder related to the provision of pension
advisory, tax advisory and tax compliance services. The level of fees for non-audit services was considered by KPMG’s ethics partner who
concluded that they did not present a threat to KPMG’s independence.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016AUDIT COMMITTEE REPORT CONTINUED

KPMG Audit Plc was appointed as the Group’s external auditor in May 2009 following a competitive tender process. A resolution proposing the
appointment of KPMG LLP, KPMG Audit Plc’s parent entity, as the Group’s external auditor was approved by shareholders at the 2014 AGM.
There are no contractual obligations which restrict the Audit Committee’s choice of external auditor. The senior statutory auditor rotates every
five years to ensure independence; an audit partner rotation took place at the end of the 2013/14 financial year and the Audit Committee took
steps to ensure that a new appropriately qualified and independent senior statutory auditor became responsible for the audit of the Group’s
financial statements with effect from 2014/15. The Audit Committee acknowledges the new requirement under the Code to tender the external
audit contract at least every ten years. The Audit Committee carried out a review of the effectiveness of the external audit process during the
year. This review included a detailed and comprehensive evaluation of the Group’s external auditor by means of a written survey questionnaire
completed by Audit Committee members and certain members of senior management, including the executive directors. The results of the
evaluation were shared with the Group’s external auditor. The Audit Committee reviewed comprehensive papers from both management and
the Group’s external auditor, which set out the planning and execution of the conduct of the audit. The Audit Committee held a meeting with
the Group’s external auditor in the absence of management to discuss further. Following this review, the Audit Committee continues to be
satisfied with KPMG LLP’s performance, that it remains objective and independent, and that the external audit process remains effective.
The Audit Committee has recommended to the Board that a resolution proposing the appointment of KPMG LLP be put to shareholders at
the 2016 AGM.

INTERNAL AUDIT
At the beginning of each year, an internal control plan is developed by the internal auditor following meetings with directors and senior
managers within the business and with reference to the significant risks contained within the Group’s risk register and identified controls.
The Audit Committee receives updates on progress against the internal control plan throughout the year.

MARTIN A. GRIFFITHS
CHAIRMAN OF THE AUDIT COMMITTEE
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEDIRECTORS’ REMUNERATION REPORT

REMUNERATION COMMITTEE – CHAIRMAN’S STATEMENT
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended 30 January 2016, which sets out the
Directors’ Remuneration Policy and the Annual Report on Remuneration. The Directors’ Remuneration Policy was approved by a binding vote
at the 2014 AGM and became effective for three years from the close of that meeting. For ease of reference, we are including the Policy in
this year’s Directors’ Remuneration Report. The Annual Report on Remuneration provides details of the amounts earned in respect of the
year ended 30 January 2016 and how the Policy will be operated for the year commencing 31 January 2016.

I am delighted to report on the strong level of support received from shareholders, as evidenced by the voting outcome at the 2015 AGM.
The resolution seeking approval of the Annual Report on Remuneration was supported by over 99.9% of the votes cast.

During the year ended 25 January 2015, the Company appointed the Group’s new Finance Director, Stuart Lorimer. As noted in last year’s
Directors’ Remuneration Report, in order to fully integrate Stuart within the business and align his interests with those of his peers, the
Remuneration Committee brought him into the existing LTIP awards, although scaled back to reflect his reduced period of employment over
the performance periods. Details of the awards are set out on page 66.

John Nicolson was appointed Chairman of the Group on 1 January 2015. At the request of the Board, he agreed to continue to chair the
Remuneration Committee until the recruitment of a new independent non-executive director with the capability to replace him in this capacity
could be completed. In this regard, I joined the Board on 1 April 2015 and replaced John as chair of the Remuneration Committee with effect
from 1 July 2015. I would like to thank John for chairing the Remuneration Committee until the end of June 2015.

2015/16 KEY DECISIONS AND PAY OUTCOMES
As described in the Strategic Report, against challenging soft drinks market conditions, the Group delivered revenue for the year ended
30 January 2016 of £258.6m, a decrease of 0.9% on the prior year. The UK soft drinks market decreased by 1.8% in value over the same
period of time. Pre-tax profit decreased by 1.4% on the prior year. The Remuneration Committee remains committed to a responsible
approach to executive pay and believes that variable pay should only be earned for achievement against stretching targets. Despite a
number of year on year improvements, the threshold profit target was not met, and therefore no annual bonus awards have been paid to
R.A. White, S. Lorimer, J.D. Kemp and A.L. Memmott in respect of the year ended 30 January 2016. Average EPS growth for the three years
ended 30 January 2016 exceeded the average EPS for the three years preceding that period (both being adjusted for Retail Price Index) by
15.0%. As a result, the Long Term Incentive Plan (‘LTIP’) awards granted in April 2013 vested at 37.89%. Further details in relation to the annual
bonus and LTIP vesting are included on pages 63 to 65.

PROPOSED CHANGES IN EXECUTIVE DIRECTOR REMUNERATION FOR 2016/17
The Remuneration Committee has continued to monitor executive remuneration policy to take account of evolving market practice and its
alignment with the strategic direction of the business (as set out in the Strategic Report on pages 2 to 45), whilst also seeking to ensure that
there is continuity to the structure of executive pay.

In line with the range of salary increases across the Group, an increase of 2.0% will be made to the executive directors’ base salaries with
effect from 1 April 2016. An increase of 2.0% will also be made to the Chairman’s fee and the other non-executive directors’ basic fee with
effect from 1 April 2016.

The Remuneration Committee reviewed the EPS targets under the LTIP during the year to ensure that they continue to provide an appropriate
balance between motivating and rewarding executive directors to deliver stretching but sustainable performance in line with business strategy,
without encouraging excessive risk taking. Following consultation with key shareholders, the Remuneration Committee concluded that it would
set absolute EPS targets on a cumulative basis for LTIP awards granted in 2016 and thereafter. The Remuneration Committee considers that
this approach will result in the setting of more meaningful EPS targets annually. The 2016 LTIP awards will continue to be based on EPS
performance only, with the view of considering other performance metrics alongside EPS in the future. Further details in relation to the EPS
targets are included on page 66.

In line with best practice, and reflecting the UK Corporate Governance Code, a clawback provision has been introduced to annual bonus awards
earned for the year ending 28 January 2017 and future years and for LTIP awards granted during 2016 and future years. The clawback provisions
will enable the Remuneration Committee to recover payments made for up to two years following the determination of the annual bonus pay-out
or vesting outcome of LTIP awards, in the event of a material misstatement of the Group’s financial results or if the participant has been guilty of
misconduct. The clawback provisions are in addition to the malus provisions that currently apply to annual bonus and LTIP awards.

The terms of reference of the Remuneration Committee are available on the Company’s website, www.agbarr.co.uk.

DAVID J. RITCHIE
CHAIRMAN OF THE REMUNERATION COMMITTEE
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

ANNUAL REPORT ON REMUNERATION
The following parts of the Remuneration Report are subject to audit, other than the elements explaining the application of the remuneration
policy for 2016/17.

SINGLE FIGURE TABLE – AUDITED INFORMATION
The aggregate remuneration provided to directors who have served as directors in the year ended 30 January 2016 is set out below, along
with the aggregate remuneration provided to such directors for the year ended 25 January 2015.

YEAR ENDED 30 JANUARY 2016

Director

Executive

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Non-executive

J.R. Nicolson

W.R.G. Barr

M.A. Griffiths

P. Powell

D.J. Ritchie*

Total

YEAR ENDED 25 JANUARY 2015

Director

Executive

R.A. White

S. Lorimer***

J.D. Kemp

A.L. Memmott

A.B.C. Short**

Non-executive

R.G. Hanna****

W.R.G. Barr

M.A. Griffiths

J.R. Nicolson

P. Powell

Total

Salary/fees
£000

Benefits
£000

Bonus
£000

Long term
incentives
£000

Pension
£000

Total
remuneration
£000

434

256

227

203

133

–

1,442

130

–

150

–

212

–

837

343

386

361

133

319

358

2,249

Salary/fees
£000

Benefits
£000

Bonus
£000

Long term
incentives†
£000

Pension
£000

Total
remuneration
£000

421

221

197

136

118

–

320

–

168

149

104

–

196

–

105

–

108

–

1,075

559

505

283

118

1,310

741

395

225

2,763

* D.J. Ritchie was appointed as a non-executive director on 1 April 2015.
** A.B.C. Short resigned as an executive director on 29 August 2014.
*** S. Lorimer was appointed as an executive director on 5 January 2015.
**** R.G. Hanna retired as a non-executive director on 31 December 2014.
†

The long term incentives figure for the year ended 25 January 2015 has been restated to reflect the market value of the shares that vested on 7 April 2015 as at that date. The long
term incentives figure for the year ended 25 January 2015 set out in the Annual Report 2015/16 used the share price as at 25 January 2015 as an estimate of the market value of
those shares.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEThe total long term incentives figure of £395,000 for the year ended 25 January 2015 is the gain made by directors in the year ended
30 January 2016 on the LTIP awards that vested on 7 April 2015. A further gain of £35,000 was made by the directors in the year ended
30 January 2016 on the exercise of options under the SAYE to give a total gain by the directors of £430,000. No other long term incentive
schemes were in place for either of the two years presented.

The figures in the single figure table above are derived from the following:

(a) Salary and fees

The amount of salary/fees received in the year. A salary sacrifice arrangement is operated by the Company.
Employees who join this arrangement no longer pay contributions to the pension schemes but receive a lower
taxable salary. Directors’ salaries are shown gross of salary sacrifice pension contributions.

(b) Benefits

The value of benefits received in the year. These include car allowance, fuel benefit, the value of SAYE options
vesting in the year, and AESOP free and matching shares awarded in the year.

(d) Long term
incentives

(e) Pension

SAYE: option shares are valued at the market price of the option shares at the date of vesting less the option
exercise price.

AESOP: free and matching shares are valued at market value at the date of award.

Details of the executive directors’ interests in the SAYE are set out on page 72.

A description of the annual bonus in respect of the year and Group performance against which the bonus pay-out
was determined is provided on pages 64 and 65.

The value of LTIP awards that vest in respect of the year.

LTIP: the shares which will vest in respect of the year have been valued based on the average market value of the
shares over the three month period ended 30 January 2016. The value of the shares which vested in respect of
the prior year was the market value of the shares on the vesting date.

Details of the executive directors’ interests in the LTIP are set out on page 72.

The pension figure includes:
ͽ for individuals in the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme (the ‘Scheme’) defined

contribution section, the Company’s contributions to the defined contribution section, excluding any pension
contributions made in respect of an individual under the Company’s salary sacrifice arrangement;

ͽ for individuals in the Scheme’s defined benefit section, the additional value achieved in the year calculated

using the HMRC method (using a multiplier of 20); and

ͽ the value of the accrued liability for the year in respect of the Company’s contribution for each director

participating in the URBS.

Further details of pension benefits are set out on pages 66 to 68.

INDIVIDUAL ELEMENTS OF REMUNERATION
BASE SALARY AND FEES
Details of annual base salaries for individual executive directors for the year ended 30 January 2016 and for the following year are set out in
the table below:

Executive director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Base salary for
year ended
30 January 2016
£000

Base salary for
year ending
28 January 2017
£000

434

256

227

203

443

262

232

207

Increase
%

2.1

2.2

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

Details of non-executive directors’ fees for the year ended 30 January 2016 and for the following year are set out in the table below:

Non-executive director fee

Chairman of the Company

Basic fee

Additional fee for chairing Audit Committee

Additional fee for chairing Remuneration Committee

Additional fee for Senior Independent Director

BENEFITS – AUDITED INFORMATION
The benefits figure for each of the executive directors is detailed as follows:

YEAR ENDED 30 JANUARY 2016

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Total

YEAR ENDED 25 JANUARY 2015

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

A.B.C. Short

Total

Year ended
30 January 2016
£000

Year ending
28 January 2017
£000

Increase
%

134

137

Car and fuel
benefit
£000

SAYE
£000

AESOP awards
£000

–

Car and fuel
benefit
£000

SAYE
£000

AESOP awards
£000

–

2.2

0.0

Total
£000

130

Total
£000

The value of the AESOP awards are the sum of the AESOP free and matching shares awarded to the directors in the year.

ANNUAL BONUS
The maximum annual bonus award opportunity for each executive director in respect of the year ended 30 January 2016 was 100% of salary,
with 80% of the bonus assessed against the year on year increase in profit before tax, excluding exceptional items, and 20% based on
non-financial strategic measures. No annual bonus has been paid in respect of the year ended 30 January 2016.

The target for the proportion of the annual bonus based on the year on year increase in profit before tax and performance against that target
is set out in the table below. 50% of this element of the bonus could be earned for on-target performance and this increases on a linear scale
for performance against the set target up to a maximum of 80% of salary.

Adjusted profit before tax growth

Threshold
target

Performance
target

7.36%

Maximum
target

12.37%

Actual
performance

Maximum
percentage
of bonus

Actual
percentage
of bonus

(1.4)%

80%

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEStrategic targets were set around the Company’s key areas of strategic focus, including: core brands and markets, brand portfolio, route to
market, partnerships, efficient operations, people development, and sustainability and responsibility. Whilst the Remuneration Committee
was satisfied that strong progress had been achieved by the executive directors towards a number of these strategic targets, the executive
directors in conjunction with the Remuneration Committee agreed that the element of the annual bonus (20% of basic salary) based on
non-financial strategic measures in respect of the year would not be paid.

ANNUAL BONUS FOR 2016/17
For the 2016/17 financial year, an element of the annual bonus (20% of basic salary) will continue to be assessed against strategic measures
to align the reward structure with key strategic priorities and to encourage behaviours which facilitate profitable growth and the future
development of the business. The remainder of the annual bonus will continue to be assessed against growth in Group profit before tax.
Performance targets will be set at challenging levels in line with those of previous years, with 50% of this element of the annual bonus being
earned for on-target performance. The actual performance targets are not disclosed as they are considered to be commercially sensitive at this
time and should therefore remain confidential to the Company. The Remuneration Committee will continue to disclose how the bonus pay-out
earned relates to performance against the targets on a retrospective basis. No changes are proposed to the maximum annual bonus
opportunity which will remain at 100% of salary.

LONG TERM INCENTIVES – AUDITED INFORMATION
AWARDS VESTING IN RESPECT OF THE FINANCIAL PERIOD
LTIP awards granted in April 2013 were subject to the achievement of an average EPS growth performance condition over a three year period
ended 30 January 2016.

Threshold vesting
at 20%
of the maximum
award

Maximum
vesting at 100%
of the maximum
award

% linked to award

Three year average EPS growth in excess of RPI

100%

10%

32.5%

There is straight-line vesting between the points and no reward below threshold performance.

The maximum value of any award of shares is 100% of basic salary.

Details of LTIP awards vesting in respect of the financial period are set out below:

YEAR ENDED 30 JANUARY 2016

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Total

Total shares
Number

Award rate
%

Shares
awarded
Number

Share price at
30 January 2016*
£

LTIP value
£000

75,645

10,162

39,667

35,332

160,806

37.89%

28,662

3,850

15,030

13,387

60,929

5.24

150

319

The long term incentives figure for the year ended 30 January 2016 has been valued using the average closing share price for the three months ended 30 January 2016 as an
estimate of the value of the incentive as the actual value of the award will not be finalised until the closing share price is known when the incentive vests in April 2016.

YEAR ENDED 25 JANUARY 2015

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Total

Total shares
Number

98,172

–

52,332

46,857

197,361

Award rate
%

31.9%

–

31.9%

Shares
awarded
Number

31,327

–

16,699

14,952

62,978

Share price at
award date*
£

LTIP value
£000

6.26

–

6.26

196

–

105

395

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

AWARDS GRANTED DURING THE FINANCIAL PERIOD
In respect of the year ended 30 January 2016 the following LTIP awards were granted equating to 125% of salary.

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Type of award Number of shares

LTIP award

88,579

52,337

46,449

41,371

Market value at
grant
£000

% of award
vesting at
threshold
%

Performance
period
Years

545

322

286

254

20.0

The performance condition for these LTIP awards is as described above for LTIP awards granted in April 2013, with the exception that the
average EPS growth target is adjusted for CPI and is calculated on the basis of profit after tax not profit before tax. The salary used in the
calculation of the award is the individual director’s salary at 1 April 2015.

S. LORIMER RECRUITMENT AWARD
In order to fully integrate S. Lorimer within the business and align his interests with those of his peers, the Remuneration Committee brought
him into the existing LTIP awards, although scaled back to reflect his reduced period of employment over the performance periods. These
awards are subject to the same growth in EPS targets as those attaching to the LTIP awards granted to executive directors during 2012/13
and 2013/14. Details of the awards are set out in the table below.

Executive Director

S. Lorimer

Equal to 25% of salary.
*
** Equal to 50% of salary.

Type of award Number of shares

LTIP award

10,162

20,325

Market value at
grant
£000

63*

125**

% of award
vesting at
threshold
%

20.0

Performance
period
Years

The Remuneration Committee may reduce the amount which would vest if it does not consider it to be a fair reflection of S. Lorimer’s
contribution to the business during the performance periods. If S. Lorimer leaves within two years of being appointed, the Remuneration
Committee will require S. Lorimer to pay back any of the recruitment award that has vested.

LONG TERM INCENTIVES FOR 2016/17
As referenced in the Chairman’s statement, LTIP awards granted in 2016 will be subject to absolute EPS targets on a cumulative basis.
The detailed performance metrics proposed are as follows:

Cumulative EPS for 2016/17, 2017/18 and 2018/19

Threshold vesting
at 20%
of the maximum
award

Maximum
vesting at 100%
of the maximum
award

% linked to award

100%

90p

100.5p

There is straight-line vesting between the points and no reward below threshold performance.

Awards made to the executive directors in 2016 will equate to 125% of salary.

CLAWBACK
As referenced in the Chairman’s statement, a clawback provision has been introduced to annual bonus awards earned for the year
ending 28 January 2017 and future years and for LTIP awards granted during 2016 and future years. The clawback provisions will enable
the Remuneration Committee to recover payments made for up to two years following the determination of the annual bonus pay-out or
vesting outcome of LTIP awards, in the event of a material misstatement of the Group’s financial results or if the participant has been guilty
of misconduct. The clawback provisions are in addition to the malus provisions that currently apply to annual bonus and LTIP awards.

TOTAL PENSION ENTITLEMENTS – AUDITED INFORMATION
Executive directors are all members of the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme (the ‘Scheme’). The Scheme has a
defined benefit section and a defined contribution section. The defined benefit section was closed to new entrants from 14 August 2003.
R.A. White and A.L. Memmott are members of the defined benefit section.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCECompany contributions (which exclude any pension contributions made in respect of an individual under the Company’s salary sacrifice
arrangement) are detailed in the following table:

YEAR ENDED 30 JANUARY 2016

Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Total

YEAR ENDED 25 JANUARY 2015

Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

A.B.C. Short

Total

Defined
benefit
£000

Defined
contribution
£000

–

Defined
benefit
£000

Defined
contribution
£000

–

URBS
£000

149

198

URBS
£000

–

132

Investment
return on URBS
£000

–

Investment
return on URBS
£000

–

Total
£000

212

358

Total
£000

108

225

The URBS is the A.G. BARR p.l.c. Unfunded Retirement Benefit Scheme for executive directors. Please see below for further details.

Details of the entitlements accruing to the two directors who are deferred members of the defined benefit section are detailed in the
table below:

R.A. White

A.L. Memmott

Accrued pension
at 30 January
2016
£000

Normal
Retirement Age

63*

The normal retirement age specified in the Scheme rules for R.A. White and A.L. Memmott is age 63, however both are also entitled under the Scheme rules to retire at age 60
without an actuarial reduction to their pension benefits and without any consent required.

Early retirement can be taken at age 55 subject to Company consent. The accrued pension would be reduced relative to age 60 to take
account of its early payment.

R.A. White ceased his accrual under the defined benefit plan on 5 April 2011. Under the terms of his service contract, R.A. White is entitled to
re-valuation of his deferred benefits in line with RPI until his normal retirement date. The rules of the Scheme provide for revaluation increases
in deferment in line with CPI. R.A. White elected for Fixed Protection 2012 to protect his benefits accrued under the Scheme. To enable R.A.
White to continue to benefit from Fixed Protection 2012, his deferred benefits are revalued in line with CPI and, to the extent that RPI exceeds
CPI in any year, a corresponding additional contribution is made to his URBS. In the year ended 30 January 2016 this has resulted in an
additional accrual of £38,920 being included in R.A. White’s URBS for that year and forms part of the £149,000 URBS figure included in the
pension table above. A further £136,080 has been accrued for the period from 5 April 2011 to 25 January 2015. This further accrual has not
been included within R.A. White’s total remuneration figure for the current year as the additional contribution is matched by a decrease in the
cost of the defined benefit scheme (Note 27). In addition, R.A. White will continue to be entitled to receive life assurance benefits as if he were
in pensionable service under the Scheme until his normal retirement date notwithstanding the termination of his employment with the
Company, but only in circumstances where he is a ‘good leaver’. A.L. Memmott ceased his accrual under the defined benefit plan on 1 March
2008. His accrued benefits retain a link to his final pensionable salary.

Dependants of the executive directors are eligible for dependants’ pensions and the payment of a lump sum in the event of death in service.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

Where the Scheme provides a pension on a defined benefit basis, final pensionable salary is used to determine the director’s pension
entitlement. Where benefits are provided on a defined contribution basis, the benefits depend on the director’s accumulated fund. Lump
sum life assurance cover is provided at four or eight times pensionable salary dependent upon the date of joining the Scheme.

The Company paid contributions to the defined contribution section of the Scheme during the year in respect of J.D. Kemp, A.L. Memmott
and S. Lorimer. These are shown in the Defined Contribution column in the total pension entitlements table above.

During the year ended 30 January 2016, R.A. White, J.D. Kemp, A.L. Memmott and S. Lorimer participated in the A.G. BARR p.l.c. Unfunded
Retirement Benefit Scheme (‘URBS’) with the agreement of the Company. The URBS was approved by the Remuneration Committee and is
an unfunded employer financed retirement benefits scheme. It was established to satisfy the Company’s contractual obligations to provide
retirement benefits for the benefit of the executive directors.

In line with the current approved remuneration policy, the Company contribution under the URBS in respect of R.A. White increased from
22.5% to 26% of his salary as a result of him reaching his 50th birthday (as defined under the rules of the URBS).

The maximum combined Company contribution under the defined contribution section of the Scheme and the URBS in respect of the
remaining executive directors is 19% of salary (as defined in the Scheme rules) rising to 26% following the executive’s 50th birthday.

The URBS figure for the directors represents a Company contribution only.

