Annual Report 2021
C&C Group plc is a leading,
vertically integrated premium
drinks company which
manufactures, markets and
distributes branded beer, cider,
wine, spirits, and soft drinks
across the UK and Ireland.
C&C Group’s portfolio of owned/exclusive brands include: Bulmers, the leading Irish cider
brand; Tennent’s, the leading Scottish beer brand; Magners, the premium international cider
brand; exclusive distribution of the Budweiser Brewing Group portfolio in Ireland including
Budweiser, the fifth largest long alcoholic drink (“LAD”) brand; as well as a range of fast-
growing, super-premium and craft ciders and beers, such as Heverlee, Menabrea, Five
Lamps and Orchard Pig.
C&C exports its Magners and Tennent’s brands to over 40 countries worldwide.
C&C Group has owned brand and contract manufacturing/packing operations in Co.
Tipperary, Ireland; and Glasgow, Scotland.
C&C is the No.1 independent drinks distributor to the UK and Ireland hospitality
sectors. Operating under the Matthew Clark, Bibendum, Tennent’s and
Bulmers Ireland brands, the Group supplies over 34,000 pubs, bars,
restaurants and hotels, and is a key route-to-market for local
and international beverage companies.
C&C Group also has a joint venture in the Admiral Taverns
tenanted pub group, which owns approximately 1,000 pubs
across England & Wales.
C&C Group plc is headquartered in Dublin and is listed on
the London Stock Exchange.
View this report online
candcgroupplc.com or
candc.annualreport21.com
Contents
Business & Strategy
Chair’s Statement
Vision, Purpose and Values
Divisional Structure
Our Engagement with Stakeholders
Group Chief Executive Officer’s Review
Strategic Report - Group Strategy
Strategic Report - Business Model
Strategic Report - How we create sustainable value
Strategic Report - Key Performance Indicators
Strategic Report - Management of Risks and Uncertainties
Group Chief Financial Officer’s Review
Responsibility Report
Governance
Directors’ Report
Directors and Officers
Corporate Governance Report
Audit Committee Report
Environmental, Social and Governance Committee Report
Nomination Committee Report
Directors’ Remuneration Committee Report
Statement of Directors’ Responsibilities
Financial Statements
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Company Balance Sheet
Company Statement of Changes In Equity
Statement of Accounting Policies
Notes Forming Part of the Financial Statements
Financial Definitions
Shareholder and Other Information
1
2
6
7
8
10
22
24
28
30
32
43
50
68
74
76
86
92
94
102
133
134
144
145
146
147
148
149
150
151
167
236
238
“ With approximately 80% of C&C’s pre COVID-19
revenue derived from the hospitality sector, the
pandemic has presented an unprecedented challenge
for C&C. The team have responded with immediate and
decisive action to secure the near term: maximising
liquidity; supporting our customer base; streamlining
costs and responding to off-trade demand with a
change in consumption dynamics. We have continued
to execute our strategy and are well positioned as
the hospitality sector reopens. I would like to extend
my appreciation to every C&C colleague for their
commitment and flexibility during this period.”
David Forde
Group Chief Executive Officer
Financial Highlights
Results
Net Revenue
Operating Loss before
Exceptional Items
€736.9 m
€59.6m
Decrease of -56.1% on a constant
currency basis
Balance Sheet
Liquidity
Net Debt
Including Leases
Net Debt
Excluding Leases
€314.6m
€441.9m
€362.3m
Shareholder Return
Dividend Suspended
Corporate GovernanceBusiness & StrategyFinancial Statements 2
Chair’s Statement
“ Continued health, safety,
and wellbeing of our
stakeholders remains
our top priority.”
Stewart Gilliland
Chair
This year marked a period of unprecedented
turmoil in our world which is impacting the
lives of all our stakeholders. COVID-19 has
had an unparalleled impact on the hospitality
sector and specifically C&C with the entire
financial year impacted by continuously
evolving national lockdowns and regional
trading restrictions. During what has been
one of the most challenging periods for the
drinks industry the continued health, safety,
and wellbeing of our stakeholders remains
our top priority.
I would like to extend my appreciation
to our colleagues for their continued
support. They are core to the success of
our business and the resilience we have
displayed during FY2021. They have all had
to rapidly adapt to a change in their working
environment, whether working from home
or within one of our distribution depots or
manufacturing sites, whilst managing the
various complications of COVID-19, such as
home schooling. The impact of COVID-19
has meant that many of our customers have
been unable to trade since March 2020 and
others are navigating the impact of their
third lockdown, closing their businesses and
furloughing staff again. We have supported
our customers throughout this period of
uncertainty, displaying compassion and
flexibility for those in the hospitality sector;
and agility in meeting off-trade demand,
fundamentally putting them at the centre of
our decision making. Lastly, I would like to
extend my sincere thanks to our supplier base
for their support, which has been key in what
we have been able to do in the hospitality
sector whilst also meeting changes in
demand dynamics in the off-trade.
Operating Results
The Group reacted quickly to the pandemic,
displaying agility and resilience in navigating
the near term challenges, while positioning
the business to deliver on its strategy as and
when normal trading conditions return. We
worked swiftly to establish a safe, compliant
and supportive working environment and
took action to secure our short-term liquidity
position. In addition, we tightly controlled
our working capital, implementing a cost
streamlining programme whilst accelerating
optimisation of our distribution network
and e-commerce offering. We responded
quickly to the change in consumption
dynamics meeting the increased off-trade
sales, ensuring continuity of supply and
continuing to tailor and develop our portfolio
to meet consumer demand and preferences.
C&C Group plc Annual Report 2021 3
Encouragingly, the inherent strength of our
brand led distribution business model and
the fundamental role the Group occupies
in the infrastructure of the UK and Irish
drinks market supported a strong return
to profitability and cash generation on the
easing of trade restrictions in July, August
and September. However, the on-trade
restrictions have been longer and tougher
than anticipated with Ireland experiencing
one of the longest hospitality sector
lockdowns in the world and H2 FY2021
providing only 54 trading days out 181
where the on-trade was open across all of
C&C’s core markets. The off-trade channel
saw a temporary change in consumer
consumption dynamics with considerable
year-on-year growth. Reflecting the special
affinity our core brands have with their local
markets, we are pleased to report that
Bulmers, Tennent’s and Magners performed
strongly in FY2021, with each gaining
volume share in the off-trade channel.
However, with on-trade operating under
restrictions for the period, the Group’s total
net revenues declined by 56.1% against
FY2020 on a constant currency basis,
delivering a pre-exceptional operating loss
of €59.6 million for FY2021.
The strength of our service offering and
unrivalled scale and reach of our drinks
distribution platform and the power of
this route to market has driven significant
distribution deals in FY2021. In Ireland
we strengthened our partnership with
Budweiser Brewing Group, beginning
exclusive distribution of Budweiser, on
the island of Ireland. With the addition
of Budweiser, C&C now has exclusive
distribution of Budweiser Brewing Group’s
complete beer brand portfolio across
Ireland. In the UK, we were chosen as
exclusive distributor and representative of
Tito’s Handmade Vodka, the #1 selling spirit
brand in the USA. Most recently we agreed
a new long-term partnership with Innis &
Gunn to sell and distribute Scotland’s #1
craft beer in the UK and Ireland on-trade.
The Group also received an 8% equity
stake at only nominal cost as part of the
agreement. Our commitment to becoming
the preeminent brand led drinks distributor
in our core markets has led to the divestment
of non-core assets including the Tipperary
Coolers business in Ireland and more recently
the divestment of Vermont Hard Cider
Company in the USA which completed in
April 2021.
We were pleased that the UK and the
European Union signed a Trade and
Cooperation Agreement, which provided
for, among other things, zero-rate tariffs
and zero quotas on the movement of goods
between the UK and the European Union.
The Brexit transition period formally ended
on 31 December 2020 and to date we have
had minimal disruption to our operations and
supply chain.
People and Culture
Our people are at the heart of our business
and our decentralised business model puts
them in the centre of the local communities
we serve. Their compassion, commitment
and resourcefulness during this period
of adversity has been extraordinary. We
recognise that many colleagues have been
placed on furlough for the many months
and we thank those affected for their
perseverance and patience. Through my role
as interim Executive Chair until 2 November
2020, I had the pleasure of working day
to day with the local management teams,
gaining a deeper understanding of the
challenges faced and our responses. The
pandemic has presented both physical
complications in our manufacturing sites and
distribution network, in addition to challenges
around employee wellbeing and engagement.
The Group has followed government policy,
ensuring only essential staff attend their
normal place of work and quickly established
a safe and compliant working environment.
Thanks to the excellent work of our
colleagues and suppliers, the Group’s supply
chain and production facilities remained
fully operational throughout the period. A
programme of stringent ongoing COVID-19
compliance health and safety audits has been
put in place in our operational sites to ensure
we provide the safest environment we can for
our colleagues, business partners, customers
and communities where we operate.
Our people are at the
heart of our business
and our decentralised
business model
puts them in the
centre of the local
communities we
serve.
Corporate GovernanceBusiness & StrategyFinancial Statements
4
Chair’s Statement
(continued)
The Group has put in place a number of
measures to ensure we are supporting
our colleagues including the provision of
impartial advice and information on physical
and mental health, financial concerns
as well as access to specific counselling
services. As part of this we have established
a network of thirty employee volunteer
mental health first aiders who have been
trained and qualified to support our wider
team on wellbeing and mental health issues.
In addition, we offered free flu vaccines to
all employees. We remain committed to
meaningful employee engagement and
understanding the needs of our workforce
and continued to conduct employee surveys
throughout the pandemic to better tailor the
initiatives and supports we have in place.
In supporting our local communities and
those that need it most, our colleagues,
including some of those on furlough,
have worked with our suppliers, business
partners and customers to deliver PPE to
the NHS, care home workers and other
essential workers. We have also made food,
drink and sanitiser donations to food banks,
charities and community groups across the
UK and Ireland.
The Board recognises that the unique mix
of our dedicated and passionate people,
alongside the inherent strengths of the
Group’s business model, are the basis from
which we will create and drive long-term
shareholder value. Our colleagues’ individual
and collective contributions are greatly
appreciated and we will continue to invest
and build on the work completed in FY2021
to improve the working environment we
provide our people.
Capital Allocation
As part of our actions around securing
liquidity, we have postponed non-committed
capital expenditure and significantly reduced
discretionary spending, marketing and
brand advertising. Capital investment has
been focused into our ESG (Environmental,
Social and Governance) initiatives which has
included an investment to move Wellpark
Brewery out of plastics during FY2022,
removing 150 tonnes of plastic annually.
We remain committed to continuing our
investment into ESG and delivering an
objective of increasing importance to our
stakeholders.
As we announced on 30 April 2020 and as
part of liquidity actions, the Board resolved
it would suspend the payment of a dividend.
We recognise the importance of dividends
and we are determined to resume returning
capital to Shareholders as and when
the operating environment and resulting
financial and cash flow performance of the
Group permit us to do so.
Board
The past year has seen considerable
evolution of the Board. I had the pleasure
to work as interim Executive Chair for most
of the year, stepping aside and back to my
current role as Non-Executive Chair on 2
November 2020, when David Forde joined
as Chief Executive Officer. In addition, Patrick
McMahon was appointed to the role of Chief
Financial Officer on 23 July 2020 following
Jonathan Solesbury’s decision to step
down. These key appointments to our senior
leadership team represent an exciting new
era for C&C and which we believe will deliver
long-term value for all our stakeholders. We
also announced that Vineet Bhalla would
be joining the Board as Independent Non-
Executive Director on 26 April 2021. The
result is a strengthened Board, with broader
and more diverse skills and ethnicity.
In response to the impact of COVID-19
and the evolving situation, the Board put in
place additional meetings to ensure the safe
stewardship of the business and to support
the management teams in navigating our
responses. I would like to thank the Board for
their additional time and commitment during
FY2021.
We remain committed to maintaining the
highest standards of governance principles
and practice, an overview is included on
pages 76 to 77.
Rights Issue
With approximately 80% of C&C’s pre-
COVID-19 net revenues derived from the
on-trade, the prolonged and continued
impact of lockdowns and on-trade trading
restrictions has been considerable. To
ensure the business is equipped with
sufficient liquidity to manage further near
term trading uncertainty and deleveraging of
the balance sheet to ensure it is in a position
to execute its proven long term strategy,
we announced on 26 May 2021, a rights
issue fundraising. The Board considered
various alternative methods of optimising the
Group's capital structure, however with the
continued impact from COVID-19 expected
through H1 FY2022, it concluded that the
most appropriate course of action is to raise
equity.
Conclusion
As we manage the economic and
operational challenges presented by
COVID-19 and position our business for
the future, I am encouraged by the agility
and resilience of our business and the
responses we have put in place to protect
all our stakeholders. The Group’s business
model has proven that it supports a
strong return to profit and underlying cash
generation, once trading restrictions in the
on-trade are eased. There is continued
momentum in the vaccine programmes
within our core markets and a roadmap
has been communicated by the respective
governments for the easing of trade
restrictions. With that in mind, and the
rights issue announced on 26 May 2021, I
look to FY2022 with optimism and believe
C&C will emerge from the pandemic a
stronger business and positioned well for
the long-term to capitalise on the prospects
that present themselves as trade resumes
across the hospitality sector.
Stewart Gilliland
Chair
C&C Group plc Annual Report 2021
5
Corporate GovernanceBusiness & StrategyFinancial Statements 6
Vision, Purpose and Values
We are committed to building a company
that delivers long-term value, an organisation
that has an affinity to the markets in which
it operates, with sustainability and social
responsibility as part of the fabric of the
company.
With our Bulmers, Tennent’s and Magners
brands, C&C has a long and rich history at
the core of the company, augmented by
continually evolving our offer to meet the
demand of our consumers and customers.
Vision
To be the preeminent brand-
led drinks distribution platform,
serving the UK and Irish drinks
market, generating stable
margins, delivering strong free
cash flow and returns for our
shareholders.
Purpose
Play a role in every drinking
occasion, delivering joy to our
customers and consumers with
remarkable brands and service.
Our
Behaviours
We learn to
improve
Competitive
Our
Culture
Open
We put
safety first
We are fact
based, data and
insight driven
Our
Values
Respect people
and the planet
We bring joy to life
Quality is at
our core
Respectful
Humble
We are
customer
centric
We keep it
simple and
remain agile
We collaborate
through trust
C&C Group plc Annual Report 2021
Divisional Structure
7
Ireland
Great Britain
Matthew Clark
and Bibendum
International
C&C’s Ireland division includes the sale of the Group’s own branded
products across the Island of Ireland, principally Bulmers, Magners,
Tennent’s, Five Lamps, Clonmel 1650, Heverlee, Dowd’s Lane,
Roundstone Irish Ale, Finches and Tipperary Water. The Group
also operates the Bulmers Ireland drinks distribution business, a
leading distributor of third party drinks to the licensed on and off-
trade in Ireland. The Group distributes San Miguel, Tsingtao and
Budweiser Brewing Group beer brands across the Island of Ireland.
As of July 2020, the Group also distributes the Budweiser brand on
an exclusive basis. Our primary manufacturing plant is located in
Clonmel, Co. Tipperary, with major distribution and administration
centres in Dublin and Culcavy, Northern Ireland.
C&C’s GB division includes the sale of the Group’s own branded
products in Scotland, with Tennent’s, Caledonia Best, Heverlee
and Magners the main brands. This division includes the sale of
the Group’s portfolio of owned cider brands across the rest of GB,
including Magners, Orchard Pig, K Cider, and Blackthorn which
are distributed in partnership with Budweiser Brewing Group. In
addition, the division includes the Tennent’s drinks distribution
business in Scotland. The Group also distributes selected Budweiser
Brewing Group brands in Scotland and the Tsingtao and Menabrea
international beer brands across the UK. Our primary manufacturing
plant and administration centre is located at the Wellpark Brewery in
Glasgow.
The Group operates, as a separate division, the distribution
businesses of Matthew Clark and Bibendum across the UK and
Ireland. In aggregate, Matthew Clark and Bibendum form the UK’s
No. 1 independent drinks distribution business to the UK licensed
on-trade.
C&C’s International division manages the sale and distribution of the
Group’s own branded products, principally Magners and Tennent’s
outside of the UK and Ireland. The Group exports to over 40
countries globally, notably in continental Europe, Asia and Australia.
The Group operates mainly through local distributors in these
markets and regions. This division includes the sale of the Group’s
cider and beer products in the US and Canada
Corporate GovernanceBusiness & StrategyFinancial Statements 8
Our Engagement with Stakeholders
We aim to maintain open and positive dialogue with all our stakeholders. Our stakeholders are
an important part of our operations and are referenced throughout this report. We have set out
below details of who our key stakeholders are, and how we engage with them. For our Section 172
Statement, please see page 79.
Key
Stakeholders
Employees
Communities
Consumers
Suppliers
Shareholders and Lenders
Customers
Governments
and Regulators
Our colleagues who work in
our business
The people who live in the
local communities around our
sites and operations
The people who drink our
products
Our partners who supply
Individuals or institutions that
Our customers, who are
Regional and national
products and services
own shares in C&C Group plc or
experts in the products they
government bodies and
provide financing
buy and sell, as well as in the
agencies which implement
Area of
Focus
• Health, safety and wellbeing
• Investment in learning
• Promotion of diversity and
inclusion
• Recognition and careers
• Fair employment and equal
opportunities
• Local causes and issues
• Health, safety and wellbeing
Why we
engage
Our people are at the heart of
our businesses and key to our
ongoing success. We want our
people to thrive in a fair and
inclusive work environment.
How we
engage
There are many ways we
engage, including employee
engagement surveys, employee
forums with Non-Executive
Directors, whistleblowing
reports, online learning and
informative and up-to-date
employee communications.
To build trust by operating
responsibly and sustainably,
and addressing issues that are
material to our communities. To
provide training opportunities
and support to local people
currently not in education,
training or employment.
We operate local employment
training programmes including,
in Wellpark, the Tennent’s
training academy, to develop
local people to work in our sites
and also to work in the local
Community. We partner with
local charities and organisations
to raise awareness and funds to
help local causes.
• Staying ahead of changing
consumer lifestyles and
habits which impact how
people want to drink
• Making sure that our
beverage offer is sustainable
and good for the planet
• Safe products and
environments
On occasions when consumers
choose alcohol, we want them
to “drink better, not more”.
experience they create and
and enforce applicable laws
deliver
across our industry
• Product quality and
• Financial performance
• Identification of opportunities
• Positive drinking
authenticity
• Strategic priorities
that offer profitable growth,
programmes and impacts
• Workplace health and
• Corporate governance
insights into consumer
• Wider sustainability agenda
safety
• Leadership and succession
• Sustainable supply chain
planning
behaviour and trends,
innovation, promotional
including human rights,
environmental impacts
reducing our environmental
• Executive remuneration policy
support and merchandising
• Legal and regulatory
impact and making positive
• Shareholder returns
and technical expertise
compliance
contributions to society
• Environmental and social
• Innovation in creation of
commitments and progress
new brands
Working collaboratively to
Our philosophy is to engage in
Our passion is to ensure we
To communicate our views to
ensure our customers receive
regular, open and transparent
nurture mutually beneficial
those who have responsibility
the best possible service and
dialogue with our existing and
relationships that deliver joint
for implementing policy, laws
value for money. Identification
prospective shareholders and
value and the best outcome for
and regulations relevant to our
of opportunities that offer
lenders. We value their thoughts
all our consumers.
businesses.
profitable growth.
and opinions which are shared with
the Board. The Board reviews the
feedback and takes appropriate
actions where necessary.
Responsible advertising and
marketing, active engagement
and education to promote
moderation and reduce the
harmful use of alcohol.
We regularly communicate
We engage with our existing investors
We engage through the use of
Ongoing dialogue,
with our suppliers, and
through one-to-one and group
best practice sales analytics
collaboration on responsible
conduct formal supplier
meetings, webcasts, presentations,
and technology to support our
drinking initiatives and
surveys, reviews and audits;
conference calls and at our AGM.
retailers, ongoing dialogue and
promotion of moderation,
Investments in third party
The Group Finance and Investor
account management support
strengthening industry
innovative and new brands.
Relations Director holds responsibility
and physical and virtual sales
standards and participation in
governments’ business and
industry advisory groups.
for the investor relations programme,
calls.
and the Group CEO and Group CFO
dedicate significant time to engaging
with our major shareholders. The
Chair, other Board members and
the Group General Counsel and
Company Secretary also engage with
our shareholders on other matters,
such as Environmental, Social and
Governance topics. We engage
with lenders primarily though Group
Finance and the Group CFO.
C&C Group plc Annual Report 2021 9
Key
Stakeholders
Employees
Communities
Consumers
Suppliers
Shareholders and Lenders
Customers
Governments
and Regulators
Our colleagues who work in
The people who live in the
The people who drink our
our business
local communities around our
products
sites and operations
Our partners who supply
products and services
Individuals or institutions that
own shares in C&C Group plc or
provide financing
Area of
Focus
• Health, safety and wellbeing
• Fair employment and equal
• Staying ahead of changing
• Investment in learning
opportunities
consumer lifestyles and
• Promotion of diversity and
• Local causes and issues
habits which impact how
inclusion
• Health, safety and wellbeing
people want to drink
• Recognition and careers
• Making sure that our
beverage offer is sustainable
and good for the planet
• Safe products and
environments
• Product quality and
authenticity
• Workplace health and
safety
• Financial performance
• Strategic priorities
• Corporate governance
• Leadership and succession
• Sustainable supply chain
planning
reducing our environmental
impact and making positive
contributions to society
• Innovation in creation of
• Executive remuneration policy
• Shareholder returns
• Environmental and social
commitments and progress
Why we
engage
Our people are at the heart of
To build trust by operating
On occasions when consumers
our businesses and key to our
responsibly and sustainably,
choose alcohol, we want them
ongoing success. We want our
and addressing issues that are
to “drink better, not more”.
people to thrive in a fair and
material to our communities. To
inclusive work environment.
provide training opportunities
and support to local people
currently not in education,
training or employment.
How we
engage
There are many ways we
We operate local employment
Responsible advertising and
engage, including employee
training programmes including,
marketing, active engagement
engagement surveys, employee
in Wellpark, the Tennent’s
and education to promote
forums with Non-Executive
training academy, to develop
moderation and reduce the
Directors, whistleblowing
local people to work in our sites
harmful use of alcohol.
reports, online learning and
and also to work in the local
informative and up-to-date
Community. We partner with
employee communications.
local charities and organisations
to raise awareness and funds to
help local causes.
new brands
Working collaboratively to
ensure our customers receive
the best possible service and
value for money. Identification
of opportunities that offer
profitable growth.
We regularly communicate
with our suppliers, and
conduct formal supplier
surveys, reviews and audits;
Investments in third party
innovative and new brands.
Our philosophy is to engage in
regular, open and transparent
dialogue with our existing and
prospective shareholders and
lenders. We value their thoughts
and opinions which are shared with
the Board. The Board reviews the
feedback and takes appropriate
actions where necessary.
We engage with our existing investors
through one-to-one and group
meetings, webcasts, presentations,
conference calls and at our AGM.
The Group Finance and Investor
Relations Director holds responsibility
for the investor relations programme,
and the Group CEO and Group CFO
dedicate significant time to engaging
with our major shareholders. The
Chair, other Board members and
the Group General Counsel and
Company Secretary also engage with
our shareholders on other matters,
such as Environmental, Social and
Governance topics. We engage
with lenders primarily though Group
Finance and the Group CFO.
Our customers, who are
experts in the products they
buy and sell, as well as in the
experience they create and
deliver
Regional and national
government bodies and
agencies which implement
and enforce applicable laws
across our industry
• Identification of opportunities
that offer profitable growth,
insights into consumer
behaviour and trends,
innovation, promotional
support and merchandising
and technical expertise
• Positive drinking
programmes and impacts
• Wider sustainability agenda
including human rights,
environmental impacts
• Legal and regulatory
compliance
Our passion is to ensure we
nurture mutually beneficial
relationships that deliver joint
value and the best outcome for
all our consumers.
To communicate our views to
those who have responsibility
for implementing policy, laws
and regulations relevant to our
businesses.
We engage through the use of
best practice sales analytics
and technology to support our
retailers, ongoing dialogue and
account management support
and physical and virtual sales
calls.
Ongoing dialogue,
collaboration on responsible
drinking initiatives and
promotion of moderation,
strengthening industry
standards and participation in
governments’ business and
industry advisory groups.
Corporate GovernanceBusiness & StrategyFinancial Statements 10
Group Chief Executive Officer’s Review
“ Our ambition is to be
the preeminent brand
led drinks distribution
platform in the
UK and Irish markets.”
David Forde
Chief Executive Officer
I had the pleasure of joining C&C Group
in November 2020, and since then, I
have been impressed by the dedication
and adaptability of my colleagues, their
passion for our brands and their continued
commitment to protecting our stakeholders
while delivering leading customer service
during these challenging times.
The last twelve months have been unlike
any other I have experienced in my career.
The COVID-19 pandemic has created
disruption on a global scale and presented
unprecedented challenges and uncertainty
for our industry. It has asked questions of
us which we have never had to consider
before and challenged us individually and
collectively to look at what matters and
find innovative responses. The pandemic
has changed the way we work and
communicate with each other and has
rapidly accelerated trends in our sector,
notably the adoption of technology by
our customers and our business; with the
majority of our colleagues, myself included,
working remotely from home.
Despite the challenges, C&C has an
inherently strong business model, with
admired brands that embody provenance
and have a real affinity with their markets,
coupled with a leading distribution
infrastructure of scale and reach. The
strength of the Group’s brand-led
distribution model, and the fundamental
role we occupy in the infrastructure of the
UK and Irish drinks market, were evident
with a return to profitability and underlying
cash generation once trade restrictions were
eased in July, August and September 2020.
Despite the on-trade restrictions, our core
brands have performed strongly in the off-
trade, with all of them taking volume share
during FY2021.
We have developed and implemented
our strategy during FY2021 in pursuit of
becoming the preeminent brand-led drinks
distribution platform serving the UK and
Irish drinks market: evolving our core brand
offering; enhancing our wider portfolio;
accelerating the adoption of technology
and driving efficiencies into our distribution
network and support functions. Core to this
has been maintaining a customer centric
view on delivering leading service, executed
by our dedicated colleagues and supported
by our suppliers and wider stakeholders.
We are pleased with the progress we
have made on our sustainability and social
C&C Group plc Annual Report 2021 11
responsibility objectives in FY2021, which form
part of the fabric of our business model and
daily decision making.
mile English distribution in house, driving
ongoing efficiencies and, in turn, enhance
future margins.
Response to COVID-19
Throughout the pandemic the Group’s key
priorities have been to protect all stakeholders
and support our customers. We have ensured
a safe, compliant and supportive working
environment for those essential employees who
cannot work from home, complying with the
advice of national and devolved governments,
in addition to health authorities. We supported
our customers with various initiatives including:
picking up excess stock in outlets; replacing old
kegs for new; credit terms; loan moratoriums;
ranging advice and promotions for the restart
of trade; and order and delivery options in
preparation for the eventual reopening of the
hospitality sector.
Thanks to the collective dedication of all our
team, the Group’s supply chain and production
facilities remained fully operational through
the year and we continued to work with our
partners to serve our off-trade customers.
We implemented a series of measures to
streamline the business to create a more
efficient cost base, maximise available cash
flow, and maintain and strengthen the Group’s
liquidity position. These measures included
maintaining constructive dialogue with lenders
throughout the period and obtaining waivers
of the existing financial covenants as outlined
in detail in Note 20. In addition, we issued
approximately €140 million of US private
placement notes (the "USPP") in March 2020
to diversify, strengthen and extend the maturity
of the Group's capital structure and sources of
debt finance.
We also took action to address our fixed
cost base by implementing a streamlining
programme which is expected to deliver
annualised savings of €18 million against the
pre COVID-19 cost base. This included the
acceleration of the optimisation of the English
and Scottish distribution networks which is
scheduled to be completed by June 2021,
which will consolidate volumes from three
separate networks into two, bringing all our final
Focused on reducing discretionary
expenditure, the Group has postponed
the majority of non-committed capital
expenditure and temporary salary
reductions for the Senior Management
team and the Board were implemented
in the first half of the financial year. We
also implemented various working capital
initiatives, including the negotiation of
temporary extensions to supplier payments
terms and agreeing payment deferrals with
the UK and Irish tax authorities, and paused
the payment of dividends.
In addition, we have availed of various
government support initiatives which have
also helped to mitigate the impact of the
pandemic. This included furlough schemes
to support 2,000 colleagues' jobs that were
directly and adversely impacted by the
pandemic and restrictions on the hospitality
sector.
Reflective of the focus on our core brand-
led distribution model and to rationalise the
Group structure, we disposed of certain
non-core assets, including the disposal
of the Tipperary Water Cooler business in
October 2020 for a consideration of €7.4
million and Vermont Hard Cider Company
in April 2021 for a consideration of USD 20
million.
Strategic development
Our ambition is to be the preeminent
brand-led drinks distribution platform in
the UK and Irish markets. Despite the
unprecedented market environment since
the end of February 2020, the Group has
continued to take decisive steps to progress
our ambition, focused on: strengthening
our owned brand portfolio, complimenting
this with agencies and ‘equity for growth’
investments; driving efficiencies into our
network which will enhance margins; and
developing our ecommerce offering.
We implemented a
series of measures
to streamline the
business to create a
more efficient cost
base, maximise
available cash flow,
and maintain and
strengthen the
Group’s liquidity
position.
Corporate GovernanceBusiness & StrategyFinancial Statements 12
Group Chief Executive Officer’s Review
(continued)
Addressing the growing consumer demand
for ‘no and low’ alcohol alternatives,
C&C launched the Tennent’s Zero and
Tennent’s Light brand extensions which
despite restrictions in the on-trade have
outperformed expectations in the off-trade.
In addition, our own hard seltzer brands have
been launched in Ireland through Seven
Summits and Shard in Scotland which is
the UK’s only draught seltzer. The strength
of our final mile distribution continues to be
reflected through the exclusive distribution
deals completed during FY2021, including:
extending our partnership with Budweiser
Brewing Group in Ireland to include exclusive
distribution of Budweiser; Tito’s Handmade
Vodka in the UK, the No.1 selling spirit brand
in the USA(i); and most recently exclusive
distribution of Innis & Gunn, Scotland’s No.1
craft beer(ii), into the IFT (‘Independent Free
Trade’) across the on-trade in the UK and
Ireland. As part of the Innis & Gunn deal we
secured a long term manufacturing contract
for our Wellpark Brewery and received an
8% equity stake at only the cost of nominal
share capital along with a long-term incentive
scheme which will make a number of
additional shares available to the Group
based on performance targets .
We accelerated the optimisation of the
English and Scottish distribution networks
by consolidating the volumes from three
separate networks currently into two. This will
rationalise our depot footprint and improve
our service offering, bringing all final-mile
distribution in house in England and, in turn,
drive ongoing efficiencies and enhance
future margins. Further, the optimisation work
supports the Group's sustainability agenda
by eliminating transport inefficiencies and
reducing product miles travelled and CO2
emissions. The network consolidation is due
to be completed by June 2021.
The pandemic has accelerated the adoption
of technology across business and wider
society. We have witnessed increased
momentum in pre COVID-19 trends within
our business including ecommerce, where
our customers’ order preference has
accelerated towards online rather than via
our contact centres. We have accelerated
development of our platforms, creating
new features to further enhance the
customer journey including: real time stock
information; guest checkout and automated
online account setup. We will continue to
leverage technology and its corresponding
benefits to the advantage of our customer
experience and service levels whilst driving
the efficiencies throughout our organisation.
Financial Performance
C&C‘s reported net revenue for FY2021
of €736.9 million represents a decrease
of 56.1% versus last year on a constant
currency basis(iii). With our Matthew
Clark and Bibendum businesses almost
exclusively exposed to the on-trade, the
majority of the decline has been reflected
in this division with FY2021 net revenue of
€337.8 million, -69.0% versus last year on a
constant currency basis(iii).
Our operating loss before exceptional items
in the year was €59.6 million and our overall
loss before interest, tax depreciation and
amortisation was €28.8 million, this excluded
an exceptional operating charge in the
year of €25.2 million. The Group displayed
robust liquidity and net debt management
during FY2021, reporting €314.6 million and
€441.9 million respectively. This represents a
movement in liquidity and net debt of -€20.7
million and -€115.0 million respectively
versus last year.
Our receivables purchase programme has
contributed €45.0 million to closing cash,
an outflow of €84.0 million on a constant
currency basis(iii), driven by reduced
revenues as a result of trading restrictions.
Close management of working capital,
supported by tax deferrals, has reduced
working capital outflow in FY2021 to €44.7
million.
During FY2021, the Group secured covenant
waivers from its lenders, this primarily
resulted in the increase in net finance costs
in the year by 38.4% to €27.4 million.
Capital Allocation
In strengthening the Group’s liquidity
position we have taken a number of actions
to reduce the level of capital investment
during FY2021, with total investment into
the existing business standing at €10.0
million focused primarily on achieving our
environmental targets and on optimising our
operational footprint.
The Group has invested €7.8 million (£7.0
million) into the Wellpark Brewery which
will remove the use of single use plastic at
the site during calendar 2021, removing
150 tonnes of plastic annually. In addition,
we have invested into an innovative carbon
capture facility, the largest in Scotland,
which will allow the brewery to store and
C&C Group plc Annual Report 2021 13
utilise over 4,200 tonnes of CO2 per year. These
investments fit with a wider Tennent’s brand
campaign, “Life is bigger than beer” and the
sustainability pledges that have been made as
part of this.
We support the IFT with a customer loan book
of €42.1 million, down from €44.7 million in
the prior year, which is primarily secured by
freehold assets and is conditional on the outlet
procuring our products over the tenure of the
agreement.
The Group provided liquidity support of €6.7
million into Admiral Taverns to support their
tenants and the on-trade. Admiral Taverns now
has sufficient liquidity to manage the near term
challenges and deliver their strategy as trading
resumes.
We remain committed to a clear and disciplined
approach to capital allocation, focusing on
the appropriate capital structure to deliver our
strategy. Following trading re-establishing and
when Group cash flow permits, we will reinstate
our dividend.
Our Brands
Over the last twelve months we saw a
significant and temporary shift in consumption
dynamics from the on-trade to the off-trade,
with the hospitality sector either locked down
or under restrictions. Our net revenue derived
in the on-trade shifted from approximately 80%
in FY2020 to approximately 40% in FY2021. I
am pleased to report that despite the obvious
challenges in the on-trade, our brands have
performed strongly in the off-trade where
their provenance and affinity with consumers,
preferencing the brands they know and trust,
has driven volume share gains in all of our three
core brands(iv),(v),(vi). In the off-trade, and in line
with consumers’ purchasing habits, we have
seen changes in pack mix with larger packs
playing a more prominent role as consumers
shop less frequently. This has also resulted in
retailers rationalising their ranges. The trading
challenges from the cancellation of key sporting
events including the 2020 European Football
Championships has been, in part, offset by the
sustained period of warm weather we enjoyed
through H1 FY2021.
In Scotland, our Tennent’s brand has
performed strongly with the underlying
brand health reflected in Tennent’s gaining
both volume and value share in the off-
trade(iv). Tennent’s off-trade volume and
value share of 26.5% and 21.6% respectively
as at 21 February 2021 represents growth
of 1.1% and 0.7%(iv) with net revenue growth
in the off-trade of 22.0% versus FY2020.
We have continued to invest behind our
‘Life is bigger than beer’ campaign and
deliver against the sustainability pledges
which were made as part of this. In addition,
there has been successful new product
development in the year with the launch
of Tennent’s Zero and Tennent’s Light,
reflecting the commitment of the brand
to the continuing changes in consumer
preferences. The Zero and Light variants
have secured over 1,500 listings in the off-
trade during FY2021, with Tennent’s Zero
voted as the Scottish Local Retailer Product
of the Year 2020, an award that is chosen
by the retailers themselves. Our direct to
convenience business in Scotland, which
supplies our own portfolio and a range
of third party products, has continued to
establish itself with year on year volume
growth of 70%.
In Great Britain, Magners has grown volume
share of apple cider in the off-trade to
9.7% as at 21 February 2021 representing
growth of +0.4%(vi). Overall volumes in the
cider category were aided by the sustained
period of warm weather through spring and
summer in 2020.
In Ireland, Bulmers’ off-trade volume and
value share of cider of 50.5% and 50.8%
respectively as at February 2021 represents
growth of 3.7% and 4.3%(vi) which in part
was supported by the exceptionally good
weather during spring and summer 2020.
The introduction of Budweiser into our Irish
portfolio, strengthens our position as the
third biggest supplier of LAD to the off-
trade(vi). Lastly, as part of the ‘no and low’
trend emerging, we launched a hard seltzer
brand in Ireland, Seven Summits, which is
resonating well with consumers.
The Group has
invested €7.8 million
(£7.0 million) into the
Wellpark Brewery
which will remove
the use of single use
plastic at the site
during calendar 2021,
removing 150 tonnes
of plastic annually.
Corporate GovernanceBusiness & StrategyFinancial Statements 14
Group Chief Executive Officer’s Review
(continued)
The capability and
effectiveness of our
final mile distribution
was reflected in the
distribution deals we
have secured and our
ability to react to the
easing of restrictions.
this asset to drive revenue and profit growth
across our product range and attract
complimentary agency brands or “equity for
growth” brand partnerships.
Environmental, Social and
Governance
The Group recognises its responsibility
to society and the importance of our
Environment, Social and Governance
(“ESG”) strategy and commitments, and
the increasingly important role this plays in
the decision making of our stakeholders.
We are pleased with the progress made
during FY2021 on our sustainability agenda
including trialling electric vehicles and
optimising our distribution network which
will result in reducing fleet mileage. In
addition, we developed our portfolio with the
introduction of ‘no and low’ alcohol variants,
and put in place health and wellbeing
external support systems for our colleagues.
Lastly, we have continued to develop our
strategy and enhance transparency across
all levels of the business, with an ESG
board committee formed during FY2021
and the launch of an ESG strategy. We
have created six pillars through which we
will execute our ESG strategy: Reduce our
Carbon Footprint; Sustainably Source our
Products and Services; Ensure Alcohol is
Consumed Responsibly; Enhance Health,
Wellbeing and Capability of Colleagues;
Build a more Inclusive, Diverse and Engaged
C&C; and Collaborate with government and
NGOs. Together these will support C&C in
delivering to a better world.
Our ESG commitments and achievements
have been discussed in more detail on
pages 50 – 67.
Performance of our brands outside the key
markets of the UK and Ireland has been
understandably challenging with these markets
experiencing the same trading restrictions as the
UK and Ireland, with volumes weighted to the
on-trade, and significantly reduced tourism in
our key European markets. As a consequence
Magners and Tennent’s reported volume
declines versus FY2020 of -46.1% and -32.6%
respectively.
Premiumisation remains a strategic focus for our
business, however the performance of our super
premium and craft brands during FY2021 has
been disappointing, with it significantly impacted
by the closure of the on-trade. Our super
premium and craft portfolio has limited exposure
in the off-trade unlike our local and core brands.
With the lifting of restrictions in the on-trade
we anticipate that our super premium and craft
portfolio will recover quickly.
Distribution
With the on-trade either locked down or under
restrictions throughout FY2021, trading in our
distribution businesses has been significantly
impacted. However, the capability and
effectiveness of our final mile distribution was
reflected in the distribution deals we have
secured and our ability to react to the easing
of restrictions, notably in July, August and
September 2020. Central to this is the strength
of our relationships, quality of our service and
value of our proposition. During the period,
we maintained market leading service levels,
as reflected in our customer satisfaction index
scores and On Time In Full (‘OTIF’) deliveries,
and despite the global supply chain challenges
presented by the pandemic we have minimised
product range issues.
Our leading scale and reach into the on-trade
markets of the UK and Ireland ensures that
we have superior access to data and the best
insight into macro and regional trends. We
continued our development of our proprietary
data assets during FY2021 and in addition we
signed an agreement with SalesOut, a leading
data company, to augment our in-house assets.
Our data and insight capability provide a
valuable advantage in driving the performance
of our own brands. We will continue to leverage
C&C Group plc Annual Report 2021 15
Corporate GovernanceBusiness & StrategyFinancial Statements 16
Group Chief Executive Officer’s Review
Operating Review
Our brand-led distribution
model and its inherent
strengths of scale and reach
is supported by investment
in our sales and distribution
infrastructure, underpinned
by our local and core brands.
The Group operates with
four distinct divisions which
are focused on the local
markets they serve with their
proposition tailored to meet
our customers’ needs. This
structure harnesses the
economies of scale in the back
office, namely: procurement,
finance and IT whilst remaining
agile to adapt and react
to market conditions and
customer requirements.
Great
Britain
€m Great Britain
Constant currency(iii)
Net revenue
- Price / mix impact
- Volume impact
Operating (loss)/profit(vii)
Operating margin
Volume – (kHL)
- of which Tennent’s
- of which Magners
Our Great Britain division’s net revenue
decreased 36.4% to €206.8 million in the
year driven by the closure of the on-trade
and volume moving into the lower margin
off-trade channel. As a result, operating
profit has reduced by €52.2 million(iii)
to a loss of €8.4 million. Despite the
trading challenges the division has made
considerable steps towards strengthening
its portfolio; optimising its cost base and
positioning itself for emerging trends.
FY2021
FY2020
Change %
206.8
325.2
(36.4%)
(12.8%)
(23.6%)
(8.4)
NM
2,007
690
480
43.8
(119.2%)
13.5%
2,626
977
530
(23.6%)
(29.4%)
(9.4%)
Wellpark Brewery remained open with
minimal levels of disruption from COVID-19.
We responded to the immediate switch
in consumption dynamics to the off-trade
and met the exceptional demand for our
off-trade SKUs, which outperformed the
market, whilst also maintaining the demand
for our contract brewing and private
label partners. We have continued our
commitment to ESG with £7 million capital
investment to remove single use plastic
in our products, which will be completed
in 2021. In addition we have installed CO2
capture and storage facilities, significantly
reducing the need to purchase CO2. Further,
we are a founding member of Circularity
Scotland, affirming our commitment to the
creation of an efficient and well-designed
Deposit Return Scheme for Scotland that
delivers the recycling and litter objectives
and supports the country’s ambitions for a
more circular economy.
We ensured support for our on-trade
customers putting in place measures that
included: flexibility on credit terms; collection
of old kegs and replacing them with new
kegs; back to trade planning including,
ranging, promotions and moratoriums
on capital loan book repayments. As a
response to the trend in customers moving
towards ordering online, we continued the
C&C Group plc Annual Report 2021
17
Ireland
€m Ireland
Constant currency(iii)
Net revenue
- Price / mix impact
- Volume impact
Operating (loss)/profit(vii)
Operating margin
Volume – (kHL)
- of which Bulmers
FY2021
166.1
FY2020
Change %
226.3
(26.6%)
(4.9)
NM
1,257
300
40.2
17.8%
1,416
366
(15.4%)
(11.2%)
(112.2%)
(11.2%)
(18.0%)
Our Ireland division’s net revenue decreased
26.6% to €166.1 million(iii) in the year driven
by the continued lockdowns with Ireland
experiencing one of the longest hospitality
sector lockdowns in the world. There was a
shift in consumption dynamics with off-trade
volumes +21.2% versus FY2020. While this
provided a welcome revenue stream, the
lower margin and pack mix pressures were
not sufficient to offset the impact of the on-
trade closures. As a result, operating profit
has reduced by €45.1 million to a loss of
€4.9 million(iii).
The Bulmers brand, despite sustained
competitive pressure over the last few
years, has performed strongly, aided by an
exceptionally warm spring and early
summer weather and consumers’ desire
for brands with provenance which they
know and trust. As a consequence
Bulmers off-trade volumes were +37.7%
versus FY2020, with the brand taking
both volume and value share in off-trade
long alcoholic drinks (“LAD”) (vi). During
the year we extended our partnership
development of our ecommerce offering
for the Tennent’s business in Scotland,
enhancing our customer experience
with the introduction of a new ordering
platform. This platform provides improved
functionality including an optimised ordering
journey, a direct link to online support via
web chat and the ability for the customer to
self-manage their trading account, including
the option to pay open invoices and apply
credit notes. We believe orders will continue
to move online as we further enhance our
ecommerce offering. We forecast by the
end of FY2022 that on-trade online orders
will make up 70% of the revenue for the
business in Scotland.
Significant work has been completed on the
secondary distribution network in Scotland,
rationalising its footprint and associated
cost base. As a result, a new 50,000
square foot depot has been established in
Edinburgh, Scotland’s second largest city
where Tennent’s had no presence before.
On the opening of the Edinburgh depot, we
will close four existing depots in Scotland,
including Matthew Clark’s Glasgow depot,
creating one final-mile logistics solution
which will be fully operational by June 2021.
This will yield ongoing efficiencies, improve
customer service and optimise working
capital by lowering overall stock levels. Our
convenience direct to store model utilises
this network, established in part following
minimum unit pricing, and has performed
strongly with overall volume growth of 70%
versus FY2020. The growth has been aided
by the development of an online platform
and retailer loyalty scheme which also
provides trade information, point of sale and
incentives.
Corporate GovernanceBusiness & StrategyFinancial Statements
18
Group Chief Executive Officer’s Review
Operating Review (continued)
Matthew Clark
and Bibendum
Matthew Clark and Bibendum
Constant currency(iii)
Net revenue
- Price / mix impact
- Volume impact
Operating (loss)/profit(vii)
Operating margin
Volume – (cases k 9L)
-Volume – (kHL)
FY2021
337.8
FY2020
Change %
1,089.9
(69.0%)
(5.7%)
(63.3%)
(257.8%)
28.2
2.6%
30,344
2,731
(63.3%)
(44.5)
NM
11,122
1,001
Net revenues for the combined Matthew
Clark and Bibendum Division in FY2021
were €337.8m, a decrease of 69.0%(iii)
versus FY2020 with the business almost
exclusively an on-trade business.
Operational gearing has generated a loss
of €44.5 million(vii) in FY2021, however
action has been taken on cost reduction
during FY2021 and network optimisation
due to complete by the end of June 2021,
both of which will deliver ongoing savings
against the pre-COVID cost base.
Matthew Clark and Bibendum
demonstrated that, on the easing of
restrictions in July to September, it was
able to respond quickly and capitalise on
customer and consumer demand with
distribution points in the on-trade peaking
at 82% of FY2020 levels for the equivalent
period. In addition, we have been
encouraged by our levels of new business
and the value and security that customers
place in us.
with Budweiser Brewing Group in Ireland to
include exclusive distribution of Budweiser.
Budweiser Brewing Group and Bulmers
Ireland have committed to investment in
the brand, notably with new branding,
packaging and a TV campaign with the new
branding trialled in Ireland as one of the first
worldwide territories. The introduction of
Budweiser into our portfolio, strengthens our
position as the third biggest supplier of LAD
to the off-trade(vi).