An accrued liability of £982,273 (2015: £543,349) is included in the closing balance sheet for the URBS. The liability has been accrued in
respect of the directors as follows:

Executive Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Total URBS liability

Accrual at
30 January 2016
£

Accrual at
25 January 2015
£

900,972

513,757

20,312

35,998

24,990

Nil

18,318

11,274

982,273

543,349

PAYMENTS TO PAST DIRECTORS
There were no payments made to past directors during the year in respect of services provided to the Company as a director.

PAYMENTS FOR LOSS OF OFFICE
As disclosed in last year’s Directors’ Remuneration Report, the Remuneration Committee awarded A.B.C. Short a pro-rated annual bonus to
reflect his period in office and his contribution to the business during the 2014/15 financial year. This bonus was paid to A.B.C. Short during
the year ended 30 January 2016. No other payments for loss of office were made during the year.

STATEMENT OF DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS – AUDITED INFORMATION
In order to further align the executive directors’ long term interests with those of shareholders, the Remuneration Committee introduced
new share ownership guidelines applicable from 2017/18. The guidelines require that, with effect from 2017/18, when the first awards granted
under the 2014 LTIP are due to vest, executive directors retain all shares acquired under Company sponsored share plans and retain up to
half of any bonus pay-out after tax to purchase shares in the Company until the value of their shareholding is equal to 125% of gross basic
salary. Until this shareholding is acquired, the executive directors may not, without Remuneration Committee approval, sell shares other than
to finance any tax liabilities arising from the vesting of LTIP awards. Prior to 2017/18, executive directors are required to retain all shares
acquired under Company sponsored share plans until the value of their shareholding is equal to 100% of gross basic salary. At the year end,
R.A. White, J.D. Kemp and A.L. Memmott met the 100% of gross basic salary requirement applicable for the year ended 30 January 2016.
S. Lorimer was appointed to the Board on 5 January 2015 and is to build up a shareholding equal to 100% of his gross basic salary in
accordance with the shareholding guidelines.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEThe interests of each executive director of the Company as at 30 January 2016 (including those held by their connected persons) were:

Owned outright

Exercised during
the year

Subject to
performance
conditions

Not subject to
performance
conditions

Total as at
30 January 2016

Unvested

356,326

–

Director

Type

Executive

R.A. White

LTIP shares

ESOS shares

SAYE options

AESOP free shares

AESOP matching shares

S. Lorimer

LTIP shares

ESOS shares

SAYE options

AESOP free shares

AESOP matching shares

Shares – non-beneficial holding*

J.D. Kemp

ESOS shares

LTIP shares

SAYE options

AESOP free shares

AESOP matching shares

–

1,074

–

147,013

–

A.L. Memmott

106,779

LTIP shares

ESOS shares

SAYE options

AESOP free shares

AESOP matching shares

Non-executive

W.R.G. Barr

Shares – non-beneficial holding**

M.A. Griffiths

J.R. Nicolson

P. Powell

D.J. Ritchie

–

12,467,531

–

5,400

5,500

–

31,327

248,578

–

4,113

585

103

–

16,699

4,896

585

103

–

14,952

–

4,113

585

103

–

4,784

–

82,824

–

4,784

130,350

–

116,102

4,784

–

4,771

–

463

–

4,232

–

4,564

–

466

–

4,771

–

464

356,326

248,578

4,784

4,771

–

463

1,074

82,824

–

4,232

–

1,184,122

147,013

4,784

130,350

4,564

–

466

106,779

116,102

4,784

4,771

–

464

–

12,467,531

10,128,708

5,400

5,500

–

* S. Lorimer’s non-beneficial shareholding represents his position as director of Robert Barr Ltd, the trustee of various employee benefit trusts.
** W.R.G. Barr’s non-beneficial shareholding represents his position as trustee of various family and charitable trusts.

The ‘Owned outright’ shares set out in the table above are the shares owned outright by the directors. These include any AESOP free shares
awarded during the year and any shares awarded during the year following vesting under the LTIP.

The number of AESOP free and matching shares awarded and shares vesting under the LTIP in the year are included in the ‘Exercised during
the year’ column.

The following sections of the Remuneration Report are not subject to audit.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

PERFORMANCE GRAPH AND TABLE
The graph below shows the Company’s Total Shareholder Return (TSR) performance against the FTSE 250 excluding investment trusts over
the past seven 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 of which the Company is a constituent member.

TOTAL SHAREHOLDER RETURN

450

400

350

300

250

200

150

100

2009

2010

2011

2012

2013

2014

2015

2016

¢ A.G. BARR ¢ FTSE 250 Ex.Investment Trusts

Year to January

CEO REMUNERATION FOR PREVIOUS SEVEN YEARS
The table below shows details of the total remuneration, annual bonus and LTIP paid out for R.A. White over the last seven financial years.

Year ended 30 January 2016

Year ended 25 January 2015

Year ended 26 January 2014

Year ended 26 January 2013

Year ended 28 January 2012

Year ended 29 January 2011

Year ended 30 January 2010

Total
remuneration
£000

Annual bonus as
a % of maximum
opportunity
%

837

1,075

989

1,086

1,070

1,204

951

75.5%

57.8%

50.0%

46.0%

75.0%

73.4%

LTIP as a % of
maximum
opportunity
%

37.89%

31.9%

38.2%

68.5%

99.3%

92.9%

45.0%

PERCENTAGE CHANGE IN CEO REMUNERATION
The table below sets out, in relation to salary, taxable benefits (car allowance, fuel benefit and AESOP awards only) and annual bonus, the
increase between the pay for the year ended 25 January 2015 and the pay for the year ended 30 January 2016 for R.A. White compared to
the wider workforce. For these purposes, the wider workforce includes all Group employees who were continuously employed by the Group
during the two years ended January 2016 but excludes executive and non-executive directors.

Percentage change

Salary

Benefits excluding exercise of SAYE options

Benefits including exercise of SAYE options

Annual bonus

CEO Wider workforce

3.1%

0.0%

36.7%

(100)%

3.1%

0.0%

175.3%

(100)%

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCE

RELATIVE IMPORTANCE OF SPEND ON PAY
The following table sets out the percentage change in dividends and the overall expenditure on pay (as a whole across the organisation).

Dividends

Overall expenditure on pay

* Dividends payable in respect of the year ended 25 January 2015.
** Dividends payable in respect of the year ended 30 January 2016.

Year ended
25 January 2015
£000

Year ended
30 January 2016
£000

14,152*

40,859

15,565**

43,600

% change

10.0%

6.7%

CONSIDERATION BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS’ REMUNERATION
The following directors were members of the Remuneration Committee during the year: J.R. Nicolson (Chairman to 30 June 2015), D.J. Ritchie
(Chairman from 1 July 2015), M.A. Griffiths, W.R.G. Barr and P. Powell.

The Remuneration Committee meets at least twice a year and is responsible for determining, within agreed terms of reference, all aspects
of the remuneration of the executive directors and such other members of senior management as it is designated to consider. The
Remuneration Committee reviews the remuneration trends, pay levels and employment conditions across the Group. The Remuneration
Committee is also responsible for recommending the remuneration of the Chairman of the Company to the Board.

During the year, the Remuneration Committee received advice from R.A. White (CEO) in respect of the remuneration of the other executive
directors, who was not in attendance when his own remuneration was being discussed. The Remuneration Committee received assistance
from J.A. Barr (Company Secretary), who acts as secretary to the Committee, and from other members of management, who may attend
meetings by invitation, except when matters relating to their own remuneration are being discussed.

EXTERNAL ADVISER
During the year, the Remuneration Committee was assisted in its work by the following external consultant:

Adviser

Deloitte LLP (Deloitte)

Details of appointment

Appointed by
the Remuneration
Committee in
January 2014
following a competitive
tender process.

Services provided
by the Adviser

Review of LTIP metrics
and calibration of
performance targets.

Market update in the
context of executive
remuneration.

Attendance at
Remuneration
Committee meetings.

Fees paid by the
Company for advice to the
Remuneration Committee
and basis of charge

£26,700

Charged on a time/
cost basis or fixed
fee dependent on
nature of project.

Other services provided to the
Company in the year ended
30 January 2016

Share schemes advice.

Consulting services
in relation to S&OP
implementation support.

Consulting services
in relation to net
sales contribution
change requests.

The Remuneration Committee is satisfied that all advice received was objective and independent. Deloitte is a member of the Remuneration
Consultants Group and, as such, voluntarily operates under the Code of Conduct in relation to executive remuneration consulting in the UK

STATEMENT OF VOTING AT LAST AGM
The following table sets out actual voting in respect of the resolution to approve the Directors’ Remuneration Report at the Company’s
Annual General Meeting on 27 May 2015.

Resolution

Votes for

% of vote

Votes against

% of vote

Votes withheld

Approve remuneration report

73,967,766

99.92

57,115

0.08

2,844,669

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

ADDITIONAL INFORMATION
EXECUTIVE DIRECTORS’ INTERESTS IN THE LTIP
The individual interests of the executive directors under the LTIP are as follows:

LTIP
Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

Date of award

04 April 2012

09 April 2013

03 June 2014

15 April 2015

04 April 2012

09 April 2013

03 June 2014

15 April 2015

04 April 2012

09 April 2013

03 June 2014

15 April 2015

At 25 January
2015
Number

98,172

75,645

84,354

–

52,332

39,667

44,234

Awarded
Number

–

88,579

10,162

20,325

52,337

–

46,449

46,857

35,332

39,399

–

41,371

Vested
Number

(31,327)

Lapsed
Number

(66,845)

At 30 January
2016
Number

Exercisable from

–

30 April 2015

–

75,645

84,354

88,579

10,162

20,325

52,337

30 April 2016

03 June 2017

15 April 2018

30 April 2016

03 June 2017

15 April 2018

(16,699)

(35,633)

–

30 April 2015

–

39,667

44,234

46,449

30 April 2016

03 June 2017

15 April 2018

(14,952)

(31,905)

–

30 April 2015

–

35,332

39,399

41,371

30 April 2016

03 June 2017

15 April 2018

EXECUTIVE DIRECTORS’ INTERESTS IN THE ESOS
The individual interests of the executive directors under the ESOS are as follows:

ESOS
Director

R.A. White

J.D. Kemp

A.L. Memmott

Date of award

03 June 2014

At 25 January
2015
Number

–

Awarded
Number

4,784

Vested
Number

Lapsed
Number

–

At 30 January
2016
Number

4,784

Exercisable from

03 June 2017

EXECUTIVE DIRECTORS’ INTERESTS IN THE SAYE
The individual interests of the executive directors under the SAYE scheme are as follows:

SAYE
Director

R.A. White

S. Lorimer

J.D. Kemp

A.L. Memmott

At 25 January
2015
Number

4,113

1,089

–

4,896

670

–

4,113

1,089

–

Granted
Number

–

3,682

4,232

–

3,894

–

3,682

Exercised
Number

(4,113)

–

(4,896)

–

(4,113)

–

Lapsed
Number

At 30 January
2016
Number

Option price
Pence

Exercisable from

–

1,089

3,682

4,232

–

670

3,894

–

1,089

3,682

254

358

01 October 2015

01 January 2018

567 01 October 2020

254

358

01 October 2015

01 January 2018

567 01 October 2020

254

358

01 October 2015

01 January 2018

567 01 October 2020

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEAESOP FREE SHARES
The following free share awards were made to the executive directors under the AESOP scheme:

R.A. White

A.L. Memmott

J.D. Kemp

Date of award and
vesting date

10 June 2015

Share price
on date of
award
Pence

At
25 January
2015
Number

615

–

Shares
awarded
Number

585

Shares
vested
Number

(585)

Shares
lapsed
Number

At
30 January
2016
Number

Value vested
£000

–

APPROVAL
This Report was approved by the Board and signed on its behalf by:

DAVID J. RITCHIE
CHAIRMAN OF THE REMUNERATION COMMITTEE
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

DIRECTORS’ REMUNERATION POLICY
This part of the report sets out the Company’s Directors’ remuneration policy which was approved by shareholders at the 2014 AGM and
became effective for three years from the close of that meeting. The policy for the executive directors has been determined by the
Remuneration Committee. The policy is due to be reviewed by shareholders at the 2017 AGM.

EXECUTIVE DIRECTORS
The table below describes each of the elements of the remuneration package for the executive directors.

Element

Purpose and link to strategy

Operation

Maximum opportunity

Base salary Core element of

Usually reviewed annually.

fixed remuneration,
reflecting the size
and scope of the role.

Purpose is to recruit
and retain directors
of the calibre required
for the Company.

Salary levels are determined by the
Remuneration Committee taking into
account a range of factors including:
ͽ role, experience and individual

performance;

ͽ pay for other employees in the Group;
ͽ prevailing market conditions; and
ͽ external benchmarks for similar roles

at comparable companies.

Benefits

Ensures the
overall package
is competitive.

Purpose is to recruit
and retain directors
of the calibre required
for the Company.

Executive directors receive benefits
in line with market practice, including
a car allowance or provision of a
company car, a biennial health check,
life assurance and the ability to ‘buy’
or ‘sell’ holidays under the Company’s
flexible benefits plan.

Other benefits may be provided
based on individual circumstances.
These may include, for example,
relocation and travel allowances.

Although there is no overall
maximum, salary increases are
normally reviewed in the context
of the salary increases across the
wider Group.

The Remuneration Committee may
award salary increases above this
level to take account of individual
circumstances such as:
ͽ increase in scope and

responsibility;

ͽ increase to reflect the executive
director’s development and
performance in the role; or

ͽ alignment to market level.

Whilst the Remuneration
Committee has not set an absolute
maximum on the levels of benefits
executive directors receive, the
value of the benefit is at a level
which the Remuneration Committee
considers appropriate against the
market and provides sufficient
level of benefit based on
individual circumstances.

Performance measures

Not applicable.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEElement

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

Annual
bonus

Rewards performance
against annual targets
which support the
strategic direction
of the Group.

Awards based on annual performance
against key financial and/or strategic
targets and/or the delivery of
personal objectives.

Maximum bonus opportunity
is 100% of base salary.

Pay-out levels are determined by the
Remuneration Committee after the
year end based on performance
against those targets.

The Remuneration Committee has
discretion to amend the bonus pay-
out if, in its judgement, any formulaic
output does not produce a fair result
for either the executive director or the
Company, taking into account overall
business performance.

Targets are set
annually reflecting the
Company’s strategy
and aligned with key
financial, strategic and/
or individual objectives.

Targets, whilst
stretching, do
not encourage
inappropriate business
risks to be taken.

At least 80% of the
bonus is assessed
against key financial
performance metrics
of the business and
the balance may be
based on non-financial
strategic measures
and/or individual
performance.

Financial metrics
There is no minimum
payment at threshold
performance, 50% of
the maximum potential
for this element of
the bonus will be
paid out for on-target
performance and
all of the maximum
potential will be paid
out for maximum
performance.

Non-financial or
individual metrics
Vesting of the non-
financial or individual
metrics will apply on
a scale between 0%
and 100% based on
the Remuneration
Committee’s
assessment of the
extent to which a
non-financial or
individual performance
metric has been met.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

Element

Purpose and link to strategy

Operation

Maximum opportunity

Long Term
Incentive
Plan 2014

Incentivises executive
directors over the
longer term and aligns
their interests with
those of shareholders.

The Remuneration Committee intends
to make long term incentive awards
under the new 2014 LTIP which was
put to shareholders for approval at the
2014 AGM.

Under the 2014 LTIP, awards of
conditional shares, nil cost share
options or other such form as has the
same economic effect may be made
with vesting dependent on the
achievement of performance conditions
set by the Remuneration Committee,
normally over a three year performance
period. Awards granted over shares may
be settled in cash at the election of the
Remuneration Committee.

As described on page 83, awards may
also vest in ‘good leaver’ circumstances
or on the death of a participant or on
a change of control.

The normal maximum award
is 125% of annual base salary
in respect of a financial year.
Under the share plan rules the
overall maximum opportunity
that may be granted in respect
of a financial year will be 200%
of annual base salary.

The normal maximum award
limit will only be exceeded
in exceptional circumstances
involving the recruitment or
retention of a senior employee.
These limits do not include the
value of shares subject to any
tax-approved option granted
as part of an ALTIP award.

The Remuneration Committee has the
right to reduce unvested or unexercised
awards and/or delay their vesting if there
has been a material misstatement of
the Group’s financial results or if the
participant has been guilty of misconduct.

The Remuneration Committee may make
a dividend equivalent payment (‘Dividend
Equivalents’) to reflect dividends that
would have been paid over the period to
vesting on shares that vest. This payment
may be in the form of additional shares
or a cash payment equal to the value
of those additional shares. The
Remuneration Committee may at its
discretion structure awards as Approved
Long Term Incentive Plan (‘ALTIP’) awards
comprising both an HMRC tax-approved
option granted under the Executive
Share Option Scheme (‘ESOS’) and an
LTIP award. ALTIP awards enable the
participant and Company to benefit from
HMRC tax-approved option tax treatment
in respect of part of the award, without
increasing the pre-tax value delivered
to participants. ALTIP awards would be
structured as a tax-approved option and
a LTIP award, with the vesting of the LTIP
award scaled back to take account of
any gain made on exercise of the
tax-approved option.

Other than to enable the grant of ALTIP
awards, the Company will not grant awards
to executive directors under the ESOS.

Performance measures

The vesting of
awards is subject
to the satisfaction
of performance
targets set by the
Remuneration
Committee.

The performance
measures are reviewed
regularly to ensure they
remain relevant but will
be based on financial
measures and/or
comparative total
shareholder return
related measures.
The relevant metrics
and the respective
weightings may vary
each year based upon
Company strategic
priorities. For 2016/17
100% of awards will
be based on earnings
per share growth.

Performance measures
and weightings for
following years will
be set out in the
directors’ annual
remuneration report
for the relevant year.

For achievement of
threshold performance
20% of the maximum
opportunity will vest.

There will usually be
straight line vesting
between threshold
and maximum
performance.

Where a tax-approved
option is granted as
part of an ALTIP award,
the same performance
conditions will apply
to the tax-approved
option as apply to
the LTIP award.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEElement

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

All
employee
share
schemes

To encourage all
employees to make
a long-term investment
in the Company’s
shares in a tax
efficient way.

Participation limits are those set
by the UK tax authorities from
time to time.

Executive directors are entitled to
participate in an HMRC tax-approved
all-employee Savings Related Share
Option Scheme (‘SAYE’) under which
they make monthly savings over a period
of three or five years linked to the grant
of an option over the Company’s shares
with an option price which can be at a
discount of up to 20% of the market
value of shares on grant.

No performance
conditions are attached
to awards in line with
HMRC practice.

Executive directors are also entitled
to participate in an HMRC tax-approved
All-Employee Share Ownership Plan
(‘AESOP’). The executive directors
participate in both sections of the AESOP,
being the partnership and matching
section and the free share section.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

Element

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

Not applicable.

Retirement
benefits

Purpose is to recruit
and retain directors
of the calibre required
for the Company.

Provides market
competitive post-
employment benefits
(or cash allowance
equivalent).

Executive directors are eligible to
participate in the A.G. BARR p.l.c. (2008)
Pension and Life Assurance Scheme
(the ‘Scheme’), which comprises a
defined contribution section and a
defined benefit section. The defined
benefit section was closed to new
entrants from 14 August 2003.

R.A. White ceased his accrual
under the defined benefit section
on 5 April 2011. The Company
has set an overall maximum of
26% of salary as the Company
contribution under the URBS in
respect of R.A. White.

Details of the entitlements accruing
to the two executive directors who
are deferred members of the defined
benefit section are detailed in the table
on page 67. The contributions paid
to the defined contribution section
in respect of four executive directors
are disclosed on page 67. Details of
accruals under the URBS are disclosed
on page 68.

Executive directors may participate
in the A.G. BARR p.l.c. Unfunded
Retirement Benefit Scheme (‘URBS’)
with the agreement of the Company.
The URBS was established to satisfy
the Company’s contractual obligations
to provide retirement benefits for the
benefit of the executive directors
where either the annual or lifetime
allowance has been exceeded whilst
those individuals were members of
the Scheme.

Benefits will be receivable in certain
circumstances, including on retirement,
death, change of control or cessation
of employment in accordance with the
rules of the URBS.

In appropriate circumstances,
executive directors may take a salary
supplement instead of contributions
into a pension plan.

The maximum combined Company
contribution under the defined
contribution section and the
URBS in respect of the remaining
executive directors is 19% of salary
(as defined in the Scheme rules)
rising to 26% following the
executive’s 50th birthday.

The Remuneration Committee
has discretion to vary the delivery
mechanism for retirement benefits,
however the exercise of this
discretion will not exceed the above
limits for the provision of executive
directors’ retirement benefits.

The Company has closed the
defined benefits section of the
Scheme to new members but the
two executive directors who are
deferred members will continue
to receive benefits in accordance
with the terms of the Scheme,
subject to separately agreed
contractual arrangements, including
those summarised below:

R.A. White’s deferred pension
will be re-valued in line with RPI
until his normal retirement date.
In addition, R.A. White will continue
to be entitled to receive life
assurance benefits as if he
were in pensionable service
under the Scheme until his normal
retirement date notwithstanding
the termination of his employment
with the Company, but only in
circumstances where he is a
‘good leaver’, as set out in his
service contract.

A.L. Memmott’s accrued
benefits retain a link to his final
pensionable salary.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCECHAIRMAN AND NON-EXECUTIVE DIRECTORS
The table below sets out an overview of the remuneration of non-executive directors:

Purpose and link to strategy

Approach of the Company

Sole element of non-executive director remuneration, set at
a level that reflects market conditions and is sufficient to attract
individuals with appropriate knowledge and expertise.

Fees are normally reviewed annually.

The remuneration of the Chairman is determined by the
Remuneration Committee. Fees are set at a level which reflects
the skill, knowledge and experience of the individual, whilst taking
into account appropriate market data.

The Board is responsible for setting the fees of the other non-
executive directors. Fees may include a basic fee and additional
fees for further responsibilities (for example, chairmanship of board
committees). Fees are set taking into account several factors, including
the size and complexity of the business, appropriate market data and
the expected time commitment and contribution for the role.

Non-executive directors do not participate in any of the Company’s
share schemes or bonus schemes nor do they receive any pension
contributions. Non-executive directors may be eligible to receive
benefits such as the use of secretarial support, travel costs or other
benefits that may be appropriate.

Actual fee levels are disclosed in the Directors’ annual remuneration
report for the relevant financial year.

EXPLANATION OF PERFORMANCE METRICS CHOSEN AND THE TARGET SETTING PROCESS
Performance measures are selected that are aligned to the Company’s strategy. Stretching performance targets are set each year for the
annual bonus and long term incentive awards. When setting these performance targets, the Remuneration Committee will take into account
a number of different reference points, which may include the Company’s business plans and strategy and the market environment. Full
vesting will only occur for what the Remuneration Committee considers to be stretching performance.

The annual bonus performance targets have been selected to provide an appropriate balance between incentivising directors to meet
financial targets for the year and achieving strategic and/or personal objectives.

The LTIP performance targets reflect the Company’s strategic objectives and therefore the financial and strategic decisions which
ultimately determine the success of the Company. The LTIP performance measures will be based on financial measures, including (but not
exclusively) Earnings Per Share growth, which is a key measure of the Company’s profitability, and/or comparative total shareholder return
related measures.

The Remuneration Committee retains the ability to adjust or set different performance measures if events occur (such as a change in
strategy, a material acquisition and/or a divestment of a Group business or a change in prevailing market conditions) which cause the
Remuneration Committee to determine that the measures are no longer appropriate and that amendment is required so that they achieve
their original purpose.

Awards and options may be adjusted in the event of a variation of share capital in accordance with the scheme rules.

POLICY FOR THE REMUNERATION OF EMPLOYEES GENERALLY
Remuneration arrangements are determined throughout the Group based on the same principle that reward should be achieved for delivery
of the business strategy and should be sufficient to attract and retain high calibre talent.

Under the rules of the ESOS and the 2014 LTIP, certain managers are eligible to participate in the ESOS and the 2014 LTIP; however there
has been no such participation to date and there is no current intention to invite managers to do so. Senior managers were not eligible to
participate in the 2003 LTIP. The annual bonus arrangements for the senior management team are similar to those for the executive directors
in that targets are set annually dependent on financial and/or non-financial performance metrics. The key principles of the remuneration
philosophy are applied consistently across the Group below this level, taking account of the seniority of employees.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

2003 LONG TERM INCENTIVE PLAN
The table below describes the legacy 2003 LTIP for the executive directors.

Element

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

Long Term Incentive
Plan 2003

Incentivises executive
directors over the longer
term and aligns their
interests with those
of shareholders.

The maximum award is
100% of annual base
salary in respect of a
financial year.

Under the 2003 LTIP
awards of conditional
shares may be made
with vesting dependent
on the achievement of
performance conditions,
normally over a three year
performance period.

Awards may vest in ‘good
leaver’ circumstances (as
defined in the 2003 LTIP
rules) or on the death of
a participant. Awards may
also vest on a takeover,
merger or other corporate
reorganisation or may be
rolled over into shares in
the acquiring company.

Awards may be adjusted in
the event of a variation of
share capital in accordance
with the scheme rules.

The performance
conditions are set
by reference to the
average earnings per
share (‘EPS’) growth
of the Company
(RPI adjusted and
excluding exceptional
items and other
significant non-
recurring items as
the Remuneration
Committee considers
appropriate).

No part of an award
vests if EPS growth
is less than 10% over
the three year period.
20% – 99.9% of an
award vests on a
sliding scale where
EPS growth is 10%
or more but less than
32.5%. 100% of an
award vests where
EPS growth exceeds
RPI growth by 32.5%
or more.

The Remuneration
Committee retains
the discretion to adjust
the performance
targets and measures
where it considers it
appropriate to do so.

APPROACH TO RECRUITMENT REMUNERATION
The policy aims to facilitate the appointment of individuals of sufficient calibre to lead the business and execute the strategy effectively for
the benefit of shareholders. When appointing a new director, the Remuneration Committee seeks to ensure that arrangements are in the best
interests of the Company and in line with market practice.

The Remuneration Committee will take into consideration a number of relevant factors, which may include the calibre of the individual, the
candidate’s existing remuneration package, and the specific circumstances of the individual including the jurisdiction from which the
candidate was recruited.

The Remuneration Committee will typically seek to align the remuneration package with the Company’s remuneration policy (as set out in
the policy table). The maximum level of variable remuneration which may be granted (excluding buy-out awards referred to below) is 300% of
salary (in line with this policy). Subject to this overall maximum variable remuneration, incentive awards will only be granted above the normal
maximum annual award opportunities where the Remuneration Committee considers there to be a commercial rationale, which may include
but is not limited to circumstances where an executive director is recruited at a time in the year when it would be inappropriate to provide a
bonus or long-term incentive award for that year as there would not be sufficient time to assess performance. The quantum in respect of the
months employed during the year may be transferred to the subsequent year so that reward is provided on a fair and appropriate basis. The
Remuneration Committee will ensure that any such awards are linked to the achievement of appropriate and challenging performance targets
and will be forfeited if performance or continued employment conditions are not achieved. The individual will usually move over time onto
a remuneration package that is consistent with the normal maximum annual award opportunities set out in the policy table.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEThe Remuneration Committee retains discretion to include other remuneration components or awards which are outside the specific terms
of the policy (but subject to the limit on variable remuneration) to facilitate the hiring of candidates of an appropriate calibre, where the
Remuneration Committee believes there is a need to do so in the best interests of the Company. The Remuneration Committee would ensure
that awards within the 300% of salary variable remuneration limit are linked to the achievement of appropriate and challenging performance
measures. The Remuneration Committee does not intend to use this discretion to make a non-performance related incentive payment (for
example a ‘golden hello’).

In some circumstances, the Remuneration Committee may make payments or awards to recognise or ‘buy-out’ remuneration arrangements
forfeited on leaving a previous employer. The Remuneration Committee will normally aim to do so broadly on a like-for-like basis taking into
account a number of relevant factors regarding the forfeited arrangements which may include the form of award, any performance conditions
attached to the awards and the time at which they would have vested. These payments or awards are excluded from the maximum level of
variable remuneration referred to above, however the Remuneration Committee’s intention is that the value awarded would be no higher than
the expected value of the forfeited arrangements.

Any share awards referred to in this section will be granted as far as possible under the Company’s existing share plans. If necessary, and
subject to the limits referred to above, recruitment awards may be granted outside of these plans as currently permitted under the Listing
Rules which allow for the grant of awards to facilitate, in exceptional circumstances, the recruitment of an executive director.

Where a position is fulfilled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to
continue according to the original terms.

Fees payable to a newly-appointed Chairman or non-executive director will be in line with the fee policy in place at the time of appointment.

ILLUSTRATIONS OF APPLICATION OF REMUNERATION POLICY
The charts below set out an illustration of the remuneration policy for 2016/17 in line with the remuneration policy above and include base
salary, pension, benefits and incentives. The charts provide an illustration of the proportion of total remuneration made up of each
component of the remuneration policy and the value of each component.

R.A. WHITE TOTAL REMUNERATION (£000)

S. LORIMER TOTAL REMUNERATION (£000)

1,800

1,350

900

450

1,590.3

1,000

590.1

100%

932.5
12%

25%

63%

35%

28%

37%

Minimum
performance

Performance
in line with expectations

Maximum
performance

750

500

250

335.6

100%

532.5
12%

25%

63%

926.5

35%

28%

37%

Minimum
performance

Performance
in line with expectations

Maximum
performance

J.D. KEMP TOTAL REMUNERATION (£000)

A.L. MEMMOTT TOTAL REMUNERATION (£000)

900

600

300

300.4

100%

475.2
12%

25%

63%

824.9

35%

28%

37%

Minimum
performance

Performance
in line with expectations

Maximum
performance

800

600

400

200

270.1

100%

425.8
12%

25%

63%

737.2

35%

28%

37%

Minimum
performance

Performance
in line with expectations

Maximum
performance

¢ Base salary, beneﬁts and pension ¢ Annual Bonus ¢ LTIP

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

Three scenarios have been illustrated for each executive director:

Minimum
performance

Performance in line
with expectations

Maximum
performance

Fixed pay

Fixed elements of remuneration
– base salary, benefits and
pension only.

Base salary is the latest known
salary (i.e. the salary effective
from 1 April 2016) and the value
for benefits has been calculated
as per the single figure table
on page 62.

Annual Bonus

No bonus.

LTIP

No LTIP vesting.

50% of salary awarded for achieving
target performance.

100% of salary awarded for achieving
maximum performance.

20% of maximum award vesting
(i.e. 25% of salary for achieving
target performance).

100% of maximum award vesting
(i.e. 125% of salary for achieving
maximum performance).

LTIP awards are included in the scenarios above at face value with no share price movement included.

SERVICE CONTRACTS
Executive directors’ contracts are on a rolling basis and may be terminated on 12 months’ notice by the Company or on 6 months’ notice by
the executive. Service contracts for new directors will generally be limited to 12 months’ notice by the Company.

The service contracts for R.A. White, J.D. Kemp and A.L. Memmott provide for a notice period of 12 months except during the six months
following either a takeover of or by the Company or a Company reconstruction. Under these conditions and certain circumstances these
directors are entitled to a liquidated damages payment equal to the director’s basic salary at termination plus the value of all contractual
benefits for a two year period. In the event this liquidated damages payment is triggered, the director will also be deemed to be a ‘good
leaver’ for the purposes of the Company’s share schemes. Given the size of the Company and the sector dynamics at the time these
directors were recruited, the Remuneration Committee considered this provision appropriate in order to attract and retain high calibre
executive directors. The Remuneration Committee is cognisant of the fact that these provisions do not reflect best practice. It has therefore
considered the alternatives available to exit these contractual arrangements, including contractual buy-out. However, the Remuneration
Committee concluded that it was not feasible to place a value on these rights, in order to remove them from the contracts, which would be
acceptable to both parties. It therefore determined that the most appropriate approach would be to maintain the legacy provisions, however
for all future appointments these provisions would not apply. The service contract for S. Lorimer does not contain these provisions.

Non-executive directors are appointed for an initial period of three years, subject to annual re-election by shareholders in accordance
with the Code. Their appointments are terminable by either the Company or the directors themselves upon three months notice
without compensation.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEPAYMENTS FOR LOSS OF OFFICE
The principles on which the determination of payments for loss of office will be approached are set out below:

Policy

Payment in lieu of notice

Payments to executive directors upon termination of their service contracts will be equal to 12 months base
salary or the highest annual rate earned by the executive during the preceding three years, whichever is
higher (plus benefits in kind and pension contributions at the discretion of the Remuneration Committee).

Annual bonus

2014 LTIP

Change of control

Mitigation

Other payments

This will be at the discretion of the Remuneration Committee on an individual basis and the decision
as to whether or not to award a bonus in full or in part will be dependent upon a number of factors,
including the circumstances of the individual’s departure and their contribution to the business during
the bonus period in question. Any bonus amounts paid will typically be pro-rated for time in service to
termination and will, subject to performance, be paid at the usual time.

The extent to which any award under the 2014 LTIP will vest would be determined based on the leaver
provisions contained within the 2014 LTIP rules. The Remuneration Committee shall determine when
awards vest in accordance with those provisions.

Awards will normally lapse if the participant leaves employment before vesting. However, awards may
vest in ‘good leaver’ circumstances, including death, disability, ill-health, injury, sale of the participant’s
employer, or any other reason determined by the Remuneration Committee. Any ‘good leaver’ awards
will vest at the date of cessation of employment unless the Remuneration Committee decides they should
vest at the normal vesting date. In either case, the extent to which an award vests will be determined by
the Remuneration Committee taking into account the extent to which the performance conditions have
been satisfied and, unless the Remuneration Committee determines otherwise, the period of time that
has elapsed from the date of grant to the date of cessation of employment. The Remuneration Committee
may vest the award on any other basis if it believes there are exceptional circumstances which warrant that.

Options are exercisable for six months from leaving employment or six months from the normal vesting
date as appropriate.

Awards under the 2014 LTIP will generally vest early on a takeover, merger or other corporate
reorganisation. The Remuneration Committee will determine the level of vesting taking account of
performance conditions and, unless the Remuneration Committee determines otherwise, pro-rating for
time, where applicable. Alternatively, participants may be allowed or required to exchange their awards
for awards over shares in the acquiring company.

Awards under all employee share schemes will be expected to vest on a change of control and those
which have to meet specific requirements to benefit from permitted tax benefits will vest in accordance
with those requirements.

The executive directors’ service contracts do not provide for any reduction in payments for mitigation
or for early payment.

Payments may be made under the Company’s all employee share plans which are governed by HMRC
tax-approved plan rules and which cover certain leaver provisions. There is no discretionary treatment
of leavers under these plans. In appropriate circumstances, payments may also be made in respect of
accrued holiday, outplacement and legal fees.

Where a buy-out award is made under the Listing Rules then the leaver provisions would be determined at the time of the award.

The Remuneration Committee reserves the right to make additional exit payments where such payments are made in good faith in discharge
of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim
arising in connection with the termination of a director’s office or employment. In doing so, the Remuneration Committee will recognise and
balance the interests of shareholders and the departing executive director, as well as the interests of the remaining directors.

Where the Remuneration Committee retains discretion it will be used to provide flexibility in certain situations, taking into account the
particular circumstances of the director’s departure and performance.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016DIRECTORS’ REMUNERATION REPORT CONTINUED

STATEMENT OF CONSIDERATION OF EMPLOYMENT CONDITIONS ELSEWHERE IN THE COMPANY
The Remuneration Committee generally considers pay and employment conditions elsewhere in the Company when considering the
executive directors’ remuneration. When considering base salary increases, the Remuneration Committee reviews overall levels of base pay
increases offered to other employees. Employees are not actively consulted on directors’ remuneration. The Company has regular contact
with union bodies on matters of pay and remuneration for employees covered by collective bargaining or consultation arrangements.

EXISTING CONTRACTUAL ARRANGEMENTS
The Remuneration Committee retains discretion to make any remuneration payments and payments for loss of office outside the policy in
this report:
ͽ where the terms of the payment were agreed before the policy came into effect;
ͽ where the terms of the payment were agreed at a time when the relevant individual was not a director of the Company and, in the opinion

of the Remuneration Committee, the payment was not in consideration of the individual becoming a director of the Company; or

ͽ to satisfy contractual commitments under legacy remuneration arrangements.

For these purposes, the term ‘payments’ includes the satisfaction of awards of variable remuneration and, in relation to an award over shares,
the terms of the payment are agreed at the time the award is granted. For the avoidance of doubt, the Remuneration Committee’s discretion
includes discretion to determine matters in accordance with the rules of the 2003 LTIP, including the extent to which awards under that plan
may vest on the fulfilment of performance conditions, in the event of the voluntary winding up of the Company, on a change of control, on the
death of a participant, and in ‘good leaver’ circumstances.

The Remuneration Committee may make minor changes to this policy which do not have a material advantage to directors, to aid in its
operation or implementation, taking into account the interests of shareholders but without the need to seek shareholder approval.

STATEMENT OF CONSIDERATION OF SHAREHOLDER VIEWS
The Remuneration Committee is committed to an ongoing dialogue with shareholders and welcomes feedback on executive and non-
executive directors’ remuneration.

Prior to the 2014 LTIP being formally put to shareholders, the Remuneration Committee engaged with major shareholders and institutional
investor bodies setting out the proposals and the detailed thinking and planning behind them.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CORPORATE GOVERNANCEDIRECTORS’ STATEMENT
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT
AND THE FINANCIAL STATEMENTS

The directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with
applicable law and regulations.

Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they
are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected
to prepare the parent Company financial statements on the same basis.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Group and parent Company and of the consolidated profit or loss for that period. In preparing each of the Group and
parent Company financial statements, the directors are required to:
ͽ select suitable accounting policies and then apply them consistently;
ͽ make judgements and estimates that are reasonable and prudent;
ͽ state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
ͽ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent Company

will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the parent Company and the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Directors’ Report, Directors’ Remuneration Report
and Corporate Governance Statement that complies with that law and those regulations.

A copy of the Group and parent Company financial statements has been placed on the Company’s website, www.agbarr.co.uk. The directors
are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation
in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

DIRECTORS’ STATEMENT PURSUANT TO THE DISCLOSURE AND TRANSPARENCY RULES
Each of the directors, whose names and functions are set out on pages 46 to 47 of this report, confirm that, to the best of their knowledge:
ͽ the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities and

financial position of the Group and parent Company and of the consolidated profit;

ͽ the Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Group
and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties
faced by the Group; and

ͽ the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for

shareholders to assess the Company’s performance, business model and strategy.

By order of the Board

R.A. WHITE
CHIEF EXECUTIVE
29 March 2016

S. LORIMER
FINANCE DIRECTOR

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF A.G. BARR P.L.C. ONLY

OPINIONS AND CONCLUSIONS ARISING FROM OUR AUDIT
1 OUR OPINION ON THE FINANCIAL STATEMENTS IS UNMODIFIED
We have audited the financial statements of A.G. BARR p.l.c. for the year ended 30 January 2016 set out on pages 89 to 133. In our opinion:
ͽ the financial 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 2016 and

of the group’s profit for the year then ended;

ͽ the group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted

by the European Union (IFRSs as adopted by the EU);

ͽ the parent company financial 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

ͽ the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group

financial statements, Article 4 of the IAS Regulation.

Audit scope:
100%

A summary of our approach:
ͽ Our audit covered 100% of the Group’s total revenue, profit before tax and total assets and was

completed at Cumbernauld and in London.

Materiality:
3% pbt

Signiﬁcant areas:
inventory and brand
support accruals

ͽ Overall group materiality: £1.4m which represents 3% of profit before tax this year.

ͽ The accounting for brand support accruals is a judgemental area.
ͽ Inventory is significant and raw materials are subject to price volatility so that is also a judgemental area.
ͽ There is no movement in the risk direction in either of these areas year on year.
ͽ There has been no change in our assessment of risks year on year.

2 OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
In arriving at our audit opinion above on the financial statements the risks of material misstatement that had the greatest effect on our audit
were as follows (unchanged from 2015):

The area of focus

Brand support discounts and costs accrued (£13.0 million):
Refer to page 59 (Audit Committee Report), pages 96 and 101
(accounting policy) and page 121 (financial disclosures)

Our approach

Risk direction:

(unchanged)

The group agrees significant sales discounts with certain of its
customers and incurs costs in supporting and developing its brands.
Accounting for such sales discounts and costs is judgemental where
promotion and brand support campaigns either span the year end
(where settlement has not been fully and finally made by the year
end) or where prior year claims arise as the year end accrual can
depend on information not yet made available by the customer.

Our procedures in relation to accounting for brand support
discounts and costs included testing the group’s authorisation
controls over such discounts and costs and inspecting the detail of
such discounts and costs. In addition we agreed samples of specific
items within accruals at the year end to supporting documentation
to assess the accuracy of brand support discounts and costs and to
ensure they are reflected in the correct period; we agreed a sample
of post year end claims relating to the period prior to the year end to
accruals at the year end to give us comfort over the completeness
of the year end accrual; and we considered and challenged the
judgements formed by management in relation to any prior year
claims from customers that remained within accruals at the year end.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016The area of focus

Valuation of inventories (£15.6 million):
Refer to page 59 (Audit Committee Report), page 99 (accounting
policy) and page 117 (financial disclosures)

Our approach

Risk direction:

(unchanged)

Inventory is a significant balance and the group’s main raw materials
are commodities which can be subject to price volatility. As the group
uses a standard cost as its basis of inventory valuation, changes in
price and production levels lead to purchase price variances which,
if not accounted for correctly, may lead to the valuation of inventories
being misstated.

In this area, our procedures included testing the group’s controls
over the tracking of purchase price variances, inventory movements
and balances; comparing the valuation of inventories for a sample
of items to supporting documentation (e.g. purchase invoices) and
considering for reasonableness (by reference to historical data and
commodity price movements) the variances arising from the group’s
standard costing system.

In addition our procedures included testing whether the standard
costs which form the basis of the inventory valuation were set
appropriately (e.g. by comparing standard costs back to supporting
purchase invoices and other supporting costings) and reflected
normal production levels, having been adjusted appropriately for any
capacity underutilisation; and agreeing the calculation of overheads
absorbed into inventory to supporting analyses of production costs
incurred during the time of production of year-end inventory.

3 OUR APPLICATION OF MATERIALITY AND AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Materiality for the group financial statements as a whole was set at £1.4m (2015: £1.4m). Materiality is determined with reference to a
benchmark of group profit before tax, normalised to exclude exceptional items where relevant. There were no exceptional items this year
so our materiality is based on profit before tax of £41.3 million, of which it represents 3% (2015: 4% of profit before tax normalized to exclude
exceptional items). We have chosen profit before tax before exceptional items because it excludes the non-recurring distorting impact of
exceptional items such as reorganisation costs.

We report to the Audit Committee any corrected or uncorrected misstatements identified exceeding £250,000, in addition to other identified
misstatements that warranted reporting on qualitative grounds. This level was selected and agreed with the Audit Committee as, given the
nature and scale of operations, adjustments under this level were not deemed to be of specific interest to them.

Audits for group reporting purposes were performed for all three components by the group audit team in Cumbernauld and in London. These
audits covered 100% of group turnover, profit before tax and total assets. The audits performed for group reporting purposes were all
performed to materiality levels set individually for each component and ranged from £10,000 to £1.1 million.

Group materiallity

£1.4m

£1.1m

Component materiality
range £10,000 to £1.1m

£1.4m
(3%)

£41.3m

Group materiallity

PBT before exceptional items

4 OUR OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 IS UNMODIFIED
In our opinion:
ͽ the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
ͽ the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are

prepared is consistent with the financial statements.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF A.G. BARR P.L.C. ONLY
CONTINUED

5 WE HAVE NOTHING TO REPORT ON THE DISCLOSURES OF PRINCIPAL RISKS
Based on the knowledge we acquired during our audit, we have nothing material to add or draw attention to in relation to:
ͽ the directors’ statement on Risk Management on pages 42 to 44, concerning the principal risks, their management, and, based on that,

the directors’ assessment and expectations of the group’s continuing in operation over the three years to 2019; or

ͽ the disclosures in note 31 of the financial statements and in the Directors’ Report concerning the use of the going concern basis

of accounting.

6 WE HAVE NOTHING TO REPORT IN RESPECT OF THE MATTERS ON WHICH WE ARE REQUIRED TO REPORT
BY EXCEPTION
Under ISAs (UK and Ireland) we are required to report to you if, based on the knowledge we acquired during our audit, we have identified
other information in the annual report that contains a material inconsistency with either that knowledge or the financial statements, a material
misstatement of fact, or that is otherwise misleading.

In particular, we are required to report to you if:
ͽ we have identified material inconsistencies between the knowledge we acquired during our audit and the directors’ statement that they

consider that the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the group’s position and performance, business model and strategy; or

ͽ the Audit Committee Report does not appropriately address matters communicated by us to the Audit Committee.

Under the Companies Act 2006 we are required to report to you if, in our opinion:
ͽ 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

ͽ the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

ͽ certain disclosures of directors’ remuneration specified by law are not made; or
ͽ we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:
ͽ the directors’ statements, set out on pages 45 and 51, in relation to going concern and longer-term viability; and
ͽ the part of the Corporate Governance Report on pages 53 to 57 relating to the company’s compliance with the eleven provisions of the

2014 UK Corporate Governance Code specified for our review.

We have nothing to report in respect of the above responsibilities.