Our Clonmel manufacturing site and
distribution network remained fully
operational over the last twelve months with
minimal impact to our supply chain. We
quickly established a safe and compliant
environment for our colleagues who did not
have the ability to work from home.
The business has ensured support for our
customer base with measures including;
providing flexibility with delivery days and
order sizes; a ‘new for old keg’ replacement
process; and C&C Hygiene, an initiative
providing funding for pre-opening / start-up
costs for our customers which is helping
500 on-trade customers. C&C Hygiene
offers a central hub with safety standards
and certification for the hospitality sector.
The initiative also offers items to facilitate
the safe opening and continuing operation
including divider screens, hand sanitisers,
signage and foot handles for doors.
We have continued to enhance our
customer proposition and service by
launching a new online ordering platform
and customer portal system, ‘Bulmers
Direct’.
During the year we rebranded our Irish
wine business Gilbeys to Bibendum Ireland.
Bibendum Ireland which is the largest
independent wine business in Ireland
performed strongly, capitalising on a
change in consumption dynamics, with total
volumes up 7.9% in FY2021 versus 878k
cases sold in FY2020.
C&C Group plc Annual Report 2021
19
Our depot network has remained fully
operational throughout the pandemic,
servicing the increased demand of the off-
trade and ensuring that we are positioned to
react quickly as and when restrictions ease.
The business generated alternative revenue
streams during on-trade restrictions,
deploying some of its fleet to support brand
owners with delivery into the convenience
channel.
We accelerated our network optimisation,
transitioning the Bibendum’s supply chain
operations from a third-party logistics
provider into the Matthew Clark network.
We also closed the Matthew Clark depots in
Scotland, transitioning this volume into the
Tennent’s depot network in Scotland. These
initiatives will drive ongoing efficiencies
through a lower cost to serve, delivering
enhanced margins.
During FY2021, our Bibendum off-trade
business performed strongly with net
revenue growth of 19.3% versus FY2020.
Walker and Wodehouse, our business which
supplies independent wine retailers, also
performed strongly with sales and gross
profit increasing 25% and 43% respectively
versus last year.
Matthew Clark and Bibendum have
continued to support the hospitality
industry through the lockdowns and trading
restrictions with increased flexibility in
delivery days and times; ‘new for old keg’
replacement process; availability of key
lines secured with supply partners; new
‘guest checkout’ facility on our ecommerce
platform and a simplified online process for
new account openings.
Matthew Clark has seen an increase in
ecommerce activity, with Matthew Clark
Live, our ecommerce platform, showing an
increase in orders with 18% of total sales
versus 13% in FY2020 and an increase
of 73% in users versus prior year. The
successful launch of ‘Guest Checkout’,
has enabled first time customers to order
and receive stock without first setting
up an account, 28% of guest users have
subsequently gone on to setup a trading
account with Matthew Clark. The business
is well placed to meet the change in
customer behaviour with our Matthew
Clark Live ecommerce platform awarded,
‘Best Business to Business’ and ‘Best
Food & Drinks’ ecommerce sites at the UK
ecommerce Awards 2020.
Our Matthew Clark and Bibendum
businesses have been encouraged with the
resilience of our customer base, with over
95% of March 2020 closing debtor ledger of
€110 million collected from customers as of
the end of FY2021.
Corporate GovernanceBusiness & StrategyFinancial Statements 20
Group Chief Executive Officer’s Review
Operating Review (continued)
International
€m International
Constant currency(iii)
Net revenue
- Price / mix impact
- Volume impact
Operating (loss)/profit(vii)
Operating margin
Volume – (kHL)
FY2021
26.2
FY2020
Change %
37.0
(29.2%)
4.3%
(33.5%)
(1.8)
NM
159
6.4
(128.1%)
17.3%
239
(33.5%)
Net revenues of €26.2 million in FY2021 have
decreased by 29.2% against FY2020(iii), this
has been driven by reduced volumes and has
resulted in an operating loss of €1.8 million
versus a profit of €6.4 million on a constant
currency in the prior year.
The effect of COVID-19 was noted in almost
every market in APAC and EMEA, however
each market responded differently to the
pandemic and the impact on the International
business has been varied as a result. Overall
volume has declined, driven by on-trade
closures in Central Europe and the reduced
levels of tourism in the peak summer
trading period. This has been mitigated
somewhat through growth in Asia, and
solid performances in the Nordics and ANZ
(Australia and New Zealand).
Europe, Middle East and Africa
In the first wave of the pandemic Central
Europe recorded a drop in volume,
with most markets implementing social
distancing restrictions and limiting access
to the on-trade where the International
business is most active. Secondary to
this was an increased level of uncertainty
as we moved into the summer when
demand would usually be highest. The
biggest challenge was the reduction in the
number of British and Irish tourists travelling
overseas to Spain and the Mediterranean
region, which directly impacted
performance. The changing restrictions,
often implemented at short notice, added
to the uncertainty and adversely impacted
on willingness to place orders, with many of
the on-trade premises in this region heavily
reliant on overseas tourism.
As the year progressed there was some
upside in ‘winter sun’ destinations’ such
as the UAE, but not enough to offset the
declines elsewhere, and in the final quarter
of the year the closure of the European
ski resorts further reduced demand.
Lockdowns across Central and Eastern
Europe, combined with the introduction of
a mass vaccination programme, resulted
in a level of optimism in the final month,
the benefit of which will be reflected in
Q1 FY2022. Overall EMEA volumes were
48.7khl, -55.6%.
C&C Group plc Annual Report 2021 21
Asia Pacific
Following the easing of trade restrictions
during FY2021, the region performed
strongly for the remainder of the year,
driven by the new distribution agreement
for Magners in South Korea and growth
in China (Magners and Tennent’s). These
two markets accounted for 64% of the total
APAC volume, and have recorded combined
growth of 125% year on year.
Australia and New Zealand volume was
robust throughout the year, largely due to
the relative success in containing the spread
of COVID-19, but overall is down -30%
compared to the prior year. Elsewhere,
volume across the rest of Asia declined but
this was driven by an ongoing decision to
focus on larger markets that can deliver
sustainable brand growth. Overall APAC
volumes were 29.5khl, -2.9%.
North America
Total volumes in FY2021 were down 18.3%
as a consequence of COVID-19 restrictions
which varied in degree across the region.
Woodchuck volumes, which historically
over-index in the off-trade, were broadly
insulated from these restrictions and
volumes finished the year in growth +9.3%.
The Magners brand however, felt the full
effect of hospitality lockdown measures with
volumes finishing -42.0% versus FY2020.
In March 2021, the Group announced the
sale of its wholly owned US subsidiary,
Vermont Hard Cider Company, to Northeast
Kingdom Drink Group LLC for a total
consideration of USD 20 million. This
transaction completed in April 2021.
Strengthening our Capital Position
The duration and impact of the pandemic
has been greater than initially expected and
the Group has demonstrated its resilience,
strength and agility over this period. As
the pandemic evolved, the Group took
significant and decisive action to protect the
business and its liquidity position, which is
reflected in the resilient financial results of
the Group for the year ended 28 February
2021. However, the Group continues to
face uncertainty driven by the significant
lockdowns and trading restrictions
implemented in the Group's key markets
and their ongoing impact on the hospitality
sector. As a result the Board has taken the
decision, in the best interests of the Group
and all of its stakeholders, to launch a Rights
Issue which was announced on 26 May
2021. With approximately 80% of C&C’s
pre-COVID-19 net revenues derived from
the on-trade, the prolonged and continued
impact of lockdowns and on-trade trading
restrictions has been considerable. To
ensure the business is equipped with
sufficient liquidity to manage further near
term trading uncertainty and deleveraging of
the balance sheet to ensure it is in a position
to execute its proven long term strategy,
we announced on 26 May 2021, a rights
issue fundraising. The Board considered
various alternative methods of optimising the
Group's capital structure, however with the
continued impact from COVID-19 expected
through H1 FY2022, it concluded that the
most appropriate course of action is to raise
equity.
Summary and Outlook
FY2021 has presented an extraordinary set
of circumstances which have challenged
our business, and our industry, at every
level. To date, we have navigated these
challenges by acting quickly and decisively,
putting in place responses to the near
term challenges while positioning C&C to
emerge from the pandemic stronger, more
streamlined and primed to deliver on our
ambition to be the preeminent brand led
number one “final-mile” drinks distributor
across our core markets. We will remain
vigilant and continue to be flexible in our
approach as the hospitality sector recovers
from COVID-19.
Our portfolio has demonstrated its
strength with our core brands growing
market share during FY2021. We will build
on this as the hospitality sector opens,
targeting cider share growth and building
our share in premium beer which we
continue to see as a market opportunity.
Development of our portfolio will remain
key as we complement with new agencies
or equity for growth brands. Our system
strength is reflected in the evolution of our
award winning ecommerce platform and
offering which positions us well to fulfil the
change in ordering behaviour and meet the
highest levels of customer service. Further
we will continue to optimise our system
through cost streamlining, infrastructure
consolidation and the adoption of
technology and the efficiencies therein.
This will be delivered by our engaged and
inspired colleagues, committed to our
sustainability agenda.
Our first priority will continue to be
protecting our stakeholders. Their health
and wellbeing are of paramount importance
to the success of C&C. We are continuously
monitoring the evolving government and
health authority guidance to ensure we
provide the safest environment we can.
We look to FY2022 with optimism as
progress with the COVID-19 vaccine
programme will see on-trade restrictions
continue to ease. The Group continues to
play an integral role in the UK and Ireland
drinks market with its infrastructure being
crucial for customers and brand owners.
Our business model’s inherent strengths,
together with reduced operating costs, will
support a stronger return to trading cash
flows, profitability and the creation of long-
term value for our shareholders.
David Forde
Chief Executive Officer
(i) Tito's number 1 spirit in USA (IRI Period Ended 04
(ii)
October 2020).
I&G number Scotland’s # 1 craft beer (CGA Scotland
MAT week ended 21.03.20).
(iii) FY2020 comparative adjusted for constant currency
(FY2020 translated at FY2021 F/X rates).
(iv) IRI, MAT to week ended 21.02.21.
(v) Nielsen, Volume Share of Cider, Off-Trade including
Dunnes and Discounters, MAT February 2021.
(vi) Nielsen, Volume Share of Long Alcoholic Drinks,
Off-Trade including Dunnes and Discounters, MAT
February 2021.
(vii) Before exceptional items.
Corporate GovernanceBusiness & StrategyFinancial Statements
22
Strategic Report - Group Strategy
The core of the Group's strategy is driving an integrated, brand-led
approach with leading route-to-market capability and having the critical
strength and scale to deliver for both our on and off-trade customers.
The primary pillars of the Group's strategy are:
Strategic pillars
Medium term strategic goals
Measurement
Invest and grow our
portfolio of leading local,
super-premium and craft
beer and cider brands.
• Brand and product investment to build value of key brands over
• Cash generation and
the long-term.
• Leverage key brand strength and market position to grow our
portfolio of super-premium and craft brands.
• Successful brand development and launches to meet changes
in consumer demand.
• Build on “partnership for equity" brand relationship to provide
route to market access.
conversion
• Revenue growth
• Enhanced margins
• Share growth and brand
health scores
• Continue the optimisation of the Matthew Clark and Bibendum
• Margin expansion at Matthew
businesses.
Clark and Bibendum
Strengthen the Group's
position as the preeminent
brand-led, "final-mile"
drinks distribution business
in the UK and Ireland.
• Deliver unrivalled portfolio strength, value and service to the UK
and Irish hospitality sectors.
• Commercialising the unrivalled data and insight on the hospitality
sector.
Ensure the efficient
allocation of capital to
enhance growth and
Shareholder returns.
• Strengthen its key capabilities across digital and technology to
improve the customer journey and drive efficiencies.
• Committed to delivering on its ESG objectives which form part of
the integrated strategy.
• Target balance sheet leverage of below 2.0 X net debt / EBITDA.
• Selective acquisitions to fuel sustainable, profitable growth and/
or cash returns to shareholders.
• Net Debt/EBITDA
• Balance Sheet strength
• EPS growth
• ROCE
With the challenges presented by COVID-19 in FY2021, the focus for the Group has been around
securing the near term of the business, ensuring the health and wellbeing of our stakeholders,
supporting our customers and maximising available liquidity. The Group's performance from an
operational and financial perspective during the COVID-19 pandemic has demonstrated the important
role the Group has to play in the success of the UK and Ireland on-trade channel and demonstrated
C&C’s structural importance to the sector. Despite the challenges, we have continued to develop and
execute our strategy through FY2021 to put ourselves in a position of strength as the hospitality sector
returns during FY2022.
C&C Group plc Annual Report 2021 Achievements during FY2021
• Our core brands demonstrated their continuing strength in FY2021 by growing off-trade volume share.
• Tennent’s off-trade volume and value share of lager of 26.5% and 21.6% respectively as at 21
February 2021 represents growth of 1.1% and 0.7%.
• Bulmers off-trade volume and value share of cider of 50.5% and 50.8% respectively as at 28 February
2021 represents growth of 3.7% and 4.3%.
• Magners’ volume share of apple cider in the off-trade has grown to 9.7% as at 21 February 2021
representing growth of +0.4%.
23
Strategic Goals
Brand and product
investment to build value of
key brands over the long-
term.
• Demonstrated the strength of the Group’s brand led distribution model, and the fundamental role
it occupies in the infrastructure of the UK and Irish drinks market, with a return to profitability and
underlying cash generation when trade restrictions were eased in July, August and September 2020.
This was underpinned by a market leading NPS score.
Deliver unrivalled portfolio
strength, value and service
to the UK and Irish hospitality
sectors.
• Exclusive distribution deals completed during FY2021, including: extending our partnership with
Budweiser Brewing Group in Ireland to include exclusive distribution of Budweiser; Tito’s Handmade
Vodka in the UK, the #1 selling spirit brand in the USA; and most recently Innis & Gunn, Scotland’s
#1 craft beer, where C&C received an 8% equity stake at only the cost of nominal share capital, in
return for supplying Innis & Gunn with access to the independent free trade in its core markets.
Build on “partnership for
equity" brand relationship
to provide route to market
access.
• Meeting growing consumer demand for ‘no and low’ alcohol alternatives, C&C launched the
Tennent’s Zero and Tennent’s Light brand extensions which have outperformed expectation in the
off-trade. In addition, our own hard seltzer brands have been launched in Ireland through Seven
Summits and Shard in Scotland which is the UK’s only draught seltzer.
Successful brand
development and launches to
meet changes in consumer
demand.
• Optimisation of the English and Scottish distribution delivery networks, consolidating the volumes
from three separate networks into two, bringing all English final mile distribution in house. In turn,
rationalising our depot footprint, improving our service offering and driving ongoing efficiencies and
enhanced future margins. Further, the optimisation work supports the Group's sustainability agenda
by eliminating transport inefficiencies and reducing product miles travelled and CO2 emissions.
Continue the optimisation
of the Matthew Clark and
Bibendum businesses.
• As a response to COVID-19, taking action to address our fixed cost base with a cost streamlining
programme to deliver annualised savings of €18 million against the pre COVID-19 cost base.
• Diversified and strengthened the Group’s capital structure and sources of debt finance by issuing
approximately €140 million of US private placement notes in March 2020.
• Improving the customer experience with our Tennent’s Direct and Matthew Clark Live ecommerce
platform as customers accelerate their use of technology, developing: real time stock information;
guest checkout and automated online account setup. With the Matthew Clark Live platform
awarded, ‘Best Business to Business’ and ‘Best Food & Drinks’ ecommerce sites at the UK
eCommerce Awards 2020. In addition, we continued to develop our proprietary data assets during
FY2021, signing an agreement with SalesOut, a leading data company, to augment our in-house
assets.
Strengthen key capabilities
across digital and technology
to improve the customer
journey and drive efficiencies.
Target balance sheet leverage
of less than 2.0 X net debt /
EBITDA.
Strengthen key capabilities
across digital and technology
to improve the customer
journey and drive efficiencies.
• Invested €7.8 (£7.0) million into our Wellpark Brewery which will eliminate the use of the single use
plastic at the site during 2021, removing 150 tonnes of plastic annually. A further €3.0 (£2.7) million
has been invested into an innovative carbon capture facility, the largest in Scotland, which will allow
the brewery to store and utilise over 4,200 tonnes of CO2 per year.
Committed to delivering
on ESG objectives which
form part of the integrated
strategy.
• Divestment of non-core assets including the Tipperary Water Coolers business in Ireland. Post year-
end we completed the disposal of Vermont Hard Cider Company in the USA for a total consideration
of USD 20 million which has been applied to reduce net debt.
Selective acquisitions to
fuel sustainable, profitable
growth and/or cash returns to
shareholders.
Corporate GovernanceBusiness & StrategyFinancial Statements 24
Strategic Report - Business Model
Core Brands
Our three core brands: Bulmers, Magners and Tennent’s are intrinsically linked to the communities
and manufacturing locations where they are produced and where their heritage was born. In addition
to their local appeal, they are also desired internationally with critical acclaim.
These brands are highly cash generative and form part of the fabric of the respective drinks markets,
and despite the on-trade challenges, have built momentum in the off-trade.
Scotland’s
favourite beer
Tennent’s is Scotland’s favourite
beer, delivering share growth
in the off-trade over the last 12
months.
Ireland’s
No.1 Cider
Bulmers is Ireland’s No.1 cider,
delivering share growth in
the off-trade over the last 12
months.
The lasting appeal of these brands
is underpinned by continued brand
and marketing investment, where they
have continued to evolve as consumer
preferences and consumption habits have
changed notably on the emergence of no
and low % variants.
No.3 Cider
in the UK
Magners is the No.3 apple
cider in the UK, delivering share
growth in apple cider in the off-
trade over the last 12 months.
C&C Group plc Annual Report 2021 25
Complemented by super-premium and craft brands
The premium market segment continues to grow structurally as consumer demands evolve
although this space is fragmented with the number of brands. C&C deploys a portfolio of super-
premium and craft beers which meet this demand and coupled with our local and core brands
provide a comprehensive range to meet customer and consumer preferences. Further innovation
will strengthen these brands and will be complemented by exclusive distribution agreements and
‘equity for growth’ investments in leading craft brands.
Belgian beer
Heverlee is a premium Belgian
Beer, which is endorsed by
the Abbey of the order of
Prémontré, in the town of
Heverlee in Leuven.
Dublin lager
The Five Lamps Dublin Brewery
was originally set up in early
2012 beside Dublin’s iconic Five
Lamps. Its first beer, Five Lamps
Dublin Lager, was launched in
September 2012.
Italian lager
Menabrea is from Northern
Italy and is matured gently in
the perfect temperature of cave
cellars for a taste of superior
clarity. This pale lager is well
balanced between citrus,
bitter tones and floral, fruity
undertones giving a consistent
and refined flavour.
Craft Beer
A range of craft beer brands
which includes Innis & Gunn,
Scotland’s leading craft beer
brand in which C&C recently
made an ‘equity for growth’
investment in.
Craft cider
Orchard Pig craft ciders are
full of Somerset character and
scrumptious tanins found in
West Country cider apples.
Other Owned
& Agency
Local, niche and speciality
brands as well as world
premium brands such as Stella
Artois, Becks, Budweiser and
Corona.
Corporate GovernanceBusiness & StrategyFinancial Statements 26
Strategic Report - Business Model
(continued)
Route-to-market
C&C’s route-to-market platform occupies a fundamental role in
the infrastructure of the UK and Ireland hospitality sectors.
Benefits for
Customers
Benefits
for C&C
Benefits for
Suppliers
C&C gives its on-trade customers
access to an unrivalled portfolio of
local, premium and third-party brands
combined with intimate product
expertise and insight into evolving
consumer tastes.
Route-to-market
ownership broadens
C&C into a multi-
beverage business.
C&C provides a unique route-
to-market platform for local and
international brand owners, with
unrivalled market access to over
34,000 licensed premises across
the UK and Ireland.
With over 13,000 SKUs, C&C’s
distribution platform provides a
comprehensive “one stop shop” for
licensed premises owners.
Ensures the Group
participates in evolving
consumer trends
across multiple drinks
categories.
C&C allies intimate knowledge of local
and regional markets, with national
coverage and economies
of scale.
Our national distribution network
and economies of scale provide
unparalleled coverage, service and
value to the benefit of our customers.
C&C’s distribution
platform enhances
market access and
visibility for its brands.
C&C takes approximately 1 million
orders per year across 13,000 SKUs
generating unrivalled insight and data
for brand-owners on the ever evolving
consumer and customer trends.
C&C’s balance sheet ensures stability,
certainty of supply and access to
credit.
Route-to-market
complements C&C’s
portfolio of local
champion brands.
C&C provides an open-access, stable
platform to all brand-owners, large
and small.
C&C Group plc Annual Report 2021 27
Scale
Inverness
Kintore
Glasgow and Wellpark
Edinburgh
Cambuslang
Dumfries
Owned, stocked
Owned, not stocked
Third party
Owned, third party
operated
Donegal
Culcavy
Kells
Galway
Borrisoleigh
Dublin
Kilkenny
Clonmel
Cork
Boldon
Wetherby
Runcorn
Grantham
Birmingham
Bedford
Park
Royal
Bristol
Fosse
Crayford
Southampton
Launceston
No.1
Drinks distributor
on Island of Ireland
No.1
Drinks distributor
in Scotland and GB
C&C has unrivalled size, scale and
distribution reach across attractive
on-trade drinks markets in Ireland
and UK.
Our operational footprint can reach
over 99% of the UK population on a
next day delivery basis.
Corporate GovernanceBusiness & StrategyFinancial Statements 28
Strategic Report - How we create sustainable value
Our ambition, to be the preeminent,
“final-mile” brand-led drinks
distribution platform in the UK and Irish
drinks markets, is supported by our
sustainability agenda.
Manufacture
Market
Optimising Production and
Manufacturing
The Group has employed
various practices to
conserve the use of energy,
reduce carbon emissions,
improve waste reduction and
recycling and minimise the
impact on natural resources.
By 2025, 100% of the
power across our sites will
be provided by renewable
sources.
Embrace sustainable
sourcing
We are committed to
sourcing our raw materials
from local sustainable
sources. All apples crushed
at the Clonmel site for the
production of Bulmers and
Magners cider are sourced
from the island of Ireland.
As well as having 165 acres
of our own orchards in Co.
Tipperary, there are over
50 partner growers on the
island with whom we work
closely.
The Group recognises that sustainability needs
to be embraced by partners at every stage of
the supply chain to promote the success of its
sustainability strategy.
Improve sustainable
packaging
The Group has made
excellent progress on its
ambitious target to be out of
single-use plastics by 2022,
reducing the environmental
impact and ecological
footprint of our products.
We are the only brewer
who is a member of the UK
Plastics Pact, which has
additional targets on plastic
packaging, waste and
recyclates.
Data
Our unrivalled scale and reach into the
on-trade markets of the UK and Ireland
ensures that we have superior access to
data and the best insight into macro and
regional trends.
Responsible drinking of alcohol
We are committed to the promotion
of responsible drinking and moderate
consumption of our products, to ensure
they are enjoyed safely by drinkers.
ESG
Pillars
see pages 50 - 51
1
2
4
5
3
ESG
Pillars
see pages 50 - 51
6
C&C Group plc Annual Report 2021 29
C&C is the No.1 independent drinks distributor to the UK
and Ireland hospitality sectors, occupying a fundamental
role in the infrastructure of the UK and Irish drinks market
as key route-to-market partner for local and international
beverage brand owners.
Market
Distribute
With the on-trade either locked down or under restrictions
throughout FY2021, trading in our distribution businesses
have been significantly impacted. However, the inherent
strengths of our final mile distribution were reflected in the
distribution deals we have secured and our ability to react
to the easing of restrictions, notably in July, August and
September 2020.
One stop shop
With over 13,000 SKUs,
C&C’s distribution
platform provides a
comprehensive “one
stop shop” for licensed
premises owners.
Communities
The Group is committed to the
communities in which we operate
and undertakes a range of initiatives
that benefit our local communities; in
particular supporting charitable activities.
Stakeholder engagement
We aim to maintain open and positive
dialogue with all our stakeholders. Our
stakeholders are an important part
of our operations and are referenced
throughout this report.
Final Mile distribution
We have accelerated the optimisation of the
English and Scottish delivery networks which
is scheduled to be completed in June 2021.
This will consolidate volumes from three
separate networks into two, bringing all of
our final mile English distribution in-house,
driving on-going efficiencies and in turn
enhance future margins.
Enhanced logistics
Electric vehicles are being trialled for
deliveries in urban areas. An electric-
powered van has been utilised for small-
volume deliveries of Five Lamps craft
beer in Dublin and a trial of electric vans
at the Matthew Clark Park Royal depot. In
Scotland, we are investigating alternative
fuel types for vehicles; electric for Wellpark-
Cambuslang trips and hydrogen for longer
distance inter-depot trips.
1
ESG
Pillar
see page 50
Corporate GovernanceBusiness & StrategyFinancial Statements 30
Strategic Report - Key Performance Indicators
With approximately 80% of C&C’s revenues derived from the hospitality
sector which throughout FY2021 has either been in lockdown or trading
under restrictions, the impact on the Group and results reported has been
significant. As such, the key focus of the business has been on securing
the near term through renegotiation of our banking covenants and a
number of liquidity actions (detailed in the CEO and CFO Statements), with
net debt and liquidity forming the key financial metrics during FY2021.
Despite the challenges, we remain committed to our business model and believe our core brands,
critical infrastructure and relative position of strength in the market leaves C&C well positioned as the
hospitality sector reopens. As such we view that the Key Performance Indicators (“KPIs”) reported
in FY2020 will become the focus for the Board as trading builds over FY2022 and FY2023, for
completeness these have been included separately below as a comparative.
Our priority remains the health and wellbeing of our stakeholders alongside continuing to deliver
against our sustainability and social responsibility objectives.
Strategic Priority
KPI
Definition (see also financial
definitions on pages 236 and 237) Performance
FY2021 Focus
Net debt
To ensure the
appropriate
level of financial
gearing
To ensure the
appropriate level
of liquidity
Liquidity
Net debt (net debt
comprises borrowings
(net of issue costs) less
cash and excluding
lease liabilities) as part of
renegotiated covenants
Liquidity (liquidity
comprises cash on hand
and headroom available
in the Group’s revolving
credit facility) as part
of our renegotiated
covenants
Tonnes of CO2 emissions
Reduction
in CO2
emissions
To achieve
the highest
standards of
environmental
management
Waste
recycling
Tonnes of waste sent to
landfill
To ensure safe
and healthy
working
conditions
Workplace
safety
accident
rate
The number of injuries
that resulted in lost-
work days, per 100,000
hours working time in
production facilities
Comparative KPIs against those reported in FY2020.
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
€301.6m
€233.6m
€362.3m
€322.9m
€335.3m
€314.6m
Links to other
Disclosures
Group CFO
Review
page 43
Group CFO
Review
page 43
38,092t(i),(ii)
32,729t(i),(ii)
26,865t(ii)
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 50
0t
0t
0t
1.02
0.52
0.54
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 50
To achieve best
practice across the
Group, including
acquired businesses
Responsibility
Report
page 50
C&C Group plc Annual Report 2021 31
Strategic Priority
KPI
Definition (see also financial
definitions on pages 236 and 237)
Performance
To enhance
earnings growth
Operating
(loss)/profit
Operating (loss)/profit
(before exceptional items)
To enhance
earnings growth
Operating
Margin
Adjusted
diluted (loss)/
earnings per
share
Basic (loss)/
earnings per
share
To generate
strong cash
flows
Free Cash
Flow
Operating (loss)/profit
(before exceptional items),
as a percentage of net
revenue
Attributable (loss)/ earnings
before exceptional items
divided by the average
number of shares in issue
as adjusted for the dilutive
impact of equity share
awards
Attributable (loss)/ earnings
divided by the average
number of shares in issue
as adjusted for the dilutive
impact of equity share
awards
Free Cash Flow is a
non- GAAP measure that
comprises cash flow from
operating activities net of
capital investment cash
outflows which form part of
investing activities(before
exceptional items)
To ensure the
appropriate
level of financial
gearing and
profits to service
debt
To deliver
sustainable
shareholder
returns
Free Cash
Flow
Conversion
Ratio
The conversion ratio is the
ratio of free cash flow as
a percentage of EBITDA
(before exceptional items)
Net debt:
EBITDA
The ratio of net debt (net
debt comprises borrowings
(net of issue costs) less
cash less IFRS 16 Leases)
to Adjusted EBITDA
(excluding IFRS 16 Leases)
Progressive
dividend/
return to
shareholders
Total dividend per share
paid and proposed in
respect of the financial year
in question
Dividend
Payout Ratio
Dividend cover is Dividend/
Adjusted diluted EPS
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
FY19
FY20
FY21
€104.5m
€120.8m
(€59.6m)*
FY2020 Focus
To seek continuing
growth, through
revenue enhancement,
acquisition synergies
and cost control
Links to other
Disclosures
Group CFO
Review
page 43
6.6%
7.0%
(8.1%)*
26.6c
29.6c
(22.9c)*
23.4c
2.9c**
(33.8c)*
To achieve adjusted
diluted EPS growth in
real terms
Group CFO
Review
page 43
To achieve EPS growth
in real terms
Group CFO
Review
page 43
€96.9m
€155.1m
(€91.2m)*
To generate improved
operating cash flows
Group CFO
Review
page 43
80.8%
101.0%
NM
2.51x
1.77x
NM
15.31c
5.5c
-*
57.6%
18.6%
-*
Move towards medium
term target of 2.0 times
Net Debt/EBITDA
(excluding IFRS 16
leases)
Group CFO
Review page
Page 43
The Group will
continue to seek to
enhance shareholder
returns
* COVID-19 is having a material impact on current year KPIs.
** Basic earnings per share was impacted by exceptional items in the prior financial year.
Reference - Strategic Report - Key Performance Indicators
(i) FY19 and FY20 figures have been restated to include emissions for the wider C&C, previously only core C&C (pre Matthew Clark and Bibendum acquisition) was disclosed to
allow year-on-year comparison.
(ii) Market based scope 1 and 2 emissions as stated in annual Carbon Disclosure Project return.
Corporate GovernanceBusiness & StrategyFinancial Statements 32
Strategic Report - Management of Risks and Uncertainties
The Board has overall responsibility for
the Group’s system of internal control,
for reviewing its effectiveness and for
confirming that there is a process for
identifying, evaluating and managing the
principal risks affecting the achievement
of the Group’s strategic objectives. This
system of internal control can only provide
reasonable and not absolute, assurance
against material misstatement or loss.
The Group has established a risk
management process to ensure effective
and timely identification, reporting and
management of risk events that could
materially impact upon the achievement of
the Group’s strategic objectives and financial
targets. This involves the Board considering
the following:
• the nature and extent of the principal risks
facing the Group;
• the likelihood of these risks occurring;
• the impact on the Group should these
risks occur; and
• the actions being taken to manage these
risks to the desired level.
The Audit Committee oversees the
effectiveness of the risk management
procedures in place and the steps being
taken to mitigate the Group’s risks.
A process for identifying, evaluating
and managing significant risks faced by
the Group, in accordance with the UK
Corporate Governance Code 2018 and
the FRC Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting, has been in place for
the entire period and up to the date the
financial statements were approved. These
risks are reviewed by the Audit Committee
and the Board, who will also consider any
emerging risks for inclusion in the Group
Risk Register.
The risks facing the Group are reviewed
regularly by the Audit Committee with the
executive management team. Specific
annual reviews of the risks and fundamental
controls of each business unit are
undertaken on an ongoing basis, the results
and recommendations of which are reported
to and analysed by the Audit Committee
with a programme for action agreed by the
business units.
• the review of any internal control
weaknesses highlighted by the external
auditor, the Group Chief Financial
Officer, Head of Internal Audit, Company
Secretary and Group General Counsel
and the Audit Committee; and
Internal Controls and Risk
Management
The key features of the Group’s system
of internal control and risk management
include:
• review, discussion and approval of the
Group’s strategy by the Board;
• clearly defined organisation structures
and authority limits for the operational and
financial management of the Group and
its businesses;
• corporate policies for financial reporting,
treasury and financial risk management,
information technology and security,
project appraisal and corporate
governance;
• review and approval by the Board of
annual budgets for all business units,
identifying key risks and opportunities;
• monitoring of performance against
budgets on a weekly basis and reporting
thereon to the Board on a periodic basis;
• an internal audit function which reviews
key business processes and controls; and
• review by senior management and the
Audit Committee of internal audit findings,
recommendations and follow up actions.
The preparation and issue of financial
reports, including consolidated annual
financial statements is managed by the
Group Finance function with oversight from
the Audit Committee. The key features of
the Group’s internal control procedures with
regard to the preparation of consolidated
financial statements are as follows:
• the review of each operating division’s
period end reporting package by the
Group Finance function;
• the challenge and review of the financial
results of each operating division with the
management of that division by the Group
Chief Financial Officer;
• the follow up of any critical weaknesses to
ensure issues highlighted are addressed.
The Directors confirm that, in addition to
the monitoring carried out by the Audit
Committee under its terms of reference,
they have reviewed the effectiveness of
the Group’s risk management and internal
control systems up to and including the
date of approval of the financial statements.
This review had regard to all material
controls, including financial, operational and
compliance controls that could affect the
Group’s business. The Directors considered
the outcome of this review and found the
systems satisfactory.
Principal Risks and Uncertainties
During the year, the Audit Committee and
the Board carried out a robust assessment
of the principal risks facing the Group,
including those that would threaten its
business model, future performance,
solvency or liquidity. The principal risks and
uncertainties set out on pages 34 to 40
represent the principal uncertainties that
the Board believes may impact the Group’s
ability to effectively deliver its strategy and
future performance. The register of risks
includes the impact of COVID-19 which
is addressed in greater detail on page
34. The list does not include all risks that
the Group faces and it does not list the
risks in any order of priority. The actions
taken to mitigate the risks cannot provide
assurance that other risks will not materialise
and adversely affect the operating results
and financial position of the Group. These
principal risks are incorporated into the
modelling activity performed to assess the
ability of the Group to continue in operation
and meet its liabilities as they fall due for
the purposes of the Viability Statement on
pages 41 to 42.
C&C Group plc Annual Report 2021 33
COVID-19
Principal Risk Matrix
Prior to the start of FY2021 on 1 March
2020, COVID-19 began to have an
impact on global economies and on
businesses generally. This impact has
increased significantly since then. Similar
to businesses across many sectors and
specifically the drinks industry, government
imposed restrictions, while necessary to
slow the spread of COVID-19, have had a
significant impact on many of the Group’s
outcomes, principally the on-trade, as well
as the Group’s employees, many of whom
have been furloughed. Our primary concern
is for the welfare of our people, their families
and the communities in which we operate.
To that end, we have followed the advice
from the respective governments at all times
and will continue to do so to protect our
people and our operations.
The Audit Committee and the Board have
assessed the potential impact of COVID-19
on the business and worked closely with
the executive team to put in place measures
to protect the business and its prospects,
in the best interests of all stakeholders.
The Board continues to closely monitor the
impact of, and developments in respect of,
COVID-19 and the guidance of governments
and health authorities; and is overseeing
all business continuity actions being
undertaken by the Group’s management
team.
As the pandemic continues into FY2022,
it drives increasing risk trends which are
detailed below.
One principal risk category was split into
two standalone principal risks – Information
Technology; and Cyber Security and Data
Protection – reflecting the increase in online
trade and increased frequency of cyber-
attacks in the sector.
h
g
H
i
t
c
a
p
m
I
w
o
L
Low
1
15
7
5
12
3
11
8
14
9
2
10
4
6
13
Likelihood
High
Risks
1. COVID-19
2. Regulatory / Social Attitude Changes to Alcohol
3. Economic & Political
4. Sustainability & Climate Change
5. Change in Customer Dynamics &Group Performance
6. People & Culture
7. Health & Safety
8. Product Quality & Safety
9. Supply Chain Operations & Costs
10. Information Technology
11. Cyber Security & Data Protection
12. Business Growth, Integration and Change Management
13. Compliance with Laws &Regulations
14. Brand & Reputation
15. Financial & Credit
Corporate GovernanceBusiness & StrategyFinancial Statements 34
Strategic Report - Management of Risks and Uncertainties
(continued)
Risk Movement
New
No change
Increasing
Decreased
Risk & Uncertainties
Impact
COVID-19
The Group is exposed both to the
immediate impact of the COVID-19
pandemic and the uncertainty created
by the continuing measures taken by
governments to minimise the spread and
mitigate the impact of coronavirus on
society.
The Group’s business units have been
significantly disrupted by the Irish and UK
governments passing legislation to close
pubs, bars, restaurants and clubs, there is a
significant risk to our on-trade business and
the overall viability of the hospitality industry.
Operations may be impacted as staff self-
isolate if they or anyone within their homes
develop symptoms. In addition, employees
may be required to be temporarily or
permanently furloughed during the period.
Where there is a COVID-19 impact on the
other principal risks contained within this
table, we have provided an explanation of
what the impact is and the mitigations.
Mitigation
Risk
Trend
The Group acted quickly to respond to the emergence of the COVID-19 virus to
protect the health and wellbeing of employees and the interests of all stakeholders;
and ensure, as a minimum, it is in compliance with local government and health
authority guidelines.
The Group has implemented its business continuity planning and restricted all
unnecessary access to its operations in line with government and health service
guidelines and consistent with industry best-practice. All travel has been suspended
unless business critical, gatherings (such as customer tastings) are suspended and
visitors are no longer allowed on site. Staff are also not allowed to move between
production facilities to minimise exposure risk.
The Group is ensuring that all employees who can work from home are doing so
safely. The Group is also offering support to employees who have children in school
and has put in place additional measures to aid personal wellbeing.
The Group has strengthened its financial position through renegotiating the timing of
term loan repayment, securing covenant waivers from lenders and diversifying our
sources of funding through the successful issue of approximately €140 million of US
private placement notes.
In May 2021, the Group announced an equity raise to strengthen the balance sheet
and reduce leverage to deal with the challenging environment and ensure the Group
remains resilient in the event of further negative developments in the pandemic.
The Group has suspended all unnecessary capital expenditure, reduced marketing
spend, reduced other operating costs and implemented a range of working capital
controls to protect liquidity including furloughing all non-essential employees.
The Group has put in place measures to help affected customers including in the
course of the pandemic, a three month holiday on capital and interest repayments
to loan customers, full credit or ‘new for old’ on un-broached kegs, together with a
dedicated helpline to offer advice and guidance around government support initiatives
that have been introduced and how to access them, as well as assistance and advice
in relation to hygiene measures.
The Group will continue to monitor guidance from governments and health authorities
and implement measures in line with best practice.
C&C Group plc Annual Report 2021 35
Risk
Trend
Impact
Mitigation
Regulatory and Social Attitude Changes to Alcohol
The Group may be adversely affected by
changes in government regulations affecting
alcohol pricing (including duty), sponsorship
or advertising.
The Group and business units continue to engage with trade bodies to ensure any
proposed changes to legislation and restrictions are appropriate within the industry.
The Group is actively involved in BBPA and also complies with all Portman Group
guidance.
Within the context of supporting responsible drinking initiatives, the Group supports
the work of its trade associations to present the industry’s case to government.
The Group has developed low, and zero, alcohol options for brands in order to
address legislation and possible duty increases as well as appeal to those consumers
looking for a healthier choice.
The Board and management will continue to consider the impact on the Group’s
businesses, monitor developments and engage with the UK, Irish and Scottish
governments to help ensure a manageable outcome for our businesses.
The Group took a number of immediate measures to respond to the impact of the
emergence of COVID-19, some of which continue to be in operation to mitigate its
ongoing impact.
Group businesses are active members in respected industry trade bodies including
being a steering committee member of the all-party UK Parliamentary Beer Group.
On an ongoing basis, the Group seeks, where appropriate, to mitigate currency risk
through hedging and structured financial contracts and take appropriate action to help
mitigate the consequences of any decline in demand within its markets.
We have implemented action plans to protect the profitability and liquidity of the Group
and mitigate a significant proportion of our cost base. We continue to review our cost
base for additional savings.
We remain vigilant to changes in local jurisdictions and retain the flexibility to take
appropriate mitigating action as necessary.
Economic and Political
Our business, financial results and
operations may be adversely affected
by economic or political instability and/
or uncertainty, in particular relating to the
impact of the COVID-19 pandemic.
The Group may also be impacted by the
UK’s exit from the European Union.
The Group’s performance is also impacted
by potential recessions, inflation, exchange
rates, taxation rates and social unrest.
The full extent of the financial impacts of
COVID-19 on economies is as yet unknown.
The stress placed on political systems to
combat the social and economic impacts of
COVID-19 may result in increased political
instability in some countries.
Corporate GovernanceBusiness & StrategyFinancial Statements 36
Strategic Report - Management of Risks and Uncertainties
(continued)
Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Risk
Trend
Sustainability and Climate Change
Failure to implement policies and meet
required sustainability and ethical standards
and social perceptions could significantly
impact C&C’s reputation as well as
potentially impact future growth.
The Group seeks to operate as efficiently and sustainably as possible. There are
objectives in place to continually reduce emissions in line with the Paris Agreement.
The Group is seeking to continually reduce waste levels and also the use of single
use plastics. The Group continues to be proactive in conserving water usage and
minimising energy usage.
Both Clonmel and Wellpark sites continue to be ISO 14001 accredited for an effective
environmental management system.
The Group ensures strong overall corporate social responsibility of suppliers is
reviewed and assessed both on an ongoing basis and as part of new tenders to ensure
sustainability and ethical practices are a fundamental part of the supply chain.
Customer and Consumer Dynamics and Group Performance
Consumer preference may change, new
competing brands may be launched and
competitors may increase their marketing
or change their pricing policies. Failure to
respond to competition and/or changes
in customer preferences could have an
adverse impact on sales, profits and cash
flow within the Group.
COVID-19 may have an impact on the
viability of a certain cohort of the Group’s
customers and on underlying consumer
behaviour and preferences.
Through diversification, innovation and strategic partnerships, we are developing our
product portfolio to enhance our offering of niche and premium products to satisfy
changing consumer requirements including the production of low and non-alcoholic
variants of our brands.
The Group has a programme of brand investment, innovation and product
diversification to maintain and enhance the relevance of its products in the market.
The Group also operates a brand‐led model in our core geographies with a
comprehensive range to meet consumer needs.
In order to specifically assist customers manage the impact of COVID-19, the Group
has given a ‘holiday’ on capital and interest repayments to loan customers, full credit
or ‘new for old’ on un-broached kegs, together with a dedicated helpline to offer
advice and guidance around government support initiatives that have been introduced
and how to access them as well and assistance and advice in relation to hygiene
measures.
People and Culture
The Group’s performance is dependent
on the skills and experience of its high-
performing colleagues throughout the
business, which could be affected by their
loss or the inability to recruit or retain them.
The Group seeks to mitigate this risk through appropriate training, remuneration
policies and succession planning.
The Group also seeks to ensure good employee relations through engagement and
dialogue.
Failure to continue to evolve our culture,
diversity and inclusion could impact our
reputation and delivery of our strategy.
In respect of the impact of COVID-19 on employees, the Group has implemented an
extensive range of measures to provide the safest working environment possible for
our people.
The closure of the on-trade and substantial
parts of the business during the year has
had a significant impact on the Company’s
workforce.
These measures include reducing all unnecessary access to the Group’s operating
facilities and ensuring that all employees who can work from home are doing so. The
Group is also offering support to employees who have children in school and has put
in place additional measures to aid personal wellbeing.
The Group employed a number of measures to retain as many members of the
workforce as possible including through the use of government furlough schemes.
C&C Group plc Annual Report 2021
37
Risk
Trend
Impact
Health and Safety
Mitigation
A health and safety related incident could
result in serious injury to the Group’s
employees, contractors, customers and
visitors, which could adversely affect
our operations and result in reputational
damage, criminal prosecution, civil litigation
and damage to the reputation of the Group
and its brands.
The continuing COVID-19 pandemic
presents a specific risk to the health
and welfare of the Group’s employees,
as measures required to be adopted by
societies and businesses to help prevent
the spread of the virus adversely effect our
employees.
Product Quality and Safety
The quality and safety of our products is
of critical importance and any failure in this
regard could result in a recall of the Group’s
products, damage to brand image and civil
or criminal liability.
The COVID-19 virus continues to present
additional risk to the safe production of the
Group’s products.
The Group has a Health, Safety and Environmental (‘HSE’) team who are responsible
for ensuring that the Group complies with all health, safety and environmental y laws
and regulations with ongoing monitoring, reporting and training.
The Group has established protocols and procedures for incident management and
product recall and mitigates the financial impact by appropriate insurance cover.
The Group has specific business continuity plans and a range of measures to
protect the business and the health and wellbeing of employees including strict
safety, hygiene and two metre social distancing measures. The safety and wellbeing
of our employees has been, and continues to be, our overriding priority. Executive
Management are monitoring events closely with regular Board oversight evaluating the
impact and designing appropriate response strategies.
The Group has implemented quality control and technical guidelines which are
adhered to across all sites. Group Technical continually monitor quality standards and
compliance with technical guidelines.
The Group also has quality agreements with all raw material suppliers, setting out
our minimum acceptable standards. Any supplies which do not meet the defined
standards are rejected and returned.
The Group has enacted specific business continuity plans and a range of measures
to protect the business in line with the advice of governments and local health
authorities; and ensure the safe production and distribution of the Group’s products.
Supply Chain Operations and Costs
Circumstances such as the prolonged
loss of a production or storage facility,
disruptions to its supply chains or critical
IT systems and reduced supply of raw
materials may interrupt the supply of the
Group’s products, adversely impacting
results and reputation.
The Group seeks to mitigate the operational impact of such an event through business
continuity plans, which are tested regularly to ensure that interruptions to the business
are prevented or minimised and that data is protected from unauthorised access,
contingency planning, including involving the utilisation of third party sites and the
adoption of fire safety standards and disaster recovery protocols. The Group seeks to
mitigate the financial impact of such an event through business interruption and other
insurance covers.
COVID-19 also poses the risk of an
interruption to the supply of raw materials
or to the effective operation of the Group’s
manufacturing facilities.
Also, there is a risk of increased input costs
due to poor harvests and price of inputs.
The Group has enacted specific business continuity plans including a range of
measures to protect the integrity of production and distribution facilities and increased
packaging capacity to meet increased take home demand. To date we have
maintained strong levels of service into our customer base. We have taken action
to ensure our facilities are staffed sufficiently, that our production plans optimise the
capacity available at each of our sites and that we prioritise the SKUs that current
consumer demand requires. The Group is also working closely with its suppliers to
protect the integrity and consistency of supply of raw materials.
The Group seeks to minimise input risks through long‐term or fixed price supply
agreements. The Group does not seek to hedge its exposure to commodity prices by
entering into derivative financial instruments.
Corporate GovernanceBusiness & StrategyFinancial Statements 38
Strategic Report - Management of Risks and Uncertainties
(continued)
Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Risk
Trend
Information Technology
The Group relies on IT systems and
supporting infrastructure to manufacture
and trade effectively. Any significant
disruption or failure of key systems could
result in business disruption and revenue
loss, accident or misappropriation of
confidential information.
Failure to properly manage existing systems,
or the implementation of new IT systems
may result in increased costs and/or lost
revenue, and reputational damage.
The Group has continued to focus on modern cloud-based assets which are naturally
more resilient to failure.
Business and IT continuity has been maintained during the coronavirus pandemic
by updating operating models to ensure the safety of our workforce and customers.
Nevertheless, the risk of disruption or failure of critical IT infrastructure, as well as
process failure remains a significant risk.
Cyber and Information Security and Data Protection
The Group’s IT security controls including gateway firewalls, intrusion prevention
systems, security incident monitoring and virus scanning have, where appropriate,
been reviewed, tested and updated during the year. Regular communications are
sent out to colleagues containing advice on IT security particularly in relation to home
working and phishing emails.
The Group’s approach is one of ongoing enhancement of controls as threats evolve
with the target being to align controls, and in particular to implement any new services
or changes to the environment.
The Group also has a suite of information security policies in place including data
protection (GDPR) and electronic information and communications.
The Group has enacted specific business continuity plans including co-ordination
with key third party IT suppliers and consideration of keyman risk for the Group’s IT
personnel.
We have implemented configuration changes to block phishing emails, increased
awareness campaigns to help our people identify these types of attacks, and
increased frequency of penetration testing.
The recent incident affecting Matthew Clark and Bibendum IT systems has
emphasised the need for continued focus on information security. The Group has
commenced a detailed review of its information security and cyber preparedness
policies and processes.
Failure of our IT infrastructure or key IT
systems may result in loss of information,
inability to operate effectively, financial or
regulatory penalties, loss of financial control
and negatively impact our reputation.
Failure to comply with legal or regulatory
requirements relating to data security
(including cybersecurity) or data privacy in
the course of our business activities, may
result in reputational damage, fines or other
adverse consequences, including criminal
penalties and consequential litigation,
adverse impact on our financial results or
unfavourable effects on our ability to do
business.
COVID-19 also poses specific IT risks
including the potential for key personnel to
contract the virus, the Group’s IT support
services being unable to discharge their
obligations due to the impact of the virus
on their own operations or an increase in
the number of malicious emails sent to
colleagues working from home.
The risk level continues to rise as more
employees work from home and this has
led to an increase in the risk of malware and
phishing attacks across all organisations.
C&C Group plc Annual Report 2021 39
Risk
Trend
Impact
Mitigation
Business Growth, Integration and Change Management
Significant projects and acquisitions have formal leadership and project management
teams to deliver integration.
Regular Group communications ensure effective information, engagement and
feedback flow to support cultural change.
The Executive Management team oversees change management and integration risks
through regular meetings.
As the Group reacts to the effects of
the COVID-19 pandemic, it is necessary
to adjust to change and assimilate new
business models. The breadth and pace
of change can present strategic and
operational challenges.
Business integration and change that
are not managed effectively could result
in unrealised synergies, poor project
governance, poor project delivery, increased
staff turnover, erosion of value and failure to
deliver growth.
Compliance with Laws and Regulations
The Group has in place permanent legal and compliance functions that ensure
the Group is aware of all new regulations and legislation, providing updated
documentation, training and communication across the Group.
The Group has a code of conduct, which is approved by the Board and supported
by a wide range of policies, including modern slavery, anti-bribery and corruption and
diversity.
The Group maintains appropriate internal controls and procedures to guard against
economic crime and imposes appropriate monitoring and controls on subsidiary
management.
As part of our ongoing process of continuous improvement, we have expanded our
web-based learning platform to provide increased engagement on key regulatory
and compliance topics for our employees and to communicate our standards and
expectations clearly. Internal Audit regularly reviews internal controls and analyses
financial transactions to mitigate the risk of error or fraud.
The Group operates in an environment
governed by strict and extensive regulations
to ensure the safety and protection of
customers, shareholders, employees
and other stakeholders. These laws and
regulations include hygiene, health and
safety, the rules of the London Stock
Exchange and competition law. Changing
laws and regulation may impact our ability
to market or sell certain products or could
cause the Group to incur additional costs
or liabilities that could adversely affect its
business. Moreover, breach of our internal
global policies and standards could result in
severe damage to our corporate reputation
and/or significant financial penalty.
Companies face increased risk of fraud and
corruption, both internally and externally,
due to financial pressures and changes
to ways of working as a consequence of
COVID-19.
Corporate GovernanceBusiness & StrategyFinancial Statements 40
Strategic Report - Management of Risks and Uncertainties
(continued)
Risk Movement
New
No change
Increasing
Decreased
Impact
Mitigation
Risk
Trend
Brand and Reputation
The Group faces considerable risk if we are
unable to uphold high levels of consumer
awareness, retain, attract key associates
and sponsorships for our brands and
inadequate marketing investment to support
our brands.
Maintaining and enhancing brand image
and reputation through the creation
of strong brand identities is crucial for
sustaining and driving revenue and profit
growth.
The closure of on-trade outlets and a
reduction in the Group’s marketing and
brand advertising due to COVID-19 may
impact the Group’s brand health scores.
Financial and Credit
The Group is subject to a number of
financial and credit risks such as adverse
exchange and interest rate fluctuations,
availability of supplier credit, credit
management of customers and possible
increase to pension funds deficits and cash
contributions.
COVID-19 may have a further impact on
the Group’s liquidity, due to lower on-trade
revenues; customers’ ability to honour
their obligations, and the Group’s ability to
access supplier credit.
Non-conformities of accounting and
financial controls could impair the
accuracy of the data used for internal
reporting, decision-making and external
communication.
To mitigate this risk, C&C has defined values and goals for all our brands. These form
the foundation of our product and brand communication strategies.
Central to all our brand image initiatives is ensuring clear and consistent messaging to
our targeted consumer audience.
Executive Management, Group Legal and internal/external PR consultants work
together to ensure that all sponsorship and affiliations are appropriate and protect the
position of our brands.
The Group is monitoring the impact of the rapidly changing trading environment on the
Group’s brands and will make necessary investment decisions to protect the Group’s
brand health scores and reputation.
The Group seeks to mitigate currency risks, where appropriate, through hedging and
structured financial contracts to hedge a portion of its foreign currency transaction
exposure. It has not entered into structured financial contracts to hedge its translation
exposure on its foreign acquisitions.
In relation to pensions, continuous monitoring, taking professional advice on
the optimisation of asset returns within agreed acceptable risk tolerances and
implementing liability‐management initiatives.
A range of credit management controls are in place which are regularly monitored by
management to minimise the risk and exposure.
The Group is working with all customers and suppliers to minimise the adverse impact
of COVID-19 on the business.
Contracts may be renegotiated. We continue to focus on retention and new sales
opportunities as customers move to more resilient and “best in class” operations.
A range of key internal financial controls, such as segregation of duties, authorisations
and detailed reviews are in place with regular monitoring by management to ensure
the accuracy of the data for reporting purposes.
C&C Group plc Annual Report 2021 41
Assessment of the Group’s
Prospects
Going Concern
After making enquiries, the Directors have
a reasonable expectation that the Group
has adequate resources to continue in
operational existence for at least twelve
months from the date of this report. That
expectation factors in the current and
expected impact of COVID-19 on the
financial performance and cash flows
of the Group. Please refer to the “Going
Concern” section of the Audit Committee
Report on pages 87 to 88 of this Annual
Report for further detail. The going concern
assessment indicated that even in a
reasonable worst case scenario the Group,
absent the impact of the potential rights
issue, has sufficient access to liquidity to
operate over this assessment period and
to satisfy the Group’s minimum liquidity
and gross debt covenant requirements.
Accordingly, we continue to adopt the going
concern basis in preparing the Group’s and
Company’s financial statements.
Viability Statement
As set out in Provision 31 of the UK
Corporate Governance Code, the Directors
have assessed the prospects of the Group
and its ability to meet its liabilities as they fall
due over the medium-term. Specifically, the
Directors have assessed the viability of the
business over a two-year period to February
2023. The assessment period has been
adjusted to reflect the unique aspects of
on-trade reopening within the Group’s core
markets in England, Scotland and Ireland
over the coming months and to align with
the working capital statement prepared in
contemplation of the proposed rights issue.
The Directors intend to return to a three-year
assessment period next year. In conducting
the assessment the Directors have taken
account of the Group’s current position and
prospects, the Group’s strategy, the Board’s
risk appetite and the Group’s Principal Risks
and Uncertainties as set out above and how
these are identified, managed and mitigated.
Based on this assessment, which includes
a robust assessment of the potential impact
that these risks would have on the Group’s
business model, future performance,
solvency and liquidity, the Directors have a
reasonable expectation that the Group will
be able to continue in operation and meet its
liabilities as they fall due over the two-year
period to February 2023 .
• Furthermore, beyond this period,
performance is impacted by global
macroeconomic and other considerations,
which become increasingly difficult to
predict, a good example of which is
the impact of the current COVID-19
pandemic.
Group’s strategic planning process
The Board considers annually a strategic
plan. Current year business performance
is reforecast during the year and a more
detailed budget is prepared for the following
year. The most recent financial plan was
approved by the Board in March 2021 and
subsequently updated in April 2021 in the
light of the recent partial re-openings of
hospitality in UK nations. The Directors
acknowledge the heightened uncertainty
of the Group’s strategic plans in the
current environment and as a result have
considered a range of different scenarios.
The plan is reviewed and approved by the
Board, with involvement from the Group
CEO, Group CFO and the management
team. Part of the Board’s role is to consider
the appropriateness of key assumptions,
considering the external environment,
business strategy and model including the
impact of COVID-19.
Period of Assessment
The Directors have determined that the
two year period to February 2023 is an
appropriate period over which to provide
its viability statement. This period has been
considered for the following reasons:
• The business model can be evolved for
significant changes in market structure
or government policy over the two year
period;
• Two years is the reporting period
applicable to the launch of the rights issue
announced on 26 May 2021;
• For major investment projects two
years is considered by the Board to
be a reasonable time horizon for an
assessment of the outcome; and
Viability Assessment and COVID-19
In assessing the impact of COVID-19
pandemic the Directors considered a base
case scenario and a reasonable worst
case scenario, both of which exclude any
upside from the potential rights issue.
Key metrics such as cash flow, including
working capital and the restoration of
working capital improvements following
the expected outflows in FY2022, interest
cover, liquidity, covenant compliance and
headroom in covenants, were subject to
sensitivity testing by flexing a number of the
key financial assumptions in order to assess
the impact of the Group’s Principal Risks
and Uncertainties, particularly in respect of
the extent and timing of the recovery in the
on-trade business from the impact of the
COVID-19 pandemic.
The Group’s scenarios assume:
• The base case projection assumes on-
trade recovery in England and Scotland
continuing from April and May 2021
respectively, Ireland’s on-trade recovery
commencing from June 2021,
• The pace of recovery is assumed to be
similar across each territory once on-
trade restrictions are eased, with gradual
improvement to volumes,
• The reasonable worst case projection
assumes the same timeline for re-opening
of the on-trade as the base case; however
volumes are projected to hold flat at
modest levels for the remainder of the
summer as many on-trade restrictions
are assumed to remain in place over that
period and then build more gradually from
that point,
• The reasonable worst case projection
contains linked working capital
assumptions reflecting a more challenged
supplier credit environment,
Corporate GovernanceBusiness & StrategyFinancial Statements 42
Strategic Report - Management of Risks and Uncertainties
(continued)
• An assumption that after an extended
lock-down, the on-trade reopens with
volumes that do not recover above 90%
in the base case scenario and 80% in the
reasonable worse case scenario of the
comparable FY2020 period for the rest of
the two year period.
The base case and reasonable worst
case scenarios also consider:
• Taking action in addressing its fixed cost
base with a cost reduction programme
expected to deliver annualised savings of
€18 million.
• Accelerated the optimisation of the
English and Scottish delivery networks
which is scheduled to be completed in
June 2021. This will consolidate volumes
from three separate networks into two,
bringing all of our final mile English
distribution in house, driving ongoing
efficiencies and in turn enhanced future
margins.
• Postponing non-committed capital
expenditure; temporary management
salary reductions and prioritising any
discretionary spending.
• Renegotiating the timing of term
loan repayment, securing covenant
waivers from lenders and the issuing of
approximately €140 million of US private
placement notes.
• Implementing various working capital
initiatives, including the negotiation
of temporary extensions to supplier
payments terms and agreeing deferrals
with the UK and Irish tax authorities.
• Availing of government furlough schemes
to support 2,000 colleagues’ jobs that
were directly and adversely impacted
by the pandemic and restrictions on
the hospitality sector over the past 12
months; and,
• Pausing the payment of dividends.
Based on the facts available at the time
of reporting, the Directors believe the
conclusions reached in the viability testing
remain appropriate.
As the pandemic emerged, in order to
strengthen the Group’s financial position at
March 2020, the Group increased funding
sources through issuing of approximately
€140 million US private placement notes.
As at 28 February 2021, the Group had
total undrawn committed credit facilities of
€206.9 million, and €107.7 million cash net
of overdrafts.
In May 2021, the Group announced a
rights issue raise to strengthen the balance
sheet and reduce leverage to deal with
the challenging environment and ensure
the Group remains resilient in the event
of further negative developments in the
pandemic.
The Audit Committee reviews the output of
the viability assessment in advance of final
evaluation by the Board. Having reviewed
the current performance, forecasts, debt
servicing requirements, total facilities
and risks, the Board has a reasonable
expectation that the Group has adequate
resources to continue in operation, meet its
liabilities as they fall due and retain sufficient
available cash across the assessment
period.
The Board therefore has a reasonable
expectation that the Group will remain viable
over the period of assessment.
Strategic Report Approval
The Strategic Report, outlined on pages
2 to 67, (including the assessment of
the Group’s prospects as set out above)
incorporates the Highlights, the Business
Profile and Key Performance Indicators,
the Chair’s Statement, the Group Chief
Financial Officer’s report, the Sustainability
Report and the Management of Risks and
Uncertainties section of this document.
This report was approved by the Board of
Directors on 26 May 2021.
Mark Chilton
Company Secretary
C&C Group plc Annual Report 2021 43
Patrick McMahon
Group Chief Financial
Officer
Group Chief Financial Officer’s Review
Results For The Year
COVID-19 and related restrictions have had an unprecedented
impact on the drinks and hospitality sector, impacting all of the
Group’s stakeholders and it has had a material impact on our
results for the year ended 28 February 2021.
C&C is reporting net revenue of €736.9 million,
operating loss(i) of €59.6 million, liquidity(ii) of €314.6
million and net debt(iii) excluding IFRS 16 Leases, of
€362.3 million. Net debt(iii) including IFRS 16 Leases
was €441.9 million. The Group returned to profitability
and underlying cash generation once trade restrictions
were eased in July, August and September 2020.
Our core brands performed strongly in FY2021, with
Bulmers, Magners and Tennent’s each gaining market
share(vii) in the off-trade channel.
The Group’s performance in FY2021 has
been profoundly impacted by COVID-19
and the associated on-trade restrictions in
our core markets. As a direct result, and on
a constant currency basis(iv), net revenue
for the Group of €736.9 million was down
56.1%.
Our core brands performed strongly in the
off-trade channel with Bulmers, Magners
and Tennent’s all gaining market share(vii)
however, the impact of the lockdowns and
restrictions in the on-trade resulted in the
Group reporting an operating loss for the
year of €59.6 million(i), down from a profit of
€118.6 million in the prior year(i)(iv). The Group
returned to profitability and underlying cash
generation once trade restrictions were
eased in July, August and September 2020.
Cash and liquidity have been a key focus
for the Group throughout FY2021. In March
2020, the Group announced the successful
issue of approximately €140 million of US
Private Placement notes (“USPP”). The
unsecured notes have maturities of 10 and
12 years and diversify the Group’s sources
of debt finance. Post year end, the Group
announced a rights issue, as outlined
in further detail below, thus ensuring the
business has the optimum capital structure
and financing to emerge from COVID-19 in a
position of strength to pursue its strategy.
As a direct consequence of the impact of
COVID-19, the Group successfully negotiated
waivers on its debt covenants from its
lending group for FY2021 and these have
been extended as outlined in detail below.
During the current financial year, the Group
extended the repayment period of its term
loan and implemented various working
capital initiatives, including the negotiation of
temporary extensions to suppliers, and UK
and Irish tax authorities’ payments terms.
Payment of dividends were paused and
the Group availed of Government furlough
schemes across the UK and Ireland to
support 2,000 colleagues’ jobs that were
directly and adversely impacted by the
pandemic and restrictions on the hospitality
sector.
Post year end, the Group has also
announced that the outcome of a cost
reduction programme it had undertaken
would deliver annualised savings of €18
million against its pre COVID-19 cost base.
Corporate GovernanceBusiness & StrategyFinancial Statements 44
Group Chief Financial Officer’s Review
(continued)
Accounting Policies
Exceptional items
As required by European Union (‘EU’) law,
the Group’s financial statements have been
prepared in accordance with International
Financial Reporting Standards (IFRSs)
as adopted by the EU, and as applied in
accordance with the Companies Act 2014,
applicable Irish law and the Listing Rules of
the UK Listing Authority. Details of the basis
of preparation and the accounting policies are
outlined on pages 151 to 166.
Finance Costs, Income Tax and
Shareholder Returns
Net finance costs before exceptional items
of €19.5 million were incurred in the financial
year (FY2020: €19.8 million). The Group
successfully negotiated financial covenant
waivers as a consequence of the impact of
COVID-19 with its lenders. Exceptional finance
costs of €7.9 million were incurred directly
associated with these waivers including
waiver fees, increased margins payable and
other professional fees associated with the
covenant waivers.
Income tax credit for the year was €14.4 million
(FY2020: charge €12.3 million) excluding
exceptional items and equity accounted
investments’ tax credit/charge. The credit
primarily arises due to the recognition of a
deferred tax asset on the losses incurred by
the Group in the financial year.
Due to the emergence of COVID-19, no final
dividend is being declared and no interim
dividend was paid. In the current financial
year, a payment of €0.4 million was made to
recipients of dividend accruing share-based
payment awards. A credit of €0.2 million was
recognised in the Income Statement as a
consequence of dividend accruing share-
based payment awards now deemed to be
not capable of achieving their performance
conditions, and hence both the share-based
payment award and related dividend accrual
were deemed to have lapsed. In the prior
financial year, total dividends to ordinary
shareholders amounted to €48.1 million, of
which €29.7 million was paid in cash, €18.1
million or 37.6% was settled by the issue of
new shares and €0.3 million was accrued with
respect to LTIP dividend entitlements.
Total exceptional items, before the impact of
taxation, of €36.1 million were incurred in the
current financial year.
COVID-19
The Group has continued to account
for the ongoing COVID-19 pandemic as
an exceptional item and has incurred an
exceptional charge of €4.6 million from
operating activities at 28 February 2021
in this regard. The Group reviewed the
recoverability of its debtor book and
advances to customers and booked a credit
of €6.1 million with respect to its provision
against trade debtors and a charge of
€1.2 million with respect to its provision
for advances to customers. The Group
incurred exceptional charges of €5.8 million
with respect to inventory, this related to
inventory that became obsolete, all as a
consequence of the COVID-19 restrictions.
The Group incurred costs of €1.7 million with
respect to a provision for lost kegs, €0.3
million with respect to the write off of an IT
intangible asset where the project will now
not be completed, due to COVID-19 and a
net credit of €0.6 million with respect to the
release of a trade provision. Other costs of
€2.3 million were incurred, which included
site improvement costs, impairment of brand
dispense equipment and an excess holiday
accrual all directly linked to the pandemic.
Restructuring costs
Restructuring costs of €8.1 million were
incurred in the current financial year. These
included severance costs of €6.8 million,
of which €4.9 million was incurred with
respect to the restructuring of the Group as
a consequence of the COVID-19 pandemic
and €1.9 million arose as a consequence
of the optimisation of the delivery networks
in England and Scotland. The Group also
incurred additional costs of €2.0 million with
respect to the optimisation of the delivery
networks in England and Scotland which
was offset by a credit of €0.7 million relating
to the profit on disposal of a property as
a direct consequence of the optimisation
project.
Equity accounted investments’
exceptional items
The hospitality and pub industry in the United
Kingdom have been significantly curtailed
by lockdowns and trading restrictions
since March 2020. The Group assessed
the carrying value of its equity accounted
investments at 28 February 2021, in light of
the underutilisation of their pub assets as
a direct consequence of such lockdowns,
and recorded an impairment charge of €8.9
million with respect to its carrying value of
its investment in Admiral Taverns and €0.2
million with respect to the carrying value of
its investment in Drygate Brewing Company
Limited.
The Group also incurred €8.8 million with
respect to its share of Admiral Taverns’
exceptional items. These included a charge
of €7.0 million with respect to the Group’s
share of the revaluation loss arising from the
fair value exercise to value Admiral’s property
assets at 28 February 2021. As a result of
the same valuation exercise, a loss of €0.4
million with respect to the Group’s share
of the revaluation was recognised in Other
Comprehensive Income. The Group also
recognised €1.8 million with respect to its
share of Admiral’s other exceptional items for
the year, including €0.8 million with respect
to a provision against trade debtors as a
consequence of COVID-19, €0.5 million with
respect to an Asbestos provision and €0.5
million in relation to other charges directly
attributable to COVID-19.
Impairment of property, plant & equipment
Property (comprising freehold land &
buildings) and plant & machinery are valued
at fair value on the Consolidated Balance
Sheet and reviewed for impairment on an
annual basis. During the current financial year,
as outlined in detail in note 11, the Group
engaged external valuers to value the freehold
land & buildings and plant & machinery at
the Group’s Clonmel (Tipperary), Wellpark
(Glasgow) and Portugal sites. Using the
valuation methodologies, this resulted in a net
revaluation loss of €1.2 million accounted for
in the Consolidated Income Statement and a
gain of €0.9 million accounted for within Other
Comprehensive Income.
C&C Group plc Annual Report 2021 45
Other
Other exceptional costs of €2.2 million
were incurred by the Group in the year with
respect to provision against legal disputes.
Profit on disposal
During the current financial year, as outlined
in further detail in note 10, the Group
disposed of its Tipperary Water Cooler
business for an initial consideration of €7.4
million, realising a profit of €5.8 million on
disposal.
Exceptional finance charges
As outlined previously, during the current
financial year, the Group successfully
negotiated covenant waivers due to the
impact of COVID-19 with its lenders. Costs
of €7.9 million were incurred in the year
directly associated with these waivers
including waiver fees, increased margins
payable and other professional fees
associated with covenant waivers.
Balance Sheet Strength and Debt
Management
Balance sheet strength provides the
Group with the financial flexibility to pursue
its strategic objectives. It is our policy to
ensure that a medium/long-term debt
funding structure is in place to provide us
with the financial capacity to promote the
future development of the business and to
achieve its strategic objectives. To ensure
the business is equipped with the optimum
capital structure and financing to emerge
from the COVID-19 pandemic in a position of
strength, we announced on 26 May 2021 a
rights issue as outlined in more detail below.
The Group manages its borrowing
requirements by entering into committed
loan facility agreements. In July 2018,
the Group amended and updated its
committed €450 million multi-currency
five year syndicated revolving loan facility
and executed a three-year Euro term loan.
Both the multi-currency facility and the
Euro term loan were negotiated with eight
banks, namely ABN Amro Bank, Allied Irish
Bank, Bank of Ireland, Bank of Scotland,
Barclays Bank, HSBC, Rabobank and Ulster
Bank. In FY2020 the Group availed of an
option within the Group’s multi-currency
revolving loan facility agreement to extend
the tenure for a further 364 days from
termination date. The multi-currency facility
agreement is therefore now repayable
in a single instalment on 11 July 2024.
During the current financial year, the Group
renegotiated an extension of the repayment
schedule of the Euro term loan with its
lenders and the last instalment is now
payable on 12 July 2022.
In March 2020, the Group completed the
successful issue of new USPP notes. The
unsecured notes, denominated in both Euro
and Sterling, have maturities of 10 and 12
years and diversify the Group’s sources of
debt finance. The Group’s Euro term loan
included a mandatory prepayment clause
from the issuance of any Debt Capital
Market instruments however a waiver of the
prepayment was successfully negotiated
in addition to a waiver of a July 2020
repayment, as a consequence of COVID-19,
which now becomes payable with the last
instalment in July 2022.
As outlined previously, as a direct
consequence of the impact of COVID-19,
the Group successfully negotiated waivers
on its debt covenants from its lending group
for FY2021, and these have been extended
up to, but not including, the August 2022
test date whether or not the rights issue is
achieved. Conditional on a Minimum Equity
Raise(viii) being achieved, the debt covenants
for 31 August 2022 were also renegotiated
to increase the threshold of the Group’s
Net Debt/Adjusted EBITDA covenant to not
exceed 4.5x and to reduce the Interest cover
covenant to be not less than 2.5x.
As part of the agreement reached to waive
the debt covenants, a minimum liquidity
requirement and a gross debt restriction
have been put in place. Where the Minimum
Equity Raise(viii) is not achieved, the minimum
liquidity requirement and a gross debt
restriction will remain in place until the
Group is able to show compliance with
its original debt covenant levels at the 31
August 2022 or any subsequent test date,
and, with respect to the minimum liquidity
requirement, the Group must maintain
liquidity of at least €150 million each month
(except for July 2021 and December 2021
when the minimum amount of liquidity is €120
million, June 2022 when the minimum amount
of liquidity is €80 million and July 2022 when
the minimum amount of liquidity is €100
million). A monthly gross debt cap of €750
million in the current financial year applied
which will continue during FY2022.
Where the Minimum Equity Raise(viii) is
achieved, the minimum liquidity requirement
and a gross debt restriction will remain
in place until the Group is able to show
compliance with its original debt covenant
levels at the 28 February 2023 or any
subsequent test date, and, with respect
to the minimum liquidity requirement, the
Group must maintain liquidity of at least €150
million each month. A monthly gross debt
cap of €750 million in the current financial
year also applied which will continue during
FY2022 but will reduce to €700 million post a
Minimum Equity Raise(viii) being achieved. The
minimum liquidity requirement and a gross
debt restriction can be lifted earlier in certain
circumstances.
The Group complied with these new minimum
liquidity and gross debt requirements during
the financial year.
The Group maintains a £200 million
receivables purchase facility.
Cash generation
Summary cash flow for the year ended
28 February 2021 is set out in the table
below. Overall liquidity remains robust. The
reduction in the Group’s receivables purchase
programme, as a direct consequence of
reduced trading, is a primary driver of the
working capital outflow in the year. The
contribution to year end Group cash from
the receivables purchase programme was
€45.0 million compared to €131.4 million
(€129.0 million on a constant currency basis(iv))
at 29 February 2020 - a cash outflow of
€84.0 million(iv). Partly offsetting the impact
of the receivables purchase programme,
during the year the Group engaged with
the UK and Irish tax authorities to secure
deferrals on certain tax payments due, and
as at 28 February 2021 this amounted to
€77.4 million.
Corporate GovernanceBusiness & StrategyFinancial Statements 46
Group Chief Financial Officer’s Review
(continued)
Table 1 – Reconciliation of Adjusted EBITDA(v) to Operating (loss)/profit
Operating (loss)/profit
Exceptional items
Operating (loss)/profit before exceptional items
Amortisation and depreciation charge
Adjusted EBITDA(v)
Table 2 – Cash flow summary
Adjusted EBITDA(v)
Working capital
Advances to customers
Net finance costs excluding exceptional finance costs
Tax refunded/(paid)
Pension contributions paid
Tangible/intangible expenditure
Net proceeds on disposal of property plant & equipment
Exceptional items paid
Other*
Free cash flow(vi)
Free cash flow(vi)
Exceptional cash outflow
Free cash flow(vi) excluding exceptional cash outflow
Reconciliation to Group Condensed Cash Flow Statement
Free cash flow(vi)
Net proceeds from exercise of share options/equity interests
Shares purchased under share buyback programme
Drawdown of debt
Repayment of debt
Payment of lease liabilities
Payment of issue costs
Disposal of subsidiary/equity investment
Cash outflow re acquisition of equity accounted investments/financial assets
Dividends paid
Net decrease in cash
2021
€m
(84.8)
25.2
(59.6)
30.8
(28.8)
2021
€m
(28.8)
(44.7)
1.2
(18.0)
7.2
(0.4)
(10.0)
1.0
(12.4)
1.3
2020
€m
29.8
91.0
120.8
32.8
153.6
2020
€m
153.6
47.9
(4.2)
(17.4)
(8.0)
(0.4)
(19.8)
0.4
(9.5)
3.0
(103.6)
145.6
(103.6)
12.4
(91.2)
(103.6)
0.3
-
570.9
(464.0)
(19.0)
(1.4)
6.7
(6.9)
(0.4)
(17.4)
145.6
9.5
155.1
145.6
0.4
(23.0)
192.6
(280.7)
(18.6)
(0.5)
5.1
(11.2)
(29.7)
(20.0)
* Other relates to share options add back, pension contributions: adjustment from charge to payment and net profit on disposal of property, plant & equipment.
C&C Group plc Annual Report 2021
47
Retirement Benefits
In compliance with IFRS, the net assets and
actuarial liabilities of the various defined
benefit pension schemes operated by the
Group companies, computed in accordance
with IAS 19 Employee Benefits, are included
on the face of the Consolidated Balance
Sheet as retirement benefits.
Independent actuarial valuations of the
defined benefit pension schemes are
carried out on a triennial basis using the
attained age method. An actuarial valuation
process is currently ongoing. The most
recently completed actuarial valuations of
the ROI defined benefit pension schemes
were carried out with an effective date of
1 January 2018 while the date of the most
recent actuarial valuation of the NI defined
benefit pension scheme was 31 December
2017. As a result of these updated
valuations the Group has committed to
contributions of 27.5% of pensionable
salaries for the Group’s staff defined benefit
scheme. There is no funding requirement
with respect to the Group’s executive
defined benefit pension scheme or the
Group’s NI defined benefit pension scheme,
both of which are in surplus. The Group has
an unconditional right to these surpluses
when the scheme concludes.
There are 2 active members in the NI
scheme and 52 active members (less than
10% of total membership) in the ROI staff
defined benefit pension scheme and no
active members in the executive defined
benefit pension scheme.
At 28 February 2021, the retirement
benefits computed in accordance with IAS
19 Employee Benefits amounted to a net
surplus of €4.9 million gross of deferred
tax (€5.5 million deficit with respect to
the Group’s staff defined benefit pension
scheme, €5.1 million surplus with respect
to the Group’s executive defined benefit
pension scheme and a €5.3 million surplus
with respect to the Group’s NI defined
benefit pension scheme) and a net surplus
of €3.1 million net of deferred tax.
The key factors influencing the change in valuation of the Group’s defined benefit pension
scheme obligations gross of deferred tax are as outlined below:
€m
(7.9)
(0.1)
0.4
13.4
(0.9)
4.9
Currency transaction exposures primarily
arise on the Sterling, US, Canadian and
Australian Dollar denominated sales of our
Euro subsidiaries and Euro purchases in
the Group’s Matthew Clark and Bibendum
business. We seek to minimise this
exposure, when possible, by offsetting the
foreign currency input costs against the
same foreign currency receipts, creating
a natural hedge. When the remaining
net exposure is material, we manage it
by hedging an appropriate portion for a
period of up to two years ahead. Forward
foreign currency contracts are used to
manage this risk in a non-speculative
manner when the Group’s net exposure
exceeds certain limits as set out in the
Group’s treasury policy. In the current
financial year, the Group hedged a portion
of its Euro payables exposure in Matthew
Clark and Bibendum however the Group
had no hedges in place at 28 February
2021.
The average rate for the translation of
results from Sterling currency operations
was €1:£0.8959 (year ended 29 February
2020: €1:£0.8721) and from US Dollar
operations was €1:$1.1602 (year ended 29
February 2020: €1:$1.1132).
Net deficit at 1 March 2020
Translation adjustment
Employer contributions paid
Credit to Other Comprehensive Income
Charge to Income Statement
Net surplus at 28 February 2021
The decrease in the deficit from €7.9 million
at 29 February 2020 to a surplus of €4.9
million at 28 February 2021 is primarily due
to an actuarial gain of €13.4 million over the
year. The actuarial gain was driven by the
increase in the discount rates used to value
the pension benefit obligation. The impact of
the increase in discount rates was partially
offset by the increase in the inflation-related
assumptions.
Financial Risk Management
The main financial market risks facing
the Group continue to include foreign
currency exchange rate risk, commodity
price fluctuations, interest rate risk,
creditworthiness and liquidity risk in relation
to its counterparties.
The Board of Directors set the treasury
policies and objectives of the Group, the
implementation of which are monitored by
the Audit Committee. Details of both the
policies and control procedures adopted to
manage these financial risks are set out in
detail in note 24 to the consolidated financial
statements.
Currency Risk Management
The reporting currency and the currency
used for all planning and budgetary
purposes is Euro. However, as the
Group transacts in foreign currencies
and consolidates the results of non-Euro
reporting foreign operations, it is exposed
to both transaction and translation currency
risk.
Corporate GovernanceBusiness & StrategyFinancial Statements 48
Group Chief Financial Officer’s Review
(continued)
Comparisons for revenue, net revenue and operating profit before exceptional items for each of the Group’s reporting segments are shown
at constant exchange rates for transactions by subsidiary undertakings in currencies other than their functional currency and for translation
in relation to the Group’s Sterling and US Dollar denominated subsidiaries by restating the prior year at current year average rates.
Applying the realised FY2021 foreign currency rates to the reported FY2020 revenue, net revenue and operating profit(i) is shown in the table
below:
Table 3 – Constant currency comparatives
Revenue
Matthew Clark and Bibendum
Ireland
Great Britain
International
Total
Net revenue
Matthew Clark and Bibendum
Ireland
Great Britain
International
Total
Operating profit(i)
Matthew Clark and Bibendum
Ireland
Great Britain
International
Total
Year ended
29 February 2020
€m
FX transaction
€m
FX translation
€m
Year ended
29 February 2020
€m
1,262.7
327.1
516.9
38.8
2,145.5
1,119.6
227.7
334.1
37.9
1,719.3
29.0
40.5
44.9
6.4
120.8
-
-
-
-
-
-
-
-
-
-
-
-
0.1
-
0.1
(33.5)
(1.8)
(13.7)
(0.9)
(49.9)
1,229.2
325.3
503.2
37.9
2,095.6
(29.7)
1,089.9
(1.4)
(8.9)
(0.9)
226.3
325.2
37.0
(40.9)
1,678.4
(0.8)
(0.3)
(1.2)
-
28.2
40.2
43.8
6.4
(2.3)
118.6
Notes to the Group Chief Financial Officer’s Review
(i) Before exceptional items.
(ii) Liquidity is defined as cash plus undrawn amounts under the Group’s revolving credit facility.
(iii) Net debt comprises borrowings (net of issue costs) less cash. Net debt including leases comprises borrowings (net of issue costs) less cash plus lease liabilities capitalised under
IFRS 16 Leases.
(iv) FY2020 comparative adjusted for constant currency (FY2020 translated at FY2021 F/X rates).
(v) Adjusted EBITDA is (loss)/earnings before exceptional items, finance income, finance expense, tax, depreciation, amortisation charges and equity accounted investments’ (loss)/
profit after tax. A reconciliation of the Group’s operating (loss)/profit to EBITDA is set out on page 46.
(vi) Free Cash Flow (‘FCF’) that comprises cash flow from operating activities net of tangible and intangible cash outflows which form part of investing activities. FCF highlights the
underlying cash generating performance of the ongoing business. FCF benefits from the Group’s purchase receivables programme which contributed €45.0m (FY2020: €131.4m
reported/€129.0m on a constant currency basis) inflow in the year. A reconciliation of FCF to net movement in cash per the Group’s Cash Flow Statement is set out above.
(vii) IRI, MAT to week ended 21.02.21. Nielsen, Volume Share of Cider, Off-Trade including Dunnes and Discounters, MAT February 2021. Nielsen, Volume Share of Long Alcoholic
Drinks, Off-Trade including Dunnes and Discounters, MAT February 2021.
(viii) "Minimum Equity Raise" means the receipt by the Company of at least £125.0 million of gross cash proceeds from the issuance of new ordinary shares in the Company including
in such proceeds the gross amount received by the Company upon issuance of any right to acquire any new ordinary shares in the Company.
C&C Group plc Annual Report 2021
49
The Board has considered a number
of different scenarios and assumptions
and the impact these might have on the
Group's financial position in deciding on the
appropriate quantum. These included the
potential length of the current lockdown,
the impact of ongoing restrictions, the
unwinding of temporary working capital
supports from government and tax
authorities, potential economic impact
on demand through the recovery and the
likelihood of any further waves of lockdown.
Taking these into consideration, the Board
believes that a rights issue will not only
reduce the Group's leverage but allow it to
continue to deliver upon its strategy.
Efficient capital allocation is a central
pillar of the Group's strategy. The Board
continues to believe that financial strength
and balance sheet flexibility is a source of
competitive advantage for the Group in the
long-term and that a leverage profile of less
than 2.0 times Net Debt/Adjusted EBITDA
is appropriate for the Group as normalised
trading conditions return.
Patrick McMahon
Group Chief Financial Officer
Commodity Price and Other Risk
Management
The Group is exposed to commodity price
fluctuations, and manages this risk, where
economically viable, by entering into fixed
price supply contracts with suppliers. We
do not directly enter into commodity hedge
contracts. The cost of production is also
sensitive to variability in the price of energy,
primarily gas and electricity. Our policy is
to fix the cost of a certain level of energy
requirement through fixed price contractual
arrangements directly with our energy
suppliers.
The Group seeks to mitigate risks in relation
to the continuity of supply of key raw
materials and ingredients by developing
trade relationships with key suppliers. We
have long-term apple supply contracts with
farmers in the west of England and have an
agreement with malt farmers in Scotland for
the supply of barley.
In addition, the Group enters into insurance
arrangements to cover certain insurable
risks where external insurance is considered
by management to be an economic means
of mitigating these risks.
Rights Issue
On 26 May 2021, the Group has announced
a rights issue. The rights issue is intended,
alongside the other actions that the Group
has already announced and implemented,
to reduce leverage and improve the Group's
overall liquidity position thereby providing
the Group with the capital structure to both
support the business during further potential
disruptions from COVID-19 and to deliver on
its strategy as normalised trading conditions
return.
Corporate GovernanceBusiness & StrategyFinancial Statements 50
Responsibility Report
Delivering to a
better world!
In FY2021, to enhance our commitment to Sustainability, we
established a Board Environmental, Social and Governance
(‘ESG’) Committee and created a dedicated ESG team, across
the Group, to champion and embed our ESG principles in
everything that we do.
Following a materiality assessment and an exercise to consider stakeholders’ interests, C&C
has developed a Sustainability Framework, which forms part of the C&C business strategy,
to guide our ESG initiatives under 6 pillars which support the UN Sustainable Development
Goals (‘SDGs’). Whilst the Company is fully committed to the path to progress, we recognise
that we are in the early stages of our journey. We expect to give a further update on the
delivery of our ESG strategy in the FY2022 Annual Report.
2
Sustainably Source
our Products
& Services
• Collaboration with our apple and barley
growers
• Achieving the highest sourcing standard
• Source water optimisation
• Water usage reduction
1
Reduce our
Carbon
Footprint
• Optimisation of our manufacturing
facilitates
• Streamlining our logistics operations
• Increasing the recyclable rate for our
brands
• Improve sustainable packaging
• Piloting electric vehicle distribution
3
Ensure Alcohol
is Consumed
Responsibly
• Introduction of 0% and low alcohol
variants
• Reducing ABV and calories of our
brands
• Active support for industry programmes,
such as Drinkaware
• Support to relevant charities
C&C Group plc Annual Report 2021 51
What ESG means to C&C
Environmental: the Group’s impact on the
natural environment and its adaptation to
climate change including greenhouse gas
emissions, energy consumption, generation
and use of renewable energy, biodiversity and
habitat, impact on water resources and the
status of water bodies, pollution, resources
efficiency, the reduction and management of
waste, and the environmental impact of the
Group’s supply chain.
Social: the Group’s interactions with
employees, customers, suppliers, other
stakeholders and the communities in
which it operates and the role of the Group
in society, workplace policies, ethical
procurement, any social or community
projects undertaken by the Group.
Governance: the ethical conduct of the
Group’s business including its corporate
governance framework (such as compliance
with the UK Corporate Governance Code
2018), business ethics policies and codes
of conduct, counterparty due diligence,
onboarding policies and procedures, the
management of bribery, corruption and
money laundering risk, the transparency of
reporting and financial and tax transparency.
4
Enhance Health,
Wellbeing & Capability
of colleagues
• Safety first!
• Health & Wellbeing external support systems
• Remote working
• Alcohol awareness training
• Embed key codes including anti-bribery
and corruption, learning and development
programmes
6
Collaborate with
Government &
NGOs
• Leading Deposit Return Scheme
(‘DRS’) Implementation In Scotland
• Collaborating on Minimum Unit Pricing
(‘MUP’) implementation in Ireland
• Portman membership
• Drinkaware support
5
Build a more
Inclusive, Diverse &
Engaged C&C
• Diversification of Board composition
• Establishment of ESG Committee and
ESG Team
• Company-wide Inclusion and Diversity
measurement
• Formal inclusion and diversity training to
people managers across the Group
• Employee engagement tracking
Corporate GovernanceBusiness & StrategyFinancial Statements 52
Responsibility Report
(continued)
Environmental
1
Reduce our
Carbon Footprint
We will deliver continuous year on year
improvements in our carbon performance.
C&C Group plc Annual Report 2021 53
A detailed review of our global energy consumption and GHG emissions data for the
last four years can be found below within our Streamlined Energy and Carbon Reporting
(‘SECR’) disclosure. In addition, in FY2022, we will work with the Science Based Targets
Initiative to set approved science based carbon reduction targets to meet the goals of the
Paris Agreement and limit global warming to well below 2°C. This entails reducing our Scope
1 and 2 emissions by 35% and our Scope 3 emissions by 25% by 2030. We have also
pledged to be a carbon-neutral business by 2050. In addition to these targets, we will also
include key climate change related risk indicators into our risk management processes.
In 2021, we established a working group to consider and assess the climate related risks
and opportunities most pertinent to the Company. Work is now underway in order to align
with the recommendations of the Taskforce for Climate-related Financial Disclosure (‘TCFD’)
and disclose all key non-financial indicators and guidance in line with the Sustainability
Accounting Standards Board (‘SASB’) Framework by FY2022.
Optimising our Manufacturing Sites
Conservation of Energy
Our Energy Consumption position is set out below.
kWh
Natural Gas
FY2018
FY2019
FY2020
FY2021
79,819,000
80,579,000
88,630,000
83,199,000
The Group has employed various practices
to conserve its use of energy. These include:
• From 1 April 2021, 100% of the electricity,
used in Wellpark, Clonmel and our UK
depot network is provided by renewable
sources. This has been achieved four
years ahead of our target.
• Biogas energy: anaerobic digestion
technology at Wellpark Brewery and
Clonmel generated 1,088,000M3 of
biogas across both sites (7.7% of heat
requirements at Wellpark and 12% at
Clonmel).
• By August 2021, we will have a fully
operational 2MWH mounted solar panel
array on two large roof areas at Clonmel,
these will contribute 5-10% of the site
energy demand at a reduced and fixed
rate tariff over the next 20 years.
• Pasteurisation control system: on-the-can
pasteuriser at Wellpark Brewery delivered
a 10% reduction in steam usage year-
on-year, as well as further improving the
finished product quality.
LPG
LNG
Diesel
Petrol
4,653,000
1,979,000
2,332,000
3,556,000
• Wellpark also benefited from the
6,228,000
6,107,000
5,591,000
5,007,000
4,555,000
31,137,000
33,257,000
15,329,000
installation of Variable Speed Drives in
our electric motors, where possible. It is
anticipated that these will save 30,000
kwh of electricity in 2021.
-
-
450,000
111,000
• At Clonmel we are undertaking a number
Kerosene/Fuel Oil
707,000
64,000
65,000
209,000
13,414,000
3,991,000
-
-
1,308,000
83,000
83,000
7,735,289
- Fitting thermostatic relief valves to
Wood
Biogas
Electricity
of initiatives, including:
- Installation of a new boiler which
increased efficiency from 78% to 92%
saving 7,660 kwh.
radiators in the new manufacturing unit
increased efficiency from 25% to 30% on
each radiator.
- Ammonia chilling plants energy upgrade,
saving of 76,642KWh from March 2019.
- LED lights for south tank farm and west
tank farm, which will see savings of
10,900KW.
34,586,000
40,695,000
41,401,000
41,187,738
(of which, renewables)
799,000
799,000
14,737,000
14,946,029
Total Scope 1
109,376,000 123,857,000 130,325,000
107,411,000
Total Scope 2
34,586,000
40,695,000
41,401,000
41,187,738
Notes on changes in Scope:
1. FY2018 / FY2019 petrol data not available.
2. FY2018/ / FY2019 Wood utilisation at Fruitissima (Portugal).
3. FY2019 - main changes due to acquisition of Mathew Clark Bibendum, and in-housing of Tennent’s distribution,
with associated depots and transport fleet.
4. Plant investments / changes of fuel at plants (e.g. VHCC switch to LNG, Frutíssima (Portugal) switch away from
wood to gas).
5. FY2021 now includes full Biogas for Clonmel and Wellpark.
Corporate GovernanceBusiness & StrategyFinancial Statements 54
Responsibility Report
(continued)
Carbon Emissions
We assess and manage climate change
related risks and opportunities, including the
impact on the availability and security of our
sources of raw materials, such as aquifers,
orchards and maltings.
We actively monitor
our carbon emissions
and have participated
in the external, global
disclosure system,
Carbon Disclosure Project (‘CDP’) Climate
Change Programme, since 2012. The Group
was awarded a B rating in 2020.
In November 2020, Tennent’s Wellpark
brewery in Glasgow, commissioned an
innovative carbon capture facility, the
largest in Scotland. Consisting of two tanks
that store approximately 4,000 tonnes of
CO2 per year and remove 100,000kms of
road transport emissions. A similar carbon
capture facility has been operating at
Clonmel since 2008. We maximise use of
recovered CO2 and use collected gas for
product carbonation initially, and for product
storage cover gas to ensure the correct
product quality.
Given our sourcing of apples from orchards
across the British Isles, the offset in carbon
absorption means that the plant in Clonmel
is effectively carbon neutral (for Scope 1 and
2 emissions).
Over the last 3 years we have improved
carbon dioxide capture to 60%. In FY2022,
it is forecast that we will be approximately
95% self-sufficient in CO2 at our
manufacturing sites.
Our Streamlined Energy and Carbon
Reporting (SECR) is detailed opposite.