SCOPE AND RESPONSIBILITIES
As explained more fully in the Directors’ Responsibilities Statement set out on page 85, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view. A description of the scope of an audit of financial
statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate. This report is made solely to
the company’s members as a body and is subject to important explanations and disclaimers regarding our responsibilities, published on our
website at www.kpmg.com/uk/auditscopeukco2014a, which are incorporated into this report as if set out in full and should be read to provide
an understanding of the purpose of this report, the work we have undertaken and the basis of our opinions.

ALEX SANDERSON (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF KPMG LLP, STATUTORY AUDITOR
CHARTERED ACCOUNTANTS
191 West George Street
Glasgow
G2 2LJ
29 March 2016

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JANUARY 2016

Revenue
Cost of sales

Gross profit

Other income
Operating expenses

Operating profit

Finance income
Finance costs

Profit before tax

Tax on profit

Profit attributable to equity holders

Earnings per share (p)

Basic earnings per share

Diluted earnings per share

Note

2, 7

5
6

8
8

Before
exceptional items
Restated
(note 1)
£m

2015

Exceptional
items
(note 7)
£m

2016

£m

258.6
(137.5)

121.1

–
(79.0)

42.1

0.1
(0.9)

41.3

(7.0)

260.9
(141.0)

119.9

0.7
(78.5)

42.1

0.1
(0.3)

41.9

(9.3)

34.3

32.6

Total
Restated
(note 1)
£m

260.9
(143.9)

117.0

0.7
(78.9)

38.8

0.1
(0.3)

38.6

(8.6)

30.0

–
(2.9)

(2.9)

–
(0.4)

(3.3)

–
–

(3.3)

0.7

(2.6)

29.63

29.51

26.00

25.86

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JANUARY 2016

Profit after tax

Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans
Deferred tax movements on items above
Current tax movements on items above

Items that will be or have been reclassified to profit or loss
Effective portion of changes in fair value of cash flow hedges
Deferred tax movements on items above

Other comprehensive income for the year, net of tax

Note

27
24
9

16
24

Group

Company

2016
£m

34.3

5.4
(2.5)
1.3

1.7
(0.3)

5.6

2015
£m

30.0

(19.7)
2.9
1.1

0.1
–

(15.6)

2016
£m

22.8

5.4
(2.5)
1.3

1.7
(0.3)

5.6

2015
£m

20.6

(19.7)
2.9
1.1

0.1
–

(15.6)

Total comprehensive income attributable to equity holders

of the parent

39.9

14.4

28.4

5.0

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSSTATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JANUARY 2016

Group

At 25 January 2015

Profit for the year
Other comprehensive income

Total comprehensive income for the year

Company shares purchased for use by

employee benefit trusts

Proceeds on disposal of shares by employee

benefit trusts

Recognition of share-based payment costs
Transfer of reserve on share award
Deferred tax on items taken direct to reserves
Dividends paid

At 30 January 2016

At 26 January 2014

Profit for the year
Other comprehensive income

Total comprehensive income for the year

Company shares purchased for use by

employee benefit trusts

Proceeds on disposal of shares by employee

benefit trusts

Recognition of share-based payment costs
Transfer of reserve on share award
Deferred tax on items taken direct to reserves
Dividends paid

Share
capital
£m

4.9

–
–

–

–
–
–
–
–

4.9

–
–

–

–
–
–
–
–

Share
premium
account
£m

Share
options
reserve
£m

Cash flow
hedge
reserve
£m

Retained
earnings
£m

Total
£m

0.9

2.3

(0.4)

148.8

156.5

–
–

–

–
–
–
–
–

0.9

–
–

–

–
–
–
–
–

–
–

–

–
0.5
(0.9)
(0.5)
–

1.4

–
1.4

1.4

–

–
–
–
–
–

1.0

1.8

(0.5)

–
–

–

–
0.9
(0.5)
0.1
–

2.3

–
0.1

0.1

–

–
–
–
–
–

34.3
4.2

38.5

(5.1)

3.1
–
0.9
–
(14.3)

171.9

148.1

30.0
(15.7)

14.3

(2.3)

1.3
–
0.5
–
(13.1)

34.3
5.6

39.9

(5.1)

3.1
0.5
–
(0.5)
(14.3)

180.1

155.2

30.0
(15.6)

14.4

(2.3)

1.3
0.9
–
0.1
(13.1)

At 25 January 2015

4.9

0.9

(0.4)

148.8

156.5

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JANUARY 2016

Company

Share
capital
£m

Share
premium
account
£m

Share
options
reserve
£m

Cash flow
hedge
reserve
£m

Retained
earnings
£m

Total
£m

At 25 January 2015

4.9

0.9

2.3

(0.4)

100.6

108.3

Profit for the year
Other comprehensive income

Total comprehensive income for the year

Company shares purchased for use by

employee benefit trusts

Proceeds on disposal of shares by employee

benefit trusts

Recognition of share-based payment costs
Transfer of reserve on share award
Deferred tax on items taken direct to reserves
Dividends paid

At 30 January 2016

At 26 January 2014

Profit for the year
Other comprehensive income

Total comprehensive income for the year

Company shares purchased for use by

employee benefit trusts

Proceeds on disposal of shares by employee

benefit trusts

Recognition of share-based payment costs
Transfer of reserve on share award
Deferred tax on items taken direct to reserves
Dividends paid

–
–

–

–
–
–
–
–

4.9

–
–

–

–
–
–
–
–

–
–

–

–
–
–
–
–

0.9

–
–

–

–
–
–
–
–

At 25 January 2015

4.9

0.9

–
–

–

–
0.5
(0.9)
(0.5)
–

1.4

–
1.4

1.4

–

–
–
–
–
–

1.0

22.8
4.2

27.0

(5.1)

3.1
–
0.9
–
(14.3)

112.2

1.8

(0.5)

109.3

–
–

–

–
0.9
(0.5)
0.1
–

2.3

–
0.1

0.1

–

–
–
–
–
–

20.6
(15.7)

4.9

(2.3)

1.3
–
0.5
–
(13.1)

22.8
5.6

28.4

(5.1)

3.1
0.5
–
(0.5)
(14.3)

120.4

116.4

20.6
(15.6)

5.0

(2.3)

1.3
0.9
–
0.1
(13.1)

(0.4)

100.6

108.3

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSSTATEMENTS OF FINANCIAL POSITION
AS AT 30 JANUARY 2016

Note

Group

2016
£m

NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Pension prepayments
Investment in subsidiary undertakings

CURRENT ASSETS
Inventories
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents

Total assets

CURRENT LIABILITIES
Loans and other borrowings
Trade and other payables
Derivative financial instruments
Provisions
Current tax liabilities

NON-CURRENT LIABILITIES
Loans and other borrowings
Trade and other payables
Deferred tax liabilities
Retirement benefit obligations

CAPITAL AND RESERVES ATTRIBUTABLE

TO EQUITY HOLDERS

Share capital
Share premium account
Share options reserve
Cash flow hedge reserve
Retained earnings

Total equity and liabilities

13
14
15
17

19
20
16
18

21
22
16
23

21
22
24
27

2015
£m

80.9
79.6
–
–

160.5

16.7
51.9
0.1
25.4

94.1

Company

2016
£m

20.0
85.3
18.3
84.3

207.9

15.2
54.1
1.1
4.4

74.8

107.5
85.3
–
–

192.8

15.6
52.7
1.1
6.8

76.2

269.0

254.6

282.7

0.7
37.4
–
0.1
3.6

41.8

17.5
4.5
12.2
12.9

47.1

4.9
0.9
1.4
1.0
171.9

180.1

269.0

0.1
51.1
0.7
1.0
3.3

56.2

14.9
–
8.7
18.3

41.9

4.9
0.9
2.3
(0.4)
148.8

156.5

254.6

1.9
101.9
–
0.1
0.9

104.8

37.2
4.5
2.9
12.9

57.5

4.9
0.9
1.4
1.0
112.2

120.4

282.7

2015
£m

16.0
79.2
18.8
62.3

176.3

15.2
54.3
0.1
25.4

95.0

271.3

1.3
106.1
0.7
1.0
0.6

109.7

35.0
–
–
18.3

53.3

4.9
0.9
2.3
(0.4)
100.6

108.3

271.3

Company Number: SC005653
The financial statements on pages 89 to 133 were approved by the Board of directors and authorised for issue on 29 March 2016 and were
signed on its behalf by:

R.A. WHITE
CHIEF EXECUTIVE

S. LORIMER
FINANCE DIRECTOR

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016CASH FLOW STATEMENTS
FOR THE YEAR ENDED 30 JANUARY 2016

Operating activities
Profit before tax
Adjustments for:
Interest receivable
Interest payable
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Amortisation of intangible assets
Share-based payment costs
Loss/(Gain) on sale of property, plant and equipment

Operating cash flows before movements in working capital

Decrease/(Increase) in inventories
Decrease/(Increase) in receivables
(Decrease)/Increase in payables
Difference between employer pension contributions and

amounts recognised in the income statement

Cash generated by operations

Tax on profit paid

Net cash from operating activities

Note

8
8
14

Investing activities
Acquisition of subsidiary (net of cash acquired)
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
Movement in finance lease
Purchase of Company shares by employee benefit trusts
Proceeds from disposal of Company shares by employee

benefit trusts
Dividends paid
Interest paid

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Group

2016
£m

2015
£m

Company

2016
£m

41.3

38.6

(0.1)
0.9
7.3
–
1.1
0.5
0.2

51.2

1.8
0.6
(16.8)

(0.7)

36.1

(6.8)

29.3

(15.7)
(4.8)
(14.7)
0.9
0.1

(34.2)

34.0
(31.5)
(0.1)
–
(5.1)

3.1
(14.3)
(0.3)

(14.2)

(19.1)

25.3

6.2

(0.1)
0.3
6.7
1.5
0.3
0.9
(0.1)

48.1

(0.7)
(4.4)
10.2

(1.4)

51.8

(7.0)

44.8

–
(7.1)
(11.5)
0.6
0.1

(17.9)

15.0
(15.0)
(0.1)
–
(2.3)

1.3
(13.1)
(0.3)

(14.5)

12.4

12.9

25.3

28.1

(0.8)
1.7
7.3
–
0.8
0.5
0.2

37.8

–
0.1
(4.5)

(0.7)

32.7

(3.9)

28.8

(17.5)
(4.8)
(14.7)
1.4
0.1

(35.5)

34.0
(31.5)
(0.1)
0.8
(5.1)

3.1
(14.3)
(1.7)

(14.8)

(21.5)

25.3

3.8

2015
£m

26.6

(0.9)
1.2
6.4
1.1
–
0.9
–

35.3

(1.3)
(4.4)
20.8

(1.4)

49.0

(4.1)

44.9

–
(7.1)
(11.5)
0.5
0.1

(18.0)

15.0
(15.0)
(0.1)
0.8
(2.3)

1.3
(13.1)
(1.1)

(14.5)

12.4

12.9

25.3

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSNOTES TO THE ACCOUNTS

1. ACCOUNTING POLICIES
GENERAL INFORMATION
A.G. BARR p.l.c. (‘the Company’) and its subsidiaries (together ‘the Group’) manufacture, distribute and sell soft drinks. The Group has
manufacturing sites in the UK and sells mainly to customers in the UK with some international sales.

The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in Scotland.
The address of its registered office is Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD.

The financial year represents the 53 weeks ended 30 January 2016 (prior financial year 52 weeks ended 25 January 2015).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial 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 financial statements of A.G. BARR p.l.c. have been prepared in accordance with International Financial
Reporting Standards (‘IFRS’) as adopted by the European Union. They have been prepared under the historical cost accounting rules except
for the derivative financial instruments and the assets of the Group pension scheme which are stated at fair value and the liabilities of the
Group pension scheme which are valued using the projected unit credit method. The directors have adopted the going concern basis in
preparing these accounts for the reasons set out in note 31.

The preparation of financial 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 significant to the consolidated financial statements are disclosed
on pages 101 and 102.

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.

CHANGES IN ACCOUNTING POLICY AND DISCLOSURES
(A) NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
The following revised IFRSs have been adopted in this consolidated financial information. The application of these revised IFRSs has not had
any material impact on the amounts reported for the current and prior periods.
ͽ Amendments to IAS 19 Defined Benefit Plans relating to employee contributions
ͽ Annual Improvements 2010-2012 Cycle, IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 38 and IAS 24
ͽ Annual Improvements 2011-2013 Cycle, IFRS 1, IFRS 3, IFRS 13 and IAS 40

(B) NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BUT NOT EFFECTIVE FOR THE FINANCIAL YEAR BEGINNING
26 JANUARY 2015 AND NOT ADOPTED EARLY
A number of new standards and amendments to standards and interpretations are effective for future year ends, and have not been applied
in preparing these financial statements. These standards and amendments are listed in the table below:

International Accounting Standards and Interpretations

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
Annual Improvements to IFRSs 2012–2014 Cycle – various standards
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases

Financial year
beginning in which
standard becomes
effective

31 January 2016
31 January 2016
31 January 2016
28 January 2018
28 January 2018

Management anticipates that the application of the above Standards and Interpretations in future periods will have no material impact on the
consolidated financial statements of the Group, with the exception of IFRS 16. Management are in the process of assessing the impact of IFRS
16 on the financial statements.

(C) RESTATEMENT OF SEGMENT REPORTING
(i) In the segment reporting to 25 January 2015 a misstatement has been noted between the gross profit for Carbonates and the Other
segments. An element totalling £2.3m of gross profit in relation to Carbonates was reported within the Others segment. This has been
restated in the table below. There has been no change to the total reported revenue or gross profit before exceptional items or any other
element of the financial statements.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

1. ACCOUNTING POLICIES CONTINUED
(ii) In the year to 30 January 2016 a new enterprise resource planning system was implemented. This implementation included an alignment
of the internal management reporting and the statutory reporting. The review concluded that some logistics and warehouse related costs
previously recorded within operating expenses would be more appropriately recorded within cost of sales as this reflects more accurately
the costs incurred in manufacturing products. This has resulted in a reduction in the gross profit of £3.4m in the year to 25 January 2015, with
an increase in distribution costs of £5.4m and a decrease in administration costs of £8.8m. There was no impact to the previously reported
operating profit.

YEAR ENDED 25 JANUARY 2015

Total revenue

Gross profit before exceptional items as previously stated
Restatement of gross profit (note i)
Reclassification of operating costs (note ii)

Restated gross profit before exceptional items

Carbonates
£m

Still drinks
and water
£m

198.3

102.2
2.3
(4.8)

99.7

58.2

17.4
–
1.3

18.7

Other
£m

4.4

3.7
(2.3)
0.1

1.5

Total
£m

260.9

123.3
–
(3.4)

119.9

CONSOLIDATION – SUBSIDIARIES
Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of
subsidiaries are included in the consolidated financial statements from the date over which control commences until the date on which
control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Group (and for acquisitions prior to 1 July 2009 costs directly attributable to the acquisition). Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
Currently, there are no non-controlling interests in any of the entities within the Group.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest
over the net identifiable assets acquired less liabilities assumed. If this consideration is lower than the fair value of the net assets of the
subsidiary acquired, the difference is recognised as a credit in profit or loss.

Intercompany transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses
resulting from intercompany transactions that are recognised in net assets are also eliminated. Accounting policies of subsidiaries are
consistent with those adopted by the Group.

REVENUE RECOGNITION
Revenue is the net invoiced sales value, after deducting promotional sales related discounts invoiced by customers, including brand support
costs, and exclusive of value added tax of goods and services supplied to external customers during the year. Brand support costs are
investments in customer promotional activities. Sales are recorded based on the price specified in the sales invoices, net of any agreed
discounts and rebates.

Revenue is recognised when 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. Brand support accruals are included in the statement of financial position in respect of these.

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 financial
information is available. Segment results that are reported to the management committee (as chief operating decision maker) include items
directly attributable to a segment as well as those which can be allocated on a consistent basis.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSFOREIGN CURRENCY TRANSLATION
(A) FUNCTIONAL AND PRESENTATION CURRENCY
Functional and presentation currency items included in the financial 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 financial 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 financial statements, an item is treated as exceptional if it is considered unusual by its nature and scale
and is of such significance that separate disclosure is required for the financial statements to be properly understood.

INTANGIBLE ASSETS
GOODWILL
Goodwill represents the excess of the consideration of an acquisition over the fair value of the Group’s share of the net identifiable 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 benefit 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 an indefinite 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 been assessed as having an indefinite life as they are expected to continue to contribute to the long
term future of the Group. 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 flows.

CUSTOMER RELATIONSHIPS
Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. The customer relationships
have a finite 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
Groupe Rubicon Limited and Funkin Ltd.

The fair value of the customer relationships at the acquisition date was based on the Multiple Excess Earnings Method (‘MEEM’) which is
a valuation model based on discounted cash flows. 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%. The useful lives of all intangible assets are
reviewed annually and amended, as required, on a prospective basis.

INTERNALLY GENERATED SOFTWARE DEVELOPMENT COSTS
Internally generated software development costs comprise of internal and third party consultancy costs incurred in relation to the Business
Process Redesign project. Amortisation is charged from the date the software is available for use. This is calculated using the straight-line
method over the expected useful life of the software, which is 10 years.

PROPERTY, PLANT AND EQUIPMENT
Land and buildings comprise mainly factories, distribution sites and offices. All property, plant and equipment is stated at historical cost less
accumulated depreciation and impairments. Historical cost includes expenditure that is directly attributable to the acquisition of the assets.
The purchase price of an asset will include the fair value of the consideration paid to acquire the asset. Borrowing costs directly attributable
to acquisition, construction and or production of assets that take a substantial time to complete are capitalised.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

1. ACCOUNTING POLICIES CONTINUED
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 benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

The carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.

Land is not depreciated. Depreciation is charged from the date that assets, other than land, are available for use. It 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%
Computer hardware – 20%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year end date. The carrying value of the
property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate that the recoverable amount may
be less than the carrying value.

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.

An item of property, plant and equipment is derecognised on disposal or where no future economic benefits are expected to arise from the
continued use of the asset.

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

LEASES
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
The Group has two heritable properties held under operating leases. 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.

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance
leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present
value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges,
are included in other long term payables. The interest element of the finance cost is charged to the income statement over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and
equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite 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 in the income statement 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. In assessing value in use the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that is based on current market assessments
of the time value of money and risks specific to the asset for which the future cash flow estimates have not been adjusted.

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

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the impairment loss was recognised although any reversal cannot result in a carrying amount that would exceed
the carrying amount that would have been recognised, net of depreciation, had no impairment loss been recognised in prior years.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSNON-DERIVATIVE FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash
equivalents, loans and borrowings, and trade payables.

TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method, less any impairment losses. 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 flows. 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 costs. When a trade receivable becomes uncollectable it is written off against the bad debt provision.

TRADE AND OTHER PAYABLES
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the
effective interest method.

INVESTMENTS
Investments in subsidiaries are carried at cost less impairment in the parent company accounts.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part
of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

INTEREST-BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost using the effective interest method.

DERIVATIVE FINANCIAL 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 gain or loss on re-measurement to fair value is recognised immediately in the income statement. However, where derivatives
qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.

At the inception of the transaction, the Group documents 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 flows of hedged items.

The fair values of the derivative instruments used for hedging purposes are disclosed in note 16. 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 classified as non-current
when the remaining maturity of the hedged item is more than 12 months from the statement of financial position date and as current when the
remaining maturity of the hedged item is less than 12 months from the statement of financial position date.

CASH FLOW HEDGES
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity.
The gain or loss relating to the ineffective portion is recognised immediately in the income statement within administration costs.

Amounts accumulated in equity are recycled through the income statement in the periods when the hedged item affects profit or loss. The gain
or loss relating to the effective portion of forward foreign currency contracts hedging overseas purchases is recognised in equity. The gain or
loss relating to the ineffective portion is recognised in the income statement within administration costs. 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 within the income statement when the forecast transaction is ultimately recognised in the income statement.

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 business less the estimated costs of completing production and selling expenses.

The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing
them to their primary distribution location and condition. This includes direct labour costs and an appropriate share of overheads based on
normal operating activity.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

1. ACCOUNTING POLICIES CONTINUED
COMPANY SHARES HELD BY EMPLOYEE BENEFIT TRUSTS
Company shares are purchased on behalf of employee benefit trusts to satisfy the liability of various employee share schemes. The amount
of the consideration paid, including directly attributable costs, is recognised as a charge in equity. Purchased shares are classified as
Company shares held by employee benefit trusts, and presented as a deduction from retained earnings.

CURRENT AND DEFERRED INCOME TAX
Tax on the profit 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 financial statements.

The following temporary differences are not provided for:
ͽ the initial recognition of goodwill; and
ͽ differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.

100

Where the carrying value of an 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 profits 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 benefit will be realised.

EMPLOYEE BENEFITS
RETIREMENT BENEFIT PLANS
The Group operates two pension schemes as detailed in note 27. The schemes are generally funded through payments to trustee-
administered funds. The Group has both defined benefit and defined contribution plans.

DEFINED CONTRIBUTION PENSION PLANS
A defined contribution plan is a pension plan under which the Group pays fixed 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.

DEFINED BENEFIT PENSION PLANS
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension
benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of plan assets
less the fair value of the defined benefit obligation. The defined benefit obligation is calculated annually by independent actuaries using the
projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of
high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity
in other comprehensive income in the period in which they arise.

The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on a
settlement is the difference between the present value of the defined benefit obligation being settled as determined on the date of
settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in connection
with the settlement.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSSHARE-BASED COMPENSATION
The Group grants 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 of the equity settled share-based payment determined at the grant date 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 payroll.

The Group records as an expense the fair value of the discount on the shares purchased by the employee as a charge to the income
statement and a credit 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.

PROFIT-SHARING AND BONUS PLANS
The Group recognises a liability and an expense for various bonuses based on formulae that take into consideration the profit attributable
to the Company’s shareholders after certain adjustments.

The Group recognises a provision where there is a contractual obligation 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 legal or constructive obligation that can be estimated
reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.

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.

101

DIVIDEND DISTRIBUTIONS
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial 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 financial statements requires management to make judgements, estimates and assumptions that affect the amounts
reported for assets and liabilities as at the statement of financial position date and the amounts reported for revenues and expenses during
the year. Due to the nature of estimation, the actual outcomes may well differ from these estimates.

The principal estimates and judgements that have a significant effect on the carrying amounts of assets and liabilities are discussed below:

VALUATION OF INVENTORY JUDGEMENT
Inventory is a significant balance in the consolidated statement of financial position. The Group purchases commodities for use in the
manufacture of soft drinks and these purchases are subject to price volatility. As the Group uses standard costing to value its inventory,
management review price variances arising from the purchases of commodities to ensure that the closing inventory correctly reflects the costs
incurred in bringing the inventory to its current state and location.