Carbon Dioxide Capture and Re-Use (te)
FY19
FY20
FY21
5,196
4,774
3,351
4,035
9,231
3,823
4,696
8,597
8,047
CO2 External Purchase(Te)
CO2 Recovered/Re-used(Te)
Scope 1 and 2 Market Based Emissions (t CO2e)
2
5
5
,
8
1
2
6
0
,
3
1
4
0
4
,
4
2
8
8
6
,
3
1
6
1
2
,
6
2
8
0
9
,
0
2
3
6
0
,
6
7
5
9
,
5
FY 2018
FY 2019
FY 2020
FY 2021
Scope 1
Scope 2
Total Footprint
Location-Based Emissions
Net Revenue (M Euro)
Total C&C
FY2018
Total C&C
FY2019
Total C&C
FY2020
Total C&C
FY2021
548
1,575
1,719
737
Production volume (Hectolitres)
4,296,586 4,388,761 4,396,981 3,803,970
18,552
Scope 1 (tCO2e)
Scope 2 (tCO2e)
Total Scope 1 & 2 (tCO2e)
Scope 3 (tCO2e)
Total Footprint (tCO2e)
* Main changes due to acquisition of Mathew Clark, and in-housing of Tennent’s distribution, with associated depots
718,088*
260,068
205,442
237,056
757,072
221,976
38,984
20,908
38,092
Note 1
13.062
13,688
24,404
26,216
10.681
31,589
Note 1
12,768
31,614
and transport fleet
Emissions Intensity
Total C&C
FY2018
Total C&C
FY2019
Total C&C
FY2020
Total C&C
FY2021
Scope 1 and 2 tCO2e per M EURO
Scope 1 and 2 kgs CO2e per HL produced
57.69
7.36
24.19
8.68
22.68
8.87
42.86
8.30
C&C Group plc Annual Report 2021 55
Market-Based Emissions
Net Revenue (M Euro)
Total C&C
FY2018
Total C&C
FY2019
Total C&C
FY2020
Total C&C
FY2021
548
1,575
1,719
737
Production volume (Hectolitres)
4,296,586 4,388,761 4,396,981 3,803,970
Scope 1 (tCO2e)
Scope 2 (tCO2e)
Total Scope 1 & 2 (tCO2e)
Scope 3 (tCO2e)
Total Footprint (tCO2e)
Emissions Intensity
18,552
13062
31,614
24,404
13,688
26,216
20,908
6,063
5957
38,092
32,279
26,865
205,442
221,976
718,088*
Note 1
237,056
260,068
32,279
Note 1
Total C&C
FY2018
Total C&C
FY2019
Total C&C
FY2020
Total C&C
FY2021
Given our sourcing of
apples from orchards
across the British
Isles, the offset in
carbon absorption
means that the
plant in Clonmel is
effectively carbon
neutral.
57.69
Scope 1 and 2 tCO2e per M EURO
Scope 1 and 2 kgs CO2e per HL produced
Definitions:
Scope 1: Direct emissions from our own operations.
Scope 2: Indirect emissions from our purchased energy (mainly electricity).
Scope 3: Including supply chain, customer use of our products, and other indirect emissions.
*FY20 now includes all scope 3 emissions in our reporting.
Note 1: FY2021 Scope 3 data is made available during FY2022 and will therefore be included in next year’s Annual
Report and Accounts.
18.78
24.19
8.68
7.36
7.34
36.45
7.06
Tonnes CO2e
Scope 1
Clonmel *
Wellpark
Matthew
Clark
VHCC **
Frutissima
Group Fleet &
Offices
Total C&C
2020-21
Total C&C
2019-20 Change YoY
4698
10589
2542
1067
1903
109
20908
26216
Scope 2 - location based
Scope 2 - market based
4684
0
4521
4521
782
782
275
249
405
405
14
0
10681
12768
5957
6513
* Adjusted to reflect the local electricity factors from Sustainable Energy Authority Ireland SEAI (Ireland) and Environmental Protection Agency EPA (US).
** Vermont Hard Cider Company was disposed by the Group of in April 2021.
Note:
1. Location based reporting method involves using an average emission factor that relates to the grid on which energy consumption occurs (using mostly grid-
average emission factor data).
2. Market-based method reflects emissions from electricity that companies have purposefully chosen (e.g. recognises the procurement of renewable power).
-20%
-16%
-9%
Waste Reduction
The Group has a long term objective of
sending zero waste to landfill. In FY2021 our
main manufacturing sites at Clonmel and
Wellpark again both achieved this target. We
will continue to implement a waste hierarchy
approach through prevention, re-use and
recycling:
• In our manufacturing operations, we
routinely monitor our waste stream and
target improvement annually. We measure
raw material usage and yields on a weekly
basis to ensure the efficient use of our
resources.
• Within the Matthew Clark business, we
have been maximising the use of return
journeys when the vehicles are empty
and backhauling cardboard and plastic to
main depots. The cardboard and plastic
are baled and sent for recycling. This not
only negates the need for a standalone
recycling service, but it also protects
the quality of the recycled materials and
ensures maximum recycling rates are
achieved.
• 100% of by-products are recycled for
use as animal feed or organic compost.
Over 15,000 tonnes of spent grain and
apple pomace were used as animal
feed in 2020, with the remainder of our
waste either recycled or sent for energy
recovery.
• In Scotland in 2021 we will introduce
bailing of can waste, which should reduce
associated vehicle movements by 90%.
• We continue to improve the quality of the
loading on the wastewater discharged
from our sites in Clonmel and Wellpark
and this has improved by more than 90%
in the last 2 years.
Corporate GovernanceBusiness & StrategyFinancial Statements 56
Responsibility Report
(continued)
Optimising our Logistics
Operations
We recognise that our carbon footprint
extends beyond manufacturing and the
distribution and transport of our products
also contributes to the Group’s carbon
footprint. During FY2021, we reported
for the first full year the carbon emissions
associated with our transport fleet through
CDP. The Group has an “End-to-End”
supply chain model in the UK and Ireland,
with circa 360 vehicles in operation. This
allows efficiencies to be identified across
every stage of the product journey.
As mentioned in the CEO’s Review, the
optimisation of C&C’s English and Scottish
delivery networks, is scheduled to be
completed in FY2022. This will consolidate
volumes from three separate networks into
two, bringing all of our final mile English
distribution in-house, which will drive on-
going efficiencies. In Scotland, this will save
approximately 600,000 km/annum and 300
to 400 tonnes of CO2 emissions, while in
England this will save approximately 1.39m
kms/annum and approximately 800 tonnes
of CO2 emissions.
Our Fleet
A Group-wide logistics forum has been
established to discuss sustainability
requirements for our fleet in order to deliver
a unified approach and share learnings
across the Group to reduce delivery miles
and carbon footprint.
All new vehicles leased or purchased must
meet the EURO 6 standard and 93% of
our fleet are currently EURO 6. We are
reviewing the profile of our fleet whilst
also investigating opportunities to reduce
its impact such as alternative fuel source
vehicles (compressed natural gas/liquefied
natural gas hydrogen/electric) and amending
vehicle specification (by for example,
applying the Direct Vision Standard for
heavy goods vehicles which assesses and
rates how much the driver can see directly
from their cab in relation to other road
users).
Across Tennent’s and Matthew Clark we
have introduced 34 solar-assisted trucks
into the delivery fleet. With solar panels on
the roofs, the trucks use solar energy to
power all on-board ancillary equipment,
cutting fuel consumption by 5% and
lowering CO2 emissions by four tonnes per
vehicle annually.
Driving efficiencies
We are eliminating the need for secondary
loads, by introducing direct delivery of
orders from manufacturing sites to customer
premises. In FY2021, we further increased
the level of direct deliveries from the Clonmel
and Wellpark sites, which has seen a
reduction in the number of loads delivered
by over 200.
By working in collaboration with raw material
and third-party drinks suppliers we are
reducing empty running of trucks. Vehicles
delivering to C&C’s operational sites are
backloaded with outbound customer
deliveries.
Software including transport network, route
planning and on-road training for driver
habits have maximised fuel efficiency and
limited frequency of runs to distance areas
each week.
As part of tender discussions with providers
and through ongoing operational initiatives
we will look to first measure our carbon
impact and then, through consolidation and
direct routing, reduce it. An example of this
is in our Clonmel manufacturing site where
we measure the efficiency of container
utilisation by identifying opportunities to
reload import containers with export orders
therefore reducing the empty running of
containers to and from the port.
Increasing the Recyclable Rate
for our Brands and Improve
Sustainable Packaging
Our lightweight can programme at Wellpark
and Clonmel, further optimising the material
used, has removed 260 tonnes of aluminium
from the supply chain. As an interim
measure whilst moving out of plastic, we
introduced a hi-cone plastic ring, which
has a 50% recycled content which saw 20
tonnes less of virgin plastic used.
In Clonmel, we have adopted a number
of initiatives including installation of a
compactor for recyclables to increase
payload and to reduce truck movements of
recyclables by 75%.
The Group has made excellent progress
on its ambitious programme to be out
of single-use plastics (shrink and hi and
C&C Group plc Annual Report 2021 57
mid cone rings) on the packaging of our
canned products by 2022, reducing the
environmental impact and ecological
footprint of our products. We are the only
brewer who is a member of the UK Plastics
Pact, which has additional targets on plastic
packaging, waste and recyclates. The
Group is committed to utilising sustainable
packaging. Due to COVID-19 restrictions
on the on-trade, in FY2021, 9% of the total
volume produced by C&C was in 100%
returnable and reusable packaging formats.
The decision to be out of plastics has
required significant capital investment of
€11.5 million in the Wellpark and Clonmel
production sites, which focused on
the canning operations. The Group’s
new primary packaging material will
be cardboard which is fully and easily
recyclable.
At Wellpark in March 2020, under Phase
1 of the out of single-use plastics initiative,
Tennent’s moved from shrink wrap to
FEC (cardboard) packaging on 10, 12
and 15 packs. In January 2021, Tennent’s
announced Phase 2 of the project that
brought about significant equipment and
infrastructure changes at Wellpark. When
the work is complete, by summer 2021, all
Tennent’s canned product will be in fully
recyclable cardboard, removing 150 tonnes
of plastic from Tennent’s Lager can packs,
including more than 100 million plastic rings.
The investment also recognises the future
market changes e.g. the Deposit Return
Scheme (‘DRS’) introduction in Scotland,
planned for July 2022.
The out of single-use plastics work in
Clonmel, commenced in January 2021,
is expected to complete in September
this year. This work will again see plastic
packaging removed from our Bulmers,
Magners and our other cider branded
products and replaced with recyclable
cardboard, removing a further 150 tonnes
of plastic.
In Clonmel, we have also reduced
the amount of plastic in polyethylene
terephthalate (‘PET’) wrap by avoiding
double wrapping pallets. This reduces the
amount of plastic used by 10 tonnes per
annum. While reducing the amount of plastic
in PET preforms sees a reduction of 72
tonnes of plastic used. Reduced polymer
usage in the wastewater treatment plant,
results in a 20% reduction in polymer usage
per annum.
Matthew Clark is working with suppliers to
rescue plastic used in packaging and ensure
green initiatives are recorded. The British
Retail Consortium process ensures that all
suppliers are ISO14001 certified or have
an environment management system that
shows carbon reduction plans.
Piloting Electric Vehicle
Distribution
Electric vehicles are being trialled for
deliveries in urban areas. An electric-
powered van has been utilised for small-
volume deliveries of Five Lamps craft beer
in Dublin and a trial of electric vans has
taken place at the Matthew Clark Park Royal
depot. In Scotland, we are investigating
alternative fuel types for vehicles, electric
vehicles for Wellpark to Cambuslang trips
and hydrogen for longer distance inter depot
shunts.
During the year, two eight tonne diesel
forklifts were replaced with new gas
powered trucks, saving 14 tonnes of CO2
per annum.
Reductions in Plastics and Aluminium Packaging
FY20
FY21
225
135
480
255
Plastic tonnes
Aluminium tonnes
Corporate GovernanceBusiness & StrategyFinancial Statements 58
Responsibility Report
(continued)
2
Sustainably source
our Products &
Services
Collaboration with our Apple and
Barley Growers
The Group recognises that sustainability
needs to be embraced by partners at
every stage of the supply chain in order
to be successful. Audits and reviews are
carried out both during initial procurement
and over the lifetime of a major supplier’s
contract to assess the supplier’s track
record in environmental management,
health and safety, sustainability, diversity
and overall corporate social responsibility.
For the second year, Matthew Clark was the
headline sponsor of the Food & Beverage
Sustainability Awards. This event was aimed
at sharing best practice and recognising
outstanding industry achievement in support
of sustainability across the hospitality
industry.
We are committed to sourcing our raw
materials from local sustainable sources.
All apples crushed at the Clonmel site for
the production of Bulmers and Magners
cider are sourced from the island of Ireland.
As well as having 165 acres of our own
orchards in Co. Tipperary, there are over
50 partner growers on the island, with
whom we work closely. The health and
sustainability of the Irish apple growing
sector are therefore central to C&C’s
strategy. A key aspect of apple orcharding
is the health of the population of bees and
other pollinating insects. As part of our
commitment to protect the biodiversity of
bees, C&C is a member of the All Ireland
Pollinator plan and patrons of the South
Tipperary Bee-Keepers Association
who carry out activity on the protection
and promotion of the species in our
Redmonstown Orchard.
In FY2021, we donated circa 12,000 tonnes
of surplus apples at Clonmel to Ixora Energy,
who converted this to biomethane in order
to supply over 300 homes with renewable
gas for the next 12 months. The bio-fertiliser
from these apples will also replace fossil
fuel fertiliser to grow potatoes, wheat and
vegetables in an area the size of 200 football
pitches.
In Scotland, Tennent’s lager is produced
using 100% Scottish malt. We seek to
support the growers of our key raw materials
such as barley and wheat through entering
into long-term supply arrangements, with
sustainability a key consideration. Malting
barley is only purchased from farms with
current and up-to-date, independently
audited farm assurance schemes. 75%
supply of malt is FSA Gold accredited and
the balance is Redtractor assured, which
ensures the best environmental practices
are adhered to.
Achieving the highest sourcing
standards
In 2020, Bibendum launched the Vivid
Charter to identify and promote best
practice in sustainability throughout our
wine supply base. By capturing and sharing
these case studies, we will look to inspire
all our wine suppliers to adopt sustainable
practices across their operations.
Source Water Optimisation and
Water Usage Reduction
COVID-19 has impacted on our plans
around water optimisation and usage
reduction and we will therefore not meet our
water ratio target of 2.5:1 by 2022.
We continue to strive to deliver continuous
improvements in our water usage. Solutions
to tackle water optimisation and water usage
reduction include:
• Anaerobic Digestion (Water Treatment)
plants are now fully operational at both
Wellpark and Clonmel and have reduced
our sites' wastewater emissions and
improved the quality of our wastewater
discharged by 80%.
• A new can rinsing system using de-ionised
air was commissioned in Clonmel in early
2020, and reduced the water consumption
by more than 17 million litres per annum.
• Pasteurisation control system at Wellpark:
has reduced water consumption in the
canning operation by 14 million litres per
annum.
• The Clonmel site commenced a three-
year groundwater protection programme
in 2018 to upgrade the site drainage and
wastewater network. This will protect the
water sources of the surrounding Tipperary
countryside.
C&C submitted a response for the CDP
Water Security questionnaire for the first time
in August 2020, and secured a C rating. The
CDP water security questionnaire provides
data users and the companies themselves
with an insight on current and future water-
related risks and opportunities. Along with
CDP's water scoring methodology, the water
security questionnaire helps companies to
drive improvements in water management
and enables benchmarking against best
practice. As part of this we investigated
the water availability in the locations where
our apples are produced and sourced. The
C&C Group plc Annual Report 2021 59
our offerings with changing demand but
our commitment to providing healthier
alternatives to existing beers.
• Tennent’s Zero is our new, refreshing
0.0% lager. With 57 calories per bottle
and 75 calories per can, and the same
great flavour profile as Tennent’s Lager,
Tennent’s Zero is a great choice for those
looking for non-alcoholic alternatives and
reduced calorie intake.
• Magners and Bulmers Zero are the light,
refreshing alternatives to our much-loved
Original recipe with 0.0% alcohol. Both
have all the flavour and character you
would expect from our Original recipe and
use a non-alcoholic fermentation to create
the cider character.
Consistent with our commitment towards
responsible alcohol consumption, and to
ensure that consumers are provided with
the full details of our products, we voluntarily
display calorie information and the Chief
Medical Officer guidelines on the packaging
of our major brands in the UK and Ireland.
Social
3
Ensure Alcohol
is Consumed
Responsibly
Introduction of 0% and Low
Alcohol Variants
C&C Group plc advocates the responsible
consumption of the brands we manufacture
and distribute. We are committed to the
promotion of responsible drinking and
moderate consumption of our products,
to ensure they are enjoyed safely by
consumers.
Recognising the evolving trends around
moderation and reduced consumption, C&C
has introduced low/no alcohol variants of its
core brands:
• Tennent’s Light has been acknowledged
as Scotland’s lowest calorie beer, being
3.5% ABV, based on our award-winning
Gluten Free Tennent’s, made from 100
per cent Scottish grown cereals and
fresh highland water from Loch Katrine.
Tennent’s Light is only 114 calories per
pint, 66 calories per bottle and is further
evidence of not just our efforts to evolve
location where our apples are produced
is considered low risk in terms of water
availability according to the WRI Aqueduct
Tool Group. As part of the 2020 CDP Water
Security questionnaire submission, we
engaged with our value chain on water
related issues. This will support our water
sustainability targets and also operate in
a manner aligned to our ESG objectives.
As this is C&C’s first year completing the
water security questionnaire, we have
begun the process of engaging with our key
suppliers, requesting water use, risks and/or
management information. Although this is a
low percentage of suppliers we considered
key ingredient and raw material suppliers as
the priority.
As part of our sustainability commitment we
are reducing the Water Ratio of hectolitres
extracted versus hectolitres produced.
FY2020 FY2021 % Change
1.2%
Water Usage Ratio 3.21:1 3.27:1
Water Usage
(m cubic metres)
1.48
1.31 (11.5%)
Despite the challenges of COVID-19 and the
resulting shift in SKU format to packaged
product to meet demand in the off trade and
an overall reduction in production volumes,
we have worked at improving our total
consumption of water at Clonmel, which has
delivered a reduction of 41 million litres per
annum. At Wellpark, the recovery and re-use
of bottle rinse water reduced consumption
by 7 million litres per annum.
The introduction of Anaerobic Digestion
capability at both Clonmel and Wellpark has
delivered a 3,120te COD improvement in the
quality of wastewater generated at our sites
over the last 3 years.
The Group has achieved the ISO 14001
certification for its Clonmel, Matthew Clark
(Whitchurch) and Bibendum sites, which
is the international standard specifying the
requirements for an effective environmental
management system. Our Wellpark site
has been recognised for its consistently
excellent environmental compliance by the
Scottish Environment Protection Agency.
Corporate GovernanceBusiness & StrategyFinancial Statements
60
Responsibility Report
(continued)
Reducing ABV & Calories of Our
Brands
In February 2021, as part of our ongoing
commitment to the promotion of responsible
drinking and moderate consumption of our
products, to ensure they are enjoyed safely
by consumers, we announced our decision
to reduce the alcohol content of K Cider
from 8.0% to 7.5% ABV. This measure will
see the removal of c.4.8m units of alcohol
and 360m kcal from the UK marketplace.
Support for Industry programmes
We are funders and active members of
Drinkaware, which performs the valuable
role of equipping consumers with
information about responsible alcohol
consumption. We also support Best
Bar None (‘BBN’) in Scotland, a national
accreditation and award scheme for
licensed premises. Participants are given
lots of support and advice to improve the
safety of their staff, premises and customers
and to adopt high management standards.
We are members of the UK’s National
Association of Cider Makers (‘NACM’),
which works closely with apple growers and
the agricultural communities in cider regions
in the UK. This working relationship puts
us at the heart of many UK Government
discussions relating to the responsible use
of alcohol. The NACM is also engaged
with tax and regulatory departments and
opinion-forming bodies having an interest
in cider and alcohol generally. We are also
a member of the European Cider and Fruit
Wine Association.
Support to Relevant Charities
In FY2022, we will review our approach to
charitable giving to ensure this is aligned to
the Group’s purpose, vision and values. The
Group is committed to the communities in
which it operates and undertakes a range of
initiatives that benefit our local communities.
Examples of our commitment to the
community are set out below.
The Group is
committed to the
communities in
which it operates
and undertakes a
range of initiatives
that benefit our local
communities.
Ireland
During FY2021, our donations and charity
activity was heavily influenced by COVID-19.
Those supported included local and national
hospitals, charities who manufactured and
distributed PPE to frontline workers and
our local women’s refuge ‘Cuan Saor’. In
recognition of the impact of the pandemic on
older members of our community we made
donations to Age Action and ALONE. Our
sports and social site charity for 2020 in Ireland
was Carrick on Suir River Rescue who provide
a voluntary service on our site adjoining River
Suir.
We are active members of Tipperary Chamber
of Commerce and hold a seat on the steering
group of County Tipperary Skillnet, our local
enterprise led learning network. We have forged
strong links with local employment services
including ‘Turas Nua’, who are Ireland’s leading
welfare to work provider, helping people move
on their journey into sustainable employment.
Bulmers Clonmel has placed over 35 long
term unemployed persons in fully paid work
placement positions since 2018.
We continue to partner with Inner City
Enterprise (‘ICE’) in Dublin. ICE is a charity
which advises and assists unemployed people
in Dublin’s inner city to set up their own
businesses. We have provided ICE with funding
to support their initiatives and a number of
our staff have joined their panel of business
advisors to support the entrepreneurs that they
work with.
C&C Group plc Annual Report 2021 61
Heverlee
Heverlee is created in association with the
Abbey of the Order of Premontre (known
as Park Abbey) and is inspired by the beers
first brewed by the monks in medieval times.
The Abbey lies just outside Leuven and is
the largest of its kind in Belgium, founded
in 1129. Today, every pint of Heverlee
sold supports the major multi-million Euro
restoration of Park Abbey ensuring Heverlee
is as bound to the Abbey’s future as we are
indebted to its past.
Scotland
The Group supports a diverse range of
sporting, charitable and community projects
across Scotland and has endeavoured
to use its support of sports to generate
opportunities for community engagement
and charitable fundraising.
Tennent’s looked to support key workers
and those most in need during the
COVID-19 pandemic. Working with our
third party suppliers, we identified a range
of products including thousands of cases
of water, juice, soft drinks and crisps that
we have been able to distribute amongst
a range of deserving causes and groups
throughout central Scotland, including 32
Trussel Trust Foodbanks and Lightburn
Hospital in Glasgow.
During the first lockdown in early 2020,
C&C Group’s in-house marketing agency,
Badaboom, supported Glasgow venue,
SWG3’s ViseUp campaign as the logistics
and distribution partner. Over 30,000 items
of PPE were produced by a network of
schools including Kelvinside Academy and
Caldervale High School and delivered by
Badaboom team members to NHS workers
in hospitals, care homes, clinics and
surgeries across Scotland.
To support the Scottish and Northern
Ireland hospitality sector re-opening in
the summer of 2020, Tennent’s offered
hundreds of thousands of complimentary
pints of Tennent’s Lager and Tennent’s Light
to consumers under its “Dedicated to You”
campaign, encouraging footfall in around
2,000 licenced venues across Scotland
and Northern Ireland. The campaign also,
promoted the safe reopening of pubs, social
distancing and responsible consumption.
Tennent’s also supported the Copper Rivet
Distillery in Kent with the provision of high
alcohol waste beer for distillation into hand
sanitiser. Tennent’s is providing 90,000
litres of high strength beer, (which the
Distillery converted into hand sanitiser for
distribution to frontline services including the
British Transport Police (Scotland) and the
Metropolitan Police).
Tennent’s has partnered with spirit producer,
Glasgow Distillery Company, to produce
almost 11,000 bottles of hand sanitiser in
support of the on-trade as it reopened in
Spring 2021.
Tennent’s continues its longstanding
partnership with The Benevolent Society of
Scotland (‘The Ben’), which aids people of
all ages who have worked in the licensed
trade for at least three years full-time.
Beneficiaries receive annual financial
assistance as well as discretionary grants for
emergency situations.
England
In 2021, Matthew Clark, has partnered with
Pubaid and the All-Party Parliamentary Beer
Group to support the Community Pub Hero
Awards. The initiative, recognises the critical
role that hospitality plays across the UK,
together with licensees and teams who went
the extra mile to help their communities
through the pandemic, whether by offering
vital supplies for local residents, cooking
hot meals for the elderly or keeping people
connected through online quizzes or chats.
Bibendum continues to be a key partner of
The Drinks Trust (formerly The Benevolent),
to provide care and support to the people
who form the drinks industry workforce
with services across vocational, wellbeing,
financial and practical support. These
services are intended to assist with and
improve the circumstances of those who
receive them.
Corporate GovernanceBusiness & StrategyFinancial Statements
at maintaining mental health and wellbeing.
We developed an in-house mobile app for
the reporting of potential symptoms and
test results which provided the leadership
team with real time data for the monitoring
and early identification of any potential
workplace transmissions. This allowed the
Company to review existing controls and
where necessary, implement further controls
to protect our colleagues.
We have ongoing COVID-19 monitoring and
reporting in place across the Group. This
covers a number of parameters including;
colleagues displaying symptoms, those
contacted by Track and Trace, tests carried
out and status, colleagues isolating and any
colleague displaying symptoms who was in
close proximity to fellow workers (less than
2 metres) for more than 15 minutes. Our
monitoring highlighted that 63 (circa 2%) of
colleagues have contracted COVID-19. All
colleagues who had contracted COVID-19
have recovered and are now back at work.
COVID-19 continues to have a substantial
impact on all of our operations.
Manufacturing increased productivity across
a range of lines whereas unfortunately a
number of the logistics depots supplying
hospitality were scaled down. Nevertheless,
the management of health, safety and
welfare continued and we delivered
improvements where possible. Combined
with the intense activity of managing
COVID-19, the Group was still able to deliver
62
Responsibility Report
(continued)
4
Enhance Health,
Wellbeing & Capability
of Colleagues
Supporting our colleagues has never been
more important. We continue to learn from
experiences during FY2021 and the global
pandemic and recognise the requirement to
further adapt and improve.
Our main priority continues to be the health,
safety and wellbeing of our employees;
recognising the key importance of delivering
better safety standards and improving the
wellbeing of our colleagues.
Safety First
The global COVID-19 pandemic introduced
a new element into our risk management
system. As a result of horizon scanning the
new emerging threat; risk assessments,
controls and training were introduced across
all of our operations at an early stage. This
enabled the Group to respond faster to the
pandemic, protect its employees and deliver
a COVID-19 secure manufacturing and
logistics supply chain.
The business invested in new technology
to help in the fight against the pandemic.
We installed thermal detection systems
measuring body temperatures as
employees arrived at work. Door handles
that automatically release sanitising gel
when the user pulls the door open, were
fitted across all operations. This ensured
regular sanitising of hands whilst reducing
the potential for contact transmission. Daily
compliance audits ensured that social
distancing, hygiene measures and face
coverings were being fully adhered to. In
addition, those staff who were capable of
working from home, were deployed to do
so. They were supported with homeworking
risk assessments, the provision of additional
equipment and routine information aimed
C&C Group plc Annual Report 2021 63
some positive results in general health
and safety. Overall a 30% reduction in
RIDDORs (over 7 day lost time events) was
achieved. In addition, we observed a further
reduction in Lost Time Accidents (1 day to
7 days absence) by 29%. This achieved an
impressive 39% reduction in all accidents
compared to the previous year.
The increase in FY2021 RIDDOR incidents
in Wellpark and Scotland Logistics is due
to higher number of contractors on site.
Briefings for contractors visiting sites have
been improved. Over the last year, there
has also been an increase in Lost Time
Accidents per 100 employees at Clonmel
(FY2021: 1.76, FY2020: 0.62)
In 2021, we will launch our revised Health
and Safety Strategy under our ‘Vision
Zero’ initiative. Vision Zero assumes that
all accidents and work-related ill-health
are preventable. It is our ambition and
commitment to create an even safer and
healthier work environment by continuing to
reduce all accidents, harm and work-related
diseases and continually promote excellence
in health, safety and wellbeing. Vision Zero
is a value-based vision, implying that work
should not negatively affect an employee’s
health, safety or wellbeing and should,
if possible, help to enhance colleagues’
competences and employability.
RIDDOR - 2020/21 Incidents x100,000 / hrs
Wellpark
Bulmers
MCB
Scotland Logistics
Bulmers Logistics
Tennents NI
0
0
0
1.83
3.92
3
4.9
7.23
9.05
10.81
10.3
10.32
2019/2020
2020/2021 YTD
Lost Time Accident Incident Rate - 2021/21 Incidents x 100 / employees
Physical health and ways to have fun and
be healthy outside of work have been
encouraged. Towards the end of the year, a
Tennent’s to Tito’s social challenge involved
colleagues across the Group clocking
activity miles (through running, cycling
or walking) with the aim of collectively
contributing enough miles to travel from the
Tennent’s Brewery in Glasgow, via other
C&C locations, to Tito’s in Austin, Texas.
Wellpark
Bulmers
MCB
Scotland Logistics
Bulmers Logistics
Tennents NI
0
0
0
0
0
0.28
0.62
0.75
1.76
1.37
1.42
3.23
2019/2020
2020/2021 YTD
Corporate GovernanceBusiness & StrategyFinancial Statements 64
Responsibility Report
(continued)
Emphasis on
promoting mental
health awareness
and encouraging
positive mental
health increased
during FY2021.
Throughout the pandemic C&C has
supported colleagues’ financial wellness in
a variety of ways. Salaries for colleagues
who are furloughed/laid-off have been
maintained to a sum equivalent to 80%
of monthly earnings. This has been
achieved by “topping up” payment from the
various government schemes as needed.
Benefits, such as Life Assurance, and
benefit allowances have been maintained
at pre-furlough/lay off terms. C&C has
provided support for longer term financial
wellbeing by continuing employer pension
contributions at 100% of pre-furlough/layoff
levels.
While we endeavour to assist our
colleagues’ financial wellbeing in practical
and tangible ways where possible, we also
recognise the needs are unique to individual
circumstances. To assist colleagues in
supporting themselves in this area we have
promoted awareness of financial wellbeing
and made a variety of resources available,
including via our new learning platforms.
Emphasis on promoting mental health
awareness and encouraging positive mental
health increased during FY2021, with
more leaders visibly demonstrating their
commitment to mental health and a greater
number of colleagues coming forward in
sharing their personal experiences and
becoming trained mental health first aiders.
Additional awareness activities took place
around World Mental Health Awareness
Day, Time to Talk Day (UK), Valentine’s Day
(Bulmers Ireland and Tennent’s Northern
Ireland) and International Women’s Day.
New learning resources were made available
on topics such as suicide awareness,
domestic abuse awareness, resilience,
alcohol awareness, responsible drinking
and understanding what organisational and
external support was available.
All business areas launched refreshed
communication channels for colleagues in
and away from work due to the pandemic.
These aimed to maintain connectivity and
social wellbeing, keep colleagues up to date
with changes and matters impacting their
business area and minimise anxiety.
Remote Working
To safeguard colleague health and wellbeing
and protect the integrity of our production
and distribution facilities, through the
year, we have maintained a policy that all
colleagues who can work from home, do
so. This has been supported with a series
of measures, including risk assessments
and provision of equipment, to help adjust
to what is a new situation for most of us.
We regularly communicated key resources
that aid personal wellbeing. With so many
schools closed during the pandemic in the
UK and Ireland, we offered support to our
colleagues who have children in school. To
facilitate the return to work we produced
short films to familiarise and educate
returning staff with the increased safety
measures and layouts put in place across
all sites.
Primary channels of communication have
varied throughout the Group, as business
areas have disparate colleague groups
which COVID-19 has impacted differently.
Across the Group, there has been greater
focus on communication channels such as
e-newsletters, all-hands video meetings,
departmental Zoom and MS Teams
meetings than in previous years.
In February 2021, we launched ‘Our Forum’,
an additional channel to allow colleagues
to stay connected and build engagement
across the Group. During these sessions,
the Managing Director, a designated
Non-Executive Director and representative
from the ESG Team discussed how the
Board and Senior Management worked
together and answered questions raised
in the Colleague Engagement Survey. ‘Our
Forum’ is part of our ongoing commitment
to understanding colleagues’ views and
covered topics including plans post
COVID-19; corporate strategy; health and
safety; training and development and flexible
and remote working.
C&C Group plc Annual Report 2021 65
The sessions enable the Non-Executive
Directors to have a direct understanding of
topics important to colleagues and allows
them to feedback to the Board on key
issues and learnings. The Board is hopeful
that, once COVID-19 restrictions are lifted,
there will be greater in-person interaction for
the ‘Our Forum’ sessions during FY2022.
Embed Key Codes
In June 2020, circa 450 colleagues
across the Group completed online policy
compliance training, created by legal
specialists, DWF Advantage, on:
• The Bribery Act;
• Fraud prevention;
• Cyber security;
• Cyber crime;
• Information security at C&C;
• Modern Slavery;
• Whistleblowing with confidence; and
• Financial crime compliance.
In February 2021, two additional courses
were added: Updated C&C Policies and
Competition Law. During FY2022, the
online compliance training will be cascaded
throughout the workforce.
Learning and Development
Programmes
A learning management platform was
introduced across all business areas. This
enabled on-demand online resources to be
offered to all colleagues, including those
away from work, and who do not commonly
use company information technology
systems. In addition to wellbeing, COVID-19,
and diversity and inclusion topics, online
learning content has been made available
to provide development to sales teams and
support organisational change programmes.
We have continued with most formal
professional qualifications and training,
although some apprenticeships requiring
on the job learning experience have been
deferred until FY2022 as work, and the
associated experiences required, have not
been available. Professional development
has continued within central and support
services functions, including Finance,
Marketing and HR, as well as some sales
and operational areas. Leadership and
management development and the ‘Raising
the Bar’ initiative has continued in Tennent’s,
which included a focus on behavioural
and diversity and inclusion related topics.
Similarly, in Matthew Clark, a suite of internal
management training interventions was
delivered across a range of behavioural
and employee relations topics. In Bulmers,
continued participation in Enterprise Ireland
funded Lean projects has allowed many
colleagues to receive Green Belt training
(which entails product improvement through
waste removal).
We continue to support professional
development across the business and this
year have supported colleagues through
further education and professional exams
including SVQs in Management, MBAs,
CIMA, CIPD and IBD qualifications.
A learning
management
platform was
introduced across all
business areas. This
enabled on-demand
online resources
to be offered to all
colleagues, including
those away from
work, and who do
not commonly use
company information
technology systems.
Governance
5
Build a more
Inclusive, Diverse
and Engaged C&C
Diversity and Inclusion
Global events in 2020, including the
prominence of the Black Lives Matter
movement, is creating an increased
focus on strong diversity policies and
fair employment practices. Like other
organisations which consider themselves
wholly equitable and equal opportunities
employers, we recognise the need for
greater effort in these areas. We have
introduced a Diversity, Inclusion and
Wellbeing Policy across C&C Group,
supplemented by shared learning resources.
Diversity and Inclusion are a focus for our
Executive Committee, who have received
external coaching to support them in leading
inclusion in a more meaningful way.
To evolve our approach, we intend to
understand more about the demographic
and intersectional make up of our
colleagues, their in-depth views on diversity
and inclusion topics and evaluate the
fairness of HR practices through improved
insight. Understanding more about our
colleagues and their views requires input
from as many colleagues as possible and
unfortunately plans have been delayed due
to the majority of colleagues being out of
work during COVID-19. This will be resumed
in FY2022.
Employee Engagement Tracking
We view colleague engagement as
the output of the relationship between
colleagues and C&C Group, i.e. how they
feel about their own experiences and
interactions, as well as the culture and
connection they feel with their respective
business areas. We benchmark colleague
Corporate GovernanceBusiness & StrategyFinancial Statements
66
Responsibility Report
(continued)
engagement against other organisations
and internally over time. Overall engagement
improved during FY2021 within the Group
and when compared to peers.
During FY2021, despite a high number of
colleagues not being at work, we increased
colleague engagement surveying across
the Group to understand the impact of
COVID-19. This included emphasis on C&C
Group’s management of the situation, a
greater focus on health and wellbeing, as
well as support provided to colleagues.
Feedback has been used by business areas
to understand what is working well, as well
as where they could improve. COVID-19 has
impacted different business areas in various
ways and local action plans have been
adopted in response to feedback received.
Communication, and a desire to understand
more about the Group’s strategy, was a
common focus across the Group. Within
business areas, targeted action has
included a focus on improving support
for those balancing competing demands,
such as home-schooling and providing the
opportunity for informal learning for those
working at home.
During FY2021, Non-Executive Directors
increased their engagement with colleagues
to better understand and represent their
interests in the boardroom and extend their
role in governing our corporate culture.
The approach also aimed to improve
colleague experience and engagement,
and the ‘Our Forum’ initiative (see page 64)
was launched. When COVID-19 restrictions
are eased, there will be greater in-person,
including informal, interaction between Non-
Executive Directors and colleagues across
the Group.
Confidential Whistleblowing
Helpline
C&C has an external, independently hosted
and confidential hotline, where our people
can share any concern or suspicion related
to ethical or compliance related wrongdoing
in the Group.
We use all our internal channels to
encourage colleagues to raise their
concerns on anything to do with how C&C
is conducting its business and its adherence
to our policies and codes. We constantly
reassure colleagues that this is a safe and
confidential way to raise concerns.
In FY2021, there were 35 instances
of colleagues utilising our confidential
whistleblowing hotline to raise concerns.
Human Rights
We do not condone and will not
knowingly participate in any form of
human exploitation, including slavery and
people trafficking. We refuse to work with
any suppliers or service providers who
knowingly participate in such practices or
who cannot demonstrate to us sufficient
controls to ensure that such practices are
not taking place in their supply chains. Our
approach is reflected in our Sustainable
and Ethical Procurement Policy, which we
circulate to suppliers. We also carry out
diligence audits and checks on our suppliers
to ensure that they have in place and adhere
to appropriate ethical policies including
our Sustainable Ethical Procurement
Policy, with KPIs for those areas where we
believe the potential impact on the Group
is material. A process is in place internally
to address and remediate any instances of
non-conformance with our Sustainable and
Ethical Procurement Policy.
A copy of our Anti-Modern Slavery
Statement is available on our website.
Anti-Bribery and Corruption
Our Anti-Bribery and Corruption Policy and
accompanying training materials, referenced
above in Embedding Key Codes, are
designed to be straightforward and direct
so that it is clear to all employees what
they may or may not do as part of normal
business transactions. The Policy applies
to all colleagues in the Group equally. It is
written to ensure that legitimate and honest
business transactions can be distinguished
from improper and dishonest transactions.
This Policy and the accompanying training
will be tracked as part of the internal
audit monitoring process to monitor
understanding and adherence to the Policy.
KPIs have been established for those areas
where we believe the potential impact on
the Group is material. During FY2021, no
incidences of bribery or corruption were
uncovered across the Group.
Tax
The Group takes its responsibilities as a
corporate citizen seriously. This includes
respecting and complying with local
tax laws and paying the required and
appropriate levels of tax in the different
countries where we operate. We claim
the allowances and deductions that we
are properly entitled to, for instance, on
the investment and employment that we
bring to our communities. We benefit from
having always been an Irish company,
established in the Republic of Ireland’s
corporate tax environment, with our major
cider production unit located in Clonmel and
the Group is headquartered in Dublin. The
majority of the Group’s profits are earned in
the Republic of Ireland and the UK, which
both have competitive corporation tax rates
compared with the European average. In
the Republic of Ireland and the UK, we remit
substantial amounts of duty on alcohol
production. The Company was grateful
for the decision of the Irish Revenue and
the HMRC to defer tax liabilities during the
outbreak of COVID-19.
Protecting Customer and other
Stakeholder Data
The Group's wholly owned subsidiary,
Matthew Clark Bibendum Limited (‘MCB’),
became aware in April 2021 that it was
the subject of a cyber-security incident,
which impacted both Matthew Clark and
Bibendum. MCB responded quickly,
enacting its cyber-security response plan,
and took steps to protect its IT systems. A
C&C Group plc Annual Report 2021 67
Portman Group
In May 2021, C&C re-joined the Portman
Group. While our internal marketing codes
have always exceeded the Portman Group
Codes of Practice, we were delighted to
re-join the Group and actively support
their aims to deliver higher standards of
best practice and ensure the responsible
marketing and promotion of alcoholic
products.
Other
In March 2020, Tennent’s worked with the
Scottish Government and NHS Scotland to
educate drinkers around the weekly alcohol
consumption guidelines of 14 units. Support
for this campaign involved advertising in
our trade wholesale brochure, “One Stop”
was distributed to circa 4,500 customers, a
donation of advertising assets were made at
Celtic Park, such as the match programme,
concourse TV screens and in game
perimeter LED boards. This messaging was
viewed by circa 150,000 fans at matches
and by TV and digital broadcast audiences
of circa 2m viewers.
leading forensic information technology firm
and legal counsel were engaged to assist
MCB investigate the incident and restore
its IT systems as quickly and as safely as
possible. The issue did not affect the IT
systems of the wider C&C Group, which
continued to operate as normal.
The Group has a number of IT security
controls in place including gateway firewalls,
intrusion prevention systems, security
incident monitoring and virus scanning.
Regular communications are sent out to
colleagues containing advice on IT security
particularly in relation to home working.
The Group’s approach is one of ongoing
enhancement of controls as threats evolve
with the target being to align controls, and in
particular to implement any new services or
changes to the environment.
The Group also has a suite of information
security policies in place including Data
Protection (‘GDPR’) and Electronic
Information and Communications. The
Group has enacted specific business
continuity plans including co-ordination
with key third party IT suppliers and
consideration of keyman risk for the Group’s
IT personnel.
We have implemented configuration
changes to block phishing emails, increased
awareness campaigns to help our people
identify these types of attacks, and are
identifying areas for further improvement
in the development of our awareness
campaigns.
The recent incident affecting Matthew Clark
and Bibendum IT systems has emphasised
the need for continued focus on information
security. The Group has commenced a
detailed review of its information security
and cyber preparedness policies and
processes.
6
Collaborate with
Government & NGOs
Leading Deposit Return Scheme
(‘DRS’) Implementation in Scotland
C&C has supported the Scottish
Government’s aims around the introduction
of a Deposit Return Scheme (‘DRS’)
since proposals were first announced in
2017. Since then, we have worked with
the Scottish Government, Zero Waste
Scotland and all stakeholders to help
create an efficient, well-designed DRS for
Scotland that delivers on the country’s
recycling and litter targets and supports
ambitions for a more circular economy.
In March 2021, C&C became a founding
member of Circularity Scotland, the system
administrator appointed to operate the DRS
in Scotland. The new administrator will work
collaboratively with producers, retailers,
the hospitality industry and wholesalers to
deliver a scheme to collect more than 90%
of used drinks containers.
Collaborate on Minimum Unit Price
Implementation in Ireland
We look forward to the planned
implementation of minimum unit pricing in
Ireland on 1 January 2022. Although the
majority of drinkers in Ireland enjoy alcohol
responsibly, we believe this legislation
will have the same impact as it has had
in Scotland in tackling the availability of
strong, cheap alcohol and its correlation
with harmful drinking. We will continue to
work with the Irish Government and all
relevant bodies around the implementation
of minimum unit price legislation.
Corporate GovernanceBusiness & StrategyFinancial Statements 68
Directors’ Report
The Directors present the Annual Report and audited Consolidated Financial Statements of the Group for the year ended 28 February 2021.
Principal Activities
The Group’s principal trading activity is the manufacturing, marketing and distribution of branded beer, cider, wine, spirits and soft drinks.
Non-Financial Reporting Statement
In compliance with the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups)
Regulations 2017, the table below is designed to help stakeholders navigate to the relevant sections in this Annual Report to understand the
Group’s approach to these non-financial matters:
Reporting Requirements
Our Policies
Section in Annual Report or
Page References
Risks
Although the risks associated with environmental
matters are actively monitored, the Group does not
believe these risks meet the threshold of a principal
risk for our business.
For employee matters, retention and recruitment of
staff is one of our principal risks. Please refer to page
36 for more details.
Although the risks associated with human rights
abuses are actively monitored, the Group does not
believe these risks meet the threshold of a principal
risk for our business.
Although the risks associated with bribery and
corruption are actively monitored, the Group does
not believe these risks meet the threshold of a
principal risk for our business.
Environmental
matters
Environmental Sustainability
Responsibility Report
Social and
Employee matters
Diversity and Inclusion
Health and Safety
Speak Up
Conflicts of Interest
Responsibility Report
Human Rights
Anti-Modern Slavery
Responsibility Report
Anti-bribery and
Corruption
Code of Conduct
Compliance
Anti-Bribery
Description of the
business model
Non-Financial
key performance
indicators
Dividends
Responsibility Report
Please refer to pages
24 to 27
Please refer to page
30
Due to the emergence of COVID-19 and the impact this has on global economies and on business generally, the Board concluded it was not
appropriate, nor prudent, to pay an interim dividend or declare a final dividend for FY2021. For the previous financial year ending 29 February
2020, an interim dividend of 5.50 cent per share was paid on 13 December 2019. No final dividend was paid for FY2020 given the outbreak
of COVID-19 and its impact.
C&C Group plc Annual Report 2021
Board of Directors
The names, functions and date of appointment of the current Directors are as follows:
Director
Stewart Gilliland
David Forde
Patrick McMahon
Andrea Pozzi
Vineet Bhalla
Jill Caseberry
Jim Clerkin
Vincent Crowley
Emer Finnan
Helen Pitcher
Jim Thompson
Function
Non-Executive Chair
Interim Executive Chair
Non-Executive Chair
Non-Executive Director
Group Chief Executive Officer
Group Chief Financial Officer
Chief Operating Officer
Independent Non-executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
69
Appointment
2020
2020*
2018
2012
2020
2020
2017
2021
2019
2017
2016
2014
2019
2019
* Stewart Gilliland was appointed as interim Executive Chair from 16 January 2020, following the retirement of Stephen Glancey, to 2 November 2020, when David Forde was
appointed Group Chief Executive Officer.
Research and Development
Share Price
Certain Group undertakings are engaged in
ongoing research and development aimed
at improving processes and expanding
product ranges.
Listing Arrangements
In order to facilitate entry into the FTSE UK
Index Series, the Group cancelled the listing
and trading of C&C shares on Euronext
Dublin with effect from 8 October 2019. The
Group is listed on the premium segment
of The London Stock Exchange and was
included in the FTSE All-Share Index and the
FTSE 250 indices in December 2019.
The Group remains domiciled and tax
resident in Ireland, with its registered and
corporate head office located in Dublin.
The Group also retains a significant
manufacturing, commercial and brand
presence in Ireland.
The price of the Company’s ordinary shares
as quoted on the London Stock Exchange
at the close of business on 26 February
2021 (being the last working day) was £2.58
(29 February 2020: £3.28). The price of the
Company’s ordinary shares ranged between
£1.45 and £3.36 during the year.