CARRYING VALUE OF BRAND SUPPORT ACCRUALS JUDGEMENT AND ESTIMATION UNCERTAINTY
The Group incurs significant costs in the support and development of the Group’s brands. Judgement is required in determining the level of
closing accrual required at a year end for promotions and brand support campaigns that either span two financial years or where the costs
have not been fully settled by the year end date. This includes sales related discounts which are included within revenue as disclosed in the
revenue recognition policy above. At 30 January 2016 the closing brand support accrual was £13.0m (25 January 2015: £12.5m).

In addition the following area of judgement had an effect on the carrying value of assets and liabilities:

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

1. ACCOUNTING POLICIES CONTINUED
RETIREMENT BENEFIT OBLIGATIONS ESTIMATION UNCERTAINTY
The determination of any defined benefit pension scheme surplus/obligation is based on assumptions determined with independent
actuarial advice. The assumptions used include discount rate, inflation, pension increases, salary increases, the expected return on scheme
assets and mortality assumptions.

2. SEGMENT REPORTING
The Group’s management committee has been identified 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 identified in the table
below: there has been no change to the segments during the year (after aggregation). The performance of the operating segments is assessed
by reference to their gross profit before exceptional items. There were no exceptional items in the year to 30 January 2016.

The operating segments disclosed have been aggregated by the nature of the products and the production processes that they share in
addition to similar long-term average gross margins for the operating segments.

YEAR ENDED 30 JANUARY 2016

Total revenue
Gross profit before exceptional items

YEAR ENDED 25 JANUARY 2015

102

Carbonates
£m

189.7
98.6

Carbonates
£m

Still drinks
and water
£m

57.1
16.9

Still drinks
and water
£m

Total revenue
Gross profit before exceptional items (Restated: note 1)

198.3
99.7

58.2
18.7

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

Other
£m

11.8
5.6

Other
£m

4.4
1.5

Total
£m

258.6
121.1

Total
£m

260.9
119.9

‘Other’ segments represent income from the sale of Funkin cocktail solutions, rental income for vending machines, the sale of ice-cream and
other soft drink related items such as water cups. In the year to 25 January 2015 this segment also included income from water coolers for the
Findlays 19 litre water business. This business was disposed of towards the end of the year to 25 January 2015.

The gross profit from the segment reporting is stated before exceptional costs. The prior year exceptional costs allocated to cost of sales in
the consolidated income statement related to the ‘Still drinks and water’ segment only.

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

All of the assets and liabilities 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 and liabilities to the statement of financial position has been disclosed for either of the
periods presented.

All of the segments included within ‘Carbonates’ and ‘Still drinks and water’ meet the aggregation criteria set out in IFRS 8 Operating Segments.

GEOGRAPHICAL INFORMATION
The Group operates predominately in the UK with some worldwide sales. All of the operations of the Group are based in the UK.

Revenue

UK
Rest of the world

2016
£m

249.4
9.2

258.6

2015
£m

253.7
7.2

260.9

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSThe Rest of the world revenue includes sales to Ireland and wholesale export houses.

All of the assets of the Group are located in the UK.

MAJOR CUSTOMERS
No single customer accounted for 10% or more of the Group’s revenue in either of the years presented.

3. PROFIT BEFORE TAX
The following items have been included in arriving at profit before tax:

Depreciation of property, plant and equipment
Impairment of property
Impairment of plant and equipment
Loss/(profit) on disposal of property, plant and equipment
Research and development costs
Impairment of inventories
Amortisation of intangible assets
Cost of inventories charged in cost of sales
Operating lease rentals payable – property
Operating lease rentals payable – motor vehicles
Operating lease rentals payable – plant
Trade receivables impairment movement
Acquisition costs (note 12)
Share-based payment costs

2016
£m

7.3
–
–
0.2
1.1
0.4
1.1
137.5
0.4
1.1
1.8
(0.4)
0.7
0.5

2015
£m

6.7
1.1
0.4
(0.1)
1.1
0.1
0.3
143.9
0.4
1.2
1.8
0.7
–
0.9

Included within administration costs (note 6) 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:

103

Statutory audit services
Fees payable to the auditor of the parent Company and consolidated accounts
Fees payable to the auditor for other services:
Audit of the Company’s subsidiaries pursuant to legislation

Non-audit services
Audit related assurance services
Other assurance services
Pension advisory services
Tax compliance services
Tax advisory services

Fees in respect of the Group’s pension plans

Audit

4. EMPLOYEES AND DIRECTORS

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

2016
£000

2015
£000

20
97
–
22
22

19
67
12
24
37

2016

2015

745
287

1,032

820
228

1,048

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

4. EMPLOYEES AND DIRECTORS CONTINUED
STAFF COSTS FOR THE GROUP FOR THE YEAR

Wages and salaries
Social security costs
Share-based payments
Pension costs – defined contribution plans
Pension costs – defined benefit plans

5. OTHER INCOME

Compensation received in respect of contract terminated

2016
£m

37.9
4.0
0.5
2.8
2.4

47.6

2016
£m

–

2015
£m

36.4
3.8
0.9
2.7
0.8

44.6

2015
£m

0.7

During the year to 25 January 2015 the contract for the production and selling of Orangina was terminated by Schweppes International
Limited. This resulted in compensation of £0.7m being received by A.G. BARR p.l.c.

6. NET OPERATING EXPENSES BEFORE EXCEPTIONAL ITEMS

104

Distribution costs (including selling costs)
Administration costs

7. EXCEPTIONAL ITEMS

Redundancy costs relating to the closure of the Tredegar manufacturing site
Impairment charges relating to the closure of the Tredegar manufacturing site

Total cost of sales

Pension curtailment (note 27)
Redundancy costs for finance, telesales, distribution, demand and supply planning reorganisation

Total operating costs

Total exceptional costs

2016
£m

57.3
21.7

79.0

2016
£m

–
–

–

–
–

–

2015
Restated
(note 1)
£m

57.2
21.3

78.5

2015
£m

1.4
1.5

2.9

(0.5)
0.9

0.4

3.3

During the year to 25 January 2015 A.G. BARR p.l.c. announced the closure of its manufacturing site at Tredegar. This resulted in an impairment
charge of £1.5m in respect of buildings and plant at the site which were written down to the recoverable amounts calculated by reference to fair
value less costs of disposal (valued by reference to an independent valuation and categorised as a level 2 fair value measurement). £0.5m of
redundancy related costs were incurred in the year to 25 January 2015. A further £0.9m of redundancy costs were provided for.

Redundancy, recruitment and training costs in relation to the finance, telesales, distribution, demand and supply planning operations were
incurred during the year to 25 January 2015 and treated as exceptional.

As a result of the finance, telesales, distribution, demand and supply planning reorganisation, a curtailment in the Group’s retirement pension
plan arose. This resulted in an exceptional credit arising from the reduction in the retirement benefit obligation following a reduction in the
number of employees remaining within the scheme. The value of this credit was £0.5m.

A tax credit of £nil (2015: £0.7m) was recognised as a result of the total exceptional costs (note 9).

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS8. FINANCE INCOME AND FINANCE COSTS
FINANCE INCOME

Interest receivable

FINANCE COSTS

Interest payable
Finance costs relating to defined benefit pension plans (note 27)
Amortisation of loan arrangement fees

9. TAXATION

Group

Current tax
Current tax on profits for the year
Adjustments in respect of prior years

Total current tax expense/(credit)

Deferred tax
Origination and reversal of:
Temporary differences
Adjustment for change in deferred tax rate
Adjustments in respect of prior years

Total deferred tax (credit)/expense (note 24)

Total tax expense/(credit)

2016
£m

0.1

2016
£m

(0.1)
(0.7)
(0.1)

(0.9)

2016

Total
£m

9.0
(0.7)

8.3

0.3
(1.6)
–

(1.3)

7.0

Before
exceptional
items
£m

2015

Exceptional
items
£m

9.0
(0.2)

8.8

0.4
–
0.1

0.5

9.3

(0.5)
–

(0.5)

(0.2)
–
–

(0.2)

(0.7)

2015
£m

0.1

2015
£m

(0.3)
–
–

(0.3)

Total
£m

8.5
(0.2)

8.3

0.2
–
0.1

0.3

8.6

105

In addition to the above movements in deferred tax, a deferred tax charge of £2.8m (2015: credit of £2.9m) has been recognised in other
comprehensive income and a charge of £0.5m (2015: a credit of £0.1m) has been taken direct to reserves (note 24).

A current tax credit of £1.3m (2015: a credit of £1.1m) has been recognised in other comprehensive income.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

9. TAXATION CONTINUED
The tax on the Group’s profit before tax differs from the amount that would arise using the tax rate applicable to the consolidated profits of
the Group as follows:

2016
£m

2016
%

2015
£m

2015
%

Profit before tax

Tax at 20.2% (2015: 21.3%)
Tax effects of:
Items that are not deductible in determining taxable profit
Current tax adjustment in respect of prior years
Deferred tax adjustment in respect of prior years
Deferred tax adjustment in respect of change of deferred tax rate
Other differences

Total tax expense

The weighted average tax rate was 17.1% (2015: 22.3%).

41.3

8.3

1.0
(0.7)
–
(1.6)
–

7.0

20.2

2.4
(1.7)
–
(3.9)
–

17.1

38.6

8.2

0.5
(0.2)
0.1
–
–

8.6

21.3

1.2
(0.4)
0.3
–
(0.1)

22.3

The Chancellor announced in his Summer Budget on 8 July 2015 that the main rate of corporation tax will be reduced to 19% from 1 April 2017
and 18% from 1 April 2020 and the future charges will reduce accordingly. Finance No.2 Bill 2015 became substantively enacted on
26 October 2015.

The deferred tax liability at 30 January 2016 has therefore been calculated having regard to the rate of 18% substantively enacted at the
balance sheet date.

10. 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.

106

Profit attributable to equity holders of the Company (£m)
Weighted average number of ordinary shares in issue

Basic earnings per share (pence)

2016

2015

34.3
115,714,487

30.0
115,377,541

29.63

26.00

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.

Profit attributable to equity holders of the Company (£m)

Weighted average number of ordinary shares in issue
Adjustment for dilutive effect of share options

Diluted weighted average number of ordinary shares in issue

Diluted earnings per share (pence)

The underlying EPS figure is calculated by using Profit attributable to equity holders before exceptional items:

Profit attributable to equity holders of the Company before exceptional items (£m)
Weighted average number of ordinary shares in issue

Underlying earnings per share (pence)

2016

34.3

2015

30.0

115,714,487
505,871

115,377,541
623,962

116,220,358

116,001,503

29.51

25.86

2016

2015

34.3
115,714,487

32.6
115,377,541

29.63

28.25

This measure has been included in the financial statements as it provides a closer guide to the underlying financial performance as the
calculation excludes the effect of exceptional items.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS11. DIVIDENDS

Paid final dividend
Paid first interim dividend
Paid second interim dividend

2016
per share

2015
per share

9.01p
3.36p
–p

12.37p

–p
3.11p
8.19p

11.30p

2016
£m

10.4
3.9
–

14.3

2015
£m

–
3.6
9.5

13.1

The directors have proposed a final dividend in respect of the year ended 30 January 2016 of 9.97p per share, amounting to a dividend of
£11.6m. It will be paid on 10 June 2016 to all shareholders who are on the Register of Members on 13 May 2016.

The notice of Annual General Meeting for the year ended 26 January 2014 omitted the resolution seeking shareholder approval for the
payment of a final dividend of 8.19p per ordinary share. Accordingly, the Board declared a second interim dividend for the year ended
26 January 2014 in place of the proposed final dividend. The interim dividend did not require the approval of shareholders. The amount of this
interim dividend was 8.19p per ordinary share.

This dividend was paid on 6 June 2014 to all shareholders who were on the Register of Members on 9 May 2014.

Dividends payable in respect of the financial year were as follows:

Final dividend proposed in respect of financial year
Interim dividend paid

2016
per share

2015
per share

9.97p
3.36p

13.33p

9.01p
3.11p

12.12p

12. ACQUISITION OF SUBSIDIARY
On 2 February 2015, the Group acquired 100% of the share capital of Funkin Limited (‘Funkin’), a company which offers a broad range of
premium cocktail solutions including fruit purées, cocktail mixers and syrups.

In the twelve months to 30 January 2016, Funkin contributed revenue of £9.8m and an operating profit of £1.3m to the Group’s results. Had
Funkin been consolidated from 26 January 2015, the consolidated income statement for the year ended 30 January 2016 would not be
materially different.

CONSIDERATION TRANSFERRED
The following table summarises the acquisition-date fair value of each major class of consideration transferred:

107

Cash
Contingent consideration

Total consideration

£m

17.5
4.5

22.0

CONTINGENT CONSIDERATION
The Group has agreed to pay the former owners of Funkin a contingent consideration based on the achievement of certain financial targets
by Funkin in the two years from the date of its acquisition by the Group. The potential undiscounted amount of all future payments that the
Group could make under the acquisition agreement is between £nil and £4.5m.

The fair value of the contingent consideration arrangement of £4.5m was estimated by assessing the expected growth of Funkin over the two
years trading post acquisition. No discount rate has been applied to the fair value estimate of the contingent consideration as due to the short
time period the effect of discounting has a negligible effect on the fair value.

RECOGNISED AMOUNTS OF IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED
The fair value of trade and other receivables was £1.4m and includes trade receivables with a fair value of £1.2m. The gross contractual
amount for trade receivables due was £1.3m of which £0.1m is expected to be uncollectible.

The fair value of the acquired identifiable intangible assets was £7.2m.

A deferred tax liability of £1.5m has been provided in relation to these fair value adjustments in relation to intangible assets.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

12. ACQUISITION OF SUBSIDIARY CONTINUED

Cash and cash equivalents
Funkin brand
Customer list
Inventories
Trade and other receivables
Trade and other payables
Current tax liability
Deferred tax liabilities

Total identifiable net assets

Goodwill

£m

1.8
6.8
0.4
0.7
1.4
(3.2)
(0.1)
(1.5)

6.3

15.7

None of the goodwill arising on the acquisition is expected to be deductible for tax purposes.

The goodwill of £15.7m arises from a number of factors including expected synergies through combining an experienced senior team and
obtaining greater production efficiencies through knowledge transfer; marketing expertise; obtaining economies of scale by cost reductions
from purchasing efficiencies; sales synergies arising from introducing Funkin to A.G. BARR’s route to market and sales channels; and
unrecognised assets such as the workforce.

ACQUISITION-RELATED COSTS
The Group incurred acquisition-related costs of £0.7m relating to external legal fees and due diligence costs. These costs have been
included in operating costs in the consolidated income statement.

13. INTANGIBLE ASSETS

108

Group

Cost
At 26 January 2014
Acquisitions

At 25 January 2015

Acquisitions through business combinations
Acquisitions

At 30 January 2016

Amortisation and impairment losses
At 26 January 2014
Amortisation for the year

At 25 January 2015
Amortisation for the year

At 30 January 2016

Carrying amounts
At 30 January 2016

At 25 January 2015

Goodwill
£m

Brands
£m

Customer
relationships
£m

Water rights
£m

Software
development
costs
£m

23.3
–

23.3

15.7
–

39.0

0.4
–

0.4

38.6

22.9

50.3
–

50.3

6.8
–

57.1

0.3
–

0.3

56.8

50.0

3.5
–

3.5

0.4
–

3.9

2.3
0.3

2.6
0.3

2.9

1.0

0.9

0.7
–

0.7

–
–

0.7

0.7
–

0.7

–

–
7.1

7.1

–
4.8

11.9

–
–

–
0.8

0.8

11.1

7.1

Total
£m

77.8
7.1

84.9

22.9
4.8

112.6

3.7
0.3

4.0
1.1

5.1

107.5

80.9

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSThe acquisitions through business combinations for the year to 30 January 2016 represent the goodwill, brands and customer relationships
obtained in the acquisition of Funkin Limited (Note 12).

Further software development costs were incurred in the year to 30 January 2016, which represents internally generated software
development costs and third party consultancy costs incurred in relation to the Business Process Redesign project. This project introduced
a more effective, modern and robust Enterprise Resource Planning software. This project was completed during the year to 30 January 2016.
The Group capitalised £0.8m (2015: £0.7m) of internal resource as part of the project.

The opening customer relationships balance represents 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 assets’ expected useful lives: the
Strathmore customer relationships were fully amortised in the year to 28 January 2012, the Rubicon asset has three years remaining and
the Funkin asset has nine years remaining.

This period has been reviewed at the statement of financial position date and remains appropriate.

The amortisation costs for the year to 30 January 2016 have been included in the income statement as administration costs.

Company

Cost
At 26 January 2014
Acquisitions

At 25 January 2015

Acquisitions

At 30 January 2016

Amortisation and impairment losses
At 26 January 2014
Amortisation for the year

At 25 January 2015
Amortisation for the year

At 30 January 2016

Carrying amounts
At 30 January 2016

At 25 January 2015

Goodwill
£m

Brands
£m

Customer
relationships
£m

Water rights
£m

Software
development
costs
£m

1.9
–

1.9

–

1.9

–
–

–

1.9

7.3
–

7.3

–

7.3

0.3
–

0.3

7.0

1.0
–

1.0

–

1.0

1.0
–

1.0

–

0.7
–

0.7

–

0.7

0.7
–

0.7

–

–
7.1

7.1

4.8

11.9

–
–

–
0.8

0.8

11.1

7.1

Total
£m

10.9
7.1

18.0

4.8

22.8

2.0
–

2.0
0.8

2.8

20.0

16.0

109

All intangible assets noted above were recognised on the acquisition of the Strathmore Water business with the exception of the additions
for the years to 25 January 2015 and 30 January 2016 which represent internally generated software development costs and third party
consultancy costs incurred in relation to the Business Process Redesign project.

At 30 January 2016, the Group and the Company had entered into contractual commitments for the acquisition of intangible assets
amounting to £nil (2015: £0.8m).

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

13. 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 2016

Rubicon operating unit
Funkin operating unit
Strathmore operating unit

Total

At 25 January 2015

Rubicon operating unit
Strathmore operating unit

Total

Goodwill
£m

21.0
15.7
1.9

38.6

Goodwill
£m

21.0
1.9

22.9

Brands
£m

43.0
6.8
7.0

56.8

Brands
£m

43.0
7.0

50.0

Customer
relationships
£m

0.7
0.3
–

1.0

Customer
relationships
£m

0.9
–

0.9

Total
£m

64.7
22.8
8.9

96.4

Total
£m

64.9
8.9

73.8

The recoverable amount of a CGU is determined based on value in use calculations. These calculations use pre-tax cash flow projections
based on financial budgets approved by management which cover a three year period. Cash flows beyond the three years are extrapolated
using the growth rates and other key assumptions as stated below:

110

KEY ASSUMPTIONS

Rubicon operating unit
Funkin operating unit
Strathmore operating unit

Gross margin
%

38.50
52.41
30.20

2016

Growth rate
%

2.25
2.25
2.25

Discount rate
%

Gross margin
%

11.00
11.00
11.00

34.43
–
29.40

2015

Growth rate
%

2.25
–
2.25

Discount rate
%

10.50
–
10.50

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 reflects management’s estimate of pre-tax cost of capital adjusted for the specific risks impacting on each operating unit.
The estimated pre-tax cost of capital is a benchmark for the Group provided by an independent third party.

Advertising and promotional costs are included in the analysis, using latest annual budgets for the year to 30 January 2016 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
pre-tax rate of 15%, none of the CGUs were impaired. Whilst cash flow projections used within the impairment reviews are subject to inherent
uncertainty, changes within reason to the key assumptions applied in assessing the value in use calculation would not result in a change in the
impairment conclusions reached.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS14. PROPERTY, PLANT AND EQUIPMENT

Group

Cost or deemed cost
At 26 January 2014
Additions
Transfer from assets under construction
Disposals

At 25 January 2015

Additions
Transfer from assets under construction
Disposals

At 30 January 2016

Depreciation
At 26 January 2014
Amount charged for year
Impairment
Disposals

At 25 January 2015

Amount charged for year
Disposals

At 30 January 2016

Net book value

As at 30 January 2016

As at 25 January 2015

Land and buildings

Freehold
£m

Long
leasehold
£m

Plant, equipment
and vehicles
£m

Assets under
construction
£m

55.1
0.4
0.1
(0.5)

55.1

5.8
0.5
(2.4)

59.0

4.1
0.5
1.1
–

5.7

1.0
(1.3)

5.4

53.6

49.4

0.5
–
–
–

0.5

–
–
(0.1)

0.4

0.5
–
–
–

0.5

–
(0.1)

0.4

–

72.9
3.5
2.3
(2.6)

76.1

3.8
5.2
(2.0)

0.9
8.2
(2.4)
–

6.7

4.5
(5.7)
–

48.6
6.2
0.4
(2.6)

52.6

6.3
(2.0)

56.9

26.2

23.5

–
–
–
–

–

–
–

–

5.5

6.7

83.1

5.5

148.0

Total
£m

129.4
12.1
–
(3.1)

138.4

14.1
–
(4.5)

111

53.2
6.7
1.5
(2.6)

58.8

7.3
(3.4)

62.7

85.3

79.6

2015
£m

–
–

–

Plant, equipment and vehicles includes the following amounts where the Group and Company is a lessee under a finance lease:

Cost-capitalised finance lease
Accumulated depreciation

Net book value

2016
£m

0.2
–

0.2

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

14. PROPERTY, PLANT AND EQUIPMENT CONTINUED

Company

Cost or deemed cost
At 25 January 2015
Additions
Transfer from assets under construction
Transfer of assets from other Group companies
Disposals

At 25 January 2015

Additions
Transfer from assets under construction
Transfer of assets from other Group companies
Disposals

112

At 30 January 2016

Depreciation
At 26 January 2014
Amount charged for year
Impairment
Disposals

At 25 January 2015

Amount charged for year
Disposals

At 30 January 2016

Net book value

As at 30 January 2016

As at 25 January 2015

Land and buildings

Freehold
£m

Long
leasehold
£m

Plant, equipment
and vehicles
£m

Assets under
construction
£m

54.6
0.4
0.1
0.1
(0.5)

54.7

5.8
0.5
0.1
(2.4)

0.4
–
–
–
–

0.4

–
–
–
(0.1)

70.9
3.5
2.3
–
(2.2)

74.5

3.8
5.2
0.8
(2.0)

0.9
8.2
(2.4)
–
–

6.7

4.5
(5.7)
–
–

Total
£m

126.8
12.1
–
0.1
(2.7)

136.3

14.1
–
0.9
(4.5)

58.7

0.3

82.3

5.5

146.8

3.8
0.5
1.1
–

5.4

1.0
(1.3)

5.1

53.6

49.3

0.4
–
–
–

0.4

–
(0.1)

0.3

–

47.6
5.9
–
(2.2)

51.3

6.3
(1.5)

56.1

26.2

23.2

–
–
–
–

–

–
–

–

5.5

6.7

At 30 January 2016, the Group and the Company had entered into contractual commitments for the acquisition of property, plant and
equipment amounting to £6.1m (2015: £1.2m).