Further Information on the Group
The information required by section 327 of
the Companies Act 2014 to be included in
this report with respect to:
1. The review of the development and
performance of the business and future
developments is set out in the CEO’s
Review on pages 10 to 21 and the
Strategic Report on pages 2 to 67.
2. The principal risks and uncertainties
which the Company and the Group
faces are set out in the Strategic Report
on pages 2 to 67 and which have been
updated to reflect the risks posed by
COVID-19.
3. The key performance indicators relevant
to the business of the Group, including
environmental and employee matters,
are set out in the Strategic Report on
pages 30 to 31 and in the Group Chief
Financial Officer’s Review on pages 43
to 49; and further information in respect
of environmental and employee matters
is set out in the Responsibility Report
on pages 50 to 67.
4. The financial risk management
objectives and policies of the Company
and the Group, including the exposure
of the Company and the Group to
financial risk, are set out in the Group
Chief Financial Officer’s Review on
pages 43 to 49 and note 24 to the
financial statements.
The Group’s Viability Statement is contained
in the Strategic Report on pages 41 to 42.
Corporate Governance
In accordance with Section 1373 of the
Companies Act 2014, the corporate
governance statement of the Company
for the year, including the main features of
the internal control and risk management
systems of the Group, is contained in
the Strategic Report and the Corporate
Governance Report on pages 76 to 85.
Corporate GovernanceBusiness & StrategyFinancial Statements 70
Directors’ Report
(continued)
Substantial Interests
As at 28 February 2021 and 14 May 2021, being the latest practicable date, details of interests over 3% in the ordinary share capital carrying
voting rights which have been notified to the Company are:
Artemis Investment Management LLP
FMR LLC
Silchester International Investors LLP
Investec Asset Management Limited
FIL Limited
BlackRock, Inc.
Brandes Investment Partners, L.P.
JNE Partners LLP
No. of ordinary
shares held as
notified at
No. of ordinary
shares held as
notified at
% at
28 February 2021
28 February 2021
14 May 2021
% at
14 May 2021
46,564,845
26,823,505
15,465,170
15,391,039
13.051,606
12,222,351
12,063,059
9,583,419
14.95% 46,564,845
14.52%
8.61% 26,823,505
4.99%
4.98%
15,465,170
15,391,039
4.19%
13,051,606
3.94%
14,829,887
3.89%
12,063,059
3.07%
9,583,419
8.37%
4.82%
4.80%
4.07%
4.76%
3.76%
2.99%
As far as the Company is aware, other than as stated in the table above, no other person or company had at 28 February 2021 or 14 May
2021, being the latest practicable date, an interest in 3% or more of the Company’s share capital carrying voting rights.
Issue of Shares and Purchase of
Own Shares
At the Annual General Meeting held on 23
July 2020, the Directors received a general
authority to allot shares. A limited authority
was also granted to Directors to allot shares
for cash otherwise than in accordance with
statutory pre-emption rights. Resolutions
will be proposed at the 2021 Annual General
Meeting to allot shares to a nominal amount
which is equal to approximately one-third
of the issued ordinary share capital of
the Company. In addition, resolutions will
also be proposed to allow the Directors
to allot shares for cash otherwise than in
accordance with statutory pre-emption
rights up to an aggregate nominal value
which is equal to approximately 5% of the
nominal value of the issued share capital of
the Company and, in the event of a rights
issue, and a further 5% of the nominal value
of the issued share capital of the Company
for the purposes of an acquisition or a
specified capital investment. If granted,
these authorities will expire at the conclusion
of the Annual General Meeting in 2022 and
the date 18 months after the passing of the
resolution, whichever is earlier.
shares (the “Repurchase Authority”). As at
the date of this Report, the Group had not
purchased any ordinary shares pursuant to
the Repurchase Authority from the start of
the financial year.
Special resolutions will be proposed at the
2021 Annual General Meeting to renew
the authority of the Company, or any of its
subsidiaries, to purchase up to 10% of the
Company’s ordinary shares in issue at the
date of the Annual General Meeting and
in relation to the maximum and minimum
prices at which treasury shares (effectively
shares purchased and not cancelled) may
be re-issued off-market by the Company.
If granted, the authorities will expire on the
earlier of the date of the Annual General
Meeting in 2022 and the date 18 months
after the passing of the resolution. The
minimum price which may be paid for
shares purchased by the Company shall not
be less than the nominal value of the shares
and the maximum price will be 105% of the
average market price of such shares over
the preceding five days. The Directors will
only exercise the power to purchase shares
if they consider it to be in the best interests
of the Company and its shareholders.
At the Annual General Meeting held on 23
July 2020 authority was granted to purchase
up to 10% of the Company’s ordinary
As at 14 May 2021, being the latest
practicable date, options to subscribe for a
total of 2,730,762 ordinary shares (excluding
Recruitment and Retention Awards) are
outstanding, representing 0.88.% of the
Company’s total voting rights. If the authority
to purchase ordinary shares were used in
full, the options would represent 0.98% of
the Company’s total voting rights.
Dilution Limits and Time Limits
All employee share plans contain the share
dilution limits recommended in institutional
guidance, namely that no awards shall be
granted which would cause the number
of Shares issued or issuable pursuant to
awards granted in the ten years ending with
the date of grant (a) under any discretionary
or executive share scheme adopted by the
Company to exceed 5%, and (b) under any
employees’ share scheme adopted by the
Company to exceed 10%, of the ordinary
share capital of the Company in issue at that
time.
The European Communities
(Takeover Bids (Directive 2004/25/
EC)) Regulations 2006
Structure of the Company’s share capital
At 14 May 2021, being the latest practicable
date, the Company has an issued share
capital of 320,626,375 ordinary shares of
€0.01 each and an authorised share capital
of 800,000,000 ordinary shares of €0.01
each.
C&C Group plc Annual Report 2021
71
At 28 February 2021, the trustee of the C&C
Employee Trust held 1,766,325 ordinary
shares of €0.01 each in the capital of the
Company. Shares held by the trustee of the
C&C Employee Trust are accounted for as
if they were treasury shares. These shares
are, however, included in the calculation
of Total Voting Rights for the purposes of
Regulation 20 of the Transparency (Directive
2004/109/EC) Regulations 2007 (“TVR
Calculation”).
As at 28 February 2021, a subsidiary of
the Group held 9,025,000 shares in the
Company, which were acquired under
the authority granted to the Company.
These shares are not included in the TVR
Calculation and are accounted for as
treasury shares.
Details of employee share schemes, and
the rights attaching to shares held in these
schemes, can be found in note 4 (Share-
Based Payments) to the financial statements
and the Report of the Remuneration
Committee on Directors’ Remuneration on
pages 102 to 132.
The Company has no securities in issue
conferring special rights with regard to
control of the Company.
Details of persons with a significant holding
of securities in the Company are set out on
page 70.
Rights and obligations attaching to the
Ordinary Shares
All ordinary shares rank pari passu, and
the rights attaching to the ordinary shares
(including as to voting and transfer) are
as set out in the Company’s Articles of
Association (“Articles”). A copy of the
Articles may be obtained upon request to
the Company Secretary.
Holders of ordinary shares are entitled to
receive duly declared dividends in cash or,
when offered, additional Ordinary Shares.
In the event of any surplus arising on the
occasion of the liquidation of the Company,
shareholders would be entitled to a share
in that surplus pro rata to their holdings of
ordinary shares.
Holders of ordinary shares are entitled
to receive notice of and to attend, speak
and vote in person or by proxy, at general
meetings having, on a show of hands,
one vote, and, on a poll, one vote for each
Ordinary Share held. Procedures and
deadlines for entitlement to exercise, and
exercise of, voting rights are specified in
the notice convening the general meeting
in question. There are no restrictions on
voting rights except in the circumstances
where a “Specified Event” (as defined in
the Articles) shall have occurred and the
Directors have served a restriction notice on
the shareholder. Upon the service of such
restriction notice, no holder of the shares
specified in the notice shall, for so long as
such notice shall remain in force, be entitled
to attend or vote at any general meeting,
either personally or by proxy.
Holding and transfer of Ordinary
Shares
Following the migration in March 2021 of
securities settlement in the securities of
Irish registered companies listed on the
London Stock Exchange (such as the
Company) and/or Euronext Dublin from the
current settlement system, CREST, to the
replacement system, Euroclear Bank, the
ordinary shares can be held in certificated
form (that is, represented by a share
certificate) or indirectly through the Euroclear
System or through CREST in CDI (CREST
Depository Interest) form.
Save as set out below, there is no
requirement to obtain the approval of the
Company, or of other shareholders, for a
transfer of ordinary shares. The Directors
may decline to register (a) any transfer of
a partly-paid share to a person of whom
they do not approve, (b) any transfer of
a share to more than four joint holders,
and (c) any transfer of a certificated share
unless accompanied by the share certificate
and such other evidence of title as may
reasonably be required. The registration
of transfers of shares may be suspended
at such times and for such periods (not
exceeding 30 days in each year) as the
Directors may determine.
Transfer instruments for certificated
shares are executed by or on behalf of the
transferor and, in cases where the share
is not fully paid, by or on behalf of the
transferee.
The Articles contain provisions designed
to facilitate the Company’s participation
in the Euroclear Bank settlement system
and to facilitate the exercise of rights in the
Company by holders of interests in ordinary
shares that are held through the Euroclear
Bank system. The holding and transfer of
ordinary shares through the Euroclear Bank
system is additionally subject to the rules
and procedures of Euroclear Bank and
applicable Belgian law and (for interests in
ordinary shares held in CDI form) those of
CREST.
Rules concerning the appointment
and replacement of the Directors
and amendment of the Company’s
Articles
Unless otherwise determined by ordinary
resolution of the Company, the number
of Directors shall not be less than two or
more than 14. Subject to that limit, the
shareholders in general meeting may
appoint any person to be a Director either
to fill a vacancy or as an additional Director.
The Directors also have the power to co-opt
additional persons as Directors, but any
Director so co-opted is under the Articles
required to be submitted to shareholders
for re-election at the first Annual General
Meeting following his or her co-option.
The Articles require that at each Annual
General Meeting of the Company one-third
of the Directors retire by rotation. However,
in accordance with the recommendations
of the UK Corporate Governance Code, the
Directors have resolved they will all retire
and submit themselves for re-election by the
shareholders at the Annual General Meeting
to be held this year.
The Company’s Articles may be amended
by special resolution (75% majority of votes
cast) passed at a general meeting.
Corporate GovernanceBusiness & StrategyFinancial Statements 72
Directors’ Report
(continued)
Powers of Directors
Under its Articles, the business of the
Company shall be managed by the Directors,
who exercise all powers of the Company
as are not, by the Companies Acts or the
Articles, required to be exercised by the
Company in general meeting.
The powers of Directors in relation to issuing
or buying back by the Company of its shares
are set out above under “Issue of Shares and
Purchase of Own Shares”.
Change of control and related
matters
Certain of the Group’s borrowing facilities
include provisions that, in the event of a
change of control of the Company, could
oblige the Group to repay the facilities.
Certain of the Company’s customer
and supplier contracts and joint venture
arrangements also contain provisions that
would allow the counterparty to terminate the
agreement in the event of a change of control
of the Company. The Company’s Executive
Share Option Scheme and Long-Term
Incentive Plan each contain change of control
provisions which allow for the acceleration of
the exercise of share options/awards in the
event of a change of control of the Company.
There are no agreements between the
Company and its Directors or employees
providing for compensation for loss of office
or employment (whether through resignation,
purported redundancy or otherwise) that
occurs because of a takeover bid in excess
of their normal contractual entitlement.
Shareholder Rights Directive II
On 20 March 2020, the provisions of the
Shareholders’ Rights Directive II (SRD II)
became law in Ireland with the publication of
the European Union (Shareholders’ Rights)
Regulations 2020 (SRD II Regulations). The
SRD II Regulations apply with effect from 30
March 2020.
SRD II Regulations codify that Irish
companies must seek shareholder approval
of a remuneration report annually; and, an
advisory remuneration policy once every
four years. The Group is, in effect, already
in compliance with this requirement having
provided shareholders with the opportunity
to opine on the Group’s remuneration report
annually since 2010; and also in providing
shareholders with an advisory vote on the
Group’s Remuneration Policy. The 2021
Remuneration Policy (“policy”) will be put
to our shareholders on an advisory basis at
this year’s AGM. Details of the Policy are set
out on pages 109 to 123.
Political Donations
No political donations were made by
the Group during the year that require
disclosure in accordance with the Electoral
Acts, 1997 to 2002.
Accounting Records
The measures taken by the Directors to
secure compliance with the requirements
of Sections 281 to 285 of the Companies
Act, 2014 with regard to the keeping of
adequate accounting records are to employ
accounting personnel with appropriate
qualifications, experience and expertise
and to provide adequate resources to the
finance function. The books of account of
the Company are maintained at the Group’s
office in Bulmers House, Keeper Road,
Crumlin, Dublin 12, D12 K702.
Auditor
In accordance with Section 383(2) of the
Companies Act, 2014, the auditor, Ernst
& Young, Chartered Accountants, will
continue in office. Ernst & Young were first
appointed as the Company’s auditor during
the financial year ending 28 February 2018
following a tender process. The Company
is committed to mandatory tendering every
ten years in line with best practice. Further
details are set on page 90.
which the Company’s auditor is unaware.
Having made enquiries with fellow Directors
and the Company’s auditor, each Director
has taken all the steps that they ought to
have taken as a Director to make themselves
aware of any relevant audit information and to
establish that the Company’s auditor is aware
of that information.
Directors’ Compliance Statement
(Made In Accordance With Section
225 of the Companies Act 2014)
The Directors acknowledge that they are
responsible for securing compliance by the
Company with its relevant obligations as
are defined in the Companies Act, 2014 (the
‘Relevant Obligations’).
The Directors confirm that they have drawn up
and adopted a compliance policy statement
setting out the Company’s policies that, in
the Directors’ opinion, are appropriate to the
Company with respect to compliance by the
Company with its relevant obligations.
The Directors further confirm the Company
has put in place appropriate arrangements or
structures that are, in the Directors’ opinion,
designed to secure material compliance with
its relevant obligations including reliance
on the advice of persons employed by the
Company and external legal and tax advisers
as considered appropriate from time to time
and that they have reviewed the effectiveness
of these arrangements or structures during
the financial year to which this report relates.
Financial Instruments
In the normal course of business, the Group
has exposure to a variety of financial risks,
including foreign currency risk, interest
rate risk, liquidity risk, and credit risk. The
Company’s financial risk objectives and
policies are set out in Note 24 of the financial
statements.
Disclosure of Information to the Auditor
In accordance with Section 330 of the
Companies Act, 2014, the Directors confirm
that, so far as they are each aware, there
is no relevant audit information, being
information needed by the auditor in
connection with preparing their report, of
Post Balance Sheet Events
On 26 May 2021, the Group announced a
rights issue. The rights issue is intended,
alongside the other actions that the Group
has already announced and implemented,
to reduce leverage and improve the Group’s
C&C Group plc Annual Report 2021 73
The Directors’ Report for the year ended 28
February 2021 comprises these pages and
the sections of the Annual Report referred
to under ‘Other information’ above, which
are incorporated into the Directors’ Report
by reference.
Signed
On behalf of the Board
David Forde
Group Chief
Executive Officer
26 May 2021
Patrick McMahon
Group Chief
Financial Officer
investigating the incident and restoring the IT
systems as quickly and as safely as possible.
As part of the cybersecurity response plan,
the Group contacted all stakeholders on the
actions the Group had taken and notified the
relevant authorities, including the Information
Commissioner’s Office. This incident did
not affect the IT systems of the wider C&C
Group, which continued to operate as normal.
The recent incident affecting Matthew Clark
and Bibendum IT systems has emphasised
the need for continued focus on information
security. The Group has commenced a
detailed review of its information security and
cyber preparedness policies and processes.
There were no other events affecting the
Group that have occurred since the year end
which would require disclosure or amendment
of the consolidated financial statements.
Annual General Meeting
Your attention is drawn to the letter to
shareholders and the notice of meeting
accompanying this report which set out
details of the matters which will be considered
at the Annual General Meeting. In particular,
please ensure to read additional disclosures
relating to restrictions at the Annual General
Meeting due to government and health
authority guidance on COVID-19 social
distancing.
Other Information
Other information relevant to the Director’s
Report may be found in the following sections
of the Annual Report:
Information
Results
Principal risks & uncertainties including
risks associated with recent emergence of
COVID-19
Directors’ remuneration, including the
interests of the directors and secretary in the
share capital of the Company
Location in the Annual Report
Financial Statements – pages 144 to 235.
Principal Risks & Uncertainties – pages 32
to 42.
Directors’ Remuneration Report – pages
102 to 132.
Long-Term Incentive Plan, share options and
equity settled incentive schemes
Directors’ Remuneration Report – pages
102 to 132.
Significant subsidiary undertakings
Financial Statements – Note 29.
Director biographies and Board composition
Directors and Officers – pages 74 to 75.
Audit Committee Report
Pages 86 to 91.
overall liquidity position thereby providing
the Group with the capital structure to both
support the business during further potential
disruptions from COVID-19 and to deliver on
its strategy as normalised trading conditions
return.
As a direct consequence of the impact
of COVID-19, the Group successfully
negotiated waivers on its debt covenants
from its lending group for FY2021, and these
have been extended up to, but not including,
the August 2022 test date whether or not
the rights issue is successful. Conditional
on a Minimum Equity Raise being achieved,
the debt covenants for 31 August 2022 were
also renegotiated to increase the threshold
of the Group’s Net Debt/Adjusted EBITDA
covenant to not exceed 4.5x and to reduce
the Interest cover covenant to be not less
than 2.5x. As part of the agreement reached
to waive the debt covenants, a minimum
liquidity requirement and a gross debt
restriction have been put in place, both in
the scenario of a Minimum Equity Raise
being achieved or a Minimum Equity Raise
not being achieved. Please refer to Note 20
for further details.
Post year end the Group announced that
the outcome of a cost reduction programme
it had undertaken would deliver annualised
savings of €18m against its pre COVID-19
cost base.
On 2 April 2021, the Group completed the
sale of its wholly owned US subsidiary,
Vermont Hard Cider Company (“VHCC”) to
Northeast Kingdom Drinks Group, LLC for a
total consideration of USD 20 million. VHCC
was classified as a disposal group, held for
sale, as at 28 February 2021.
In April 2021, the Group's wholly owned
subsidiary, Matthew Clark Bibendum Limited
("MCB"), were the subject of a cybersecurity
incident, which impacted both Matthew
Clark and Bibendum. MCB responded
quickly, enacting its cybersecurity response
plan, and taking steps to protect its IT
systems. Additionally, C&C engaged a
leading forensic information technology firm
and legal counsel to assist the Group in
Corporate GovernanceBusiness & StrategyFinancial Statements
74
Directors and Officers
1
3
5
7
9
11
2
4
6
8
10
12
1. Stewart Gilliland
Chair
Stewart Gilliland (64) was appointed a Non-
Executive Director of the Company in April
2012 and Chair in July 2018. Stewart is also
Chair of the Nomination Committee. From
2006 to 2010 he was Chief Executive Officer
of Müller Dairy (UK) Ltd. Prior to that, he held
positions at Whitbread Beer Company and
at Interbrew SA in markets including the UK,
Ireland, Europe and Canada. He is currently
a Non-Executive Director and member of the
Audit Committee and Nomination Committee
at Tesco plc, a Non-Executive Director and
Chair of the Remuneration Committee at
Natures Way Foods Limited and a Non-
Executive Director of Chapel Down Limited. He
is a former Non-Executive Director of Booker
Group plc, Mitchells & Butlers plc, Sutton &
East Surrey Water plc, Vianet Group plc and
Tulip Limited.
2. David Forde
Group Chief Executive Officer
David Forde (53) was appointed Group Chief
Executive Officer in November 2020. Prior to
joining the Company, David was the Managing
Director of Heineken UK, a leading producer
of beer and cider brands in the UK market,
as well as a significant pub operator, with
approximately 2,500 outlets in its estate. David
worked with Heineken for 31 years and had
extensive experience in senior leadership
positions across the business. He started
his career with the Sales and Marketing
team at Heineken Ireland, before gaining
international experience in the Netherlands
and then Poland, where he was Marketing
Director. Progressing to senior leadership,
David was appointed General Manager of
Heineken UK in 2007 and played a key role in
Heineken's acquisition of Scottish & Newcastle
in 2008 and the subsequent integration of
the two businesses. In 2009, David returned
to Heineken Ireland as Managing Director,
before being appointed Managing Director of
Heineken UK in 2013.
3. Patrick McMahon
Group Chief Financial Officer
Patrick McMahon (41) was appointed Group
Chief Financial Officer in July 2020. He has
held a number of senior management positions
within the food and beverage sector across
the UK, Ireland and North America over the
past 15 years. Having originally joined C&C in
2005 his previous roles include Group Finance
Director, Finance Director of a number of
C&C’s business units and most recently, Group
Strategy Director prior to his appointment as
Group CFO. Patrick is a Fellow of Chartered
Accountants Ireland, having trained at KPMG.
4. Andrea Pozzi
Group Chief Operating Officer
Andrea Pozzi (49) is the Group’s Chief
Operating Officer with responsibility for the
Group’s manufacturing, logistics, procurement
and IT functions as well as leading the Group’s
businesses in Great Britain and the export
business. He joined C&C in 2010 and has had
a number of roles within the Group, including
Group Manufacturing Director and Managing
Director International (EMEA and GB). Before
joining C&C, Andrea held various management
positions with the Carlsberg Group, Scottish &
Newcastle and Masterfoods.
5. Vineet Bhalla
Independent Non-Executive Director
Vineet Bhalla (48) was appointed a Non-
Executive Director of the Company in April
2021. Vineet is a highly experienced digital
professional, with over 25 years of experience
across defence, consumer goods, health
and retail sectors. Until March 2021, Vineet
was Chief Technology Officer and a Senior
Vice President at Burberry plc. He previously
held global roles for Unilever as Head of
IT for their digital marketing and research
and development divisions and had led
data-driven and digital transformations at
scale. Prior to Unilever, Vineet held global
technology positions at Diageo enabling data
driven transformation of their UK and Ireland
Customer Development Teams. Vineet also
currently holds a Non-Executive Director at
Moorfields Eye Hospital NHS Foundation Trust
and serves as Chair of the Trust’s People and
Culture Committee. Vineet brings strong digital
transformation skills to the Board.
C&C Group plc Annual Report 2021 Board Committees
Audit Committee
Emer Finnan (Chair)
Vincent Crowley
Jim Thompson
Nomination Committee
Stewart Gilliland (Chair)
Emer Finnan
Vincent Crowley
Helen Pitcher
Remuneration
Committee
Helen Pitcher (Chair)
Jill Caseberry
Jim Clerkin
ESG Committee
Jim Thompson (Chair)
Jill Caseberry
Helen Pitcher
Patrick McMahon
Andrea Pozzi
Senior Independent
Director
Vincent Crowley
75
6. Jill Caseberry
Independent Non-Executive Director
Jill Caseberry (56) was appointed a Non-
Executive Director of the Company in February
2019, a member of the Remuneration
Committee in March 2019 and a member of
the ESG Committee in September 2020. Jill
has extensive sales, marketing and general
management experience across a number of
blue chip companies including Mars, PepsiCo
and Premier Foods. Jill is a Non-Executive
Director, Chair of the Remuneration Committee
and member of the Audit and Nomination
Committee at Bellway plc and at Halfords
plc. Jill is also a Non-Executive Director and
a member of the Remuneration Committee
at Bakkavor plc and Senior Independent
Director, Chair of the Remuneration Committee
and member of the Audit and Nomination
Committees of St. Austell Brewery Company
Limited. Jill brings considerable experience
of brand management and marketing to the
Board.
7. Jim Clerkin
Independent Non-Executive Director
Jim Clerkin (66) was appointed as a Non-
Executive Director of the Company in April
2017. Jim has over 40 years’ experience
in the beer, wines, champagne and spirits
industry. He has worked in the industry in
Ireland, UK, France, Canada, Mexico and
the United States at senior levels including
managing director and CEO roles. He brings
a wealth of experience and knowledge of
global drinks to the Board including by way
of his roles at Guinness Ireland, Diageo and
Allied Domecq for North America. In 2008, Jim
was asked to take over the Moet Hennessy
(LVMH) wine and spirits business in the US as
President and CEO. In 2015, the territory was
extended to include North America. In 2020,
he was appointed to a new role as President
of Strategic Development and advisor to the
global CEO. Jim has also served on the Board
of the Distilled Spirits Council USA for twelve
years. In additional to his professional career,
Jim has also been the Chair of Co Operation
Ireland (USA) which is a renowned peace and
reconciliation charity.
8. Vincent Crowley
Independent Non-Executive Director
Vincent Crowley (66) was appointed as a
Non-Executive Director of the Company in
January 2016 and as Senior Independent
Director in June 2019. He is a member of
the Audit Committee and the Nomination
Committee. Vincent was previously
both Chief Operating Officer and Chief
Executive Officer of Independent News
and Media plc, a leading media company.
He also served as Chief Executive Officer
and subsequently as a Non-Executive
Director of APN News & Media, a media
company listed in Australia and New
Zealand. He initially worked with KPMG in
Ireland. Vincent is currently Chair of Altas
Investments plc and a Non-Executive
Director of Grafton Group plc. Vincent
brings considerable domestic and
international business experience across a
number of sectors to the Board.
9. Emer Finnan
Independent Non-Executive Director
Emer Finnan (52) was appointed as a
Non-Executive Director of the Company
in May 2014, became Chair of the Audit
Committee in July 2015 and is a member
of the Nomination Committee. She is
President, Europe of Kildare Partners,
a private equity firm based in London
and Dublin, where she is responsible for
investment origination in Europe. After
qualifying as a chartered accountant with
KPMG, she worked in investment banking
at Citibank and ABN AMRO in London and
then NCB Stockbrokers in Dublin. In 2005
she joined EBS Building Society in Ireland,
becoming its Finance Director in early 2010.
In September 2012, Emer re-joined NCB
Stockbrokers to lead a financial services
team in Ireland. She joined Kildare Partners
in 2013. She brings considerable financial
expertise to the Board.
For information on independence of the Directors, please see Directors’
Statement of Corporate Governance on pages 76 to 85.
10. Helen Pitcher OBE
Independent Non-Executive Director
Helen Pitcher (63) was appointed a Non-Executive
Director of the Company in February 2019,
Chair of the Remuneration Committee in March
2019 and a member of the ESG Committee
in September 2020. Helen is currently Chair
of a leading board effectiveness consultancy,
Advanced Boardroom Excellence Ltd, Chair of
the Criminal Cases Review Commission, a Non-
Executive Director at United Biscuits UK, Senior
Independent Director at OneHealth Group Ltd
and Chair of its Remuneration and Nominations
Committees, President of INSEAD Directors
Network Board (IDN) and a Chair of INSEAD
Directors Club Limited. Helen is the President of
KidsOut (a National Children’s Charity) and sits
on the Advisory Board for Leeds University Law
Faculty. Helen was previously Chair of the Queens
Counsel Selection Panel, and a Board member
and Remuneration Chair for the CIPD. In Helen’s
earlier career she was part of Grand Metropolitan
plc as a Divisional Director (Board Director,
Clifton Inns Ltd). In 2015 Helen Pitcher was
awarded an OBE for services to business. Helen
brings a wealth of experience and knowledge of
governance and board effectiveness in a variety
of sectors, including the drinks industry, to the
Board.
11. Jim Thompson
Independent Non-Executive Director
Jim Thompson (60) was appointed a Non-
Executive Director of the Company, and a
member of the Audit Committee in March 2019,
and Chair of the ESG Committee in September
2020. Jim serves on the board of Directors of
Millicom International Cellular SA. He has been
a Guest Lecturer at the MBA Programmes at
the University of Virginia, Columbia University
and George Washington University. He holds an
MBA from the Darden School at the University of
Virginia where he received the Faculty Award for
academic excellence. He has previously worked
at Southeastern Asset Management, Mackenzie
and Bryant Asset Management. Jim brings
substantial international investment management
experience to the Company.
12. Mark Chilton
Company Secretary
& Group General Counsel
Mark Chilton (58) joined the Group in January
2019 as Company Secretary and Group General
Counsel. Mark was Company Secretary and
General Counsel of Booker Group plc from 2006
until 2018. Mark qualified as a solicitor in 1987.
Corporate GovernanceBusiness & StrategyFinancial Statements 76
Corporate Governance Report
the Group has been able to demonstrate
its resilience, strength and agility. Since the
pandemic emerged in early 2020, the Group
has adapted quickly and taken significant,
prudent actions to protect the business
and its liquidity position, focusing on factors
within its control with the aim of navigating
the pandemic as safely as possible and
positioning its business as well as possible
for a future normalisation. Throughout this
time, the Board’s primary concern has been
the welfare and health and safety of the
Group’s employees, their families and the
communities in which the Group operates.
To that end, the Group has followed the
advice from the respective governments and
relevant authorities and sought to comply
with applicable regulations at all times and
will continue to do so to protect its people
and operations.
The Group has taken a series of proactive
steps to mitigate, where possible, the
negative financial and operational impacts of
the COVID-19 pandemic, including:
• obtaining waivers of the existing
financial covenants under its financing
arrangements;
• cancelling all discretionary expenditure;
• placing a significant number of employees
on a temporary furlough and reducing
salaries across the Group including
senior management and the Board in
the first half of the financial year ended
28 February 2021;
• postponing the majority of non-committed
capital expenditure;
• re-deployment of resources to capture
growth opportunities in the off-trade channel;
• rationalising the Group structure, reflecting
the Group’s focus on its core brand-led
distribution model, through the disposal
of certain non-core assets, including the
disposal of the Tipperary Water Cooler
business in October 2020 for an initial
cash consideration of €7.4 million and
the disposal of the Vermont Hard Cider
Company in April 2021 for a consideration
of USD 20 million;
• implementing various working capital
initiatives, including the negotiation of
temporary extensions to supplier payments
terms and agreeing tax deferrals with the
UK and Irish tax authorities;
• continuing to progress with restructuring
and optimisation of work streams across
the Group, including the integration of the
Group’s distribution platforms in Scotland
and England;
• pausing the payment of dividends; and
• further optimising its brand-led distribution
model in the first quarter of the financial
year ending 28 February 2022 by
implementing significant cost reduction
and optimisation programmes that will
enhance margins post recovery.
We have needed to call on the extensive
skills and experience of the entire Board
when navigating the uncertain period and
our robust governance framework has
been fundamental to our ability to do this
successfully. We have met more frequently
than usual, both as a full Board, but also
within our various Committees, and with
the added challenge of doing so remotely.
The Board and our company secretarial
team during this time have worked tirelessly
in order to ensure the best outcome for all
stakeholders.
Stakeholders
We have sought to balance the needs of
our numerous stakeholders throughout
the year, be they employees, communities,
consumers, customers, suppliers,
shareholders or regulators, while taking
steps to secure the Group’s longer term
success. There has been a constant
dialogue with all of the main stakeholder
groups, and on behalf of the Board, I would
like to take this opportunity to thank them
all for their partnership during this very
challenging period. Working together has
been vital and will continue to be so as we
seek a sustainable future together.
Details of the methods we have used to
engage with stakeholders to understand
their views can be found on pages 8 to 9.
A statement on how the Directors have had
regard to the matters set out in section 172
of the Companies Act 2006 can be found on
page 79.
Dear Shareholder,
On behalf of the Board I am
pleased to present the FY2021
Corporate Governance Report.
This provides an overview of
the Board’s activities during the
year, along with our governance
arrangements.
Throughout FY2021, we have focused our
efforts on implementing and delivering the
strategy through Board agendas, cognisant
of our purpose to play a role in every drinking
occasion, delivering joy to our customers
and consumers. For almost the whole of the
year, the Group’s key markets have been
heavily impacted by the unprecedented
impact of COVID-19. As a Board, we have
been focused on taking the necessary steps
to successfully guide the Company through
this period of uncertainty and ensure we
are well positioned for the recovery, work
which has been underpinned by our robust
governance framework.
Board Activities and Response to
COVID-19
The COVID-19 pandemic has created
one of the most challenging operating
environments for the Group in its long
history, with unprecedented levels of
disruption across the Group’s key markets.
The duration of the pandemic’s impact
has been greater than initially expected.
However, in these unpredictable conditions,
C&C Group plc Annual Report 2021 77
exciting new era for C&C, which we believe
will deliver long term value for all of our
stakeholders.
We also announced that Vineet Bhalla
would be joining the Board on 26 April 2021.
The result is a strengthened Board, with
broader and more diverse skills, ethnicity
and gender.
Board Evaluation
To ensure that the Board and its
Committees continue to operate effectively,
we evaluate the performance of the Board
on an annual basis. During FY2020, an
external evaluation was carried out, meaning
that the evaluation in FY2021 was carried
out on an internal basis as part of the
FY2021 internal Board evaluation process.
An explanation of how this process was
conducted, the conclusions arising from
it and the outcome of that review can be
found on page 84.
UK Corporate Governance Code
The Corporate Governance Report, which
incorporates by reference the Responsibility
Report, the Audit Committee Report, the
Nomination Committee Report (which
contains the Diversity Report) and the
Remuneration Report, describes how
the Company has complied with the
provisions of the Code. Further details on
the Company’s compliance with the Code
during FY2021 can be found on page 78.
As Stewart was an interim Executive Chair
for a large part of the year, the Board
determined it appropriate that I would
author the introduction to the Corporate
Governance report for FY2021.
Vincent Crowley
Senior Independent Director
Remuneration Policy
Our proposed Remuneration Policy, which
is intended to apply for the coming three
years, will be put to shareholders for their
approval at this year’s AGM. The proposed
policy has been designed so that there
continues to be close alignment between
executive reward and the delivery of our
business strategy. Details of the proposed
policy, the outcome of the shareholder
consultation process that has been
undertaken and the implementation of the
current policy during the year can be found
in the Directors Remuneration Report on
pages 102 to 132.
Diversity
As a people focused business, our strength
comes from an inclusive and welcoming
environment, where we recognise that the
experiences and perspectives which make
us unique come together in our shared
values and vision. We strongly believe that
the more our people reflect the diversity
of our clients and consumers, the better
equipped we are to service their needs.
As part of its remit the Nomination
Committee (‘the Committee’) reviews the
Group’s policies on workforce diversity and
inclusion, their objectives, and link to the
Company’s strategy. The Group has always
operated open and inclusive hiring and staff
management practices.
During the year, the Committee
recommended, and the Board endorsed,
the adoption of a new Diversity and
Inclusion Policy, which is published on
the Company’s website. In reviewing the
Group’s policy, the Committee was satisfied
it supported the development of a more
diverse workforce within the business and
were consistent with the Group’s inclusive
and welcoming culture. The policy equally
applies to our Board members and all of
our employees, regardless of their contract,
location or role in the business. We aim to
ensure our inclusivity applies to all aspects
of their careers, including recruitment,
selection, benefits and opportunities for
training and promotion. More details on
workforce diversity can be found on pages
99 to 100.
At the fiscal year-end, 30% of the Board’s
membership was female. The Committee
was fully aware, however, that this level
reduced with the appointment of Vineet
Bhalla, which was an important step to
deepen the skills and diversify the ethnicity
of the Board. While at the date of this report,
we have a stronger and more diverse
Board overall, we recognise that the gender
composition of the Board is below the level
expected and it is our intention to address
that as soon as practicable and by no later
than the end of February 2022. Further
details can be found in the Nomination
Committee Report on page 100.
Changes to the Board
The Board plans for its own succession, with
the support of the Nomination Committee.
The Committee remains focused, on behalf
of the Board, on Board succession planning
for both Executive and Non-Executive
Directors.
The Committee aims to ensure that:
• the succession pipeline for senior
executive and business critical roles in the
organisation is strong and diverse;
• processes are in place to identify potential
successors and manage succession
actively;
• there is a structured approach to
developing and preparing possible
successors; and
• processes are in place to identify “at risk”
posts.
On 9 July 2020, we announced that David
Forde would be joining the Company as
our new CEO and that Patrick McMahon
would become CFO in succession to
Jonathan Solesbury, who informed the
Board of his intention to retire. We are
very grateful to Jonathan for his significant
contribution to C&C, particularly his support
in helping manage the Company through
the unparalleled challenges of COVID-19,
in which he played a critical role. I am
delighted that we have been able to attract
a candidate of the calibre of David Forde to
the role of CEO and that through succession
planning, we had a candidate of the quality
of Patrick McMahon internally for the role
of CFO. These appointments represent an
Corporate GovernanceBusiness & StrategyFinancial Statements 78
Corporate Governance Report
(continued)
Compliance with the UK Corporate
Governance Code
The Board considers that the Company
has, throughout FY2021 complied with the
provisions of the Code with the exception
of the period when the Company was
non-compliant with provision 9 of the
Code whereby the roles of chair and chief
executive should not be exercised by
the same individual. This was due to the
appointment of Stewart Gilliland as interim
Executive Chair following the retirement of
Stephen Glancey as CEO, reflecting the
circumstances of the CEO’s departure
and the need to ensure an orderly and
successful transition. Upon David Forde
joining the Company on 2 November
2020, Stewart Gilliland reverted to the
role of Non-Executive Chair. At that time
of the announcement of David Forde’s
appointment, the Board extended Stewart
Gilliland’s role as Non-Executive Chair by an
additional 12 months until the AGM in 2022.
At the date of publication of this Report,
Stewart Gilliland will have been in post as a
Director longer than nine years from the date
of his appointment in April 2012, resulting in
a non-compliance with provision 19 of the
Code. Further details can be found on page
98 of the Nomination Committee Report.
Leadership and Company Purpose
Role of the Board
The Company is led and controlled by the
Board of Directors (‘the Board’) chaired by
Stewart Gilliland.
The core responsibility of the Board is
to ensure the Group is appropriately
managed to achieve its long term objectives,
generating value for shareholders
and contributing to wider society. The
Board’s objective is to do this in a way
that is supported by the right culture and
behaviours.
The Board has adopted a formal schedule
of matters specifically reserved for decision
by it, thus ensuring that it exercises control
over appropriate strategic, financial,
operational and regulatory issues (a copy
of the schedule of reserved matters is
available on our website). Matters not
specifically reserved for the Board and its
Committees under its schedule of matters
and the Committees’ terms of reference,
or for shareholders in general meeting, are
delegated to members of the Executive
Committee.
The balance of skills, background and
diversity of the Board contributes to the
effective leadership of the business and
the development of strategy. The Board’s
composition is central to ensuring all
directors contribute to discussions. As a
means to foster challenge and director
engagement, led by the Senior Independent
Director, the Non-Executive Directors
meet without the Chair present at least
annually. Likewise, the Chair holds meetings
with the Non-Executive Directors without
the executives present. In each of these
settings, there is a collegiate atmosphere
that also lends itself to a level of scrutiny,
discussion and challenge.
The Company has procedures whereby
Directors (including Non-Executive Directors)
receive formal induction and familiarisation
with the Group’s business operations
and systems on appointment, including
trips to manufacturing sites with in-depth
explanations of the processes involved at
the site.
Our Purpose and Strategy
C&C is a leading, vertically integrated
premium drinks company, which
manufactures, markets and distributes
branded beer, cider, wine, spirits and soft
drinks across the UK and Ireland. The Board
considers C&C’s purpose is to play a role in
every drinking occasion, delivering joy to our
customers and consumers with remarkable
brands and service. Further detail on the
Group’s purpose can be found on page 6.
Information on our strategy on pages 22 to
23.
Our Culture and Values
C&C has an open, humble, respectful, but
competitive culture, underpinned by certain
values and behaviours, namely:-
Our Values
• We respect people and the planet
• We bring joy to life
• Quality is at our core
Our Behaviours
• We put safety first
• We are customer centric
• We collaborate through trust
• We keep it simple and remain agile
• We are fact based, data and insight driven
• We learn to improve
The Board recognises the importance of
communication and engagement with the
wider workforce as a means of assessing and
monitoring culture. The role and effectiveness
of the Board and the culture it promotes are
essential to a successfully run company.
The Board has appointed a Non-Executive
Director to each business unit to provide a
link between the Board and the Company’s
workforce, so that employees’ views are
heard in the boardroom, as well as facilitating
a better understanding of business units and
functions, within the organisation.
During FY2021, the engagement of the Non-
Executive Directors with employees from
each business area through a series of forum
meetings has provided invaluable insight
into the evolution of our culture and values,
and their link to strategy. The assignment
between each Non-Executive Director and
their corresponding business area can be
found on page 81. Employee surveys formed
the basis of questions raised with the Non-
Executive Directors, including the Company’s
response to the COVID-19 pandemic, and
views on what the Company could improve
in its response to help the business and its
employees. Participants were also invited
to raise matters for direct feedback to and
from Non-Executive Directors. The format
of engagement proved successful and was
endorsed by the Board as an extremely useful
feedback mechanism.
C&C Group plc Annual Report 2021 79
The Company’s culture is based upon being open, humble, respectful, but competitive. The Board with support from its committees,
monitors the alignment of the Group’s culture with our purpose, values and strategy, through a variety of mechanisms, cultural indicators and
reporting lines, including those summarised below:-
Cultural Indicators
Health and Safety
Employees
Ethics and Compliance
Customers and Suppliers
Sustainability
• Lost time frequency
rates
• Workplace safety
accident rates
• Riddors
• Results of employee
engagement surveys
• Internal audit reports
and findings
• Employee turnover
• Fraud and
rates
• Gender pay gap
disclosures
• Reports on progress
on diversity and
inclusion
misconduct statistics
• Annual confirmation of
compliance with our
anti-financial crime
policies
• Whistle blower
• Training investment
statistics
per head
• Compliance with
supply chain
standards
• Customer retention
rates
• Supplier audits
• Brand satisfaction
ratings
• Greenhouse gas
emissions
• Waste reduction rates
Section 172 Statement
A director of a company must act in a way
they consider, in good faith, would most
likely promote the success of the company
for the benefit of its members as a whole,
taking into account the factors as listed in s.
172. This is not a new requirement, and the
Board has always considered the impact of
its decisions on stakeholders. We set out
below some examples of how the Board
has done so in relation to four decisions
during the year. Details of who the Board
considers the main stakeholders are, how
we have engaged with them during the year
and the outcomes of the process are set out
on pages 8 to 9 and forms part of the s.172
statement.
Engagement with Shareholders
Information on relations with shareholders
is provided as part of the Stakeholder
engagement section of the Strategic Report
on pages 8 to 9.
In fulfilling their responsibilities, the Directors
believe that they govern the Group in
the best interests of shareholders, whilst
having due regard to the interests of
other stakeholders in the Group including
customers, employees and suppliers.
The Code encourages a dialogue with
institutional shareholders with a view
to ensuring a mutual understanding of
objectives. The Executive Directors have
regular and ongoing communication with
major shareholders throughout the year,
by participating in investor roadshows and
presentations to shareholders. Feedback
from these visits is reported to the Board.
The Executive Directors also have regular
contact with analysts and brokers. The
Chair, Senior Independent Non-Executive
Director and other Non-Executive Directors
receive feedback on matters raised at the
meetings with shareholders and are offered
the opportunity to attend meetings with
major shareholders. As a result of these
procedures, the Non-Executive Directors
believe that they are aware of shareholders’
views. In addition, Vincent Crowley, the
Senior Independent Non-Executive Director,
is available to meet with major shareholders.
Arrangements can also be made through
the Company Secretary for major
shareholders to meet with newly appointed
Directors.
The Group maintains a website at www.
candcgroup.com which is regularly updated
and contains information about the Group.
Stakeholders
The Code provides that the Board should
understand the views of the Company’s key
stakeholders other than shareholders and
describe how their interests and the matters
set out in section 172 of the UK Companies
Act 2006 (‘s.172’) have been considered in
Board discussions and decision making.
Whilst s.172 is a provision of UK company
law, the Board acknowledges that as
a premium listed issuer, it is important
to address the spirit intended by these
provisions.
Corporate GovernanceBusiness & StrategyFinancial Statements 80
Corporate Governance Report
(continued)
Key decision
Dividend
Stakeholders
In May 2020, the Company announced that the Board had decided not to recommend an interim or a final dividend
for the year under review. In reaching this decision, the Board considered the importance of a dividend to the
Company’s shareholders, the need to preserve the Company’s liquidity and the exceptional circumstances that
COVID-19 represented. The Board will keep future dividends under review and will restart payments when it is
appropriate to do so.
• Shareholders
• Governments
and regulators
Board Director and Executive Committee salary reduction
During the year, a range of actions to mitigate risks was implemented. As a result of the COVID-19 pandemic, a
significant proportion of the workforce was affected by a range of cost mitigation measures, which included reduced
salary, reduced working hours, furloughing arrangements and, in some cases, redundancy. Mindful of the wider
employee context and in support of the Company’s culture, which is rooted in fair and equitable treatment for all
stakeholders, the interim Executive Chair, the Executive and Non-Executive Directors and the Executive Committee
all agreed to take temporary reductions in their fees and base salaries. Reductions remained in place for a period of
5 months.
• Employees
• Shareholders
Disposal of the Tipperary Water Cooler business
In October 2020, the Board approved the sale of our Tipperary Water Cooler business, receiving an initial €7.4
million in respect of disposal proceeds. In deciding whether the disposal supported the long term success of the
Company, and with due regard to the interests of the Company’s stakeholders, the Board evaluated the contribution
of the business, its growth prospects and fit with the overall strategy of the Group. In consideration of these matters,
the Board considered the potential impact of the sale on the Company’s stakeholders, and in particular, the impact
on the employees of the Tipperary Water Cooler business. It was determined, at the time the decision was made,
that the employees of the Tipperary Water Cooler business would not be materially disadvantaged by the change in
ownership, and jobs would be protected as part of the sale. Following evaluation of these factors, it was determined
that the sale of the business was in the best interests of the Company and its stakeholders as a whole.
• Employees
• Shareholders
Rights Issue
As part of risk mitigation measures in response to COVID-19, the Board approved the decision to fundraise through
a rights issue. In formulating its decision, the directors took into account the views of the investor community
regarding potential investment, the short and long term requirements of the business which could impact on
employees and suppliers, and the protection of the interests of stakeholders as a whole. The merits of the rights
issue were considered, including that it would reduce leverage, enhance liquidity and strengthen the Company’s
position, ensuring that C&C remains resilient in the event of further negative developments in COVID-19. Recognising
the value C&C places on its retail investors and providing them with an opportunity to participate in the equity raise
alongside institutional investors, the Board concluded that it was in the best interests of shareholders, as well as the
Company’s wider stakeholder community and was accordingly approved by the Board.
• Employees
• Customers
• Suppliers
• Shareholders
• Governments
and regulators
C&C Group plc Annual Report 2021 81
Division of Responsibilities
It is the Company’s policy that the roles
of the Chair and Group Chief Executive
Officer are separate, with their roles and
responsibilities clearly divided and set
out in writing (available on our website).
In January 2020, the Chair became the
interim Executive Chair for a temporary
period. Upon the appointment of a new
Chief Executive Officer, David Forde on 2
November 2020, the Chair, Stewart Gilliland
reverted back to a Non-Executive role.
Chair
The Chair, Stewart Gilliland is responsible
for the leadership of the Board and
ensuring effectiveness in all aspects of its
role. The Chair is responsible for ensuring,
through the Company Secretary that
Directors receive accurate, timely and clear
information. He is responsible for setting
the Board’s agenda and ensuring adequate
time is available for Board discussion and
to enable informed decision making. He is
responsible for encouraging and facilitating
the effective contribution of Non-Executive
Directors and constructive relations between
Executive and Non-Executive Directors.
Senior Independent Director
Vincent Crowley is the Senior Independent
Non-Executive Director. In addition
to his role and responsibilities as an
Independent Non-Executive Director, the
Senior Independent Director is available
to shareholders where concerns have not
been resolved through the normal channels
of communication and for when such
contact would be inappropriate, which is
of particular importance during the period
that the Non-Executive Chair is serving
as interim Executive Chair. He acts as a
sounding board for the Chair and acts as
an intermediary for the Directors when
necessary. He is responsible for annually
evaluating the performance of the Chair in
consultation with the other Non-Executive
Directors.
Non-Executive Directors
The Non-Executive Directors provide an
external perspective, sound judgement
and objectivity to the Board’s deliberations
and decision making. With their diverse
range of skills and expertise, they support
and constructively challenge the Executive
Directors and monitor and scrutinise the
Group’s performance against agreed
goals and objectives. The Non-Executive
Directors together with the Chair meet
regularly without any Executive Directors
being present. The Non-Executive Directors
provide a conduit from the workforce to
the Board for workforce engagement and
have sufficient time to meet their board
responsibilities.
Chief Executive Officer
The Group Chief Executive Officer is
responsible for the leadership and day-
to-day management of the Group. This
includes formulating and recommending
the Group’s strategy for Board approval in
addition to executing the approved strategy.
Company Secretary
Mark Chilton, as Company Secretary,
supports the Chair, the Group Chief
Executive Officer and the Board Committee
Chairs in setting agendas for meetings of the
Board and its Committees. He is available
to all Directors for advice and support. He is
responsible for information flows to and from
the Board and the Board Committees and
between Directors and senior management.
In addition, he supports the Chair in respect
of training and the Board and Committee
performance evaluations. He also advises
the Board on regulatory compliance and
corporate governance matters.
Board Committees
The Board has established an Audit
Committee, an ESG Committee, a
Nomination Committee and a Remuneration
Committee to oversee and debate relevant
issues and policies outside main Board
meetings. Throughout the year, the Chair of
each Committee provided the Board with
a summary of key issues considered at the
Committee meetings. Board Committees
are authorised to make enquiries of the
Executive Directors and other executives
across the Group as they feel appropriate
and to engage the services of external
advisers as they deem necessary in the
furtherance of their duties at the Company’s
expense.
The Audit Committee Report is on pages 86
to 91, the Nomination Committee Report is
on pages 94 to 101 and the Remuneration
Report is on pages 102 to 132.
Workforce Engagement
The Board has appointed a Non-Executive Director to each business unit to understand
employee’s views. The following are the areas assigned to each of the Non-Executive
Directors:
Business Area
Matthew Clark
Commercial Scotland
Commercial Ireland
HR
Commercial International
Finance
Bibendum
Operations
Non-Executive Director
Jim Thompson
Jill Caseberry
Helen Pitcher
Emer Finnan
Jim Clerkin
Vincent Crowley
Corporate GovernanceBusiness & StrategyFinancial Statements 82
Corporate Governance Report
(continued)
Board Meetings in FY2021
The Directors’ attendance at Board meetings during the year is shown below. The core
activities of the Board and its Committees are covered in scheduled meetings held during
the year. Additional ad hoc meetings are also held to consider and decide matters outside
scheduled meetings. There were 16 Board meetings, 11 Audit Committee meetings, 11
Nomination Committee meetings and 10 Remuneration Committee meetings held in the year
under review.
All Directors holding office at the time attended the 2020 AGM.
Director
Executive
David Forde1
Patrick McMahon1
Jonathan Solesbury
Andrea Pozzi2
Non-Executive
Stewart Gilliland
Jill Caseberry
Jim Clerkin3
Vincent Crowley
Emer Finnan
Helen Pitcher4
Jim Thompson5
Number of
Meetings
Attended*
Maximum
Possible
Meetings
% of Meetings
Attended
4
6
10
15
16
16
15
16
16
15
15
4
6
10
16
16
16
16
16
16
16
16
100
100
100
94
100
100
94
100
100
94
94
1. Meetings attended by David Forde and Patrick McMahon from date of their appointment.
2. Andrea Pozzi was unable to attend a meeting due to a urgent business meeting.
3. Jim Clerkin was unable to attend one unscheduled meeting due to the meetings being called at short notice and his
inability to re-arrange his schedule.
4. Helen Pitcher was unable to attend a meeting due to a prior commitment made before joining the Board.
5. Jim Thompson was unable to attend one unscheduled meeting due to the meeting being called at short notice and
his inability to re-arrange his schedule.
Board activity during FY2021
Each Board meeting follows a carefully
tailored agenda agreed in advance by the
Chair, Group Chief Executive Officer and
Company Secretary. A typical meeting will
comprise reports on current trading and
financial performance from the CEO and
CFO, investor relations updates, monitoring
strategy, examining investment and
acquisition opportunities and presentations/
reports upon areas on specific subject
areas. A summary of the key activities
covered during FY2021 is set out in the table
below.
Strategy, Operations and Finance
• Approved the Group’s Viability Statement;
• Received presentations from the COO
and management on brand marketing
plans;
• Received presentations from the CEO and
CFO and senior management on strategic
initiatives and trading performance;
• Approved the annual budget plan and
KPIs;
• Reviewed and approved the Group’s full
year FY2020 and half year FY2021 results
as well as trading updates;
• Approved the Group’s 2020 Annual
Report (including a fair, balanced and
understandable assessment) and 2020
AGM Notice;
• Received updates from the COO and
senior management on the Group’s
sustainability framework;
• Reviewed the Group’s debt, capital and
funding arrangements and approved the
private placement;
Leadership and People
• Continued to focus on the composition,
balance and effectiveness of the Board,
including the appointment of a new CEO,
CFO and Independent Non-Executive
Director.
• Appointed Spencer Stuart to lead the
search for the recruitment of a new Chair;
• Considered progress towards greater
diversity in the workforce;
Safety
• Received and discussed six monthly
safety performance reports and updates
presented by the COO and Group Health
and Safety Manager;
Internal Control and Risk Management
• Reviewed the Group’s risk management
framework and principal risks and
uncertainties;
• Reviewed and confirmed the Group’s
Viability Statement and going concern
status;
• Reviewed and validated the effectiveness
of the Group’s systems of internal controls
and risk management;
• Reviewed updates on the information and
cyber security control environment in light
of incident in April 2021;
Governance and Legal
• Reviewed regular briefings on corporate
governance developments and legal and
regulatory issues;
• Approved the Group’s Modern Slavery
Statement for publication;
• Received reports on engagement with
institutional shareholders, investors and
other stakeholders throughout the year;
• Reviewed progress against the 2020
Board evaluation action plan;
• Conducted an internal Board evaluation
covering the Board’s effectiveness, with
the outcome discussed by the Board;
C&C Group plc Annual Report 2021 83
• Received regular reports from the Chairs
of the Audit, Nomination, Remuneration
and ESG Committees; and
• Approved the Group’s updated
competition policy.
Objectives and Controls
The Group’s strategic objectives are set
out on pages 22 to 23 and a summary of
performance against the Group’s KPIs is
at pages 30 to 31. The Board also receives
regular updates across a broad range of
internal KPIs and performance metrics.
The Group has a clear risk management
framework in place, as set out on pages
32 to 42, to manage the key risks to the
Group’s business.
Business Model and Risks
The Group’s Business model is set out
on pages 24 to 27. The Risk Management
Report on pages 32 to 42 contains an
overview of the principal risks facing the
Group and a description of how they are
managed.
Whistleblowing
All employees have access to a confidential
whistleblowing service which provides an
effective channel to raise concerns. The
Audit Committee and the Board receives
updates detailing all notifications and
subsequent action taken.
Composition, Succession and
Evaluation
Following the appointment of David Forde
as Group Chief Executive Officer and
Patrick McMahon as Group Chief Financial
Officer, the Board consists of the Chair,
three Executive Directors and seven
independent Non-Executive Directors.
Over half of the Board comprises
independent Non-Executive Directors and
the composition of all Board Committees
complies with the Code. Additionally, the
Chair was considered independent on
his appointment. Details of the skills and
experience of the Directors are contained
in the Directors’ biographies on pages 74
and 75.
The independence of Non-Executive
Directors is considered by the Board
and reviewed at least annually, based on
the criteria suggested in the Code. Non-
Executive Directors do not participate in any
of the Company’s share option or bonus
schemes.
Following this year’s review, the Board
concluded that all the Non-Executive
Directors continue to remain independent in
character and judgement and are free from
any business or other relationship that could
materially interfere with the exercise of their
independent judgement in accordance with
the Code.
Appointments to the Board
Recommendations for appointments to
the Board are made by the Nomination
Committee. The Committee follows Board
approved procedures (available on our
website together with a copy of the terms
of reference for the Nomination Committee)
which provide a framework for the different
types of Board appointments on which
the Committee may be expected to make
recommendations. Appointments are made
on merit and against objective criteria with
due regard to diversity (including skills,
knowledge, experience and gender).
All Board appointments are subject to
continued satisfactory performance
followings the Board’s annual effectiveness
review. The Nomination Committee leads
the process for Board appointments and
makes recommendations to the Board.
The activities of the Nomination Committee
and a description of the Board’s policy on
diversity are on pages 99 to 100.
Time Commitment
Following the Board evaluation process,
detailed further on page 84, the Board
has considered the individual Directors
attendance, their contribution and their
external appointments and is satisfied that
each of the Directors is able to allocate
sufficient time to devote to the role.
Development
On appointment, a comprehensive tailored
induction programme is arranged for each
new Director. The aim of the programme
is to provide the Director with a detailed
insight into the Group. The programme
involves meetings with the Chair, Group
Chief Executive Officer, Group Chief
Financial Officer, Group Chief Operating
Officer, Company Secretary and key senior
executives as appropriate. It covers areas
such as:
• the business of the Group;
• their legal and regulatory responsibilities
as Directors of the Company;
• briefings and presentations from
Executive Directors and other senior
executives; and
• opportunities to visit business operations.
To update the Directors’ skills, knowledge
and familiarity with the Group and its
stakeholders, visits to Group business
locations are organised for the Board
periodically, as well as trade visits with
members of senior management to assist
Directors’ understanding of the operational
issues that the business faces. Non-
executive Directors are also encouraged
to visit Group operations throughout their
tenure to increase their exposure to the
business. Directors are continually updated
on the Group’s businesses, the markets
in which they operate and changes to the
competitive and regulatory environment
through briefings to the Board and meetings
with senior executives.
Training opportunities are provided through
internal meetings, presentations and
briefings by internal advisers and business
heads, as well as external advisers.
Information and Support
All members of the Board are supplied with
appropriate, clear and accurate information
in a timely manner covering matters which
are to be considered at forthcoming Board
and Committee meetings.
Corporate GovernanceBusiness & StrategyFinancial Statements 84
Corporate Governance Report
(continued)
Should Directors judge it necessary to
seek independent legal advice about the
performance of their duties with the Group,
they are entitled to do so at the Group’s
expense. Directors also have access to
the advice and services of the Company
Secretary, who is responsible for advising
the Board on all governance matters
and ensuring that Board procedures are
followed.
The appointment and removal of the
Company Secretary is a matter requiring
Board approval.
Re-election of Directors
All Directors are required by the Company’s
Articles of Association to submit themselves
to shareholders for re-election at the
first Annual General Meeting after their
appointment and thereafter by rotation at
least once every three years. In accordance
with the Code, all Directors will, however,
stand for re-election annually.
Board Evaluation
FY2020 Board and Committee external
evaluation
As reported in the FY2020 Annual Report,
an external evaluation was undertaken in
2020. Overall the results of the evaluation
were positive and showed that the Board
was running effectively. The Board was
seen as being cohesive and comprising
the appropriate balance of experience,
skills and knowledge. Board meetings
operated in a spirit of openness, fostered
by the Chair, in which Directors were able
to challenge and discuss openly ideas of
importance to the Group, its strategy and
risk.
While the outcome of the evaluation clearly
indicated that the Board and individual
Directors continued to operate to a high
standard, the Board developed an action
plan based on the feedback from the
evaluation, designed to further enhance
Board effectiveness. Ensuring the Board
maintains the high standards it has always
set was and is of significant importance.
The key areas identified in the 2020 external evaluation for increased focus and development
during FY2021 are set out below:
Area of Focus
Detailed Feedback
Culture
Board logistics
and information
Risk Picture
The evaluation found a strong desire from the Board to develop a
deeper understanding of organisational culture. As part of this focus
Directors are eager to develop workforce engagement and greater
oversight of reward practices throughout the organisation.
In light of the challenges of remote Board meetings, Directors
communicated that there may need to be refinement to Board
agendas, including ensuring there is a balance struck between
insight and excessive detail.
The Directors voiced satisfaction with the strength of work done
on developing and communicating the updated risk framework in
recent years. Feedback indicated that this risk picture needs to be
further developed, particularly in relation to emerging non-financial
risks and wider economic developments.
Committees. The results were presented
and discussed by the Board and each of its
committees at their respective meetings in
April/May 2021.
FY2020 External Board Effectiveness
Evaluation Outcomes
Evaluation of the Chair and Non-
Executive Directors
A questionnaire was issued to each Board
member (excluding the Chair) and the result
was unanimous support for the Chair. The
Senior Independent Director shared the
feedback with the Chair.
The Chair held one to one meetings with
each Director to assess their effectiveness
and to agree any areas of improvement
or training and development, including
on environmental, social and governance
matters based on the outcomes of the
questionnaires each of them had completed
on themselves. There were no issues of any
substance arising from this review.
FY2021 Board and Committee internal
evaluation
As set out earlier in this report, the Board’s
activities during the year were dominated
by the unique challenges posed by the
pandemic. As a result, a shorter and
more targeted evaluation was undertaken
for 2021, seeking feedback from Board
members on how they felt the Board had
collectively responded to these challenges
and how it should evolve its approach
in future, in addition to consideration of
progress against the Board action plan.
Board and Committee Evaluation
Process
The review was conducted through a
questionnaire, which sought Directors
feedback on a variety of matters including
COVID-19, the composition of the
Board and Committees, understanding
stakeholders, Board dynamics, strategic
oversight, risk management and internal
control, succession planning, the advice and
support provided, the focus of meetings and
priorities for change.
The results of the questionnaires were
collated and a summary provided to
the Chair and the Chairs of each of the
C&C Group plc Annual Report 2021
85
Audit, Risk and Internal Control
Financial and Business Reporting
The Strategic Report on pages 2 to 67
explains the Group’s business model and
the strategy for delivering the objectives
of the Group.
A Statement on Directors’ Responsibilities
on the Annual Report and Accounts being
fair, balanced and understandable can be
found on page 133 and a statement on the
Group as a going concern and the Viability
Statement are set out on pages 41 to 42.
Risk Management
Please refer to pages 32 to 42 for
information on the risk management
process and the Group’s principal risks and
uncertainties.
Internal Control
Details on the Group’s internal control
systems are set out on pages 89 to 90.
Internal Audit
Details of the Internal Audit function are
provided within the Audit Committee report
on page 90.
Audit Committee and Auditors
For further information on the Group’s
compliance with the Code and provisions
relating to the Audit Committee and
auditors, please refer to the Audit
Committee Report on pages 86 to 91.
Remuneration
For further information on the Group’s
compliance with the Code provisions
relating to remuneration, please refer to the
Directors’ Remuneration Report on pages
102 to 132 for the level and components
of remuneration. Shareholders approved
the Group’s current Remuneration Policy
at the 2018 AGM. The Policy is designed
to promote the long term success of the
Group.
The following is a table of reference that provides an overview of where to find disclosures
relating to the sections of the 2018 UK Code:
Section
Disclosure Locations
Board
Leadership and
Purpose
Details on how the Board promotes the long-term success of the
Company are set out in our Strategic Report on pages 2 to 67 and
throughout this Corporate Governance Report on pages 76 to
85. Our purpose and values are set out on pages 6 to 7. Relations
with shareholders are described on page 9. Our whistleblowing
programme is described on page 66.
Division of
Responsibilities
Pages 74 to 75 gives details of the Board and Management Team.
The Board governance structure is detailed on pages 76 to 85.
Composition,
Succession and
Evaluation
Details on appointments and our approach to succession are set
out in the Nomination Committee report on pages 94 to 101. Details
on the external evaluation are set out on page 84.
Audit, Risk and
Internal Control
Remuneration
The Audit Committee Report can be found on pages 86 to 91,
with further detail on the principal risks to the business in the Risk
Report on pages 32 to 42.
The Company’s Remuneration Policy can be found in the FY2018
Annual Report. The Remuneration Committee Report can be found
on pages 102 to 132.
Constructive Use of the Annual General
Meeting
The Code encourages boards to use the
Annual General Meeting to communicate
with investors and to encourage their
participation. In compliance with the
Code, under normal circumstances, the
Board welcomes as many shareholders
as possible to attend the Annual General
Meeting to discuss any interest or concern,
including performance, governance or
strategy, with the Directors. All Directors are
also usually expected to attend the Annual
General Meeting. The Chairs of the Audit,
Nomination and Remuneration Committees
would be expected to be available at
the Annual General Meeting to answer
shareholder questions, through the Chair
of the Board, on the responsibilities and
activities of their Committees. Shareholders
also have the opportunity to meet with the
Directors following the conclusion of the
formal part of the meeting.
For the 2021 Annual General Meeting, your
attention is drawn to details set out in the
notice of meeting. While the company was
obliged to hold a virtual AGM in 2020, it is
hoped that Government and Public Health
restrictions will allow the hosting of an
in-person AGM this year. The Company
believes an in-person AGM is important
to allow shareholders meet with and
engagement with the Board and other
shareholders. Given government and
health authority guidance on COVID-19 is
still evolving, shareholders are encouraged
to monitor the Company’s website and
regulatory news for updates in relation to
the AGM.
In compliance with the Code, at the Annual
General Meeting, the Chair of the meeting
will announce the level of proxies lodged on
each resolution, the balance for and against
and abstentions, and such details will be
placed on the Group’s website following
the meeting. A separate resolution will be
proposed at the Annual General Meeting in
respect of each substantially separate issue.
This report was approved by the Board of
Directors on 26 May 2021.
Mark Chilton
Company Secretary
Corporate GovernanceBusiness & StrategyFinancial Statements 86
Audit Committee Report
Dear Shareholder
I am pleased to present
the Audit Committee (the
“Committee”) report covering
the work of the Committee
during FY2021. This provides
an overview of the Committee’s
activities in the year under
review and looks ahead to
our anticipated activities in the
coming year.
Group’s viability disclosures and its ability to
continue as a going concern, with particular
scrutiny being given to the reports prepared
and assumptions used by management to
support those statements.
There were eleven meetings during the
year and after each Committee meeting
I provided an update to the Board on the
key issues discussed during our meetings.
I also met separately with the external
audit partner and senior management on a
number of occasions during the year.
More information about the Committee’s
activities during the year can be found in the
pages which follow.
The Year Ahead
COVID-19 has had a profound impact on
the sectors in which we operate, and on
the Group, and we continue to respond to
the challenges and opportunities that this
brings. The Committee fulfils a key role in
assisting the Board in ensuring that the
integrity of the Group’s financial statements
and the effectiveness of the Group’s internal
financial controls and risk management
systems are maintained. Through the
Committee’s composition, resources and
the commitment of its members, I believe
that it remains well placed to meet those
challenges and to discharge its duties in the
year ahead.
On behalf of the Board.
Emer Finnan
Chair of the Audit Committee
26 May 2021
Year in Review
The Committee throughout the year
continued to play a key role in assisting the
Board in fulfilling its oversight responsibility.
Its activities included reviewing and
monitoring the integrity of financial
information, key accounting judgements and
related disclosures, audit quality and the
robustness of the Group’s risk management
and system of internal controls. In
discharging its duties, the Committee works
to a structured agenda closely linked to the
events in the Company’s reporting cycle.
The Committee’s work was supported
by the Group’s well established risk and
financial management structures. The
exceptional and unprecedented challenges
posed by the COVID-19 pandemic and
the impact on the Group’s businesses has
tested the robustness of those structures
and the established working processes
between management and the Committee.
I am pleased to report that the Group’s
risk and financial management structures
have operated effectively during the year
under review. I would like to thank my
colleagues and fellow Board members for
their contribution and counsel over the past
12 months, which enabled the Committee
to fulfil its role in providing effective scrutiny
and challenge.
As in previous years, the Committee’s
primary focus was on the integrity of the
Group’s financial reporting processes. In
considering the financial statements, the
Committee concentrated on the accounting
judgements and disclosures relating to
the impact of COVID-19 on the Group’s
businesses, including government support
and tax deferral initiatives, liquidity and
the impact on financial covenants, cost
control and cost saving measures. Other
focus areas included going concern,
recoverability of trade receivables and
advances to customers, asset impairment
testing, the valuation of property, plant
and equipment and revenue recognition.
Careful consideration was given to the
C&C Group plc Annual Report 2021 Role and Responsibilities of the
Committee
The Committee supports the Board
in fulfilling its responsibilities in relation
to financial reporting, monitoring the
integrity of the financial statements and
other announcements of financial results
published by the Group; and reviewing
and challenging any significant financial
reporting issues, judgements and actions
of management in relation to the financial
statements. The Committee reviews
the effectiveness of the Group’s internal
controls and risk management systems and
the effectiveness of the Group’s Internal
Audit function. On behalf of the Board,
the Committee manages the appointment
and remuneration of the External Auditor
and monitors its performance and
independence. The Group supports an
independent and confidential whistleblowing
procedure and the Committee monitors the
operation of this facility.
In accordance with the Code, the Board
requested that the Committee advise it
whether it believes 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 position and
performance, business model and strategy.
The Committee’s Terms of Reference reflect
this requirement and can be found in the
Investor Centre section of the Group’s
website. A copy may be obtained from the
Company Secretary.
87
All members of the Committee are,
and were considered by the Board to
be throughout the year under review,
independent.
The Committee members have been
selected to provide the wide range of
financial and commercial expertise
necessary to fulfil the Committee’s duties
and responsibilities and provide effective
governance. As a qualified chartered
accountant, I am considered by the Board
to have recent and relevant financial
experience, as required by the Code. The
Committee is considered by the Board as a
whole to have competence relevant to the
sector in which the Group operates. Details
of the skills and experience of the Directors
are contained in the Directors’ biographies
on pages 74 and 75 of the Annual Report
and Accounts.
The Committee has access to the Group’s
finance team, to its Internal Audit function
and to its External Auditor and can seek
further professional training and advice, at
the Group’s cost, as appropriate.
the right to attend Committee meetings,
however, during the year, Stewart Gilliland
(in his capacity as Chair), David Forde,
Group Chief Executive Officer, Jonathan
Solesbury, Group Chief Financial Officer
and his successor as Group Chief Financial
Officer, Patrick McMahon, the Head of
Internal Audit together with members of
the Internal Audit team, Director of Group
Finance, and representatives from Ernst &
Young, the External Auditor, were invited
to attend meetings. The Committee also
meets separately with the Head of Internal
Audit and the External Auditor without
management being present.
The Company Secretary and Group General
Counsel is Secretary to the Committee.
Significant Judgemental Areas
The key matters reviewed and evaluated
by the Committee during the year are set
out below. Each of these areas received
particular focus from the External Auditor,
who provided detailed analysis and
assessment of the matters in their report to
the Committee.
Meeting Frequency and Main
Activities in the Year
Going Concern
The Committee met on five scheduled
occasions during FY2021. In addition there
were six ad hoc meetings. All members of
the Committee attended every meeting.
The quorum necessary for the transaction
of business by the Committee is two, each
of whom must be a Non-Executive Director.
Only members of the Committee have
The Committee and the Board reviewed and
challenged the evidence and assumptions
supporting the adoption of the going
concern basis for the FY2021 financial
statements.
In assessing the impact of the COVID-19
pandemic on the Going Concern Statement
and Viability Statement, the Committee
considered a base case scenario, along with
a reasonable worse case scenario, both of
which exclude any upside from the potential
rights issue. The Committee assessed the
Group’s cash flow forecasts for the period
ending 31 August 2022 (the going concern
“assessment period”). It also assessed
the assumptions relating to the profitability
and cash generation of the business. The
key assumption in the assessment is the
phased reopening of the on-trade business
in the Company’s main markets of England,
Scotland and Ireland based on available
Government advice and roadmaps.
Membership and Attendance
The following non-executive Directors served on the Committee during the year:
Member
Emer Finnan (Chair)
Vincent Crowley
Jim Thompson
Member Since
2 July 2014
22 March 2016
1 March 2019
Number of Meetings
Attended
Maximum Possible
Meetings
11
11
11
11
11
11
Corporate GovernanceBusiness & StrategyFinancial Statements
88
Audit Committee Report
(continued)
The Group’s scenarios are outlined below:
• The base case projection assumes on-
trade recovery in England and Scotland
continuing from April and May 2021
respectively, Ireland’s on-trade recovery
commencing from June 2021.
• The pace of recovery is assumed to be
similar across each territory once on-
trade restrictions are eased, with gradual
improvement to volumes.
• In aggregate on-trade volumes over the
assessment period are projected to be
approximately 79% of FY2020 in the
base case scenario over the assessment
period.
• The reasonable worst case projection
assumes the same timeline for re-opening
of on-trade as the base case; however
volumes are projected to hold flat at
modest levels for the remainder of the
summer as many on-trade restrictions
are assumed to remain in place over that
period and then build more gradually from
that point.
• The reasonable worst case projection
contains linked working capital
assumptions reflecting a more challenged
supplier credit environment.
The going concern base case and
reasonable worse case scenarios also
consider the achievement of cost saving
measures, the Group’s financing facilities,
the use of temporary government supports
and projected dividend payments. The
Group benchmarked the impacts of both
scenarios against the monthly liquidity and
gross debt covenant waiver tests through
the going concern assessment period.
The Group has obtained waivers on its
original covenant requirements up to, but
not including, the August 2022 test date
whether or not the rights issue is successful.
The headroom on the covenants within the
financing facilities have been reviewed in
detail by management and assessed by the
Committee. Refinancing activities, including
the extension of facilities, and the covenant
waivers obtained on the Group’s debt,
have been reviewed by the Committee, in
addition to Going Concern and Viability
Statement reports which include details of
the projected revenue and profitability and
the related impact on projected cash flows.
Having considered these factors, the
Committee and the Board have concluded
that monthly liquidity and gross debt
covenant waiver tests will be satisfied
under both the base case and reasonable
worse cast scenarios (without any benefit
of the proposed rights issue) and therefore
consider it appropriate to adopt the going
concern basis of accounting with no
material uncertainties as to the Group’s
ability to continue to do so.
In making this assessment, the Committee
and Board considered the continued
impact of COVID-19 and in particular the
assumptions in respect of forecasted level
of the on-trade business in each of the
Group’s main trading locations. While it
was recognised that COVID-19 continues
to have a negative impact on the on-trade
business, given the actions available to
management, the Committee and the Board
do not expect any reasonably anticipated
deterioration in the forecasted revenues to
impact the Group’s ability to continue as a
going concern.
The Committee also reviewed the Viability
Statement. The viability period has been
reduced from previous reports, from a
three-year period, to a two-year period to
align with the working capital statement
prepared in contemplation of the proposed
rights issue. This two-year period to
February 2023 was considered appropriate
for this year only given the continued
uncertainty of COVID-19. The scenario
workings assessing the ability of the Group
to continue trading for this two-year period
are consistent with the going concern
assumptions above, projected out to
February 2023 and assume that the Group
will seek to have the necessary financing
requirements in place in the absence of the
potential rights issue throughout the viability
period.
For further information on the work
undertaken by the Committee, the Board
and management in relation to the going
concern basis of preparation for the
FY2021 financial statements, please see
‘Going Concern’ on page 41 and ‘Viability
Statement’ on pages 41 to 42. The
Directors’ Going Concern statement is set
out on page 41.
Recoverability of Trade Receivables
and Advances to Customers
The Group has a risk through exposure to
on-trade receivable balances and advances
to customers who may experience financial
difficulties. Given the uniqueness of the
COVID-19 outbreak, the assessment of
the impact of the outbreak on the Group’s
expected credit loss model required
significant judgement by the Committee. In
particular, the Committee considered the
basis used by management in calculating
the expected credit losses, whether it
adequately captured the additional risks
in the current environment and the level
of security in respect of those loans. As a
result of the review process, the Committee
concluded that the expected credit loss on
trade receivables and loans was prudent
but appropriate and were properly reflected
in the consolidated financial statements.
Asset impairment testing
The Committee considered the carrying
value of goodwill, intangible assets and
equity accounted investments as at the
year-end date to assess whether or not
it exceeded the expected recoverable
amounts for these assets. In particular, the
Committee considered and challenged
the valuation financial models, including
sensitivity analysis, used to support
the valuation and the key assumptions
and judgements used by management
underlying these models including
consideration for COVID-19. The key
assumptions used in the financial models
and consequently the key focus areas for
the Committee relate to future volume, net
C&C Group plc Annual Report 2021 89
Other Areas of Focus
The Committee also during the year:
• approved the Internal Audit plan and
agreed the External Auditor’s work plans
for the Group;
• considered regular reports from the Head
of Internal Audit on their findings;
• reviewed and recommended revisions to
the Board to the Group Risk Register and
the Principal Risks and Uncertainties; and
• reviewed the External Auditor’s
independence and objectivity, the
effectiveness of the audit process, the
re-appointment of the External Auditor
and approved the External Auditor’s
remuneration.
Fair, Balanced and Understandable
Assessment
One of the key compliance requirements
of a group’s financial statements is for
the Annual Report and Accounts to be
fair, balanced and understandable. The
coordination and review of Group wide
contributions into the Annual Report and
Accounts follows a well established and
documented process, which is performed in
parallel with the formal process undertaken
by the External Auditor.
The Committee received a summary of
the approach taken by management in the
preparation of the FY 2021 Annual Report
and Accounts to ensure that it met the
requirements of the Code. This, and our
own scrutiny of the document, enabled
the Committee, and then the Board, to
confirm that the 2021 Annual Report
and Accounts taken as a whole, was fair,
balanced and understandable and provided
the information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
Internal Controls and Risk
Management Systems
The Committee is responsible, on behalf of
the Board, for reviewing the effectiveness
of the Group’s internal controls and risk
management systems, including financial,
operational and compliance controls.
In order to keep the Committee abreast
with latest developments, the Head of
Internal Audit reported to each meeting on
developments and emerging risks to internal
control systems and on the evolution of our
principal risks. The Committee reviewed
the updated principal risks, their evolution
during the year, and the associated risk
appetites and metrics in light of business
changes and performance, challenging
and confirming their alignment to the
achievement of the Group’s strategic
objectives. This included consideration of
the impact of COVID-19 and Brexit. On a
regular and ongoing basis, the Committee
considered the ongoing overall assessment
of each risk, their associated metrics and
management actions and mitigations
in place and planned. This review was
supported through consideration of risk
dashboards outlining both principal risks
and any escalated or emerging risks
resulting in the reclassification of two
risks, namely Information Technology, and
Cyber and Information Security and Data
Protection. Those changes to our risk profile
were then approved by the Board. The
Group’s principal risks and uncertainties are
set out on pages 32 to 42.
In addition, the Committee reviewed
reports issued by both Internal Audit and
the External Auditor and held regular
discussions with the Group Chief Financial
Officer, the Head of Internal Audit and
representatives of the External Auditor.
revenue and operating profit, the growth
rate in perpetuity and the discount rate
applied to the resulting cash flows. The
Committee considered the outcome
of the financial models and found the
methodology to be robust, and in all
instances concluded that the outcome was
appropriate. This included the recognition of
an impairment with respect to the Group’s
carrying value of its investment in Admiral
Taverns of €8.9 million and an impairment
of €0.2 million with respect to its carrying
value of its investment in Drygate Brewing
Company Limited.
Valuation of property, plant and
equipment
The Group values its land and buildings
and plant, machinery and equipment at
market value/depreciated replacement cost
and consequently carries out an annual
valuation. The Group engages external
valuers to value the Group’s property,
plant and machinery at a minimum
every three years or as at the date of
acquisition for assets acquired as part
of a business combination. An external
valuation was conducted at 28 February
2021 by PricewaterhouseCoopers LLP
to value the land and buildings and plant,
machinery and equipment at the Group’s
Clonmel (Tipperary), Wellpark (Glasgow)
and Portugal sites. Following a review of
PwC’s valuation report, the Committee is
satisfied that the adjustments posted were
reasonable and that the carrying values at
28 February 2021 are appropriate.
Revenue recognition
The Committee considered the Group’s
revenue recognition policy and is satisfied
it is appropriate and in line with IFRS 15
Revenue from Contracts with Customers.
Following discussions with the External
Auditor, and the deliberations set out
above, we were satisfied that the financial
statements dealt appropriately with each of
the areas of significant judgement.
Corporate GovernanceBusiness & StrategyFinancial Statements 90
Audit Committee Report
(continued)
Internal Audit
The Committee is responsible for
monitoring and reviewing the operation and
effectiveness of the Internal Audit function
including its focus, work plan, activities and
resources.
At the beginning of the financial year, the
Committee reviewed and approved the
Internal Audit plan for the year having
considered the principal areas of risk in
the business and the adequacy of staffing
levels and expertise within the function.
The Committee also reviewed those plans
again during the year in light of COVID-19,
which resulted in the Internal Audit function
changing direction and focus having
regard to imposed working restrictions
and the placing on furlough of a number
of our colleagues. As national lockdowns
were imposed, the team took a risk based
approach to the rest of the year, while
at the same time establishing new ways
of working. A number of high risk audits
were conducted remotely and others were
deferred into FY2022 where appropriate.
This was a position endorsed by the
Committee in recognition of the operational
challenges being experienced at the time
by the business and to the businesses of
our customers, which required immediate
prioritisation and focus. The FY2022
audit plan has considered all existing and
emerging risks and what was deferred
from FY2021, incorporating both elements
where appropriate. The ability to achieve
the FY2022 Internal Audit plan in spite of
continued lockdown and social distancing
restrictions has also been considered, with
additional resources deployed when able.
During the year, the Committee received
regular verbal and written reports from the
Head of Internal Audit summarising findings
from the work of Internal Audit and the
responses from management to deal with
the findings.
The Committee monitors progress on the
implementation of any action plans arising
on significant findings to ensure these are
completed satisfactorily and meets with
the Head of Internal Audit in the absence of
management.
External Audit
It is the responsibility of the Committee to
monitor the performance, objectivity and
independence of Ernst and Young (“EY”),
the External Auditor. In December 2020,
we met with EY to agree the audit plan for
the year end, highlighting the key financial
statement and audit risks, to ensure that
the audit was appropriately focused.
In addition, EY’s letter of engagement
and independence was reviewed by the
Committee in advance of the audit.
In May 2021, in advance of the finalisation
of the financial statements, we received a
report from EY on their key audit findings,
which included the key areas of risk and
significant judgements referred to above,
and discussed the issues with them in order
for the Committee to form a judgement on
the financial statements. In addition, we
considered the Letter of Representation
that the External Auditor requires from the
Board.
The Committee meets with the External
Auditor privately at least once a year to
discuss any matters they may wish to raise
without management being present.
Assessment of Effectiveness of
External Audit
During the year, the Committee reviewed
EY’s fees for its services performed, its
effectiveness and whether the agreed
audit plan had been fulfilled and the
reasons for any variation from the plan.
The review included a formal evaluation
process including the completion of a
short questionnaire by each member of
the Committee, the Group Chief Financial
Officer, the Director of Group Finance and
applicable senior finance executives across
the business.
The Committee also considered the
robustness of the FY2021 audit, the
degree to which EY was able to assess
key accounting and audit judgements
and the content of the audit committee
report issued by the External Auditor. Due
to governmental advice and restrictions
regarding social distancing and travel, EY’s
audit teams have followed different levels of
remote working in the locations where the
Group operates. The Committee is satisfied
that this has not impacted the effectiveness
of the audit or the audit process. On the
basis of the Committee’s evaluation and
taking into account the views of other
key internal stakeholders, the Committee
concluded that both the audit and the audit
process were effective.
Audit Tender
Following a tender process, the current
External Auditor was first appointed for the
year ended 28 February 2018. The Group’s
lead audit engagement partner has been
the same since that date. The external audit
had not been tendered since then.
There are no contractual obligations
restricting the Company’s choice of External
Auditor. The Committee will continue to
review the auditor appointment and the
need to tender the audit, ensuring the
Group’s compliance with the Code and any
related regulations.
The Committee confirmed compliance
with the Statutory Audit Services for Large
Companies Market Investigation (mandatory
Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order
2014, having last carried out a competitive
tender for audit services in 2017.
Non-Audit Services
The Group has a policy in place governing
the provision of non-audit services by
the External Auditor in order to ensure
that the External Auditor’s objectivity and
independence is safeguarded.
C&C Group plc Annual Report 2021 91
Confidential Reporting Programme
Evaluation of the Committee
The evaluation of the Committee was
completed as part of the 2021 internal
board evaluation process. An explanation
of how this process was conducted, the
conclusions arising from it and the action
items identified is set out on page 84. The
Committee has considered this in the
context of the matters that are applicable to
the Committee.
This report was approved by the Board of
Directors on 26 May 2021.
Emer Finnan
Chair of the Audit Committee
In line with best practice, the Group has
an independent and confidential reporting
programme in all of its operations whereby
employees can, in confidence, report on
matters where they feel a malpractice
has taken or is taking place, or if health
and safety standards have been or are
being compromised. Additional areas that
are addressed by this procedure include
criminal activities, improper or unethical
behaviour and risks to the environment.
The programme allows employees to raise
their concerns with their line manager or,
if that is inappropriate, to raise them on a
confidential basis. An externally facilitated
confidential helpline and confidential email
facility are provided to protect the identity
of employees in these circumstances. Any
concerns are investigated on a confidential
basis by the Human Resources Department
and/or the Company Secretary and Group
General Counsel and feedback is given
to the person making the complaint as
appropriate via the confidential email facility.
An official written record is kept of each
stage of the procedure and results are
summarised for the Committee.
The Audit Committee is also responsible
for ensuring that arrangements are in
place for the proportionate independent
investigation and appropriate follow up of
any concerns which might be raised. The
Committee receives regular reports on all
whistleblowing incidents. The Board also
receives a report on whistleblowing in the
Company Secretary and Group General
Counsel’s regular report to Board meetings.
In FY2021, no incidences of concern were
uncovered.
We encourage employees to report
genuine issues and concerns as they arise.
Those concerns are taken seriously. They
are investigated where appropriate and
confidentiality is respected.
Under this policy the auditor is prohibited
from providing non-audit services if the
auditor:
• may, as a result, be required to audit its
own firm’s work;
• would participate in activities that would
normally be undertaken by management;
• would be remunerated through a
“success fee” structure or have some
other mutual financial interest with the
Group; and
• would be acting in an advocacy role for
the Group.
Other than above, the Company does not
impose an automatic ban on the External
Auditor providing non-audit services.
However, the External Auditor is only
permitted to provide non-audit services
that are not, or are not perceived to be,
in conflict with auditor independence and
objectivity, if it has the skill, competence
and integrity to carry out the work and it
is considered by the Audit Committee to
be the most appropriate firm to undertake
such work in the best interests of the
Group. The engagement of the External
Auditor to provide non-audit services
must be approved in advance by the Audit
Committee or entered into pursuant to
pre-approved policies and procedures
established by the Audit Committee and
approved by the Board.
The nature, extent and scope of non-
audit services provided to the Group by
the External Auditor and the economic
importance of the Group to the External
Auditor are also monitored to ensure
that the External Auditor’s independence
and objectivity is not impaired. The Audit
Committee has adopted a policy that,
except in exceptional circumstances with
the prior approval of the Audit Committee,
non-audit fees paid to the Group’s auditor
should not exceed 100% of audit fees in any
one financial year.
EY provided no non-audit services in
FY2021.
Corporate GovernanceBusiness & StrategyFinancial Statements
92
Environmental, Social and Governance Committee Report
Dear Shareholder
I am pleased to present the
first Environmental, Social and
Governance (“ESG”) Committee
report covering the work of
the Committee during FY2021.
This provides an overview of
the Committee’s activities in
the year under review and
looks ahead to our anticipated
activities in the coming year.
Year in Review
Corporate responsibility is central to the
Company’s strategy and forms an integral
part of how C&C operates. To reflect
C&C’s ongoing commitment to operating
a sustainable business, the Board has
established a new committee, the ESG
Committee. The Terms of Reference of the
Committee was constituted by resolution of
the Board of Directors of the Company in
July 2020 to assist the Board in defining the
Group’s strategy relating to ESG matters.
Following the Board’s decision to establish
the Committee, a Head of ESG was
appointed to lead the Company towards our
vision relating to ESG targets. To support
the Head of ESG, applications were sought
internally for ESG Champions from each
business unit who were passionate about
ESG and how our business influences these
areas.
Interviews were then held by the Company
Secretary and Head of ESG, with the first
ESG Champions appointed in September
2020, when the ESG Committee was
established. The ESG Champions have
attended both Committee meetings held
during FY2021. Our vision is for the ESG
Champions to be appointed on an 18 month
term, allowing them to be involved in the
setting of long term and meaningful targets
and providing an opportunity to help shape
the future of the business at a strategic level
through ESG matters. The Committee has
been delighted by the Champions’ energy,
enthusiasm and, moreover, input as we
continue to define the ESG strategy.
Since appointment, the Head of ESG,
with the support of the Champions and in
collaboration with the Board, has worked
to establish the Company’s purpose, vision
and values, KPIs and timelines that follow
legal and regulatory requirements.
Furthermore and as part of our commitment
to continual improvement, a review of
material ESG factors relevant to the
beverages and distribution sectors was
undertaken in the year. The purpose of the
review was to calibrate our existing position
and ensure that any new and material
issues of importance to those sectors are
captured. Moreover, to provide a basis
for strategy formulation, we reviewed
international guidance and non-financial
standards published by the UN Sustainable
Development Goals (‘UN SDGs’), the
Sustainability Accounting Standards Board
(‘SASB’) and the World Economic Forum
(‘WEF’). The results of the work were then
discussed and used to form opinion,
recognise best practice and provide clear
direction on our ESG strategy in FY2022.
ESG objectives, which relate to the six pillars
of our Sustainability Framework as detailed
on pages 50 to 51, are defined annually and
reviewed on an ongoing basis.
A key element of our ESG strategy is to raise
the voice of employees in the boardroom.
The Board recognises the importance of
communication and engagement with the
wider workforce as a means of assessing
and monitoring culture. The role and
effectiveness of the Board and the culture it
promotes are essential to a successfully run
company. During FY2021, the engagement
of the Non-Executive Directors with a range
of employees from each business area has
provided invaluable insight into the evolution
of our culture and values, and their link to
strategy, through a series of ‘Our Forum’
meetings. The meetings, hosted by the
ESG Champions, allowed employees to
raise, with the Non-Executive Directors and
business units Managing Directors, a variety
of issues that were of importance to them,
including the Company’s response to the
COVID-19 pandemic, and views on what the
Company could improve in its response to
help the business and its employees.
Our colleagues remain our most valuable
asset and we are committed to creating an
open and inclusive culture, which enables
all of our people to thrive, and to promote
C&C Group plc Annual Report 2021 93
diversity and inclusion to ensure we have
a balanced pipeline of talent for the future.
The Champions, at the request of the
Nomination Committee, reviewed the
Board’s policy on diversity and inclusion,
which was subsequently recommended to
the Board and approved during the year
with the aim of continuing to encourage
diversity within the Group.
In terms of corporate responsibility and
community engagement, the Board is
committed to treating all stakeholders in
every area of operations with honesty,
fairness, openness, engagement and
respect, and to conducting all business
ethically and safely. The Group will only
work with parties that share these values.
Our Code of Conduct (‘our Code’) sets out
our expectations for how we do business,
clarifying our commitments to ethical,
social and environmental performance.
Our ESG policies support our Code.
I would like to thank my colleagues for
their contribution and counsel since the
formation of the Committee, during what
has been a challenging period for the
Group.
On behalf of the Board
Jim Thompson
Chair of the ESG Committee
26 May 2021
Roles and Responsibilities of the Committee
Role of the Committee
The Committee is required to:-
• Assist the Board in defining the Group’s
strategy relating to ESG matters;
• Review the policies, programmes,
practices and initiatives of the Group
relating to ESG matters ensuring they
remain effective and up to date;
• Provide oversight of the Group’s
management of ESG matters and
compliance with legal and regulatory
requirements, including applicable rules
and principles of corporate governance,
and applicable industry standards;
• Report on these matters to the
Board and, where appropriate, make
recommendations to the Board; and
• Report as required to shareholders of the
Company on the activities and remit of the
Committee.
The Committee has defined Terms of
Reference which can be found in the
Investor Centre section of the Group’s
website at www.candcgroupplc.com.
Membership and Attendance
The following directors served on the Committee during the year.
Member
Jim Thompson (Chair)
Jill Caseberry
Patrick McMahon
Helen Pitcher
Andrea Pozzi
No member of the Committee nor any other
Director participates in discussions or votes
concerning his or her own re-election or
evaluation of his or her own performance.
Details of the skills and experience of the
Directors are contained in the Directors’
biographies on pages 74 and 75. Their
remuneration is set out in the Remuneration
Report.
The quorum necessary for the transaction
of business by the Committee is two, each
of whom must be a Non-Executive Director.
Only members of the Committee have
the right to attend Committee meetings.
The Committee Secretary is the Assistant
Company Secretary.
Meeting Frequency and Main Activities
during the year
The Committee met on two occasions
during the year ended 28 February 2021. All
members of the Committee attended each
Member Since
24 September 2020
24 September 2020
24 September 2020
24 September 2020
24 September 2020
Number of
Meetings
Attended
Maximum
Possible
Meetings
2
2
2
2
2
2
2
2
2
2
meeting. At the invitation of the Committee,
the Chair, the Group CEO, the Company
Secretary and General Counsel, the Head of
ESG and the ESG Champions were invited
to attend both meetings.
Evaluation of the Committee
During FY2020, an external evaluation was
carried out of the Board, meaning that
the evaluation in FY2021 was carried out
internally as part of the FY2021 internal
Board evaluation process. An explanation
of how this process was conducted, the
conclusions arising from it and the outcome
of that review can be found on page 84.