Freehold land and buildings includes the following amounts where the Company is a lessee under a finance lease:

Cost-capitalised finance lease
Accumulated depreciation

Net book value

2016
£m

23.3
(2.7)

20.6

51.8
6.4
1.1
(2.2)

57.1

7.3
(2.9)

61.5

85.3

79.2

2015
£m

23.3
(2.5)

20.8

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS15. PENSION PREPAYMENT
The Company established the A.G. BARR p.l.c. (2008) Scottish Limited Partnership (‘the Partnership’) in the year to 26 January 2014
and through the Partnership has entered into a long term pension funding arrangement with the A.G. BARR 2008 Pension and Life
Assurance Scheme.

Non-current
Current

Prepayment of pension contributions

Company

2016
£m

18.3
1.2

19.5

2015
£m

18.8
1.2

20.0

The element of the prepayment classified as current is included within the prepayments figure of £3.8m (2015: £4.0m), as set out in note 20.

The Partnership is controlled by A.G. BARR p.l.c. and its results are consolidated by the Group.

A ‘structured entity’ is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls
the entity, such as when any voting rights relate only to administrative tasks and the relevant activities are directed by means of contractual
arrangements. As outlined in note 27, during the year to 26 January 2014, certain freehold properties were transferred to a limited partnership
(a structured entity) established by the Group the main purpose of which is to lease these properties to a group company and, as a result,
to provide the Group’s pension scheme with a distribution of the profits of the Partnership. The distribution is subject to discretion exercisable
by the Group in certain circumstances however, given that the Group has the ability to control the limited Partnership by making an additional
contribution into the scheme, it is the view of the directors that the Group controls the Partnership and therefore it is treated as a
consolidated entity.

The carrying value of the properties sold to the Partnership and leased back to the Company remain included on the Group’s and Company’s
balance sheet and continued to be depreciated in line with the Group’s and Company’s accounting policies with the Group and Company
retaining full operational control over these properties.

113

The Group has taken advantage of the exemption conferred by Regulation 7 of the Partnerships (Accounts) Regulations 2008 and has,
therefore, not appended the accounts of this qualifying partnership to these financial statements. Separate accounts for the Partnership are not
required to be, and have not been, filed at UK Companies House.

As part of the funding arrangement the Company made a one off payment to the Pension Scheme of £20.4m to allow it to invest in the
Partnership and this is treated as a prepayment of pension contributions. Further information on the asset backed funding arrangement is
included within note 27. As the Partnership results are consolidated within the Group results no prepayment is recognised in the consolidated
statement of financial position.

16. DERIVATIVE FINANCIAL INSTRUMENTS
GROUP AND COMPANY
FAIR VALUE HIERARCHY
IFRS 7 requires all financial 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.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by
using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as
possible on entity specific estimates. The fair value of the forward foreign exchange contracts is determined using forward exchange rates at
the date of the statement of financial position, with the resulting value discounted accordingly as relevant.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

16. DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
The following tables show the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount
is a reasonable approximation of fair value.

Group
At 30 January 2016

Financial assets not measured at fair value
Foreign exchange contracts used for hedging
Trade receivables
Cash and cash equivalents

Financial liabilities measured at fair value
Contingent consideration (note 12)

Financial liabilities not measured at fair value
Finance lease liabilities
Unsecured bank borrowings
Trade payables

114

Group
At 25 January 2015

Financial assets not measured at fair value
Foreign exchange contracts used for hedging
Trade receivables
Cash and cash equivalents

Financial liabilities measured at fair value
Foreign exchange contracts used for hedging

Financial liabilities not measured at fair value
Unsecured bank borrowings
Trade payables

Fair value –
hedging
instruments
£m

Carrying amount

Loans and
receivables
£m

Other financial
liabilities at
amortised cost
£m

Fair value

Total
£m

Level 2
£m

1.1
–
–

1.1

–

–
–
–

–

–
50.0
6.8

56.8

–

–
–
–

–

–
–
–

–

4.5

0.2
18.0
8.4

26.6

Fair value –
hedging
instruments
£m

Carrying amount

Loans and
receivables
£m

Other financial
liabilities at
amortised cost
£m

0.1
–
–

0.1

0.7

–
–

–

–
49.1
25.4

74.5

–

–
–

–

–
–
–

–

14.9
17.7

32.6

1.1
50.0
6.8

57.9

4.5

0.2
18.0
8.4

26.6

Total
£m

0.1
49.1
25.4

74.6

0.7

14.9
17.7

32.6

1.1
50.0
6.8

57.9

4.5

0.2
18.0
8.4

26.6

Fair value

Level 2
£m

0.1
49.1
25.4

74.6

0.7

14.9
17.7

32.6

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSCompany
At 30 January 2016

Financial assets not measured at fair value
Foreign exchange contracts used for hedging
Trade and other receivables and amounts due from

subsidiary companies
Cash and cash equivalents

Financial liabilities measured at fair value
Contingent consideration (note 12)

Financial liabilities not measured at fair value
Unsecured bank borrowings
Finance lease liabilities
Trade payables and amounts due to other subsidiary

companies

Company
At 25 January 2015

Financial assets not measured at fair value
Foreign exchange contracts used for hedging
Trade and other receivables and amounts due from

subsidiary companies
Cash and cash equivalents

Financial liabilities measured at fair value
Foreign exchange contracts used for hedging

Financial liabilities not measured at fair value
Unsecured bank borrowings
Finance lease liabilities
Trade payables and amounts due to other subsidiary

companies

Fair value –
hedging
instruments
£m

Carrying amount

Loans and
receivables
£m

Other financial
liabilities at
amortised cost
£m

Fair value

Total
£m

Level 2
£m

1.1

–
–

1.1

–

–
–

–

50.3
4.4

54.7

–

–
–

–

–
–

–

4.5

18.0
21.1

73.6

112.7

Fair value –
hedging
instruments
£m

Carrying amount

Loans and
receivables
£m

Other financial
liabilities at
amortised cost
£m

0.1

–
–

0.1

0.7

–
–

–

50.3
25.4

75.7

–

–
–

–

–
–

–

14.9
21.3

72.7

108.9

1.1

50.3
4.4

55.8

4.5

18.0
21.1

73.6

112.7

Total
£m

0.1

50.3
25.4

75.8

0.7

14.9
21.3

72.7

108.9

1.1

50.3
4.4

55.8

4.5

18.0
19.7

73.6

91.6

Fair value

Level 2
£m

0.1

50.3
25.4

75.8

0.7

14.9
20.0

72.7

107.6

115

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 value.

The fair value of the current trade and other receivables and the current trade and other payables approximates to their book value as none
of the balances are interest bearing.

For the current borrowings, the impact of discounting is not significant as the borrowings will be paid within 12 months of the year end date.
The carrying amount approximates their fair value.

The fair value of the non-current borrowings is based on cash flows discounted using the current variable interest rate charged on the
borrowings of 1.5% and a discount rate of 1.5% and are within level 2 of the fair value hierarchy.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

16. DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
CONTINGENT CONSIDERATION
The Group has agreed to pay the former owners of Funkin a contingent consideration based on the achievement of certain financial targets
by Funkin in the two years from the date of its acquisition by the Group. The potential undiscounted amount of all future payments that the
Group could make under the acquisition agreement is between £nil and £4.5m.

17. INVESTMENT IN SUBSIDIARIES

Opening investment in subsidiaries
Investment in year

Closing investment in subsidiaries

2016
£m

62.3
22.0

84.3

2015
£m

62.3
–

62.3

The investment made by the Company in the year was in relation to the acquisition of Funkin Limited (note 12).

The carrying value of the investment represents the fair value of the consideration paid at the date the investments were acquired.

The principal subsidiaries are as follows:

Principal subsidiary

Principal activity

116

Funkin Limited
Funkin France Limited
Funkin USA Limited
Rubicon Drinks Limited

Distribution and selling of cocktail solutions
Distribution and selling of cocktail solutions
Distribution and selling of cocktail solutions
Manufacture, distribution and selling of soft drinks

Country of
incorporation

England
England
England
England

Country of
principal
operations

UK
France
USA
UK

A.G. BARR p.l.c. holds 100% of the equity and votes of the subsidiaries. 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 the only ones which materially affect the profit and assets of the Group.
Refer to note 32 for a full list of the subsidiaries.

18. CASH AND CASH EQUIVALENTS

Cash and cash equivalents

Group

2016
£m

6.8

2015
£m

25.4

Company

2016
£m

4.4

Cash and cash equivalents include the following for the purposes of the cash flow statements:

Cash and cash equivalents
Bank overdrafts (note 21)

The credit quality of the holder of the Cash at bank is AA(-) rated (2015: AA(-) rated).

Group

Company

2016
£m

6.8
(0.6)

6.2

2015
£m

25.4
(0.1)

25.3

2016
£m

4.4
(0.6)

3.8

2015
£m

25.4

2015
£m

25.4
(0.1)

25.3

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS19. INVENTORIES

Returnable containers
Materials
Finished goods

Group

Company

2016
£m

–
4.8
10.8

15.6

2015
£m

0.4
4.3
12.0

16.7

2016
£m

–
4.7
10.5

15.2

2015
£m

0.4
3.5
11.3

15.2

During the year to 30 January 2016 the Group announced it would cease the manufacture and sale of 750ml returnable glass bottles and
replace these with non-returnable 750ml glass bottles. As a result there are no returnable containers held in the closing inventory at
30 January 2016.

20. TRADE AND OTHER RECEIVABLES

Trade receivables
Less: provision for impairment of receivables

Trade receivables – net
Prepayments
Amounts due by subsidiary companies

Group

Company

2016
£m

50.6
(0.6)

50.0
2.7
–

52.7

2015
£m

50.1
(1.0)

49.1
2.8
–

51.9

2016
£m

49.2
(0.6)

48.6
3.8
1.7

54.1

2015
£m

50.1
(1.0)

49.1
4.0
1.2

54.3

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 receivables. The amounts due from subsidiary companies are considered to be fully recoverable.

117

The Group’s and Company’s most significant customer, a UK major customer, accounts for £7.3m of the trade receivables carrying amount
at 30 January 2016 (25 January 2015: £5.7m).

The ageing of the Group and Company’s trade receivables and their related impairment at the reporting date was:

Group

Not past due
Past due 1 to 30 days
Past due 31 to 60 days
Past due 61+ days

Total

Company

Not past due
Past due 1 to 30 days
Past due 31 to 60 days
Past due 61+ days

Total

Gross
2016
£m

44.9
3.4
0.3
2.0

50.6

Gross
2016
£m

44.4
2.7
0.3
1.8

49.2

Impairment
2016
£m

(0.1)
(0.1)
(0.1)
(0.3)

(0.6)

Impairment
2016
£m

(0.1)
(0.1)
(0.1)
(0.3)

(0.6)

Gross
2015
£m

48.4
0.8
0.3
0.6

50.1

Gross
2015
£m

48.4
0.8
0.3
0.6

50.1

Impairment
2015
£m

(0.2)
(0.1)
(0.1)
(0.6)

(1.0)

Impairment
2015
£m

(0.2)
(0.1)
(0.1)
(0.6)

(1.0)

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

20. TRADE AND OTHER RECEIVABLES CONTINUED

Trade receivables overdue in excess of 30 days

Group

2016

4.6%

2015

1.7%

Company

2016

4.4%

2015

1.7%

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

2016
£m

48.6
2.0

50.6

2015
£m

46.5
3.6

50.1

2016
£m

47.2
2.0

49.2

The carrying amount of the Group and Company’s external trade and other receivables are denominated in the following currencies:

UK Sterling
Euro

Group

Company

2016
£m

51.7
1.0

52.7

2015
£m

51.5
0.4

51.9

2016
£m

51.4
1.0

52.4

Movements in the Group and Company’s provisions for impairment of trade receivables were as follows:

118

At start of year
Net provision (utilised)/charged during the year

At end of year

Group

Company

2016
£m

1.0
(0.4)

0.6

2015
£m

0.3
0.7

1.0

2016
£m

1.0
(0.4)

0.6

2015
£m

46.5
3.6

50.1

2015
£m

52.7
0.4

53.1

2015
£m

0.3
0.7

1.0

The provision allowance in respect of trade receivables is used to record impairment losses unless the Group and Company are satisfied
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, with a corresponding charge being recorded in administration costs. 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 costs in the income statement.

The other classes within trade and other receivables do not contain impaired assets.

21. BORROWINGS

Current
Bank borrowings
Finance lease liabilities

Non-current
Bank borrowings
Finance lease liabilities

Total borrowings

Group

Company

2016
£m

0.6
0.1

17.5
0.1

18.3

2015
£m

0.1
–

15.0
–

15.1

2016
£m

0.6
1.3

17.5
19.8

39.2

2015
£m

0.1
1.2

15.0
20.1

36.4

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSAll of the Group’s borrowings are denominated in UK Sterling with the exception of the current bank borrowings which represent the closing
overdraft on a Euro bank account.

During the year to 30 January 2016, the Group renegotiated a £35m revolving credit facility. A total arrangement fee of £0.1m was incurred
and will be amortised over the life of the loan facility. The revolving credit facility will expire in January 2018. A further £10m revolving credit
facility was arranged in the year to 26 January 2014 and will expire in March 2017.

During the year to 26 January 2014 certain property assets were transferred into A.G. BARR Scottish Limited Partnership and are being
leased back to the Company under a 21 year lease agreement. Further details are included within note 27.

The amortisation charge is included in the finance costs line in the income statement.

Group

Company

Current bank borrowings
Finance lease liability payable within one year

Current loans and other borrowings disclosed in the statement

of financial position

Non-current bank borrowings
Unamortised arrangement fee
Finance lease liability payable after more than one year

Non-current loans and other borrowings disclosed in the statement

of financial position

The movements in the Group borrowings are analysed as follows:

2016
£m

0.6
0.1

0.7

Group

2016
£m

17.5
(0.1)
0.1

17.5

2015
£m

0.1
–

0.1

2015
£m

15.0
(0.1)
–

14.9

Opening borrowings balance
Borrowings made
Repayments of borrowings
Bank overdrafts drawn

Closing borrowings balance

Reconciliation to net (debt)/funds:

Closing borrowings balance
Cash and cash equivalents (note 18)

Net (debt)/funds

2016
£m

0.6
1.3

1.9

Company

2016
£m

17.5
(0.1)
19.8

37.2

2016
£m

15.1
34.0
(31.5)
0.5

18.1

2016
£m

(18.1)
6.8

(11.3)

2015
£m

0.1
1.2

1.3

2015
£m

15.0
(0.1)
20.1

35.0

2015
£m

15.0
15.0
(15.0)
0.1

15.1

2015
£m

(15.1)
25.4

10.3

119

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

21. BORROWINGS CONTINUED
The undrawn facilities at 30 January 2016 were as follows:

Revolving credit facility – three years, expires January 2018
Revolving credit facility – three years, expires February 2017
Overdraft

The undrawn facilities as at 25 January 2015 were as follows:

Revolving credit facilities – three years, expires February 2017
Revolving credit facility for Crossley, expired June 2015
Overdraft

The maturity profile of the borrowings is as follows:

Less than one year
One to two years
Two to five years

120

The gross value of finance lease liabilities for the Group is as follows:

Gross ﬁnance lease liabilities – minimum lease payments:
Less than one year
Two to five years
Later than five years

Future finance charges on finance lease liabilities

Present value of finance lease liabilities

The present value of finance lease liabilities for the Group is as follows:

Less than one year
Two to five years
Later than five years

The Group leases certain IT assets under a finance lease agreement. The lease term is 5 years.

Total facility
£m

35.0
10.0
5.0

50.0

Total facility
£m

20.0
15.0
5.0

40.0

Drawn
£m

17.5
–
0.6

18.1

Drawn
£m

15.0
–
0.1

15.1

2016
£m

0.6
–
17.5

18.1

2016
£m

0.1
0.1
–

0.2
–

0.2

2016
£m

0.1
0.1
–

0.2

Undrawn
£m

17.5
10.0
4.4

31.9

Undrawn
£m

5.0
15.0
4.9

24.9

2015
£m

0.1
–
15.0

15.1

2015
£m

–
–
–

–
–

–

2015
£m

–
–
–

–

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSThe gross value of finance lease liabilities for the Company is as follows:

Gross ﬁnance lease liabilities – minimum lease payments:
Less than one year
Two to five years
Later than five years

Future finance charges on finance lease liabilities

Present value of finance lease liabilities

The present value of finance lease liabilities for the Company is as follows:

Less than one year
Two to five years
Later than five years

2016
£m

1.3
5.2
24.1

30.6
(9.5)

21.1

2016
£m

1.3
4.8
15.0

21.1

2015
£m

1.2
5.0
25.4

31.6
(10.3)

21.3

2015
£m

1.2
4.6
15.5

21.3

As well as the IT assets noted within the Group, the Company leases certain property assets under a finance lease agreement. The lease
term is 21 years and further details can be found within note 27.

22. TRADE AND OTHER PAYABLES

Trade payables
Other taxes and social security costs
Accruals
Contingent consideration (note 12)
Amounts due to subsidiary companies

Non-current
Current

121

Group

Company

2016
£m

8.4
5.3
23.7
4.5
–

41.9

4.5
37.4

41.9

2015
£m

17.7
4.3
29.1
–
–

51.1

–
51.1

51.1

2016
£m

7.4
4.8
23.5
4.5
66.2

106.4

4.5
101.9

106.4

2015
£m

17.7
4.3
29.1
–
55.0

106.1

–
106.1

106.1

The tables below analyse the Group and Company’s financial liabilities into the relevant maturity groupings based on the remaining period to
the contractual maturity date as at the statement of financial position date. The amounts disclosed in the table below are the contractual
undiscounted cash flows:

Group
At 30 January 2016

0 to 6 months
7 to 12 months
1 to 2 years
2 to 5 years
5+ years

Borrowings
£m

Finance lease
liabilities
£m

Trade
payables
£m

Financial
instruments
£m

0.7
0.1
0.2
17.5
–

18.5

–
–
0.1
0.1
–

0.2

8.4
–
–
–
–

8.4

–
–
4.5
–
–

4.5

Total
£m

9.1
0.1
4.8
17.6
–

31.6

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

22. TRADE AND OTHER PAYABLES CONTINUED

At 25 January 2015

0 to 6 months
7 to 12 months
1 to 2 years
2 to 5 years
5+ years

Borrowings
£m

Finance lease
liabilities
£m

Trade
payables
£m

Financial
instruments
£m

0.1
0.1
0.2
15.1
–

15.5

–
–
–
–
–

–

17.7
–
–
–
–

17.7

0.4
0.2
–
–
–

0.6

As trade payables are not interest bearing, their fair value is taken to be the book value.

Disclosures relating to borrowings are included in note 21.

Company
At 30 January 2016

0 to 6 months
7 to 12 months
1 to 2 years
2 to 5 years
5+ years

At 25 January 2015

0 to 6 months
7 to 12 months
1 to 2 years
2 to 5 years
5+ years

122

Borrowings
£m

Finance lease
liabilities
£m

Trade
payables
£m

Financial
instruments
£m

0.7
0.1
0.2
17.5
–

18.5

0.6
0.6
1.3
4.0
24.1

30.6

7.4
–
–
–
–

7.4

–
–
4.5
–
–

4.5

Borrowings
£m

Finance lease
liabilities
£m

Trade
payables
£m

Financial
instruments
£m

0.1
0.1
0.2
15.1
–

15.5

0.6
0.6
1.2
5.1
24.1

31.6

17.7
–
–
–
–

17.7

As trade payables are not interest bearing, their fair value is taken to be the book value.

Disclosures relating to borrowings are included in note 21.

23. PROVISIONS

Group and Company

Opening provision
Provision created during the year
Provision released during the year
Provision utilised during the year

Closing provision

The closing provision relates to the redundancy costs associated with the closure of the Tredegar manufacturing facility.

During the prior year, provisions related to redundancy costs associated with the reorganisation of finance, telesales, distribution, demand
and supply planning operations and the closure of the Tredegar manufacturing site.

Total
£m

18.2
0.3
0.2
15.1
–

33.8

Total
£m

8.7
0.7
6.0
21.5
24.1

61.0

Total
£m

18.8
0.9
1.4
20.2
24.1

65.4

2015
£m

0.4
1.0
(0.1)
(0.3)

1.0

0.4
0.2
–
–
–

0.6

2016
£m

1.0
–
–
(0.9)

0.1

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS24. DEFERRED TAX ASSETS AND LIABILITIES

Group

At 26 January 2014
(Charge)/credit to the income

statement (note 9)

Credit/(charge) to other

comprehensive income

Credit to other reserves

At 25 January 2015

Credit/(charge) to the income

statement (note 9)

(Charge)/credit to other

comprehensive income

Deferred tax arising on acquisition
Transfer between asset and

liability categories

Charge to other reserves

At 30 January 2016

Company

At 26 January 2014
(Charge)/credit to the income

statement

Credit/(charge) to other

comprehensive income

Credit to other reserves

At 25 January 2015

Credit/(charge) to the income

statement

(Charge)/credit to other

comprehensive income
Transfer between asset and

liability categories

Charge to other reserves

At 30 January 2016

Retirement
benefit
obligations
£m

Share-based
payments
£m

Foreign
exchange
contract
hedge
£m

Total
deferred tax
asset
£m

Retirement
benefit
obligations
£m

Foreign
exchange
contract
hedge
£m

Accelerated
tax
depreciation
£m

Total
deferred tax
liability
£m

Net deferred
tax (liability)/
asset
£m

–

(0.3)

2.9
–

2.6

0.4

(2.5)
–

(0.5)
–

–

0.7

(0.1)

–
0.1

0.7

0.1

–
–

–
(0.5)

0.3

0.1

–

–
–

0.1

–

(0.3)
–

0.2
–

–

0.8

(0.4)

2.9
0.1

3.4

0.5

(2.8)
–

(0.3)
(0.5)

0.3

(1.0)

–

–
–

(1.0)

–

–
–

0.5
–

(0.5)

Retirement
benefit
obligations
£m

Share-based
payments
£m

Foreign
exchange
contract
hedge
£m

Total
deferred tax
asset
£m

Retirement
benefit
obligations
£m

–

(0.3)

2.9
–

2.6

0.4

(2.5)

(0.5)
–

–

0.7

(0.1)

–
0.1

0.7

0.1

–

–
(0.5)

0.3

0.1

–

–
–

0.1

–

(0.3)

0.2
–

–

0.8

(0.4)

2.9
0.1

3.4

0.5

(2.8)

(0.3)
(0.5)

0.3

(1.0)

–

–
–

(1.0)

–

0.5
–

(0.5)

–

–
–

–

–
–

(0.2)
–

(0.2)

Foreign
exchange
contract
hedge
£m

–

–
–

–

(0.2)
–

(0.2)

(11.2)

(12.2)

0.1

–
–

0.1

–
–

(11.1)

(12.1)

0.8

–
(1.5)

–
–

0.8

–
(1.5)

0.3
–

(11.8)

(12.5)

(11.4)

(0.3)

2.9
0.1

(8.7)

1.3

(2.8)
(1.5)

–
(0.5)

(12.2)

Accelerated
tax
depreciation
£m

Total
deferred tax
liability
£m

Net deferred
tax (liability)/
asset
£m

123

(2.3)

(0.1)

–
–

(3.3)

(0.1)

–
–

(2.4)

(3.4)

(2.5)

(0.5)

2.9
0.1

–

(0.1)

0.4

–

–
–

(2.5)

–

0.3
–

(3.2)

(2.8)

–
(0.5)

(2.9)

No deferred tax asset is recognised in the statement of financial position for unused capital losses of £2.4m (2015: £2.4m).