This report was approved by the Board of
Directors on 26 May 2021.
Jim Thompson
Chair of the ESG Committee
Corporate GovernanceBusiness & StrategyFinancial Statements
94
Nomination Committee Report
blend of brand, distribution and hospitality
sector expertise to maximise the potential of
our iconic brands and optimise the potential
of our distribution capabilities.
In Patrick McMahon we have a CFO
with an inimitable understanding and
experience of our business. His progression
through senior leadership positions
within the business and integral role in
the transformative Matthew Clark and
Bibendum transaction make him an ideal fit
for this position and the natural successor
to Jonathan Solesbury, who informed
the Board of his intention to retire during
the year. The Board would like to thank
Jonathan for his significant contribution to
C&C and we wish him well for the future.
As we navigate the current challenges
and uncertainty of COVID-19, these
appointments represent an exciting new era
for C&C, which we believe will deliver long
term value for all our stakeholders.
making. While incorporating all aspects of
diversity, we have placed a particular focus
on gender and ethnic diversity in light of the
Hampton Alexander and Parker Reviews,
which act as guidance for the Committee.
The Committee was pleased that Vineet
Bhalla’s further broadened the diversity of
the Board, which now has a broader and
more diverse skill set, as well as ethnicity
and gender.
At the financial year-end, 30% of the Board’s
membership was female. The Committee
was fully aware, however, that this level
reduced with the appointment of Vineet
Bhalla, which was an important step to
deepen the skills and diversify the ethnicity
of the Board. While at the date of this report,
we have a stronger and more diverse
Board overall, we recognise that the gender
composition of the Board is below the level
expected and it is our intention to address
that as soon as practicable and by no later
than the end of February 2022.
In addition, the Committee continued to
review the skills and composition of the
Board. Following this review, the Board
identified the necessity of having more
digital and technology experience, which
is increasingly important in a digitalised
world. To enhance the Board’s collective
capability and aid us as we seek to deliver
our strategic objectives, the Committee
recommended, and the Board endorsed
the appointment of Vineet Bhalla. The
Board was particularly satisfied that
the appointment would bring strong
digital experience as an experienced IT
professional, latterly with Burberry as Chief
Technology Officer and previously as Head
of IT for Unilever for their digital marketing
and research and development divisions.
With each review of its composition, and
when considering any appointment, the
Board has particular regard for diversity
of gender, social and ethnic backgrounds,
nationality, and cognitive and personal
strengths. Diversity at Board level – and
throughout the organisation – is key to
ensure that we incorporate a wider range
of perspective in deliberations and decision
Following the announcement of David’s
appointment as CEO in July 2020, and to
allow an orderly process of succession, the
Board requested that I continue in my role
as interim Executive Chair until David joined
C&C in November 2020, at which time I
reverted to the role of Non-Executive Chair.
In addition, the Board asked that I extend
my role as Non-Executive Chair by an
additional 12 months until the AGM in 2022.
This will provide continuity of leadership for
C&C following the appointment of a new
CEO and CFO.
The Committee will continue to monitor the
composition and balance of the Board to
ensure that a broad range of expertise is
available from the existing members and
will recommend further appointments as
and when appropriate to assure the long
term success of the Company. I intend to
retire from my role as Chair and step down
from the Board in July 2022, by which time
I will have served on the Board for over 10
years, including four years as Chair. The
Committee, led by Vincent Crowley, Senior
Independent Director (SID) has established
Dear Shareholder
I am pleased to present the
Nomination Committee (‘the
Committee’) report covering
the work of the Committee
during FY2021. This provides
an overview of the Committee’s
activities in the year under
review and looks ahead to
our anticipated activities in the
coming year.
Year in Review
Succession planning continued to be the
primary focus of the Committee’s work.
During the year, the Committee engaged
in a thorough process to consider the
appointment of a new Group Chief
Executive Officer (CEO) and Group Chief
Financial Officer (CFO). Following a rigorous
process, which considered internal and
external candidates, the Committee
recommended the appointment of David
Forde as CEO and Patrick McMahon as
CFO. I am happy to report that in each case,
the Committee’s recommendations were
subsequently endorsed unanimously by the
Board.
For the role of CEO, following a thorough
evaluation of exceptional candidates for the
position, the Committee was unanimously of
the view that David Forde had the requisite
C&C Group plc Annual Report 2021 95
Roles and Responsibilities of the
Committee
Role of the Committee
The Committee is responsible for Board
recruitment and conducts a continuous
and proactive process of planning and
assessment, taking into account the
Board’s composition against the Company’s
strategic priorities and the main trends and
factors affecting the long-term success
and future viability of the Company. The
Committee’s key objective is to ensure that
the Board comprises individuals with the
necessary skills, knowledge, experience and
diversity to ensure that the Board is effective
in discharging its responsibilities and that
appropriate succession arrangements
are in place. The Committee has defined
Terms of Reference which can be found in
the Investor Centre section of the Group’s
website at www.candcgroupplc.com.
The Committee is responsible for leading
a formal, rigorous and transparent process
for the appointment of new Directors to the
Board and ensuring that plans are in place
for orderly succession to the Board and
senior management positions.
Except for the Chair, all members of the
Committee are and were, throughout the
year under review, considered by the Board
to be wholly independent. Given that the
Chair was carrying out an executive function
on an interim basis, it was determined that
he should remain on the Committee. This
was particularly important as he played a
leading role in ensuring an orderly transition
to David Forde as the Group’s new CEO.
No member of the Committee nor any
other Director participates in discussions
concerning or votes on his or her own
re-election or evaluation of his own
performance. Details of the skills and
experience of the Directors are contained
in the Directors’ biographies on pages 74
and 75. Their remuneration is set out in the
Remuneration Report.
The quorum necessary for the transaction
of business by the Committee is two, each
of whom must be a Non-Executive Director.
Only members of the Committee have the
right to attend Committee meetings. The
Company Secretary is Secretary to the
Committee.
Membership and Attendance
The following Non-Executive Directors served on the Committee during the year.
Member
Member Since
Stewart Gilliland (Chair)
24 October 2017
Vincent Crowley
Emer Finnan
Helen Pitcher
1 June 2019
5 July 2018
23 October 2019
Number of Meetings
Attended
Maximum Possible
Meetings
11
11
11
11
11
11
11
11
a process to identify and appoint my
successor and we will communicate with
you as appropriate.
Our colleagues remain our most valuable
asset and we are committed to creating an
open and inclusive culture, which enables
all of our people to thrive, and to leverage
diversity and inclusion to ensure we have
a balanced pipeline of talent for the future.
The Committee will continue its work to
ensure the Board maintains a balance
of individuals representing a wide cross
section of experience, cultural backgrounds
and specialisms. With the aim of continuing
to promote diversity on the Board and
within the Group as a whole, the Committee
reviewed the Board’s policy on diversity and
inclusion, which was recommended to the
Board and approved during the year.
As part of our annual Board and committee
evaluation process, further details of which
are set out on page 84, the Committee
assessed the time commitment needed
from Non-Executive Directors to ensure
that each individual has sufficient time to
devote to their duties for C&C. The impact
of the pandemic on business has required
the Board and its committees to devote
additional time to Board business and to
providing leadership oversight, and each
of our Directors remain fully committed to
promoting the success of the Company
in a way that ensures that the interests
of shareholders and other stakeholders
are protected. I would like to thank my
colleagues for their contribution and counsel
over the past 12 months, for what has been
a challenging period for the Group.
In the coming year, the Committee will
continue to focus on succession planning
and on furthering our diversity and inclusion
agenda.
On behalf of the Board
Stewart Gilliland
Chair of the Nomination Committee
26 May 2021
Corporate GovernanceBusiness & StrategyFinancial Statements
96
Nomination Committee Report
(continued)
Meeting Frequency and Main
Activities during the year
The Committee met on eleven occasions
during the year ended 28 February 2021. All
members of the Committee attended each
meeting. At the invitation of the Committee,
the Group CEO, the Group Director of
Human Resources, the Group Head of
Employee Engagement, and Independent
Audit were invited to attend meetings from
time to time.
Set out below is a summary of the main
activities of the Committee in the year.
CEO Appointment
As reported in last year’s Annual Report,
following the retirement of Stephen Glancey
in January 2020, Stewart Gilliland was
appointed as interim Executive Chair
pending the appointment of his successor,
to ensure continuity of executive leadership
and an orderly process of succession.
The search from Spencer Stuart was
rigorous and international in its scope.
The Committee considered an extensive
list of potential candidates, both internally
and externally, with the skills, knowledge
and experience required. The candidates
included in the initial list for the Committee
were of diverse backgrounds in its widest
sense (gender, nationality, age, experience,
ethnicity and social backgrounds). The
Committee unanimously selected David
Forde as its preferred candidate. David,
having started his career with the sales and
marketing team at Heineken Ireland, was
the Managing Director of Heineken UK, a
position he had held since 2013. Heineken
UK is a leading producer of beer and cider
brands in the UK market, as well as a
significant pub operator, with approximately
2,500 outlets. David worked with Heineken
for 31 years and has extensive experience
in senior leadership positions across the
business and has an intimate knowledge of
our industry.
The Committee appointed Spencer Stuart
to conduct a search for candidates for
the role of the new Group Chief Executive
Officer. Spencer Stuart did not, and does
not, have any connection to the Company
other than in respect of provision of these
services.
Following the Committee’s recommendation
and due consideration by the Board, David
Forde was appointed our new Group Chief
Executive Officer on 8 July 2020. The Board
is pleased to have recruited an individual of
his calibre to lead the Group through its next
stage of development.
The Company did not use open advertising
to search for suitable candidates for the
role as we believe that the optimal way
of recruiting for this position is to use
targeted recruitment based on the skills and
experience required.
As an initial step, the Committee agreed
a role profile with Spencer Stuart, which
referred to the following characteristics and
experience:
• Previous experience of the public
company environment;
• Experience of operating within the
beverage industry;
• A reputation for delivering shareholder
value; and
• A positive match with the culture of the
Group and the members of the Board.
Induction of Group CEO
David Forde took up the position of Group
Chief Executive Officer on 2 November
2020 and is bringing a fresh perspective to
the Board and its committees. As set out
on page 83, when a new Board member
joins the Company they receive a formal,
comprehensive and tailored induction
designed to suit their individual needs
and their role. The induction programme
includes activities and meetings with key
personnel, technical meetings and site
visits. This is an effective way of introducing
them to the Group’s culture and of ensuring
that they have the information and support
they need to understand the business and
to enable them to be productive in their role.
Group CEO Induction
A comprehensive induction programme was
arranged for David Forde to help him settle
into his new role. This included meetings
with senior management and operational
and functional teams around the Group and
was structured to help David gain an insight
into how the business works on a day to
day basis and to understand its strategic
priorities, purpose, culture, values and
people.
Since joining, David has attended business
and budget reviews in each business unit.
Visits were arranged, subject to COVID-19
restrictions, which included key locations
in the Group. These visits gave David an
opportunity to meet with local management
teams and other colleagues and to speak
with them first hand and to listen to their
views.
David has also spent time meeting with a
number of the Group’s investors, as well
as suppliers, customers and consumers.
He has also had one to one meetings with
his Board colleagues and has met with
business unit heads, senior management
and members of the Company’s
governance and control functions.
C&C Group plc Annual Report 2021 97
Details of some of the activities undertaken by David are set out below:
Area
Provided by
Subjects covered and discussed
Business Units
Executive
Management
• Ireland, Great Britain, Matthew Clark and Bibendum and International
business reviews;
• Ireland, Great Britain, Matthew Clark and Bibendum and International
business budget reviews;
• various site visits;
Governance legal and
compliance
Company Secretary
and Group General
Counsel
• review of the governance framework and landscape; Board and
committee matters; overview of the Group’s legal and compliance
framework and material litigation;
Health and Safety
Group Health & Safety
Manager
• execution of safety strategies, priorities and initiatives and their alignment
to the Performance, People and Purpose strategy;
Finance, Strategic plan
and business model
Group Chief Financial
Officer
• financial control framework and governance processes;
• internal and external reporting of the Company’s results;
• overview of the Group’s businesses and business model, two year
business plan and strategic aims;
• review of the Group’s M&A strategy;
Tax
Group Chief Financial
Officer
• review of the Group’s tax strategy and profile, principal uncertain tax
positions and areas requiring the exercise of judgement;
• tax governance procedures and control framework;
People
Group HR Director
• review of the Group’s People strategy including succession planning,
diversity and inclusion and engagement initiatives;
• Group remuneration philosophy, executive remuneration and annual cycle;
long term incentive plan;
Investor Relations
Treasury
Group Chief Financial
Officer
Group Chief Financial
Officer
• C&Cs’ investment case, key areas of investor focus and IR annual
programme;
• overview of the Group’s treasury operations, governance, funding, credit
ratings, liquidity management, foreign exchange and interest rate risk
management;
IT
Group IT Director
• overview of the digital and technology function including in-depth reviews
on strategy, operating model, initiatives and cyber security;
Internal Audit
Head of Internal Audit
• review of Group Internal Audit plan, internal control framework, key
financial controls, whistleblowing programme and the biannual major risk
assessment process; and
Environmental, Social and
Governance
Head of ESG
• Overview of the ESG framework, strategy and KPI’s.
Group CFO Appointment
Jonathan Solesbury who served as the
Group’s CFO since 2017 informed the Board
of his intention to retire during FY2020.
Accordingly, Jonathan stepped down from
the Board at the AGM on 23 July 2020, but
remained with C&C until 1 September to
facilitate an orderly transition.
Patrick McMahon, Group Strategy Director,
and designated successor to Jonathan was
appointed as Group Chief Financial Officer
and an Executive Director with effect from
23 July 2020.
A Fellow Chartered Accountant, Patrick
originally joined C&C in 2005 from KPMG.
Throughout his career with C&C he has held
a number of senior leadership positions
including, Financial Director of individual
business units and overall Group Finance
Director. As Group Strategy Director,
Patrick was central to the integration and
turnaround of Matthew Clark and Bibendum
since their acquisition in 2018.
Corporate GovernanceBusiness & StrategyFinancial Statements 98
Nomination Committee Report
(continued)
New Non-Executive Director
During the year, the Committee continued
to review the skills and composition of the
Board and identified an opportunity to bring
more digital and technology experience
into its deliberations. A thorough process
was undertaken by the Committee to
identify and assess a number of potential
candidates. A boutique executive search
firm, Audeliss was instructed to assist with
the search for the new appointment. The
search firm signed up to the Voluntary Code
of Conduct and does not have any other
connection to the Company or with any
individual Directors, other than to provide
recruitment services. Open advertising was
not used for this position.
To enhance the Board’s collective capability
and aid us on our journey to meet our
strategic objectives, the Committee
recommended the appointment of
Vineet Bhalla, noting, in particular, that
the appointment would bring strong
digital experience as an experienced IT
professional, latterly with Burberry as
Chief Technology Officer and previously
as Head of IT for Unilever for their digital
marketing and research and development
divisions. The Committee also noted that
this appointment would demonstrate
the Company’s broader commitment to
diversity. In making this recommendation,
the Committee also satisfied itself that
Vineet Bhalla met the independence criteria
of the Code and took into account his
other significant commitments and the time
involved, as disclosed to the Committee.
The Committee’s recommendation resulted
in Vineet Bhalla’s appointment to the Board
as a Non-Executive Director with effect from
26 April 2021.
Re-appointment of Directors
The Committee considers the selection
and reappointment of directors carefully
before making a recommendation to the
Board. The Board is conscious of the
length of tenure of non-executives when
formulating its succession planning process.
Non-Executive Directors and the Chair are
generally appointed for a period of three
years, which may be renewed for a further
two terms. Notwithstanding the appointment
of three years, in line with good governance
practice, all Directors are put forward for re-
election by shareholders annually at the AGM
providing shareholders with the opportunity
to express their confidence and support
for the Board as a whole and each Director
individually.
Appointment of a new Chair
As outlined in his introductory letter, the
Chair will step down from his role in July
2022 following 10 years on the Board and
four years as Chair. A selection process
for a new Chair is being led by the Senior
Independent Director (‘SID’), Vincent Crowley,
and the Committee, with assistance from
the Company Secretary and Group General
Counsel and the Group Director of Human
Resources. The current Chair is not involved
in the selection process.
As part of the external search process, the
services of an executive search firm are
being used to identify potential candidates.
The Committee considered the credentials
of a number of search consultants before
recommending the appointment of Spencer
Stuart, which is a signatory to the voluntary
code of conduct for executive search firms.
Spencer Stuart is used from time to time by
the Company for the recruitment of senior
executives, but does not have any other
connection to the Company or with individual
directors.
The Company has not used open advertising
to search for suitable candidates for the
role as we believe that the optimal way
of recruiting for this position is to use
targeted recruitment based on the skills and
experience required.
As an initial step, the Committee has agreed
a role profile with Spencer Stuart, which
referred to the following characteristics and
experience:
• Experience as a Chair;
• City/investor experience;
• FTSE 250 plc experience and an
understanding of the UK corporate
governance environment;
• Broad sector experience, with an
emphasis on business to business and
business to customer environments within
the beverage industry;
• A reputation for delivering shareholder
value; and
• A positive match with the culture of the
Group and the members of the Board.
The process for appointing a successor is
ongoing.
Succession Planning
Given both the appointment of a new CEO
and CFO and a Non-Executive Director,
along with the commencement of a search
for a new Chair, the Committee has had
reason to extensively consider succession
planning for both Board and senior
management roles during the year.
The Board plans for its own succession,
with the support of the Committee. The
Committee remains focused, on behalf of
the Board, on Board succession planning
for both Executive and Non-Executive
Directors.
The Committee aims to ensure that:
• the succession pipeline for senior
executive and business critical roles in the
organisation is strong and diverse;
• processes are in place to identify potential
successors and manage succession
actively;
• there is a structured approach to
developing and preparing possible
successors; and
• processes are in place to identify “at risk”
posts.
On at least an annual basis, each Director’s
intentions are discussed with regard to
continued service on the Board and their
succession is considered in the context of
the composition of the overall Board and
the corporate governance guidance on non-
executive tenure. This transparency allows
for an open discussion about succession
for each individual, both for short term
emergency absences as well as longer term
plans.
C&C Group plc Annual Report 2021 99
As in previous years, we conducted an
analysis of the balance of experience,
skills, gender and diversity on the Board
as a whole, taking account of the future
needs of the business in the light of the
business strategy, the Board changes set
out above, and the knowledge, experience,
length of service and performance of the
Directors, including their ability to continue
to contribute effectively to the Board. In
accordance with our policy, we also had
regard to the requirement to achieve a
diversity of characters, backgrounds,
experience and gender amongst Board
members.
Skills Balance and Directors’
Performance Evaluation
During the year, the Committee also
considered the composition of the
Board and each of its Committees. The
Committee continues to actively review the
long term succession planning process for
Directors to ensure the structure, size and
composition (including the balance of skills,
experience, independence, knowledge
and diversity (including gender, ethnic and
social backgrounds)) of the Board and
its Committees continues to be effective,
promoting the Company’s ability to deliver
its strategy.
As part of its review, the Committee
considered the performance and
independence of Stewart Gilliland, Jill
Caseberry, Jim Clerkin, Vincent Crowley,
Emer Finnan, Helen Pitcher and Jim
Thompson, each of them having confirmed
their willingness to stand for re-election at
the forthcoming AGM.
During FY2020, an external evaluation was
carried out, meaning that the evaluation
in FY2021 was carried out on an internal
basis. Having undertaken a performance
evaluation of both the Board and individual
Directors, the Committee considered that
the independence of each of the Non-
Executive Directors, being Jill Caseberry,
Jim Clerkin, Vincent Crowley, Emer
Finnan, Helen Pitcher and Jim Thompson.
In assessing their independence, the
Committee has had due regard to various
matters which might affect, or appear to
affect, the independence of certain of the
directors. The Committee was fully satisfied
that each remained fully independent in
both character and judgement.
In determining the independence of Stewart
Gilliland and Jill Caseberry, the Company
had regard to the products sold to Tesco
plc, of which Stewart Gilliland is a Non-
Executive Director, and the products
purchased from St Austell Brewery
Company Limited, of which Jill Caseberry is
a Non-Executive Director. The Committee
remains fully satisfied these relationships are
not material and have in no way impaired
their independence.
The Committee had also undertaken
a review of each of the Non-Executive
Directors’ other interests, external time
commitments and tenure, such review being
particularly rigorous in the case of Emer
Finnan and Stewart Gilliland as they had
served seven and nine years respectively
on the Board, and has concluded that
each of them is independent in character
and judgement and that there are no
relationships or circumstances likely to
affect (or which appear to affect) his or her
judgement. The Committee is also satisfied
that each of them continues to be able to
devote sufficient time to their role.
No Director participated in the evaluation of
his/her own performance, independence or
time commitments.
The Committee was satisfied that the Board
has the appropriate balance of relevant
skills, experience, independence and
knowledge of the Company to enable it to
discharge its duties to lead and steward the
business.
Diversity
As a people focused business, our strength
comes from an inclusive and welcoming
environment, where we recognise that the
experiences and perspectives which make
us unique come together in our shared
values and vision. We strongly believe that
the more our colleagues reflect the diversity
of our clients and consumers, the better
equipped we are to service their needs.
As part of its remit the Committee reviews
the Group’s policies on workforce diversity
and inclusion, their objectives, and link to
the Company’s strategy. The Group has
always operated open and inclusive hiring
and staff management practices.
During the year, the Committee
recommended, and the Board endorsed,
the adoption of a new Diversity and Inclusion
Policy, which is published on the Company’s
website. In reviewing the Group’s policy,
the Committee sought the views of the
ESG Champions prior to implementation.
The Committee was satisfied that it
supported the development of a more
diverse workforce within the business and
were consistent with the Group’s inclusive
and welcoming culture. The policy equally
applies to our Board members and all of
our employees, regardless of their contract,
location or role in the business. We aim to
ensure our inclusivity applies to all aspects
of their careers, including recruitment,
selection, benefits and opportunities for
training and promotion. The Executive
Committee members have undergone
Diversity and Inclusion training to ensure this
is embedded across the whole organisation.
More details on workforce diversity can be
found on page 100.
Our vision is to be an employer of choice,
with a rich and diverse mix of people who
reflect the societies and communities in
which we work and operate.
C&C is a great place to work and our policy
reinforces our commitment to equality,
diversity and inclusion and to having a
truly representative workforce where every
member feels respected, valued and able
to be their best. We want to ensure that
equality, diversity and inclusion is a core
part of how we operate, it’s embedded in
our culture, and reflected in our people and
their behaviours.
Corporate GovernanceBusiness & StrategyFinancial Statements 100
Nomination Committee Report
(continued)
We are committed to:-
• Reviewing and adapting our policies and
procedures to ensure workforce diversity
and equal opportunities;
• Implementing initiatives that drive an
inclusive culture where all employees feel
accepted and valued;
• Promoting a more inclusive environment,
which attracts all candidates and signals
our commitment to celebrate and
promote diversity;
• Taking an inclusive approach to ensure
we attract a diverse pool of talent and
experience;
• The use of clear statements which
promote equality and inclusion within the
recruitment process;
• Training our managers and wider teams
to increase cultural diversity, awareness,
knowledge and skills;
• Encouraging our people to share their
experiences and help each other to
understand more about what diversity
and inclusion means;
• Authentically telling our diversity and
inclusion story and celebrating our
approach, both inside and outside our
organisation.
At Board level, our approach to the
appointment of new directors reflects our
desire to ensure the optimal balance of
experience and backgrounds on the Board.
Great emphasis is placed on ensuring that
Board membership reflects diversity in its
broadest sense and increasingly embodies
our employee base and the communities
in which we operate. We also ensured that
the Board considered whether diversity and
inclusion across the wider business was
being progressed, including discussions
with management at site visits during the
year. The Board recognises the benefits of
diversity. Our Directors come from different
backgrounds, nationalities, a wide range
of professions and each brings unique
capabilities and perspectives to our Board
discussions.
We are committed to maintaining a diverse
Board. Appointments to the Board and
throughout the Company will continue to
be made on merit and overall suitability
for the role against objective criteria with
due regard to the benefits of diversity
(including, but not limited to, ethnicity,
experience, gender, nationality, age and
educational and social backgrounds as well
as individual characteristics such as broad
life experience).
When recruiting, we instruct the external
recruitment consultants to ensure that a
balance of male and female candidates
is put forward for consideration by the
Committee. Following Vineet’s appointment
to the Board, female representation on our
Board is at 27%.
The Committee and the Board recognise
the importance and benefit of diversity
beyond the Board and in this regard seek
to ensure that all recruitment decisions
are fair and non-discriminatory and that
all employees get an equal opportunity to
achieve their full potential.
Statistical gender diversity employment data
for the Company as at 28 February 2021 is
as follows:
Male Number/
Percentage
Female Number/
Percentage
Directors
7/70%
3/30%
Senior
Managers
Other
employees
58/64%
32/36%
1,913/75%
647/25%
The Committee and the Board are
committed to greater diversity throughout
the Company and recognise this will require
continued focus on an inclusive culture and
a systematic review of existing recruitment,
retention and promotion practices during
the forthcoming year.
The ESG Committee Report on pages 92 to
93 provides further detail on the approach
being taken to better understand our
diversity and employees’ views on inclusion
and the implementation of the Policy across
the Group.
ESG Committee
To reflect C&C’s ongoing commitment
to operating a sustainable business, the
Board established a new committee, the
ESG Committee. The Committee made
recommendations to the Board concerning
both the Chair and membership of the ESG
Committee. In all cases, the Committee’s
recommendations were subsequently
endorsed unanimously by the Board.
Time Commitment
In line with its terms of reference, the
Committee performs an annual review
of the time required from the Chair, SID
and Non-Executive Directors to perform
their duties. As part of this process,
the Committee reflects on a director’s
attendance at scheduled meetings and
their availability at other times during the
year. In the year under review, directors
were available, often at short notice and
outside regular working hours, to discuss
matters that required a prompt decision, for
example, the consideration and oversight of
the various strategies employed during the
year to navigate the impact of the COVID-19
pandemic upon the business.
Evaluation of the Committee
During FY2020, an external evaluation was
carried out, meaning that the evaluation
in FY2021 was carried out on an internal
basis as part of the FY2021 internal Board
evaluation process. An explanation of
how this process was conducted, the
conclusions arising from it and the outcome
of that review can be found on page 84.
This report was approved by the Board of
Directors on 26 May 2021.
Stewart Gilliland
Chair of the Nomination Committee
C&C Group plc Annual Report 2021 101
Diverse and Effective Board
Board balance
The Board comprises 11 Directors, with a
broad and complementary set of technical
skills, educational and professional
experience, nationalities, personalities,
cultures and perspectives.
Independence
Gender diversity
Ethnicity
Chair
Independent
Non-independent
Age Range
40-50
51-60
61-70
1
7
3
3
4
4
Male
Female
Tenure
1-3 years
4-7 years
8-10 years
8
3
6
4
1
White
Indian
10
1
Nationality
Irish
British
USA
Italian
4
5
1
1
Board Skills Matrix
Director
Independence
Core Industry
Senior Executive
Finance/Audit & Risk
Legal/Public Policy
Manufacturing/ Supply Chain
Communications/ Marketing/
Customer Service
International Markets
UK and Ireland Pubs Exp
M&A/Capital Markets
Digital/Technology
Executive Directors
Non-Executive Directors
David
Forde
Patrick
McMahon
Andrea
Pozzi
Stewart
Gilliland
Vineet
Bhalla
Jill
Caseberry
Jim
Clerkin
Vincent
Crowley
Emer
Finnan
Helen
Pitcher
Jim
Thompson
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Corporate GovernanceBusiness & StrategyFinancial Statements 102
Directors’ Remuneration Committee Report
Governance
The Committee has defined Terms of Reference which can be found in the Investor Centre
section of the Group’s website. A copy may be obtained from the Company Secretary.
Remuneration Committee Membership and Meeting Attendance
The following Non-Executive Directors served on the Committee during the year:
Member
Helen Pitcher (Chair)
Jill Caseberry
Jim Clerkin*
Member since
1 March 2019
1 March 2019
24 October 2019
Number of Meetings
Attended
Maximum Possible
Meetings
10
10
8
10
10
10
* Jim Clerkin was unable to attend the meetings on 20 October 2020 and 10 February 2021 due to prior
Dear Shareholder
engagements.
On behalf of the Board, I
am pleased to present the
Directors’ Remuneration Report
(‘Report’) for the year ended 28
February 2021.
The Company is incorporated in Ireland
and is therefore not subject to the UK
company law requirement to submit its
Directors’ Remuneration Policy (‘Policy’)
to a binding vote. Nonetheless, in line
with our commitment to best practice, the
2021 Policy will be put to our shareholders
on an advisory basis. The Company’s
existing Policy was approved at our 2018
AGM following a vote in favour of over
99%. Shareholders showed a similarly
high level of support for our Directors’
Remuneration Report in 2020, with over
99% of votes in favour of it. These high
levels of support reflect shareholders’
views of our responsible approach to
executive remuneration, an approach that
will continue under the new Policy. We hope
that shareholders will demonstrate their
support again this year.
All members of the Committee are and were considered by the Board to be independent.
The quorum necessary for the transaction of business is two, each of whom must be a
Non-Executive Director. Only members of the Committee have the right to attend committee
meetings, however, during the year, Stewart Gilliland (Chair), David Forde (CEO), Patrick
McMahon (CFO) and the Group Director of Human Resources along with Independent
Audit, a Board effectiveness firm, as explained on page 84, were invited to attend meetings
(although never during the discussion of any item affecting their own remuneration or
employment).
The Company Secretary is Secretary to the Committee.
Main Activities in FY2021
External Advisers
• Approval of the FY2020 bonus and LTIP
measures;
• Approval of the Directors’ Remuneration
Report for the financial year ended 29
February 2020;
• Reviewing and consulting with
shareholders on the revised Directors’
Remuneration Policy and consideration of
their feedback;
• Considering the FY2022 remuneration
packages;
• Considering the impact of COVID-19
on the Executive and all employee
remuneration arrangements;
• Approving the terms of the CFO,
Jonathan Solesbury’s departure;
• Approving the terms of Patrick
McMahon’s appointment as CFO;
• Approving the terms of David Forde’s
appointment as CEO.
The Committee seeks and considers advice
from independent remuneration advisers
where appropriate. During the year ended
28 February 2021, the Committee obtained
advice from Deloitte LLP. Deloitte’s fees for
this advice amounted to £27,575 charged on
a time or fixed fee basis. Deloitte is one of
the founding members of the Remuneration
Consultants’ Code of Conduct and adheres
to this Code in its dealings. The Committee
is satisfied that the advice provided by
Deloitte is objective and independent.
The Committee is comfortable that the
Deloitte engagement team that provide
remuneration advice to the Committee do
not have connections with the Company
that may impair their independence.
C&C Group plc Annual Report 2021
103
Business context (including new
Chief Executive Officer and Group
Chief Financial Officer)
Since the last Policy review, the business
has evolved significantly in scale, scope and
complexity. We completed the acquisition of
Matthew Clark and Bibendum in April 2018,
a move which has significantly strengthened
our brand led distribution model, broadened
our operations and footprint and added
circa 1,600 people to C&C. As the largest
independent alcohol distributor across
the UK and Ireland, C&C is structurally
integral to the markets we serve. We have
continued to build the value of our brands,
to invest in our insight capability, improved
the efficiency of our logistics network and
continued to sharpen our focus on our
ESG objectives. We also de-listed from the
Euronext Dublin and joined the FTSE 250
in December 2019, with the London Stock
Exchange our primary and sole listing.
In addition we had a senior leadership
transition within C&C during 2020.
Following a thorough executive recruitment
process, on 9 July 2020 we announced
the appointment of David Forde as Group
CEO. David took up his position and joined
the Board on 2 November 2020. We
believe David has the requisite blend of
market and sector expertise to maximise
the potential of our iconic brands and
our distribution capabilities. In July 2020
we also announced the appointment of
Patrick McMahon as Group CFO. Having
originally joined C&C in 2005 Patrick has an
inimitable understanding and experience of
our business, with previous experience as
Group Finance Director, Finance Director
of a number of C&C’s business units and
most recently, Group Strategy Director.
As we navigate the current challenges
and uncertainty of COVID-19, these
appointments provide the leadership, insight
and capability to deliver long term value for
all our stakeholders.
As the COVID-19 situation continues to
evolve, we have taken a number of steps to
protect our colleagues, business partners,
community and customers; ensure our
supply chain and production facilities remain
operational; and support the hospitality
sector with measures to facilitate fully
compliant operations in line with guidelines
and regulations. We also continue to
seek opportunities to ease the burden on
those in greatest need during this crisis.
Recently, this has seen the donations of
water, soft drinks and juices together with a
range of sponsorship initiatives for various
community groups.
We continue to work proactively to maximise
cash and have been able to maintain
strong liquidity with a supportive lending
syndicate. The Group successfully issued
approximately €140 million of new US
Private Placement notes in March 2020 to
diversify, strengthen and extend the maturity
of our capital structure and sources of
debt finance. In addition, we successfully
negotiated covenant waivers from our
lenders up to, but not including, the August
2022 test date whether or not the rights
issue is successful as outlined in detail
in Note 20 of the Consolidated Financial
Statements. While the Board recognises the
absolute importance of dividend income for
shareholders, given the focus on preserving
cash, and the Group’s decision to avail of
government support through this crisis, we
did not declare a final dividend for FY2020
and FY2021. However, we intend to re-
instate our dividend policy as and when it is
appropriate.
Executive Remuneration Outcomes
for FY2021
The Committee has continuously monitored
remuneration decisions being taken across
the Group and has considered executive
pay in the context of the wider workforce
and the broader impact on society, the
Company and its shareholders.
While the final level of that impact was
unclear, the Committee considered it
prudent to delay certain key decisions in
the first half of FY2021. Consequently, all
decisions on salary, bonuses and share
awards for FY2021 were deferred until
September, following the completion of
our half year. This decision was made to
ensure that the Committee, had a clearer
line of sight over expected performance
and the full impact of COVID-19 on the
business prior to implementing any
decisions and setting performance
targets. In implementing the decision, the
Committee had the full support of Executive
Management.
In September 2020, a review was
undertaken and it was determined in
view of the continued uncertainty that no
bonus targets would be set for FY2021. As
outlined below, no bonuses are to be paid to
Executive Directors in respect of FY2021.
Salary
In response to the rapid emergence of
the pandemic, and as part of the actions
announced to preserve cash and reduce
costs, there was an average reduction
in salary of approximately 20% across
the workforce. Management and Board
remuneration reduced by 30% and 40%
respectively for a three month period until
the end of June 2020. Whilst salaries across
the workforce returned to normal rates,
Directors chose to extend the reduction for
the period of July and August 2020 at the
rate of 20% to reflect the ongoing economic
situation and the experience of the Group’s
wider stakeholders.
The following are the base salaries for our
new CEO, David Forde and our new CFO,
Patrick McMahon and our existing Group
Chief Operating Officer (COO), Andrea
Pozzi:
• David Forde: €690,000
• Patrick McMahon: €420,000 (with effect
from appointment to the Board)
• Andrea Pozzi: £321,300 (unchanged from
March 2019)
Corporate GovernanceBusiness & StrategyFinancial Statements 104
Directors’ Remuneration Committee Report
(continued)
The total fixed pay for our new CEO and
CFO is significantly less than the previous
CEO and CFO reflecting both the lower
base salaries and the 5% cap on pension
contributions.
FY2020 and FY2021 Bonus
As outlined in our 2020 Directors’
Remuneration Report, mindful of the
Company’s commitment to preserve cash
and lower operating expenses, final approval
of the bonuses earned by the Executive
Directors (including the former CEO and
CFO) based on performance during the
twelve months ending February 2020
were deferred. These FY2020 bonuses
were approved in October, with Executive
Directors receiving a pay-out of 25% of
salary as a result of achieving the cash
conversion metric. Andrea Pozzi’s bonus
was also subject to an under pin regarding
brand redistribution which was not achieved,
resulting in a pay-out of 12.5% of salary.
Given the current financial year commenced
in March 2020, at the same time as the
outbreak of COVID-19 and the associated
government restrictions, no bonuses are to
be paid to Executive Directors in respect of
FY2021.
2018 LTIP and ESOS Awards
The three year performance period in
respect of the 2018 LTIP and ESOS awards
came to an end, based on the targets set
in 2018 - namely EPS growth, free cash
flow conversion and growth in ROCE –
these were not met over the three year
performance period ended 28 February
2021 and the awards lapsed.
Long-Term Incentives Awarded in
FY2021
Given the uncertain outlook associated with
COVID-19 and in line with guidance from
the Investment Association, the grant of
our FY2021 LTIP awards was also deferred
from the normal grant date for a period of
six months. In determining the quantum
of the FY2021 LTIP and the proposed
measures and targets, the Committee was
sensitive to the need to balance incentivising
executive performance (including a newly
appointed CEO and CFO) at a time when
our management teams are being asked
to demonstrate significant leadership
and resilience whilst ensuring that the
Executive’s experience is commensurate
with that of shareholders, employees and
other stakeholders. The Committee was
also conscious of ensuring that the newly
constituted management team have a
meaningful long-term equity component so
as to ensure alignment with shareholders’
interests as we enter an important phase for
the business.
Taking all of these factors in account,
including the circa 30% fall in share
price since the 2019 LTIP awards were
granted, the Committee determined that
our new CEO, new CFO and the COO
would be granted LTIP awards of 134% of
their respective contractual salaries. This
represents a reduction of 16% of salary
compared to our normal LTIP award levels
of 150%.
The Committee faced considerable
challenge in establishing meaningful and
robust performance measures and targets
for the FY2021 LTIP awards. This reflects
the backdrop of COVID-19 with its already
significant and disproportionate impact on
the business and the industry compared to
the broader economy and the associated
forward looking continued uncertainty.
The Committee therefore determined that
for the FY2021 LTIP only three separate
performance conditions, aligned to the
Company’s key priorities for each of the
three years in the performance period,
will be set and assessed over the relevant
year. No proportion of the award will vest
until the end of the full three year period
and the whole award will be subject to an
overriding three year financial performance
assessment. Further information in relation
to the awards is detailed below. For the
avoidance of doubt, the Committee does
not intend to continue this approach after
this LTIP cycle.
Under the terms of the LTIP award, the
Committee has full discretion to reduce
awards to ensure that the final outturn of the
LTIP reflects all relevant factors, including
consideration of any potential for windfall
gains.
LTIP Performance Conditions
Performance conditions for FY2021 LTIP
awards
The vesting of the FY2021 LTIP awards
will be subject to an assessment of the
Company’s underlying financial performance
across the three year performance period
FY2021 – FY2023. Each award will also
be subject to three separate performance
conditions aligned to the Company’s key
priorities for each of the three years in the
performance period and assessed over the
relevant year, as set out below.
Threshold vesting in respect of any year will
be no more than 25%, but subject to the
overriding three year financial performance
assessment. No award will vest until the end
of the full three year period, and Executive
Directors’ awards will then be subject to a
further two year holding period.
C&C Group plc Annual Report 2021 105
Year
Weighting
Measure
Further detail
FY2021
30%
Liquidity
The use of a liquidity measure reflects our absolute focus on liquidity for the business in our
response to the COVID-19 pandemic, and is fully aligned with other actions we have taken to
strengthen the Group’s liquidity.
The targets and vesting schedule (subject to the assessment of underlying financial performance
over the full three year period) are as follows:
FY2022
35%
Net Debt to
EBITDA
FY2023
35%
Financial
measures
FY2021 Liquidity1
Less than €250 million
€250 million2
€300 million2
Vesting
0%
25%
100%
1 Cash on hand plus availability under the Group’s Revolving Credit Facility as at the end of FY2021 but excluding any
possible proceeds from the UK’s COVID-19 Corporate Finance Facility.
2 Straight line vesting between €250 million and €300 million.
In the second year of the three year performance period, we anticipate that the current extreme
impact of the COVID-19 pandemic on the industry will have reduced, such that the business
will be able to focus on establishing the foundations for recovery. Therefore, for this year, we
propose to set targets based on a Net Debt to EBITDA measure, reflecting our strategic priority
of ensuring the appropriate level of financial gearing and profits to service debt.
Those targets will be disclosed in the FY2022 Directors’ Remuneration Report.
By the third year of the three year performance period, we anticipate that recovery from the
COVID-19 pandemic and the establishment of foundations for recovery will enable us to revert
to more typical financial performance measures. We currently expect that the measures will be
based on earnings, cash conversion and ROCE.
The details of the measures (including the weightings, and targets) will be established towards
the start of FY2023 and will be disclosed in the FY2023 Directors’ Remuneration Report or, if
determined before its finalisation, in the FY2022 Directors’ Remuneration Report.
David Forde forfeited remuneration
As announced in his appointment release,
David Forde forfeited cash remuneration
from his previous employment to join C&C.
This included the forfeiture of a retention
payment payable in cash at the end of July
2021 with a value of €1,368,785.
To align David Forde’s interests with those
of C&C’s shareholders, compensation
for this forfeited remuneration was made
through an award of C&C shares with an
equivalent value of €1,368,785. In addition,
David Forde’s contractual arrangements
with his former employer meant that by
resigning to join C&C he was subject to an
eight week break in employment, in respect
of which his loss of fixed remuneration was
€103,250. We also agreed to compensate
David Forde for this loss of remuneration
but, notwithstanding that fixed remuneration
was forfeit, agreed with David Forde that half
of it would be awarded in C&C shares and
half of it in a cash payment. Structuring the
compensation as an award over Company
shares provides an immediate alignment
with shareholders’ interests and the
delivery of our short and long term strategic
priorities.
The share award was granted at the earliest
available opportunity, on 3 November 2020,
over 842,636 C&C shares in aggregate with
a value of €1,420,410. Reflecting the fact
the forfeited remuneration bought out was
guaranteed cash based remuneration, the
share price at the date of grant was used
to calculate the number of shares to ensure
the value was equal to the remuneration
forfeited. The award will vest in respect of
50% of the shares in November 2022 and
50% of the shares in November 2023. After
sales of shares to cover tax, David Forde
will be required to retain 50% of the shares
acquired in satisfaction of our Executive
Corporate GovernanceBusiness & StrategyFinancial Statements 106
Directors’ Remuneration Committee Report
(continued)
Director shareholding requirement (see page
129 for further details).
In order to give flexibility as to the basis on
which the share award may be settled, we
are seeking shareholder approval at the
2021 AGM to settle the award with new
issue or treasury shares (on the basis that
any such shares would count against the
dilution limits included in the Company’s
LTIP).
Remuneration Policy Review
In 2020, the Committee undertook a full
review of the Policy. That review took
account of market practice, shareholder
expectations and best practice governance
developments since our last review in
2018. These matters were given careful
consideration during the Policy review
process. In particular, taking into account
the Code provisions in relation to the
alignment of Executive Director pensions
with those of the wider workforce and
the requirement to adopt a formal policy
on post-employment shareholding
requirements.
In addition to the post-employment
holdings, the Committee were fully aware
of the focus on Executive Director pensions
and, more specifically, any difference
between contributions for Executive
Directors and those of the workforce.
As part of the Policy that will be put to
shareholders at the 2021 AGM, there is a
cap on pension contributions for all future
Executive Directors. The Committee is also
aware of the expectation that contributions
for incumbent Executive Directors are
aligned with the majority of the workforce by
the end of 2022, and we have set out a clear
plan to achieve this for all current Executive
Directors (as set out on page 112 of the
Remuneration Policy).
continue to drive the delivery of strategy
and generate value for all stakeholders. The
new Group CEO has reviewed the Group’s
existing incentive framework and input into
the Committee’s proposals prior to our
consultation with shareholders in 2020 and
2021.
of COVID-19 on the business is clearer.
Nevertheless, in keeping with the current
remuneration policy the intention is that 75%
of the metrics for any bonus will be based
on financial measures and the remainder on
non-financial or strategic goals, which may
include ESG measures.
We consulted with shareholders extensively
during the latter part of 2020 and the early
part of 2021 when the 2021 Policy was
being formulated to ensure that it aligned
with the expectations of our shareholders.
Engagement with our key investors was
constructive and insightful.
Implementation of the Remuneration
Policy in FY2022
Based on the continuation of the existing
approach, the Committee intends to
take the following approach to the
implementation of the Policy for FY2022;
Salary
In light of the continuing business
uncertainty and resulting disruption to the
business, the Committee has agreed that
executive salaries will remain unchanged
for the year ahead, in line with the wider
workforce.
Pension
In line with best practice and investor
expectations, the pension contributions
(or cash in lieu of pension) for Executive
Directors will be capped at the level available
for the majority of the Group’s workforce
(currently 5% of salary). This 5% rate applies
to both David Forde and Patrick McMahon
from their appointment to the Board. For
our COO, Andrea Pozzi, a phased decrease
in pension has been proposed to align
his pension with the wider workforce by 1
March 2023 (see page 112).
Long-Term Incentives
The current intention is that awards of
LTIPs will be made in late May / early June
2021. The Committee has yet to determine
the performance measures, which may
include EPS, free cash flow and return
on capital employed along with an ESG
based measure (with financial measures
accounting for at least 75% of the awards).
The Committee has determined that before
the measures are set, it should review
the first quarter’s trading and the latest
assessment of any continuing measures to
control the pandemic. The measures will be
confirmed in the RNS when the awards are
made.
Non-Executive Directors
There are no changes to how the
Remuneration Policy will be applied for
Non-Executive Directors other than the
requirement to build up their individual
shareholding to 50% of their annual base fee
within 3 years of their appointment or within
3 years from the date of approval of the
Remuneration Policy, if later.
Director Changes
Stewart Gilliland was appointed as interim
Executive Chair from 16 January 2020 to
ensure continuity of executive leadership
while the Group recruited a new CEO, which
we did in July 2020 with the appointment of
David Forde.
In a further change, we also announced
at that time the appointment of Patrick
McMahon as CFO, successor to Jonathan
Solesbury, who informed the Board of his
intention to retire during the year.
The Policy will be proposed in the new
Group CEO’s first year since appointment,
being an opportune time to put in place
a new three-year Policy designed to
Annual Bonus
The Committee has decided to delay the
establishment of any bonus scheme until
later in the year once the wider impact
C&C Group plc Annual Report 2021 107
positive step. My role as the Non-Executive
Director responsible for engaging with HR is
an invaluable resource when reviewing wider
employee incentive arrangements.
Conclusion
I would like to express my appreciation to
our major shareholders for helping us to
develop our Policy. We value the opportunity
to engage with shareholders to foster
mutual understanding of expectations;
and, to ensure shareholders have had an
opportunity to raise any issues or concerns
directly with the Board. I hope that you will
join the Board in supporting the resolution to
approve the 2021 Policy.
Helen Pitcher OBE
Chair of the Remuneration Committee
Following the announcement of David’s
appointment as CEO in July 2020, and to
allow an orderly process of succession,
the Board requested that Stewart Gilliland
continued in his role as interim Executive
Chair until David joined C&C in November,
2020, at which time Stewart reverted to the
role of Non-Executive Chair.