A further deferred tax asset of £0.8m (2015: £0.9m) has not been recognised in respect of acquired tax losses in Taut (UK) Limited,
a subsidiary of the Company.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

25. 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 five years
Due beyond five years

Total lease commitments

2016
£m

3.1
9.1
2.7

14.9

2015
£m

2.6
9.3
4.7

16.6

26. FINANCIAL RISK MANAGEMENT
FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate
risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial
instruments to hedge certain risk exposures.

Risk management is carried out by the finance department in accordance with policies approved by the board of directors. The Group’s finance
department identifies, evaluates and manages financial risks in close co-operation with the Group’s business units. The Board provides
guidance on overall market risk management including use of derivative financial 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 Sterling but does have some purchases and sales denominated in US
Dollars and Euros. Due to the hedging arrangements that have been in place for the year ended 30 January 2016, if Sterling had weakened/
strengthened by 10% against the US Dollar or Euro, with all other variables held constant, there would have been an immaterial effect on
post-tax profit (year ended 25 January 2015: immaterial impact on post-tax profit).

124

The Group periodically enters into forward option contracts to purchase foreign currencies for known purchases where the value and volume of
trading purchases is known. The Treasury Committee assesses whether hedge accounting should be applied for each forward option contract.

PRICE RISK
The Group is not exposed to equity securities price risk because no such investments are held by the Group other than within Pension
Scheme assets.

The Group purchases a wide range of commodities in the ordinary course of business. Exposure to changes in the market price of certain
of these commodities, including sugar, plastic, aluminium and mango, is managed through the use of forward physical supply contracts,
primarily to convert floating or indexed prices to fixed prices. The use of such contracts to hedge commodity exposures is governed by the
Group’s risk management policies and is continually monitored by the Treasury Committee. Commodity derivatives also provide a way to
meet customers’ pricing requirements whilst achieving a price structure consistent with the Group’s overall pricing strategy.

All of the Group’s commodity derivatives are treated as ‘own use’ contracts, which are outside the scope of IAS 39, since they are both entered
into, and continue to be held, for the purposes of the Group’s ordinary operations, and are not net settled (the Group takes physical delivery
of the commodity concerned). ‘Own use’ contracts do not require accounting entries until the commodity purchase actually crystallises.

The majority of the Group’s forward physical contracts and commodity derivatives have original maturities of less than one year.

As all of the commodity contracts qualify for the ‘own use’ treatment, no sensitivity analysis has been carried out.

CASH FLOW AND FAIR VALUE INTEREST RATE RISK
As the Group has no significant interest-bearing assets, the Group’s income and operating cash inflows are substantially independent of
changes in market interest rates.

The Group’s interest rate risk arises from long term borrowings. Borrowings obtained at variable rates expose the Group to cash flow interest
rate risk, which is partially offset by cash held at variable rates.

For the year ended 30 January 2016, if interest rates on Sterling-denominated borrowings at that date had been 0.5% higher/lower with all
other variables held constant, there would have been an immaterial change in the post-tax profit for the year (year ended 25 January 2015:
immaterial impact).

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSCREDIT RISK
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions,
as well as credit exposures to major and direct to store customers, including outstanding receivables and committed transactions.

For banks and financial 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 financial position, past experience and other factors. Individual risk limits are set by the management
committee based on internal or external ratings. The utilisation of credit limits is regularly monitored. Sales to direct to store customers are
largely settled in cash in order to manage credit risk from smaller, independent stores.

LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient 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
business, the Group maintains flexibility in funding by maintaining sufficient cash reserves and the availability of borrowing facilities.

Management monitors rolling forecasts of the Group’s liquidity reserve (which comprises undrawn borrowing facilities and cash and cash
equivalents) on the basis of expected cash flows. This is carried out at a Group level and involves projecting forward cash flows and
considering the level of liquid assets necessary to meet excesses of expenditure relative to income.

CAPITAL RISK MANAGEMENT
The Group defines ‘capital’ as being net debt plus equity.

The Group’s objective when managing capital is to maintain an appropriate capital structure to balance the needs of the Group, whilst
operating 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.

125

The Group monitors existing equity in issuance 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 36 to 41. 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 financial institutions and investors. The Group believes that the current net debt/EBITDA ratio together with existing shares in
issuance provides an efficient capital structure and an acceptable level of financial flexibility.

For the year ended 30 January 2016, there was a net debt position of £11.3m (year ended 25 January 2015: net cash surplus position).

The Group monitors capital efficiency on the basis of the return on capital employed ratio (‘ROCE’). In the financial year ended 30 January
2016, ROCE decreased to 18.8% from 24.0%.

27. RETIREMENT BENEFIT OBLIGATIONS
During the year the Company operated two pension schemes, the A.G. BARR p.l.c. (2005) Defined Contribution Scheme and the
A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme. The latter is a funded defined benefit scheme based on final salary which
also includes a defined contribution section for the pension provision of new executive entrants. Under the defined benefit scheme, the
employees are entitled to retirement benefits based on final pensionable pay. No other post-retirement benefits are provided.

DEFINED BENEFIT SCHEME: ACTUARIAL VALUATION
The assets of the schemes are held separately from those of the Company and are invested in managed funds. A full valuation of the defined
benefit scheme was conducted as at 5 April 2014 using the attained age method.

A surplus of £12.2m was determined at the valuation date.

The defined benefit scheme exposes the Group to actuarial risks such as longevity risk, interest rate risk and market investment risk.

Responsibility for governance of the plans, including investment decisions and contribution schedules, lies jointly with the Company and the
board of trustees. The board of trustees is composed of representatives from the company scheme members as set out in the plan’s rules.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
DEFINED BENEFIT SCHEME: IAS 19 INFORMATION
The full actuarial valuation carried out at 5 April 2014 was updated to 30 January 2016 by a qualified independent actuary.

The valuation used for the defined benefit schemes has been based on market conditions as at the Company year end.

The amounts recognised in the statement of financial position are as follows:

Group and Company

Present value of funded obligations
Fair value of scheme assets

Deficit recognised in the statement of financial position

The movement in the defined benefit obligation over the year is as follows:

Group and Company

At 25 January 2015

Current service cost
Curtailment gain
Interest income/(expense)

Total cost recognised in income statement

126

Remeasurements
– changes in financial assumptions
– actuarial return on assets excluding amounts recognised in net interest

Total remeasurements recognised in other comprehensive income

Cashflows
Employer contributions
Benefits paid
Premiums paid

Total cash outflow

As at 30 January 2016

2016
£m

(120.2)
107.3

(12.9)

Fair value of
plan assets
£m

Present value
of obligation
£m

112.7

(131.0)

–
–
3.6

3.6

–
(7.3)

(7.3)

2.4
(4.0)
(0.1)

(1.7)

(1.9)
0.2
(4.3)

(6.0)

12.7
–

12.7

–
4.0
0.1

4.1

2015
£m

(131.0)
112.7

(18.3)

Total
£m

(18.3)

(1.9)
0.2
(0.7)

(2.4)

12.7
(7.3)

5.4

2.4
–
–

2.4

107.3

(120.2)

(12.9)

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSThe movement in the defined benefit obligation in the year to 25 January 2015 was as follows:

Group and Company

At 26 January 2014

Current service cost
Curtailment gain
Interest income/(expense)

Total cost recognised in income statement

Remeasurements
– changes in financial assumptions
– actuarial return on assets excluding amounts recognised in net interest

Total remeasurements recognised in other comprehensive income

Cashflows
Employer contributions
Benefits paid
Premiums paid

Total cash outflow

As at 25 January 2015

Fair value of
plan assets
£m

Present value
of obligation
£m

97.2

(97.3)

–
–
4.2

4.2

–
11.9

11.9

2.3
(2.9)
–

(0.6)

(1.4)
0.5
(4.1)

(5.0)

(31.6)
–

(31.6)

–
2.9
–

2.9

Total
£m

(0.1)

(1.4)
0.5
0.1

(0.8)

(31.6)
11.9

(19.7)

2.3
–
–

2.3

112.7

(131.0)

(18.3)

ASSET BACKED FUNDING ARRANGEMENT
During the year to 26 January 2014 the Company established the A.G. BARR Scottish Limited Partnership (‘the Partnership’) and through the
Partnership has entered into a long term pension funding arrangement with the Pension Scheme.

127

Under this arrangement certain property assets were transferred into the Partnership and are being leased back to A.G. BARR p.l.c under a
21 year lease agreement, generating an income stream of £1.1m per annum for the pension scheme, increasing annually in line with inflation.

The Partnership is controlled by A.G. BARR p.l.c. and its results are consolidated by the Group. The value of the properties transferred into the
Partnership remains included on the Group’s and Company’s balance sheet at carrying values at the date of transfer with the Group and
Company retaining full operational control over these properties.

At the end of the term of the relevant lease, or earlier if the Scheme becomes fully funded to the extent that the members’ benefits can be
secured with an insurance company, the Company has the option to repurchase the properties in the Partnership for an agreed fixed price.

FINANCIAL ASSUMPTIONS

Discount rate
Future salary increases
Inflation assumption

2016

3.70%
4.20%
3.20%

2015

3.20%
4.20%
3.20%

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

27. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
MORTALITY ASSUMPTIONS

Average future life expectancy (in years) for a male pensioner aged 65
Average future life expectancy (in years) for a female pensioner aged 65
Average future life expectancy (in years) at age 65 for a male non-pensioner aged 45
Average future life expectancy (in years) at age 65 for a female non-pensioner aged 45

2016

25
24
27
27

2015

25
24
27
27

The mortality tables adopted in finalising the fair value of the liabilities are the 2013 VITA tables based on the member’s year of birth. This
assumes that the expected age at death for males is 90 to 92 and for females is 89 to 92 depending on their age at 30 January 2016.

The fair value of scheme assets at the year end dates is analysed as follows:

Equities
Bonds
Property
Cash

Total market value of scheme assets

2016
£m

41.6
60.7
0.4
4.6

107.3

2015
£m

46.8
59.9
0.3
5.7

112.7

2014
£m

49.5
43.1
–
4.6

97.2

2013
£m

56.8
25.9
–
4.2

86.9

2012
£m

53.6
24.5
–
4.8

82.9

SENSITIVITY REVIEW
The sensitivity of the overall pension liability to changes in the weighted principle assumptions is:

128

Change in assumption

Year to 30 January 2016

Year to 25 January 2015

Impact on overall liabilities

Discount rate
Rate of inflation
Life expectancy

Increase/decrease by 0.1%
Increase/decrease by 0.1%
Increase/decrease by 1 year

Decreases/increases liabilities by £2.2m
Increases/decreases liabilities by £1.5m
Increases/decreases liabilities by £4.3m

Decreases/increases liabilities by £2.6m
Increases/decreases liabilities by £1.7m
Increases/decreases liabilities by £3.9m

METHODS AND ASSUMPTIONS USED IN PREPARING THE SENSITIVITY ANALYSES
The sensitivities disclosed were calculated using approximate methods taking into account the duration of the Scheme’s liabilities. They have
been calculated consistently with last period’s disclosures, however these change over time with financial conditions and assumptions.

RISKS TO WHICH THE SCHEME EXPOSES THE COMPANY
The nature of the Scheme exposes the Company to the risk of paying unanticipated additional contributions to the Scheme in times of
adverse experience. The most financially significant risks are likely to be:

– ASSET VOLATILITY
The Scheme’s liabilities are calculated using a discount rate set with reference to corporate bond yields in line with the requirements of IAS
19R. If the Scheme assets under perform this yield, this will create a deficit. The plan holds investments in a portfolio of equity and bonds
which are expected to outperform corporate bonds in the long term but provide volatility and risk in the short term.

The Trustees have made a number of steps to control the level of investment risk within the Scheme over the last 12 months including
continuing to reduce the overall exposure to equities and diversifying the growth asset mix. As disclosed above, the Group entered into an
asset backed funding arrangement during the year to 26 January 2014, helping to manage the risk of asset returns through a secure income
stream. The Trustees will continue to review the risk exposures in light of the longer term objectives of the Scheme.

– CHANGES IN BOND YIELDS
A decrease in corporate bond yields will increase plan liabilities. In the event of a reduction in the corporate bond yields there will be an
increase in the value of the Scheme’s bond holdings.

– INFLATION RISK
The Group pension obligations are linked to inflation, and higher inflation will lead to higher liabilities. The majority of the Scheme’s assets are
either unaffected by inflation (fixed interest bonds) or loosely correlated with inflation (equities), meaning that an increase in inflation will also
increase the deficit.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS– LIFE EXPECTANCY
The Scheme’s obligation is to provide benefits for the life of the members. An increase in life expectancy will result in an increase in the
Scheme’s liabilities.

POLICY FOR RECOGNISING GAINS AND LOSSES
The Company recognises actuarial gains and losses immediately, through the remeasurement of the net defined benefit liability.

ASSET-LIABILITY MATCHING STRATEGIES USED BY THE SCHEME OR THE COMPANY
The Scheme does not currently use any specific asset-liability matching strategies. The Trustees’ current investment strategy, having
consulted with the Company, is to invest circa 40% of the Scheme’s assets in a mix of equities and diversifying return seeking assets, with
the balance in long dated gilts and corporate bonds, in order to strike a balance between:
ͽ maximising the returns on the Scheme’s assets; and
ͽ minimising the risks associated with the lower than expected returns on the Scheme’s assets.

DESCRIPTION OF FUNDING ARRANGEMENTS AND FUNDING POLICY THAT AFFECT FUTURE CONTRIBUTIONS
The Schedule of Contributions dated 9 January 2015 sets out the current contributions payable by the Company to the Scheme. This was
revised based on the actuarial valuation performed as at 5 April 2014 to allow for the rental income stream from the asset backed funding
arrangement effectively being a commitment which will offset the requirement for future deficit contributions.

EXPECTED CONTRIBUTIONS OVER THE NEXT ACCOUNTING PERIOD
A.G. BARR p.l.c. expects to contribute approximately £1.2m to the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme in the period
ending 28 January 2017, and the Scheme expects to receive further contributions of approximately £1.2m from the asset backed funding
arrangement in which the Scheme holds an interest.

The weighted average duration of the defined benefit obligation is 20 years.

The expected maturity analysis of the undiscounted defined benefit pension benefit, estimated on the Scheme’s funding is as follows:

Proportion of total pension benefits to be paid as at 5 April 2015
Proportion of total pension benefits to be paid as at 5 April 2014

1%
1%

3%
3%

95%
95%

On 20 January 2016, the Company announced its intention to close the defined benefit section of the A.G. BARR p.l.c. (2008) Pension and
Life Assurance Scheme to future accrual (note 33).

Less than
one year

One to
two years

Two to
five years

Greater than
five years

129

DEFINED CONTRIBUTION SCHEME
The pension costs for the defined contribution schemes are as follows:

Defined contribution costs

2016
£m

2.8

2015
£m

2.7

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

28. SHARE CAPITAL

Group and Company

Issued and fully paid

2016

116,768,778

2015

116,768,778

£m

4.9

£m

4.9

The Company has one class of ordinary shares which carry no right to fixed income.

During the year to 30 January 2016 the Company’s employee benefit trusts purchased 913,724 (2015: 383,790) shares. The total amount paid
to acquire the shares has been deducted from shareholders’ equity and is included within retained earnings. At 30 January 2016 the shares
held by the Company’s employee benefit trusts represented 1,254,095 (2015: 1,350,184) shares at a purchased cost of £8.9m (2015: £7.5m).

29. SHARE-BASED PAYMENTS
As disclosed in the Directors’ Remuneration Report the Group runs a number of share award plans and share option plans:
ͽ Savings Related Share Option Scheme which is open to all employees
ͽ LTIP and ESOS options which are granted to executive directors
ͽ AESOP awards that are available to all employees

SAVINGS RELATED SHARE OPTION SCHEME (‘SAYE’)
All SAYEs outstanding at 25 January 2015 and 30 January 2016 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
five 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
five dealing days immediately preceding the date of invitation.

130

The movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

At start of the year
Granted in the year
Forfeited
Exercised

At end of the year

2016

2015

Average exercise
price in pence
per share

305p
567p
449p
256p

471p

Options

1,418,930
819,858
(98,477)
(726,883)

1,413,428

Average exercise
price in pence
per share

306p
–p
254p
327p

305p

Options

1,587,861
–
(19,420)
(149,511)

1,418,930

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 £2.54, £3.58 and £5.67 (2015: £2.54 and £3.58).

The weighted average share price on the dates that options were exercised in the year to 30 January 2016 was £5.28.

The weighted average remaining contractual life of the outstanding share options at the year end is 3 years (2015: 2 years).

Date of grant

Number of share awards 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

1 October 2015

819,858
611p
5
2.37%
70%

260p

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSLTIP
During the year, an award of shares was made to the executive directors as disclosed in the Directors’ Remuneration Report. S. Lorimer
was also granted performance related recruitment awards in two tranches.

The weighted average fair value of the share awards made during the period was determined using the Black-Scholes valuation model.
The significant inputs to the model were as follows:

Date of grant

Number of share awards 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

LTIP 15
15 April 2015

228,736
615p
3
1.88%
50%

581p

S. Lorimer
LTIP 15
tranche 1

10,162
615p
1
1.88%
50%

604p

S. Lorimer
LTIP 15
tranche 2

20,325
615p
2
1.88%
50%

591p

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 £150 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 five 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 £3,600 and the shares awarded are held in trust for five years.

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:

131

Rubicon Drinks Limited
Funkin Limited
Findlays Limited

Sales of goods and services

Purchase of goods and services

2016
£m

40.3
0.5
–

2015
£m

40.1
–
–

2016
£m

52.4
–
–

2015
£m

52.3
–
0.1

The amounts disclosed in the table below are the amounts owed to and due from subsidiary companies that are trading subsidiaries.
The difference between the total of these balances and the amounts disclosed as amounts due by (note 20) and to subsidiary companies
(note 22) are balances due by and due to dormant subsidiary companies.

Rubicon Drinks Limited
Funkin Limited
Findlays Limited

Amounts owed by related parties

Amounts due to related parties

2016
£m

–
0.5
–

2015
£m

–
–
–

2016
£m

62.2
–
2.9

2015
£m

51.1
–
3.0

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES TO THE ACCOUNTS CONTINUED

30. RELATED PARTY TRANSACTIONS CONTINUED
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 benefits
Pension and other costs
Share-based payments

2016
£m

3.3
0.5
0.1

3.9

2015
£m

3.4
0.3
–

3.7

The Directors’ Remuneration Report can be found on pages 61 to 84.

RETIREMENT BENEFIT PLANS
The Group’s retirement benefit plans are administered by an independent third party service provider. During the year the service provider
charged the Group £0.3m (2015: £0.5m) for administration services in respect of the retirement benefit plans. At the year end £nil (2015: £nil)
was outstanding to the service provider on behalf of the retirement benefit plans.

31. GOING CONCERN
The directors are confident that it is appropriate for the going concern basis to be adopted in preparing the financial statements. The
statement of financial position shows consolidated net assets of £180.1m (2015: £156.5m) and the Company has sufficient reserves to continue
making dividend payments. Whilst the Group’s net debt position has decreased from a surplus of £10.4m at 25 January 2015 to a deficit of
£11.3m at 30 January 2016, there is borrowing headroom of £31.9m at the year end.

32. SUBSIDIARIES
The Group’s subsidiaries at 30 January 2016 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary
shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The
country of incorporation or registration is also their principal place of business.

132

Name of entity

Place of business/
country of
incorporation

UK
Funkin Limited
France
Funkin France Limited
USA
Funkin USA Limited
UK
Rubicon Drinks Limited
UK
A.G. BARR Capital Partner Limited
UK
A.G. BARR General Partner Limited
A.G. BARR Pension Trustee Limited
UK
A.G. BARR Scottish Limited Partnership UK
UK
Robert Barr Limited
UK
Findlays Limited
UK
Barr Leasing Limited
UK
Hampshire Mineral Water Co Ltd
UK
Mandora St Clement’s Limited
Jersey
Groupe Rubicon Limited
UK
Rubicon Products Limited
UK
Rubicon Beverages Limited
UK
St Clement’s (UK) Limited
UK
Taut (UK) Ltd
UK
Tizer Limited

Ownership interest
held by the group

2016
%

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

2015
%

Principal activities

– Distribution and selling of cocktail solutions
– Distribution and selling of cocktail solutions
– Distribution and selling of cocktail solutions

100 Manufacturing, distribution and selling of exotic soft drinks
100 Investment holding company
100 Investment holding company
100 Investment holding company
100 Investment holding company
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity
100 Non-trading entity

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS33. SUBSEQUENT EVENTS
On 20 January 2016, the Company announced its intention to close the defined benefit section A.G. BARR p.l.c. (2008) Pension and Life
Assurance Scheme to future accrual. Following consultation with the pension scheme Trustee, the Company entered into consultation with
the employees who are active members of the scheme. The employee consultation ended 23 March 2016. Further legal consultation
followed this and as at the date of the signing of the financial statements this consultation has not yet been concluded. As a consequence
of this process not being complete it has not been possible at the date of signing to accurately estimate the effect of the proposed closure
on the financial results to 28 January 2017.

The Government announced a proposed soft drinks levy in the March 2016 budget. The details are still to be consulted upon, however it is
expected that there will be minimal financial impact on the business at the proposed point of implementation in April 2018.

133

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016REVIEW OF TRADING RESULTS

Revenue
Cost of sales

Gross profit

Other income

Distribution costs (including selling costs)
Administration costs

Operating expenses

Operating profit before exceptional items

Exceptional items

Operating profit after exceptional items

Finance income
Finance expense

Net finance expense

Profit before tax

134

Tax on profit

Profit after tax

2016
£m

258.6
(137.5)

121.1

–

(57.3)
(21.7)

(79.0)

42.1

–

42.1

0.1
(0.9)

(0.8)

41.3

(7.0)

34.3

2015
£m
Restated

2014
£m
Not restated

2013
£m
Not restated

2012
£m
Not restated

260.9
(141.0)

119.9

0.7

(57.2)
(21.3)

(77.8)

42.1

(3.3)

38.8

0.1
(0.3)

(0.2)

38.6

(8.6)

30.0

254.1
(137.9)

116.2

–

(50.2)
(27.4)

(77.6)

38.6

(3.8)

34.8

0.2
(0.5)

(0.3)

34.5

(6.1)

28.4

237.6
(129.6)

108.0

–

(47.4)
(25.7)

(73.1)

34.9

(3.2)

31.7

0.2
(0.4)

(0.2)

31.5

(6.2)

25.3

222.9
(117.8)

105.1

–

(46.1)
(25.3)

(71.4)

33.7

1.9

35.6

0.3
(1.1)

(0.8)

34.8

(7.3)

27.5

Earnings per share on issued share capital (pence)

29.37

25.69

24.13

21.74

23.53

Dividends recognised as an appropriation in the year

(pence)

12.37

11.30

2.83

16.90

8.65

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSNOTICE OF ANNUAL GENERAL MEETING

THE FOLLOWING INFORMATION IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any
matter referred to in this report or as to the action you should take, you should seek your own personal financial advice from: (i) a
stockbroker, bank manager, solicitor, accountant or other independent professional adviser authorised under the Financial Services
and Markets Act 2000 if you are resident in the United Kingdom; or (ii) another appropriately authorised independent financial adviser
if you are not resident in the United Kingdom.

If you have sold or otherwise transferred all of your shares in A.G. BARR p.l.c., please pass this report, together with the accompanying
documents, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other person who arranged the sale or
transfer so they can pass these documents to the person who now holds the shares.

Notice is hereby given that the one hundred and twelfth annual general meeting of A.G. BARR p.l.c. (the “Company”) will be held at the offices of
KPMG LLP, 191 West George Street, Glasgow G2 2LJ on Wednesday 1 June 2016 at 11.00 a.m. to consider and, if thought fit, pass the resolutions set
out below. Resolutions 1 to 14 (inclusive) will be proposed as ordinary resolutions and Resolutions 15 and 16 will be proposed as special resolutions.

1. To receive and approve the audited accounts of the group and the Company for the year ended 30 January 2016 together with the

directors’ and auditor’s reports thereon.

2. To receive and approve the annual statement by the chairman of the remuneration committee and the directors’ remuneration report

(other than the part containing the directors’ remuneration policy) as set out on page 61 and pages 61 to 73 of the Company’s annual report
and accounts for the year ended 30 January 2016.

3. To declare a final dividend of 9.97 pence per ordinary share of 4 1/6 pence for the year ended 30 January 2016.

4. To re-elect Mr John Ross Nicolson as a director of the Company.

5. To re-elect Mr Roger Alexander White as a director of the Company.

6. To re-elect Mr Stuart Lorimer as a director of the Company.

7. To re-elect Mr Jonathan David Kemp as a director of the Company.

8. To re-elect Mr Andrew Lewis Memmott as a director of the Company.

9. To re-elect Mr William Robin Graham Barr as a director of the Company.

10. To re-elect Mr Martin Andrew Griffiths as a director of the Company.

11. To re-elect Mr David James Ritchie as a director of the Company.

12. To re-elect Ms Pamela Powell as a director of the Company.

13. To re-appoint KPMG LLP as the Company’s auditor, to hold office until the conclusion of the next general meeting at which accounts are

laid, and to authorise the audit committee of the board of directors of the Company to fix their remuneration.

14. THAT the board of directors of the Company (the “Board”) be and it is hereby generally and unconditionally authorised pursuant to and in
accordance with section 551 of the Companies Act 2006 (the “2006 Act”) to exercise all the powers of the Company to allot shares in the
capital of the Company and to grant rights to subscribe for or to convert any security into shares in the Company:

(a) up to an aggregate nominal amount of £1,621,788.50; and

(b) up to a further aggregate nominal amount of £1,621,788.50 provided that: (i) they are equity securities (within the meaning of section
560 of the 2006 Act); and (ii) they are offered by way of a rights issue in favour of the holders of shares (excluding the Company in its
capacity as a holder of treasury shares) on the register of members of the Company on a date fixed by the Board where the equity
securities respectively attributable to the interests of such holders are proportionate (as nearly as practicable) to the respective
numbers of shares held by them on that date subject to such exclusions or other arrangements as the Board deem necessary or
expedient to deal with: (a) equity securities representing fractional entitlements; (b) treasury shares; or (c) legal or practical problems
arising in any overseas territory, the requirements of any regulatory body or any stock exchange or any other matter whatsoever,

provided that this authority shall expire on the earlier of 31 July 2017 and the conclusion of the next annual general meeting of the

Company after the passing of this resolution, save that the Company may before such expiry make an offer or enter into an agreement
which would or might require shares to be allotted, or rights to subscribe for or to convert securities into shares to be granted, after such
expiry and the Board may allot shares or grant such rights in pursuance of such an offer or agreement as if the authority conferred hereby
had not expired.

135

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTICE OF ANNUAL GENERAL MEETING CONTINUED

15. THAT, subject to the passing of resolution 14 set out in the notice of the annual general meeting of the Company convened for 1 June 2016
(“Resolution 14”), the board of directors of the Company (the “Board”) be and is hereby generally empowered, pursuant to sections 570
and 573 of the Companies Act 2006 (the “2006 Act”), to allot equity securities (within the meaning of section 560 of the 2006 Act)
(including the grant of rights to subscribe for, or to convert any securities into, ordinary shares of 4 1/6 pence each in the capital of the
Company (“Ordinary Shares”)), wholly for cash either pursuant to the authority conferred on them by Resolution 14 or by way of a sale
of treasury shares (within the meaning of section 560(3) of the 2006 Act) as if section 561(1) of the 2006 Act did not apply to any such
allotment or sale, provided that this power shall be limited to:

(a) the allotment of equity securities, for cash, in connection with a rights issue, open offer or other pre-emptive offer in favour of holders
of Ordinary Shares (excluding the Company in its capacity as a holder of treasury shares) on the register of members of the Company
on a date fixed by the Board where the equity securities respectively attributable to the interests of such holders are proportionate
(as nearly as practicable) to the respective numbers of Ordinary Shares held by them on that date subject to such exclusions or other
arrangements in connection with the rights issue, open offer or other offer as the Board deem necessary or expedient to deal with:
(i) equity securities representing fractional entitlements; (ii) treasury shares; or (iii) legal or practical problems arising in any overseas
territory, the requirements of any regulatory body or any stock exchange or any other matter whatsoever; and

(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £243,268.00,

provided that this authority shall expire on the earlier of 31 July 2017 and the conclusion of the next annual general meeting of the

Company after the passing of this resolution, save that the Company may before such expiry make an offer or enter into an agreement
which would or might require equity securities to be allotted after the expiry of this authority and the Board may allot equity securities
pursuant to such an offer or agreement as if the authority conferred hereby had not expired.

16. THAT the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Companies Act

2006 (the “2006 Act”) to make one or more market purchases (within the meaning of section 693(4) of the 2006 Act) of ordinary shares
of 4 1/6 pence each in the capital of the Company (“Ordinary Shares”), on such terms and in such manner that the directors think fit,
provided that:

(a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased shall be 11,676,877;

(b) the maximum price which may be paid for an Ordinary Share is an amount equal to the higher of: (i) 105% of the average of the middle

market quotations for an Ordinary Share as derived from the London Stock Exchange Daily Official List for the five dealing days
immediately preceding the day on which the Ordinary Share is purchased; and (ii) the higher of the price of the last independent trade
and the highest current independent bid on the trading venue where the purchase is carried out;

(c) the minimum price which may be paid for an Ordinary Share is an amount equal to its nominal value (in each case exclusive of

associated expenses);

(d) unless previously renewed, varied or revoked, the authority hereby conferred shall expire on the earlier of 31 July 2017 and the

conclusion of the next annual general meeting of the Company after the passing of this resolution, but a contract to purchase Ordinary
Shares may be made before such expiry which will or may be completed wholly or partly thereafter, and a purchase of Ordinary Shares
may be made in pursuance of any such contract; and

(e) an Ordinary Share so purchased shall be cancelled or, if the directors so determine and subject to the provisions of applicable laws

or regulations of the Financial Conduct Authority, held as a treasury share.

136

By order of the Board

JULIE A. BARR
COMPANY SECRETARY

28 April 2016
Registered Office
A.G. BARR p.l.c.
Westfield House
4 Mollins Road
Cumbernauld
G68 9HD

Registered in Scotland SC005653

Shareholders should also read the notes to this Notice of Annual General
Meeting which are set out on pages 137 to 141 of this report. Those notes
provide further information about shareholders’ entitlement to attend,
speak and vote at the Annual General Meeting (or appoint another person
to do so on their behalf).

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSEXPLANATORY NOTES
The following notes provide an explanation of the resolutions to be considered at the one hundred and twelfth annual general meeting
(the “AGM”) of A.G. BARR p.l.c. (the “Company”).

Resolutions 1 to 14 (inclusive) will be proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than
half of the votes cast must be in favour of the resolution.

Resolutions 15 and 16 will be proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-
quarters of the votes cast must be in favour of the resolution.

RESOLUTION 1 – RECEIVE AND APPROVE THE REPORTS AND ACCOUNTS
Shareholders are being asked to receive and approve the audited accounts of the group and the Company (as audited by KPMG LLP) for the
year ended 30 January 2016 together with the associated reports of the directors and auditor.

RESOLUTION 2 – DIRECTORS’ REMUNERATION
This Resolution invites shareholders to approve the annual statement by the chairman of the remuneration committee and the directors’
remuneration report (other than the part containing the directors’ remuneration policy which was approved at the 2014 AGM and which will
not be voted on until the 2017 AGM) for the year ended 30 January 2016. Resolution 2 is an advisory vote and will not affect the way in which
the Company’s pay policy has been implemented. Each year, shareholders will be given an advisory vote on the implementation of the
directors’ remuneration policy in relation to the payments and share awards made to directors during the year under review.

RESOLUTION 3 – FINAL DIVIDEND
Shareholders are being asked to approve a final dividend of 9.97 pence per ordinary share of 4 1/6 pence for the year ended 30 January
2016. If shareholders approve the recommended final dividend, it will be paid on 10 June 2016 to all shareholders on the Company’s register
of members on 13 May 2016.

RESOLUTIONS 4 TO 12 INCLUSIVE – RE-ELECTION OF DIRECTORS
The board of directors of the Company (the “Board”) complies with the provisions of the UK Corporate Governance Code whereby all
directors are subject to annual re-election. Accordingly, all directors of the Company are retiring and offering themselves for re-election.

137

Biographical details of the directors are set out on pages 46 and 47 of this report. The Board has confirmed that, following formal
performance evaluation, all of the directors continue to perform effectively and demonstrate commitment to their roles. The Board therefore
unanimously recommends the proposed re-election of the directors.

RESOLUTION 13 – RE-APPOINTMENT OF AUDITOR
The Company is required to appoint an auditor at each general meeting at which accounts are presented to shareholders and KPMG LLP
have indicated their willingness to continue in office. Accordingly, shareholders are being asked to re-appoint KPMG LLP as auditor of the
Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company and to authorise the
audit committee of the Board to fix their remuneration.

RESOLUTION 14 – AUTHORITY TO ALLOT SHARES
The directors may not allot shares in the Company unless authorised to do so by shareholders in general meeting. Sub-paragraph (a) of
Resolution 14, if passed, will authorise the directors to allot shares having an aggregate nominal value of up to £1,621,788.50, representing
approximately one third of the Company’s issued share capital as at 27 April 2016 (being the latest practicable date prior to the publication
of this report). The directors have no present intention to exercise this authority.

In line with guidance issued by the Investment Management Association, sub-paragraph (b) of Resolution 14, if passed, will authorise the
directors to allot additional shares in connection with a rights issue having an aggregate nominal value of up to £1,621,788.50, representing
approximately one third of the Company’s issued share capital as at 27 April 2016 (being the latest practicable date prior to the publication
of this report). The directors have no present intention to exercise the authority sought under sub-paragraph (b) of Resolution 14. However,
if such authority is obtained, it will give the Company greater flexibility to allot additional shares for the purpose of a pre-emptive rights issue.
This authority will be used when the directors consider it to be in the best interests of shareholders.

The authorities sought under Resolution 14 will expire on the earlier of 31 July 2017 (being the latest date by which the Company must hold its
annual general meeting in 2017) and the conclusion of the annual general meeting of the Company held in 2017.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTICE OF ANNUAL GENERAL MEETING CONTINUED

RESOLUTION 15 – DISAPPLICATION OF STATUTORY PRE-EMPTION RIGHTS
If the directors wish to allot new shares for cash, the Companies Act 2006 states that the shares must be offered first to existing shareholders
in proportion to their existing shareholdings. For legal, regulatory and practical reasons, it might not be possible or desirable for shares
allotted by means of a pre-emptive offer to be offered to certain shareholders, particularly those resident overseas. Furthermore, it might,
in some circumstances, be in the Company’s interests for the directors to be able to allot some shares for cash without having to offer them
first to existing shareholders. To enable this to be done, shareholders’ statutory pre-emption rights must be disapplied. Accordingly,
Resolution 15, if passed, will empower the directors to allot a limited number of new equity securities without shareholders’ statutory
pre-emption rights applying to such allotment. The authority conferred by Resolution 15 would also cover the sale of treasury shares for cash.

Sub-paragraph (a) of Resolution 15 would confer authority on the directors to make any arrangements which may be necessary to deal with
any legal, regulatory or practical problems arising on a rights issue, an open offer or any other pre-emptive offer in favour of ordinary
shareholders, for example, by excluding certain overseas shareholders from such issue or offer.

Sub-paragraph (b) of Resolution 15 would disapply shareholders’ statutory pre-emption rights by empowering the directors to allot equity
securities for cash on a non pre-emptive basis but only new equity securities having a maximum aggregate nominal value of £243,268.00,
representing approximately 5% of the Company’s issued share capital as at 27 April 2016 (being the latest practicable date prior to the
publication of this report).

The authority sought under Resolution 15 will expire on the earlier of 31 July 2017 (being the latest date by which the Company must hold an
annual general meeting in 2017) and the conclusion of the annual general meeting of the Company held in 2017.

RESOLUTION 16 – PURCHASE OF OWN SHARES
The Companies Act 2006 permits a company to purchase its own shares provided the purchase has been authorised by shareholders in
general meeting.

Resolution 16, if passed, would give the Company the authority to purchase any of its own issued ordinary shares at a price of not less than
an amount equal to the nominal value of an ordinary share and not more than the higher of: (i) 5% above the average of the middle market
quotations of the Company’s ordinary shares as derived from the London Stock Exchange Daily Official List for the five dealing days before
any purchase is made; and (ii) the higher of the last independent trade and the highest current independent bid on the London Stock
Exchange plc.

138

The authority will enable the purchase of up to a maximum of 11,676,877 ordinary shares, representing 10% of the Company’s issued ordinary
share capital as at the date of the AGM, and will expire on the earlier of 31 July 2017 (being the latest date by which the Company must hold
an annual general meeting in 2017) and the conclusion of the annual general meeting of the Company held in 2017.

The directors will only exercise this buy back authority after careful consideration, taking into account market conditions prevailing at the time,
other investment opportunities, appropriate gearing levels and the overall position of the Company. Purchases would be financed out of
distributable profits and shares purchased would either be cancelled (and the number of shares in issue reduced accordingly) or held as
treasury shares.

The Company operates two share option schemes under which awards may be satisfied by the allotment or transfer of ordinary shares to
a scheme participant. However, in practice, the Company has always satisfied awards to participants by the transfer of ordinary shares from
the trustee of each of the schemes.

As at 1 April 2016 (being the latest practicable date prior to the publication of this report), options had been granted over 1,371,809 ordinary
shares (the “Option Shares”) representing approximately 1.17% of the Company’s issued share capital at that date. If the authority to purchase
the Company’s ordinary shares (as described in Resolution 16) were exercised in full, the Option Shares would have represented
approximately 1.31% of the Company’s issued share capital as at 1 April 2016. As at 1 April 2016, the Company did not hold any treasury shares.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSNOTES
1. Attending the annual general meeting (the “AGM”) in person

If you wish to attend the AGM in person, you should arrive at the venue for the AGM in good time to allow your attendance to be
registered. It is advisable to have some form of identification with you as you may be asked to provide evidence of your identity to the
Company’s registrar, Equiniti Limited (the “Registrar”), prior to being admitted to the AGM.

2. Appointment of proxies
Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak and vote at the AGM. A proxy
need not be a member of the Company but must attend the AGM to represent a member. To be validly appointed, a proxy must be
appointed using the procedures set out in these notes and in the notes to the accompanying proxy form.

If a member wishes a proxy to speak on their behalf at the AGM, the member will need to appoint their own choice of proxy (not the
Chairman of the AGM) and give their instructions directly to them. Such an appointment can be made using the proxy form accompanying
this notice of AGM or through CREST.

Members can only appoint more than one proxy where each proxy is appointed to exercise rights attached to different shares. Members
cannot appoint more than one proxy to exercise the rights attached to the same share(s). If a member wishes to appoint more than one
proxy, they should contact the Registrar at Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA.

A member may instruct their proxy to abstain from voting on a particular resolution to be considered at the AGM by marking the “Withheld”
option in relation to that particular resolution when appointing their proxy. It should be noted that an abstention is not a vote in law and will
not be counted in the calculation of the proportion of votes “For” or “Against” the resolution.

The appointment of a proxy will not prevent a member from attending the AGM and voting in person if he or she wishes.

A person who is not a member of the Company but who has been nominated by a member to enjoy information rights does not have a

right to appoint any proxies under the procedures set out in these notes and should read note 8 below.

3. Appointment of a proxy using a proxy form
A proxy form for use in connection with the AGM is enclosed. To be valid, any proxy form or other instrument appointing a proxy, together
with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during
normal business hours only) by hand by the Registrar at Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA at least 48
hours before the time of the AGM or any adjournment of that meeting.

139

If you do not have a proxy form and believe that you should have one, or you require additional proxy forms, please contact the Registrar
at Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA.

4. Appointment of a proxy through CREST
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using
the procedures described in the CREST Manual and by logging on to: www.euroclear.com. CREST personal members or other CREST
sponsored members and those CREST members who have appointed (a) voting service provider(s) should refer to their CREST sponsor
or voting service provider(s) who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications, and must contain
the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the
appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted
so as to be received by the Registrar (ID RA19) no later than 48 hours before the time of the AGM or any adjournment of that meeting. For this
purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application
Host) from which the Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any
change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will,
therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or,
if the CREST member is a CREST personal member, or sponsored member, or has appointed (a) voting service provider(s), to procure that
his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this regard, CREST members and, where applicable, their CREST sponsors or voting
system provider(s) are referred to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated

Securities Regulations 2001.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016

NOTICE OF ANNUAL GENERAL MEETING CONTINUED

5. Appointment of a proxy by joint holders

In the case of joint holders, where more than one of the joint holders purports to appoint one or more proxies, only the purported
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint
holders appear in the Company’s register of members in respect of the joint holding (the first named being the most senior).

6. Corporate representatives
Any corporation which is a member can appoint one or more corporate representatives. Members can only appoint more than one

corporate representative where each corporate representative is appointed to exercise rights attached to different shares. Members cannot
appoint more than one corporate representative to exercise the rights attached to the same share(s).

7. Entitlement to attend and vote
To be entitled to attend and vote at the AGM (and for the purpose of determining the votes they may cast), members must be registered in
the Company’s register of members at 6.00 p.m. on 30 May 2016 (or, if the AGM is adjourned, at 6.00 p.m. on the day two days prior to the
adjourned meeting). Any changes to the Company’s register of members after the relevant deadline will be disregarded in determining the
rights of any person to attend and vote at the AGM.

8. Nominated persons
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 (the “2006 Act”) to enjoy
information rights (a “Nominated Person”) may, under an agreement between him/her and the member by whom he/she was nominated,
have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the member
as to the exercise of voting rights.

9. Website giving information regarding the AGM

Information regarding the AGM, including information required by section 311A of the 2006 Act, and a copy of this notice of AGM is
available from www.agbarr.co.uk.

140

10. Audit concerns
Members should note that it is possible that, pursuant to requests made by members of the Company under section 527 of the 2006

Act, the Company may be required to publish on a website a statement setting out any matter relating to: (a) the audit of the Company’s
accounts (including the auditor’s report and the conduct of the audit) that are to be laid before the AGM; or (b) any circumstance
connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were
laid in accordance with section 437 of the 2006 Act. The Company may not require the members requesting any such website publication
to pay its expenses in complying with sections 527 or 528 of the 2006 Act. Where the Company is required to place a statement on a
website under section 527 of the 2006 Act, it must forward the statement to the Company’s auditor not later than the time when it makes
the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has
been required under section 527 of the 2006 Act to publish on a website.

11. Voting rights
As at 27 April 2016 (being the latest practicable date prior to the publication of this notice), the Company’s issued share capital consisted
of 116,768,778 ordinary shares of 4 1/6 pence each, carrying one vote each. As at 27 April 2016, the Company did not hold any treasury
shares. Therefore, the total voting rights in the Company as at 27 April 2016 were 116,768,778 votes.

12. Notification of shareholdings
Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chairman of the AGM as
his/her proxy will need to ensure that both he/she, and his/her proxy, comply with their respective disclosure obligations under the UK
Disclosure Rules and Transparency Rules.

13. Further questions and communication
Under section 319A of the 2006 Act, the Company must cause to be answered any question relating to the business being dealt with
at the AGM put by a member attending the meeting unless answering the question would interfere unduly with the preparation for the
meeting or involve the disclosure of confidential information, or the answer has already been given on a website in the form of an answer
to a question, or it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.

Members who have any general queries about the AGM should contact the Company Secretarial Department by email to:

companysecretarialdepartment@agbarr.co.uk.

Members may not use any electronic address provided in this report or in any related documents (including the accompanying proxy form)

to communicate with the Company for any purpose other than those expressly stated.

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTS

14. Documents available for inspection
The following documents will be available for inspection at the offices of KPMG LLP, 191 West George Street, Glasgow G2 2LJ from

9.15 a.m. on the day of the AGM until the conclusion of the AGM:

14.1 copies of the service contracts of the Company’s executive directors; and
14.2 copies of the letters of appointment of the Company’s non-executive directors.

141

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016NOTES

142

A.G. BARR P.L.C. ANNUAL REPORT AND ACCOUNTS 2016ACCOUNTSA.G. BARR P.L.C.
Westfield House
4 Mollins Road
Cumbernauld
G68 9HD
01236 852 400
www.agbarr.co.uk

Registered Office
Westfield 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