We believe that our current and proposed
2021 Policy arrangements remain
appropriate, a view shared by our major
shareholders during the consultations. It
was considered that the existing model is
clearly understood, supports our culture and
provides a foundation to restore shareholder
value in the future.
Gender Pay Gap Disclosure
In April 2021 we published our latest Gender
Pay Gap report for those entities with more
than 250 UK employees, namely, Matthew
Clark Bibendum Limited and Tennent
Caledonian Breweries Limited. Details can
be found on each business’s respective
website.
We are committed to promoting equality,
diversity and inclusion as we build a culture
where everyone can progress. This includes
ensuring that our colleagues are paid a
fair and equitable rate for the work they do
regardless of gender or other differences.
Going forward we will continue to focus on
areas that improve our gender pay gap.
Committee Evaluation
The evaluation of the Committee was
completed as part of the 2020 external
board evaluation process conducted by
Independent Audit. An explanation of
how this process was conducted, the
conclusions arising from it and the action
items identified is set out on page 84. The
Committee has considered this in the
context of the matters that are applicable to
the Committee.
Shareholder Engagement
The Committee values open, ongoing
engagement with major shareholders and
key institutional investor bodies.
The overall tone from shareholders was
positive and constructive and enabled us
to understand what was important for the
Committee to consider both from a policy
perspective and regarding the challenges
faced in FY2021.
As a Committee, we will continue to
engage with shareholders and institutional
investor bodies in the development of
our remuneration policies and structures
and will continue to emphasise the links
to performance and to consider wider
stakeholders.
Wider Workforce Remuneration and
Employee Engagement
In line with the Code, the Company takes
a fully aligned approach to remuneration
throughout the organisation to support
succession, as well as a culture of
performance and ownership. The Company
regularly engages directly with the workforce
through a number of channels and on a
wide range of topics, including pay. The
Company’s annual engagement survey
places a focus on employee satisfaction,
and seeks details on a number of areas
including competitive pay and benefits.
It is an important part of our values that all
employees, not just management, have
the opportunity to become shareholders
in the Group. All employees with at least
one month’s continuous service have the
opportunity to participate in our Profit
Sharing Scheme.
An aspect of the Code that we believe
enhances business is the greater linkage
between companies’ corporate governance
and remuneration frameworks. The widening
of the remit of Remuneration Committees
to oversee employee rewards and
ensure incentives are aligned with culture
while simultaneously promoting greater
consideration of the ‘employee voice’ in
Board decision-making is a particularly
Corporate GovernanceBusiness & StrategyFinancial Statements 108
Directors’ Remuneration Committee Report
(continued)
Remuneration at a glance
Remuneration Outcomes as at 28 February 2021
Element
Base salary as at 28 February 2021
Pension (% of base salary)
Benefits
Annual Bonus (% of max)
LTIP (% of max)
David Forde Patrick McMahon
Andrea Pozzi
€420,000
5%
€690,000
5%
£321,300
25%
7.5% 7.5% 7.5%
0%
0%
0%
0%
0%
0%
Annual Bonus Outcomes
LTIP Outcome
As described, given the financial year commenced in March 2020,
at the same time as the outbreak of COVID-19 and the associated
government restrictions, no bonus scheme was established and no
bonuses are to be paid to Executive Directors in respect of FY2021.
The 2018 LTIP award of 100% of base salary and 2018 ESOS
award of 150% granted to Andrea Pozzi in respect of the three year
performance period ended on 28 February 2021 did not meet the
performance conditions and the awards lapsed in full. David Forde
and Patrick McMahon did not hold any awards under the 2018 LTIP
and 2018 ESOS.
COVID-19 Impact on Executive Remuneration
The following table sets out the key components of executive remuneration and the decisions made by the Committee
Element of Remuneration
Committee decision
Rationale
2021 temporary
salary reductions
Base salaries were reduced for 5 months for
Executive Directors together with a reduction in
the Chair’s fee. Whilst not a decision made by the
Committee, there was a corresponding reduction in
the fees paid to the Non-Executive Directors.
The Committee took into consideration the wider stakeholder
experience, including employees, shareholders, customers
and the communities in which we operate and considered it
appropriate to apply the temporary reduction.
2020-2021 bonus
plan outcome
No bonus scheme was established in the financial
year.
Given the financial uncertainty, the Committee and the Board
did not believe it appropriate to establish a bonus scheme.
2018 LTIP and
ESOS vesting
No adjustments to the awards were made during
the year. The awards lapsed in full in line with
performance against the targets.
2021-2022 bonus
plan design
No bonus plan has yet been established for
Executive Directors in the financial year.
The awards lapsed in accordance with the level of achievement
against the performance conditions.
Given the impact of COVID-19, the Committee and the Board
did not believe it appropriate to establish a bonus scheme at
the present time.
2020 LTIP award
The multiple of salary applied to determine the
award was reduced. This takes into account the fall
in the share price as a consequence of the impact
of the COVID-19 pandemic on the business.
The Committee decided to reduce the multiple of salary used
to determine the number of shares to be awarded to Executive
Directors and decided that the multiple of salary for the 2020
award would be reduced from 150% to 134% of salary.
The awards are subject to three separate
performance conditions aligned to the Company’s
key priorities for each of the three years in the
performance period, more information in relation
to which is included on page 105; as described on
page 105 the awards are subject to an assessment
of underlying financial performance over the full
three year period.
The Committee has faced considerable challenge in
establishing meaningful and robust performance measures
and targets for the FY2021 LTIP awards. No proportion of
the awards will vest until the end of the full three year period
and vesting of any part is subject to an overriding three year
financial performance assessment.
2021 salary review
Base salaries will remain unchanged in FY2022.
The Committee took into consideration the wider stakeholder
experience, including employees, shareholders, customers
and the communities in which we operate and considered it
appropriate for salaries to remain unchanged for FY2022.
C&C Group plc Annual Report 2021 109
Remuneration Policy
Introduction
The current Remuneration Policy for Directors applied from the date of the 2018 AGM (2018 Policy). In line with typical UK practice, we are
seeking approval for a new Remuneration Policy (the 2021 Policy) at the 2021 AGM. The 2021 Policy is set out below, and before that we
have set out our approach to the design of the 2021 Policy and a summary of the key proposed changes between the 2018 Policy and the
2021 Policy.
Designing the 2021 Policy
The 2021 Policy has been designed to continue to drive the delivery of strategy and generate value for all stakeholders under the leadership
of our new CEO and CFO. We have also taken into account market practice, shareholder expectations, wider workforce pay and polices
and best practice governance developments since our last Policy review (including the 2018 UK Corporate Governance Code). Overall we
consider that the current remuneration framework remains fit for purpose. Therefore, the changes proposed are to provide further alignment
with best practice and to ensure sufficient flexibility over the next three years.
When designing remuneration policies and principles, having regard to the Code, the Committee has applied the following principles:-
• clarity – remuneration arrangements will be transparent and promote effective engagement with shareholders and the workforce;
• simplicity – remuneration structures will avoid complexity and their rationale and operation should be easy to understand;
• risk – remuneration arrangements will ensure reputational and other risks from excessive rewards, and behavioural risks that can arise
from target-based incentive plans, are identified and mitigated;
• predictability – the range of possible values of rewards to individuals and other limits or discretions will be identified and explained;
• proportionality – the link between individual awards, the delivery of strategy and the long-term performance of the company will be clear;
and,
• alignment to culture – incentive plans will drive behaviours consistent with company purpose, values and strategy.
We have set out below information on the key proposed changes to the 2018 Policy.
• Pension: In line with best practice and investor expectations, the 2021 Policy reduces the Executive Directors’ pension contributions (or
cash in lieu of pension) from the 25% of salary level in the 2018 Policy. For David Forde, Patrick McMahon and any other Executive Director
appointed after 1 March 2021, the contribution is reduced to the level available for the majority of the Group’s workforce (currently 5%
of salary). For our COO, Andrea Pozzi, a phased decrease in pension has been proposed to align his pension with the wider workforce
by 1 March 2023 in accordance with which: (1) his pension contribution has reduced to 20% of salary with effect from 1 March 2021; (2)
will reduce to 10% of salary with effect from 1 March 2022; and (3) will be reduced to the level available for the majority of the Group’s
workforce with effect from 1 March 2023.
• Maximum annual bonus: We are increasing the overall maximum annual bonus opportunity to 125% of salary. While there is no change
in the maximum bonus potential for FY2022 which will remain at 100% of salary, this increase in headroom is to provide flexibility for the
business during the lifetime of the 2021 Policy. Any future increase in the annual bonus potential will be considered alongside the level of
stretch inherent in the targets set.
• On-target annual bonus: In line with best practice, the maximum on-target bonus will be capped at 50% of the maximum bonus
potential (currently capped at 60% of maximum). This change will apply for FY2022.
• Increase annual bonus deferred into shares: To provide further alignment with shareholders, we are increasing the proportion of
the bonus deferred into shares. Under the new policy up to 50% of any bonus earned will ordinarily be paid in cash with the remainder
deferred into shares. The deferral period is also being increased to three years from the two years that applies under the 2018 Policy.
Corporate GovernanceBusiness & StrategyFinancial Statements 110
Directors’ Remuneration Committee Report
(continued)
• Annual bonus measures: We will retain flexibility under the new 2021 Policy to set measures and targets annually reflecting the
Company’s strategy and aligned with key financial, operational, strategic and/or individual objectives. The approach to the measures for
the FY2022 bonus is described on page 113.
• Long term incentive plan: No changes are proposed to the LTIP quantum under the new 2021 Policy of up to 150% of salary (300% in
exceptional circumstances). The three year performance period and two year holding period will continue to apply. As described on page
114 the performance measures for the FY2022 LTIP are intended to be based on EPS, Cash Conversion and ESG targets measured over
a three year performance period, and the measures and targets will be confirmed in due course and announced when the awards are
granted.
• In-service shareholding guidelines: The 2018 Policy includes a shareholding requirement of 200% of salary for the CEO and 100% of
salary for other Executive Directors. This guideline will be increased to 200% of salary for all Executive Directors.
• Post-employment shareholding guidelines: We have introduced a post-employment requirement pursuant to which an Executive
Director must retain 100% of their in-service shareholding requirement for 12 months following cessation and half of their in-service
requirement for a further 12 months following cessation. The requirement applies only to shares acquired from LTIP and deferred bonus
awards granted after 1 March 2021. We consider that this “tapered” approach, in the light of the two year holding period for LTIP awards
and the introduction of bonus deferral, is a balanced way of ensuring alignment with longer term shareholder interests.
• Governance changes: Minor changes to the 2018 Policy to reflect governance changes are also proposed, which will update the malus
and clawback provisions for variable pay, enhance discretion to override formulaic outturns on variable pay awards, and clarify the
approach to dividend equivalents.
Summary
We believe the proposed 2021 Policy includes a range of enhancements which align C&C’s remuneration structures with best practice
and with the expectations of our shareholders. Our approach is intended to ensure we motivate our management team to deliver against
stretching performance targets whilst ensuring their interests are aligned not only with shareholders’ interests but also with those of wider
stakeholders.
C&C Group plc Annual Report 2021 111
General statement of policy
The main aim of the Group’s policy on Directors’ remuneration is to attract, retain and motivate Directors of the calibre required to promote
the long-term success of the Group. The Committee therefore seeks to ensure that Directors are properly, but not excessively, remunerated
and motivated to perform in the best interests of shareholders, commensurate with ensuring shareholder value.
The Committee seeks to ensure that Executive Directors’ remuneration is aligned with shareholders’ interests and the Group’s strategy.
Share awards are therefore seen as the principal method of long-term incentivisation. Similar principles are applied for senior management,
several of whom have material equity holdings in the Company.
Annual performance-related rewards aligned with the Group’s key financial, operational and strategic goals and based on stretching
targets are a further component of the total executive remuneration package. For senior management, mechanisms are tailored to local
requirements.
The Group seeks to bring transparency to executive Directors’ reward structures through the use of cash allowances in place of benefits
in kind. In setting Executive Directors’ remuneration, the Committee has regard to pay levels and conditions applicable to other employees
across the Group.
The 2021 Policy
If the 2021 Policy is approved at the 2021 AGM, it will apply from that date.
Future Policy Table
Executive Directors
The table below sets out the Company’s Remuneration Policy for Executive Directors.
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Salary
Reflects the
individual’s role,
experience and
contribution.
Set at levels to
attract, recruit and
retain Directors of the
necessary calibre.
Salaries are set by the Committee taking
into account factors including, but not
limited to:
• scope and responsibilities of the role;
• experience and individual
performance;
• overall business performance;
• prevailing market conditions;
• pay in comparable companies; and
• overall risk of non-retention.
Typically, salaries are reviewed annually,
with any changes normally taking effect
from 1 March.
None.
While there is no prescribed
formulaic maximum, any
increases will take into account
the outcome of pay reviews
for employees as a whole.
Larger increases may be
awarded where the Committee
considers it appropriate to
reflect, for example:
increases or changes in scope
and responsibility;
to reflect the Executive
Director’s development and
performance in the role; or
alignment to market level.
Increases may be implemented
over such time period as
the Committee determines
appropriate.
Corporate GovernanceBusiness & StrategyFinancial Statements
112
Directors’ Remuneration Committee Report
(continued)
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Benefits/cash allowance in lieu
Ensures that benefits
are sufficient to recruit
and retain individuals
of the necessary
calibre.
The Group seeks to bring transparency
to Directors’ reward structures through
the use of cash allowances in place of
benefits in kind. The cash allowance
can be applied to benefits such as
a company car and health benefits.
Group benefits such as death in service
insurance are also made available.
Other benefits may be provided based
on individual circumstances including
housing or relocation allowances, travel
allowance or other expatriate benefits.
Benefits and allowances are reviewed
alongside salary.
There is no prescribed
maximum monetary value of
benefits.
None.
Benefit provision is set at a
level which the Committee
considers appropriate against
the market and relative to
internal benefit provision in
the Group and which provides
sufficient level of benefit based
on individual circumstances.
Pension/cash allowance in lieu
Contributes towards
funding later life cost
of living.
Executive Directors may participate in
the Company’s defined contribution
pension scheme or take a cash
allowance in lieu of pension entitlement
(or a combination thereof).
None.
The Company’s current CEO
and CFO and any Executive
Director appointed after 1
March 2021
A contribution and/or cash
allowance not exceeding the
level available to the majority of
the Group’s workforce.
The Company’s current COO
A contribution and/or cash
allowance:
1. of 20% of salary with effect
from 1 March 2021;
2. of 10% of salary with effect
from 1 March 2022; and
3. not exceeding the level
available to the majority of
the Group’s workforce with
effect from 1 March 2023.
C&C Group plc Annual Report 2021 113
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Annual bonus
Motivates employees
and incentivises
delivery of annual
performance targets
which support the
strategic direction of
the Company.
Bonus levels are determined after the
year end based on performance against
targets set by the Committee.
Maximum opportunity is 125%
of base salary
(100% in FY2022).
The Committee has discretion to
vary the bonus pay out should any
formulaic output not reflect the
Committee’s assessment of overall
business performance, or if the
Committee considers the pay-out to
be inappropriate in the context of other
relevant factors including to avoid
outcomes which could be seen as
contrary to shareholder expectations.
Up to 50% of any bonus earned will
ordinarily be paid in cash with the
remainder deferred into shares, for up to
three years.
Additional shares may be delivered in
respect of deferred bonus award shares
to reflect dividends over the deferral
period. The number of additional
shares may be calculated assuming the
reinvestment of dividends on such basis
as the Committee determines.
Malus and clawback provisions will
apply to the annual bonus. See the
“Malus and clawback” section below for
more details.
Performance is ordinarily
measured over the financial
year. The Committee has
flexibility to set performance
measures and targets annually,
reflecting the Company’s
strategy and aligned with key
financial, operational, strategic
and/or individual objectives.
The majority of the bonus
will be based on financial
measures, such as profit and
cash. The balance of the bonus
will be based on financial or
strategic targets such as brand
equity and our ESG goals.
In the case of financial
measures, 25% of the bonus
will be earned for threshold
performance increasing to
50% for on-target performance
and 100% for maximum
performance.
For non-financial measures, the
amount of bonus earned will be
determined by the Committee
between 0% and 100% by
reference to its assessment of
the extent to which the relevant
metric or objective has been
met.
Corporate GovernanceBusiness & StrategyFinancial Statements 114
Directors’ Remuneration Committee Report
(continued)
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Awards may be made up to
150% of salary in respect of
any financial year.
In exceptional circumstances
the maximum award is 300%
of salary in respect of any
financial year.
Vesting is based on the
achievement of challenging
performance targets measured
over a period of three years.
Performance may be assessed
against financial measures
(including, but not limited to,
EPS and Cash Conversion)
and operational or strategic
measures (which may include
ESG measures) aligned with the
Company’s strategy, provided
that at least 75% of the award
is based on financial measures.
For the achievement of
threshold performance against
a financial measure, no more
than 25% of the award will
vest, rising, ordinarily on a
straight-line basis, to 100% for
maximum performance; below
threshold performance, none of
the award will vest.
For non-financial measures,
the amount of the award that
vests will be determined by
the Committee between 0%
and 100% by reference to its
assessment of the extent to
which the relevant metric or
objective has been met.
LTIP
Incentivises Executive
Directors to execute
the Group’s business
strategy over the
longer term and aligns
their interests with
those of shareholders
to achieve a
sustained increase in
shareholder value.
Awards are made in the form of nil-cost
options or conditional share awards, the
vesting of which is conditional on the
achievement of performance targets (as
determined by the Committee).
Vested awards must be held for a
further two year period before sale of
the shares (other than to pay tax). This
holding period can be operated on the
basis that:
• awards vest following the assessment
of the applicable performance
conditions but will not be released
(so that the participant is entitled
to acquire shares) until the end of a
holding period of two years beginning
on the vesting date; or
• the participant is entitled to acquire
shares following the assessment
of the applicable performance
conditions but that (other than as
regards sales to cover tax liabilities)
the award is not released (so that the
participant is able to dispose of those
shares) until the end of the holding
period
The Committee retains discretion to
adjust the outturn of an LTIP award,
including to override the formulaic
outcome of the award, in the event
that performance against targets does
not properly reflect the underlying
performance of the Company, or if
the Committee considers the pay-out
to be inappropriate in the context of
other relevant factors including to avoid
outcomes which could be seen as
contrary to shareholder expectations.
Additional shares may be delivered in
respect of vested LTIP award shares to
reflect dividends over the vesting period
and, if relevant, the holding period. The
number of additional shares may be
calculated assuming the reinvestment
of dividends on such basis as the
Committee determines.
C&C Group plc Annual Report 2021
115
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Share-based rewards – all-employee plans
No performance conditions
would usually be required in
tax-advantaged plans.
Align the interests of
eligible employees
with those of
shareholders through
share ownership.
The C&C Profit Sharing Scheme is an
all-employee share scheme and has two
parts.
Part A relates to employees in Ireland
and has been approved by the Irish
Revenue Commissioners (the Irish
APSS). Part B relates to employees
in the UK and is a HMRC qualifying
plan of free, partnership, matching or
dividend shares (or cash dividends) with
a minimum three year vesting period
for matching shares (the UK SIP). UK
resident Executive Directors are eligible
to participate in Part B only.
There is currently no equivalent plan for
Directors resident outside of Ireland or
the UK.
Under the Company’s
Irish APSS, the maximum
value of shares that may be
allocated each year is as
permitted in accordance with
the relevant tax legislation
(currently €12,700, which
is the combined value for
the employer funded and
employee foregone elements).
Under the Company’s UK SIP
the current maximum value of
partnership shares that may be
acquired is £750 per annum,
with an entitlement to matching
shares of £750 per annum.
However, the Committee
reserves the right to increase
the maximum to the statutory
limits (being £1,800 in respect
of partnership shares, £3,600
in respect of matching shares
and £3,600 in respect of
free shares, or in any case
such greater limit as may be
specified by the tax legislation
from time to time).
Shareholding guidelines
In-service requirement
Executive Directors are required to build and maintain a personal shareholding of at least two times’ salary.
Executive Directors are required to retain 50% of the after tax value of vested share awards until the shareholding guideline is met.
Shares subject to awards which have vested but which remain unexercised, shares subject to LTIP awards which have vested but not been
released (i.e. which are in a holding period) and shares subject to deferred bonus awards count towards the shareholding requirement on a
net of assumed tax basis.
Post-employment requirement
The Committee has adopted a post-employment requirement. Shares are subject to this requirement only if they are acquired from LTIP or
deferred bonus awards granted after 1 March 2021. For the first year after employment the Executive Director is required to retain such of
those shares as have a value equal to the “in-service” guideline, or their actual shareholding, if lower, and for a further year such of those
shares as a have a value equal to half of the “in-service” guideline or their actual shareholding, if lower.
Corporate GovernanceBusiness & StrategyFinancial Statements 116
Directors’ Remuneration Committee Report
(continued)
Explanation of performance measures
Performance measures for the LTIP and annual bonus are selected by the Committee to reflect the Company’s strategy. In the case of both
the annual bonus and the LTIP, the majority of the award (at least 75% in the case of the LTIP) will be based on financial measures, with any
balance based on operational or strategic measures which reward the Executive Directors by reference to the achievement of objectives
aligned with future successful implementation of the Company’s strategy. The Committee has discretion to set performance measures
(and weightings where there is more than one measure) on an annual basis to take account of the prevailing circumstances. Measures and
weightings may vary depending upon an Executive Director’s area of responsibility.
Targets are set annually by the Committee having regard to the circumstances at the time and taking into account a number of different
factors.
To the extent provided for in accordance with any relevant amendment power under the rules of the share plans or in the terms of any
performance condition, the Committee may alter the performance conditions relating to an award or option already granted if an event
occurs (such as a material acquisition or divestment or unexpected event) which the Committee reasonably considers means that the
performance conditions would not, without alteration, achieve their original purpose. The Committee will act fairly and reasonably in making
the alteration so that the performance conditions achieve their original purpose and the thresholds remain as challenging as originally
imposed. The Committee will explain and disclose any such alteration in the next remuneration report.
Malus and clawback
In line with the UK Corporate Governance Code, malus and clawback provisions apply to all elements of performance-based variable
remuneration (i.e. annual bonus, and LTIP) for the Executive Directors. The circumstances in which malus and clawback will be applied are
if there has been in the opinion of the Committee a material mis-statement of the Group’s published accounts, material corporate failure,
significant reputational damage, error in assessing a performance condition, or the Committee reasonably determines that a participant has
been guilty of gross misconduct. The clawback provisions will apply for a period of two years following the end of the performance period; in
the case of any deferred bonus award or LTIP award which is not released until the end of a holding period, clawback may be implemented
by cancelling the award before it vests/is released.
Share plans and other incentives
The Committee may operate the Company’s share plans in accordance with their terms and exercise any discretions available to them
under the plans, including that awards may be adjusted in the event of a variation of capital, demerger, special dividend or other relevant
event. Awards may be settled, in whole or in part, in cash, although the Committee would only settle an Executive Director’s award in cash
in appropriate circumstances, such as where there is a regulatory restriction on the delivery of shares or as regards the tax liability arising in
respect of the award.
In the event of a change of control or other relevant event, awards under the share plans will vest to the extent determined in accordance
with the rules of the plans, after the exercise, where relevant, of any applicable discretion.
• Unvested LTIP awards will vest taking into account the performance conditions and pro-rating for time, although the Committee has
discretion not to apply time pro-rating.
• Vested LTIP awards which are in a holding period will be released to the extent already determined.
• Deferred bonus awards will vest in full.
• Awards under the all-employee plans will vest in accordance with the rules of those plans, which do not provide for any discretionary
treatment.
C&C Group plc Annual Report 2021 117
Legacy payments
The Committee reserves the right to make any remuneration payment or any payment for loss of office (including exercise any discretion in
respect of any such payment) without the need to consult with shareholders or seek their approval, notwithstanding that it is not in line with
the policy set out above, where the terms of the payment were agreed either:
• before the policy came into effect (provided that, in the case of any payment agreed after the Company’s 2015 Annual General Meeting, it
is in line with the policy in effect at the time the payment was agreed); or
• at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was not in
consideration for the individual becoming a Director of the Company.
For these purposes: the term ‘payment’ includes any award of variable remuneration; in relation to an award over shares, the terms of the
payment are ‘agreed’ at the time the award is granted.
Minor changes
The Committee may, without the need to consult with shareholders or seek their approval, make minor changes to this Policy to aid in its
operation or implementation taking into account the interests of shareholders.
Comparison with remuneration policy for employees generally
Remuneration packages for Executive Directors and for employees as a whole reflect the same general remuneration principle that
individuals should be rewarded for their contribution to the Group and its success, and the reward they receive should be competitive in the
market in which they operate without paying more than is necessary to recruit and retain them.
The remuneration package for Executive Directors reflects their role of leading the strategic development of the Group. Accordingly there
is a strong alignment with shareholders’ interests, through long term performance-based share rewards. Senior management are similarly
rewarded.
These rewards are not appropriate for all employees but it is the Committee’s policy that employees in general should be afforded an
opportunity to participate in the Group’s success through holding shares in the Company through all-employee plans.
Executive Directors are incentivised through an annual cash bonus to achieve shorter term objectives and all employees are similarly
incentivised. The deferral of bonus for the Executive Directors increases their alignment with the longer term interests of shareholders.
For Executive Directors the remuneration package reflects the demands of a global market. For employees generally, remuneration and
reward are tailored to the local market in which they work. It is the Committee’s policy that all employees should share in the success of the
business divisions towards whose success they have contributed.
Consideration of employment conditions generally and consultation with employees
As described above, when setting the policy for Executive Directors’ remuneration, the Committee applies the same core principle as
applied for the pay and employment conditions of other Group employees. When reviewing Directors’ remuneration, the Committee has
regard to the outcome of pay reviews for employees as a whole.
The Committee did not directly consult with employees when formulating the Directors’ remuneration policy set out in this report and no
remuneration comparison measurements comparing Executive Directors’ remuneration with employees were generally used.
The Group has regular contact with employee representatives on matters of pay and remuneration for employees covered by collective
bargaining or consultation arrangements.
Corporate GovernanceBusiness & StrategyFinancial Statements 118
Directors’ Remuneration Committee Report
(continued)
Illustration of remuneration policy
The following charts show the level of remuneration and the relative split of remuneration between fixed pay (base salary, benefits and cash
allowance in lieu of pension) and variable pay (annual bonus and LTIP) for each Executive Director on the basis of minimum remuneration,
remuneration receivable for performance in line with the Company’s expectations, maximum remuneration (not allowing for any share price
appreciation) and maximum remuneration assuming a 50% increase in the share price for the purposes of the LTIP element.
David Forde
Patrick McMahon
Andrea Pozzi
€3,018k
51%
€2,501k
41%
€1,379k
19%
25%
€776k
28%
23%
100%
56%
31%
26%
€1,839k
€1,524k
51%
41%
28%
23%
€841k
19%
25%
€474k
€1,623k
50%
€1,354k
40%
26%
22%
€771k
18%
23%
€458k
100%
56%
31%
26%
100%
59%
31%
28%
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Bases and Assumptions
For the purposes of the above charts, the following assumptions have been made:
• Base salary is the latest known salary as at 1 March 2021.
• Benefits as disclosed in the single figure table on page 124 for the year ended 28 February 2021, but “annualised” in the case of David
Forde and Patrick McMahon to reflect that the value disclosed on page 124 is for a part year only.
• Cash allowance in lieu of pension for Executive Directors at the level of 5% of salary for David Forde and Patrick McMahon and 20% of
salary for Andrea Pozzi (based on salary as at 1 March 2021).
• An annual bonus opportunity of 100% of salary
• An LTIP award of 150% of salary.
Where relevant, the average exchange rate for FY2021 has been used for ease of comparison.
C&C Group plc Annual Report 2021
119
In illustrating the potential reward the following assumptions have been made:
Minimum performance
Performance in line with expectations
Maximum performance
Maximum performance plus share price
increase
Fixed pay
Fixed elements of remuneration
(base salary, benefits allowance
and pension allowance)
Fixed elements of remuneration
(base salary, benefits allowance
and pension allowance)
Fixed elements of remuneration
(base salary, benefits allowance
and pension allowance)
Fixed elements of remuneration
(base salary, benefits allowance
and pension allowance)
Annual bonus
No bonus
LTIP
No vesting
50% of salary delivered for
achieving target performance
100% of salary delivered
for achieving maximum
performance
100% of salary delivered
for achieving maximum
performance
25% of the award (37.5% of
salary) for achieving threshold
performance
150% of salary for achieving
maximum performance
150% of salary for achieving
maximum performance plus
an assumed 50% increase in
the share price giving an overall
value of 225% of salary.
Recruitment remuneration policy
When recruiting a new Executive Director, the Committee will typically seek to use the Policy detailed in the table above to determine the
appropriate remuneration package to be offered. To facilitate the hiring of candidates of the appropriate calibre required to implement the
Group’s strategy, the Committee retains the discretion to make payments or awards which are outside the Policy subject to the principles
and limits set out below.
In determining appropriate remuneration, the Committee will take into consideration all relevant factors (including the quantum and nature of
remuneration) to ensure the arrangements are in the best interests of the Group and its shareholders. This may, for example, include (but is
not limited to) the following circumstances:
• an interim appointment is made to fill an Executive Director role on a short-term basis;
• exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a short-term basis;
• 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. Subject to the limit on variable remuneration set out below, 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 Executive Director received benefits at his previous employer which the Committee considers it appropriate to offer.
The Committee may also alter the performance measures, performance period, vesting period, deferral period and holding period of the
annual bonus or long-term incentive if the Committee determines that the circumstances of the recruitment merit such alteration. The
rationale will be clearly explained.
The Committee may make an award to compensate the prospective employee for remuneration arrangements forfeited on leaving a
previous employer. In doing so, the Committee will take account of relevant factors regarding the forfeited arrangements which may include
the form of any forfeited awards (e.g. cash or shares), any performance conditions attached to those awards (and the likelihood of meeting
those conditions) and the time over which they would have vested. These awards or payments are excluded from the maximum level of
variable remuneration referred to below; however, the Committee’s intention is that the value awarded or paid 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 Group’s existing share plans. If necessary, and
subject to the limits referred to below, recruitment awards may be granted outside of these plans.
Corporate GovernanceBusiness & StrategyFinancial Statements 120
Directors’ Remuneration Committee Report
(continued)
Recruitment awards will normally be liable to forfeiture or “clawback” on early departure (i.e. within the first 12 months of employment).
It would be the Committee’s policy that a significant portion of the remuneration package (including any introductory awards) would be
variable and linked to stretching performance targets and continued employment. The maximum level of variable remuneration that may be
granted to new Directors (excluding buy-out arrangements) is 425% of base salary.
Where a position is filled internally, any pre-appointment remuneration entitlements or outstanding variable pay elements shall be allowed to
continue according to the original terms.
Fees payable to a newly-appointed Chair or Non-Executive Director will be in line with the fee policy in place at the time of appointment.
Policy on payment for loss of office
Executive Directors
Service Contracts
Details of the service contracts of the Executive Directors in office during the year are as follows:
Name
David Forde
Patrick McMahon
Andrea Pozzi
Contract date
2 November 2020
8 July 2020
31 May 2017
Notice period
12 months
12 months
12 months
Unexpired term of contract
n/a
n/a
n/a
Compensation on Termination
The service contracts of the Executive Directors do not contain any pre-determined compensation payments in the event of termination of
office or employment other than payment in lieu of notice.
The principles on which the compensation for loss of office would be approached are summarised below:
Policy
Notice period
Termination
payment/
payment in lieu
of notice
Annual bonus
Share based
awards
None of the Executive Directors has a service contract with a notice period in excess of one year. Service
contracts for new Directors will generally be limited to 12 months’ notice by the Company.
The Company has retained the right to make payment to the Executive Director of 12 months’ fixed remuneration
in lieu of the notice period. Discretionary benefits may also include, but are not limited to, outplacement and legal
fees.
Payment of the annual bonus would be at the discretion of the Committee on an individual basis and would
be dependent upon the circumstances of their departure and their contribution to the business during the
bonus period in question. A departing Director may be eligible, depending on the circumstances and subject to
performance, for payment of a bonus pro-rata to the period of employment during the year, to be payable at the
usual time.
The vesting of share based awards is governed by the rules of the relevant incentive plan.
C&C Group plc Annual Report 2021 121
Policy
LTIP
Unvested
awards
LTIP
Vested but
unreleased
awards
Deferred bonus
awards
Mitigation
‘Good leavers’ typically include leavers due to death, injury, ill-health, disability, redundancy and retirement with
the consent of the Company or business disposal or any other reason as determined by the Committee.
The provisions for ‘good leavers’ provide that unvested awards will vest at the normal vesting point taking
account of the performance over the period and subject to pro-rating for time, although the Committee has
discretion to waive pro-rating for time. Any holding period would typically continue to apply. The Committee
has the discretion to accelerate vesting (and release) to the date of cessation of employment (and to assess
performance accordingly) or to determine vesting at the end of the performance period and to release the award
then.
Under the LTIP, if a participant ceases employment during a holding period, their award will continue unless
he/she is summarily dismissed, in which case the award will lapse. Awards which are retained will typically be
released at the originally anticipated release date. However, the Committee has discretion to release the award at
the date of cessation.
In the event of cessation due to death, ill-health, injury or disability, the deferred bonus share award would be
released as soon as practicable following termination. In the event of cessation for any other reason (unless the
participant is summarily dismissed, in which case the award will lapse), the award will be released at the normal
time, although the Committee has discretion to release at cessation.
Executive Directors’ service contracts contain no contractual provision for reduction in payments for mitigation
or for early payment, and accordingly any payment during the notice period will not be reduced by any amount
earned in that period from alternative employment obtained as a result of being released from employment with
the Group before the end of the contractual notice period.
Other payments
Payments may be made under the Company’s all employee share plans which are governed by the Irish
Revenue Commissioners and HMRC tax-advantaged plan rules and which cover leaver provisions. There is no
discretionary treatment of leavers under these plans.
Payments may also be made in respect of accrued but untaken holiday and for fees for any outplacement
services and legal and professional advice in connection with the termination.
Where on recruitment a buy-out award had been made outside the LTIP 2015, then the applicable leaver
provisions would be specified at the time of the award.
The 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 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 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.
Corporate GovernanceBusiness & StrategyFinancial Statements 122
Directors’ Remuneration Committee Report
(continued)
Non-Executive Directors
The table below sets out the Company’s Remuneration Policy for Non-Executive Directors
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Non-Executive Director fees
Attract and retain high calibre
individuals with appropriate
knowledge and experience
Additional Fees
Provide compensation to Non-
Executive Directors taking on
additional responsibility
Shareholding Guidelines
Provide alignment of interest
between Non-Executive
Directors and shareholders
Fees are based on the level
of fees paid to Non-Executive
Directors serving on Boards of
similar-sized listed companies
and the time commitment and
contribution expected for the
role.
The Articles of Association
provide that the ordinary
remuneration of Directors (i.e.
Directors’ fees, not including
executive remuneration) shall
not exceed a fixed amount
or such other amount as
determined by an ordinary
resolution of the Company.
The current limit was set at the
Annual General Meeting held in
2013, when it was increased to
€1.0 million in aggregate.
Not applicable.
Not applicable.
Not applicable
Fees paid to Non-Executive Directors are
determined and approved by the Board as
a whole. The Committee recommends the
remuneration of the Chair to the Board.
Fees are reviewed from time to time and
adjusted to reflect market positioning and
any change in responsibilities.
Non-Executive Directors are not eligible to
participate in the annual bonus plan or share-
based plans and, save as noted below, do
not receive any benefits (including pension)
other than fees in respect of their services to
the Company.
Non-Executive Directors may be eligible to
receive certain benefits as appropriate such
as the use of secretarial support, travel costs
or other benefits that may be appropriate.
If tax is payable in respect of any benefit
provided, the Company may make a further
payment to cover the tax liability.
Non-Executive Directors receive a basic fee
and an additional fee for further duties (for
example chairship of a committee or Senior
Independent Director responsibilities) or time
commitments.
Non-Executive Directors build up their
individual shareholding to 50% of their annual
base fee within 3 years of their appointment
or within 3 years from the date of approval of
the Remuneration Policy, if later.
An annual review against the guidelines is put
in place, after Q4, which would allow 25% of
the fee to be invested into stock if the current
holding does not meet 50% of the annual
base fee. The fee and the share price on the
date of the fourth fee payment of the year is
the test of whether the guideline is met.
C&C Group plc Annual Report 2021 123
Letters of appointment
Each of the Non-Executive Directors in office during the financial year was appointed by way of a letter of appointment. Each appointment
was for an initial term of three years, renewable by agreement (but now subject to annual re-election by the members in General Meeting).
The letters of appointment are dated as follows:
Non-Executive Director
Stewart Gilliland
Vineet Bhalla
Jill Caseberry
Jim Clerkin
Vincent Crowley
Emer Finnan
Helen Pitcher
Jim Thompson
Date of letter of appointment
17 April 2012 (Chair)
26 April 2021
7 February 2019
1 April 2017
23 November 2015
4 April 2014
7 February 2019
7 February 2019
The letters of appointment are each agreed to be terminable by either party on one month’s notice and do not contain any pre-determined
compensation payments in the event of termination of office or employment.
Corporate GovernanceBusiness & StrategyFinancial Statements 124
Directors’ Remuneration Committee Report
(continued)
Annual Remuneration Report
Remuneration in detail for the Year ended 28 February 2021
Directors’ Remuneration (Audited)
The following table sets out the total remuneration for directors for the year ended 28 February 2021 and the prior year.
Single Total Figure of Remuneration – Executive Directors (Audited)
The table below reports the total remuneration receivable in respect of qualifying services by each Executive Director during the year ended
28 February 2021 and the prior year. Stewart Gilliland was interim Executive Chair from 1 March 2020 until 2 November 2020, at which point
he reverted to his role of Non-Executive Chair; given his current role, his remuneration for the whole year is included in the Single Total Figure
of Remuneration Table for Non-Executive Directors on page 128.
Year ended February
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
Salary/fees
(a)
Taxable benefits
(b)
Annual bonus
(c)
Long term
incentives
Pension related
benefits
(d)
(e)
Termination
payments
(f)
Miscellaneous
(g)
Total
2020
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
€’000
Executive Directors
David Forde1
Stephen Glancey2
Patrick McMahon3
Andrea Pozzi
Jonathan Solesbury4
Total
230
-
-
698
255
-
311
368
137
497
933 1,563
17
-
19
27
13
76
-
52
-
28
37
117
-
-
-
-
-
-
-
174
-
46
124
344
-
-
12
-
- 1,120
-
175
-
-
-
544
- 1,020
13
90
48
-
92
124
-
-
-
-
641
- 1,472
- 1,731
-
698
-
-
-
-
-
-
37
56
- 2,973
-
-
-
287
-
428 1,078
198 1,802
- 2,684
163
391
641
698 1,509
56 3,322 5,853
The remuneration for Stephen Glancey, Jonathan Solesbury and Andrea Pozzi was translated from Sterling using the average exchange rate for the relevant year. For Executive
Directors who joined or left in the year, salary, taxable benefits, annual bonus, long term Incentives and pension relates to the period in which they served as an Executive Director.
1. Figures for David Forde are from 2 November 2020, the date he joined the Board.
2. Stephen Glancey left the Board on 15 January 2020 and the Group on 29 February 2020. The remuneration referred to in the table above for FY2020 is the remuneration he
earned for the full year.
3. Figures for Patrick McMahon are from 23 July 2020, the date he joined the Board.
4. Figures for Jonathan Solesbury are to 23 July 2020 (the date he left the Board) plus certain payments made to him in connection with the cessation of his employment on 31
August 2020 (following the conclusion of a handover period) as further described on page 125.
Details on the valuation methodologies applied are set out in Notes (a) to (g) below. The valuation methodologies are as required by the
Regulations and are different from those applied within the financial statements, which have been prepared in accordance with International
Financial Reporting Standards (“IFRS”).
Notes to Directors’ Remuneration Table
(a) Salaries and fees
The amounts shown are the amounts earned in respect of the financial year.
(b) Taxable benefits
The Executive Directors received a cash allowance of 7.5% of base salary. The Group provided death-in-service cover of four times annual
base salary and permanent health insurance (or reimbursement of premiums paid into a personal policy).
(c) Annual bonus
No bonus scheme was implemented in FY2021 due to the unpredictability of COVID-19.
(d) Long term incentives
1. The amounts shown in respect of long term incentives are the values of awards where final vesting is determined as a result of the
achievement of performance measures or targets relating to the financial year and is not subject to achievement of further measures or
targets in future financial years.
2. The awards granted in May 2018 in respect of the LTIP and ESOS, the performance conditions for these awards are detailed in note 4
(Share-Based Payments). These awards lapsed in full.
C&C Group plc Annual Report 2021 125
Weighting
Performance
target
% of element
vesting
33%
33%
33%
3%
8%
65%
75%
9.3%
10%
25%
100%
25%
100%
25%
100%
Performance
target
% of element
vesting
2%
6%
25%
100%
LTIP Performance Conditions
Performance condition
Compound annual growth in Underlying EPS over the three year
performance period FY2019, FY2020 and FY2021
Threshold
Maximum
Free cash flow Conversion
Threshold
Maximum
Return on Capital Employed
Threshold
Maximum
ESOS Performance Conditions
Performance condition
Compound annual growth in Underlying EPS over the three year
performance period FY2019, FY2020 and FY2021
Threshold
Maximum
Details of the performance conditions for the 2017 LTIP and ESOS awards were included in the Directors’ Remuneration Report last year.
(e) Pensions related benefits
No Executive Director accrued any benefits under a defined benefit pension scheme. Under their service contracts, Executive Directors
received a cash payment of 25% of base salary (or 5% of salary for David Forde and Patrick McMahon) in order to provide their own pension
benefits as disclosed in column (e) of the table.
(f) Termination payments
Stephen Glancey stepped down as Group Chief Executive Officer with effect from 15 January 2020 and left the Company on 29 February
2020. Details of payments made to Stephen Glancey in connection with his leaving the Company were included in the prior year Directors’
Remuneration Report.
Jonathan Solesbury retired from the Board as Group Chief Financial Officer on 23 July 2020 and left the business on 31 August 2020
following the conclusion of a handover period. Between 23 July 2020 and 31 August 2020 he continued to receive his basic salary and
contractual benefits (with the basic salary subject to the 20% reduction referred to on page 103). Following his departure from the business,
he received €641,129 in lieu of his notice period.
(g) Miscellaneous
The miscellaneous payments are: (1) in respect of 2020, a payment made to Stephen Glancey in relation to holiday entitlement, as disclosed
in the Directors’ Remuneration Report for the year ended 29 February 2020; (2) in respect of 2021, the awards granted to David Forde to
compensate him for remuneration forfeited to join C&C as referred to on pages 105 to 106; and (3) in respect of 2021, a payment of €37,221
made to Jonathan Solesbury in relation to holiday entitlement that was not taken at the time of stepping down from the Board.
Additional Information
Fees from external appointments
None
Payments to Former Directors and Payments for Loss of Office
There were no payments to former Directors or payments for loss of office other than those made to Jonathan Solesbury, as outlined above.
Corporate GovernanceBusiness & StrategyFinancial Statements 126
Directors’ Remuneration Committee Report
(continued)
Directors’ Shareholdings and Share Interests
Shareholding guidelines
Executive Directors are required to build up (and maintain) a minimum holding of shares in the Company. Under the existing policy, the CEO
was expected to maintain a personal shareholding of at least two times’ salary, while other Executive Directors were required to hold one
times’ salary. This has been increased to two times’ salary for all Executive Directors under the new Policy.
Executive Directors are expected to retain 50% of the after tax value of vested share awards until at least the shareholding guideline has
been met.
Under the new Policy, Non-Executive Directors are required to build up and maintain a shareholding equivalent to 50% of their annual base
fee within 3 years of their appointment or within 3 years from the date of approval of the Policy, if later.
Executive Directors’ Interests in Share Capital of the Company (Audited)
The beneficial interests, including family interests, of the Directors and the Company Secretary in office at 28 February 2021 in the share
capital of the Company are detailed below:
Directors
David Forde*
Patrick McMahon
Andrea Pozzi
Total
28 February
2021 (or date of
retirement from
the Board if
earlier)
Total
1 March 2020
(or date of
appointment if
later)
Total
-
52,473
126,514
178,987
-
2,858
66,465
69,323
David Forde was granted 842,636 C&C shares on 3 November 2020 with a value of €1,420,410. 50% of this award will vest in November
2022 and 50% in November 2023.
Company Secretary
Mark Chilton *
18,005
17,587
* Mark Chilton elected to participate in the UK SIP during the year, pursuant to which he was granted a number of matching shares, as permitted by the legislation.
Between 28 February 2021 and 14 May 2021, being the latest practicable date, Patrick McMahon acquired 168 shares under the Irish APSS.
There were no other changes in the above Directors’ or the Company Secretary’s interests between these dates.
For more details on the Profit Sharing Scheme, please see page 115.
The Directors and Company Secretary have no beneficial interests in any Group subsidiary or joint venture undertakings.
Share incentive plan interests awarded during year (Audited)
LTIP
The table below sets out the plan interests awarded to Executive Directors’ during the year ended 28 February 2021. Awards granted under
the LTIP are subject to performance conditions as set out on page 105 measured over a performance period from 1 March 2020 to 28
February 2023. During the year, David Forde was granted awards (“Buy-Out Awards”) to replace remuneration forfeited upon his departure
from his former employer. Buy-Out Award 1 will vest on 3 November 2022 and Buy-Out Award 2 will vest on 3 November 2023.
C&C Group plc Annual Report 2021 127
Executive Director
David Forde
Type of award
LTIP
Maximum opportunity
134% of base salary
Number of shares
363,357
Face value
(at date of grant in Euros)2
924,380
% of maximum opportunity
vesting at threshold
25%
Buy-Out Award 13
Buy-Out Award 23
N/A
N/A
Patrick McMahon
Andrea Pozzi
LTIP
LTIP
134% of base salary
134% of base salary
421,318
421,318
221,174
188,421
710,205
710,205
562,666
479,343
N/A
N/A
25%
25%
1. The LTIP awards were granted in the form of nil cost options over €0.01 ordinary shares in the Company.
2. The face value of LTIP awards is based on the number of shares under award multiplied by the closing share price of the day before the date of grant on 2 December 2020
converted into Euro, being £2.285 (€2.544). The face value of the Buy-Out Awards is based on the number of shares under award multiplied by the closing share price of the
grant date 2 November 2020 converted into €, being £1.518 (€1.685).
3. The Buy-Out Awards were granted in the form of nil cost options over €0.01 ordinary shares in the Company. The number of shares under award was determined by reference to
the value of the forfeited remuneration and accordingly the “Maximum opportunity” is not expressed as a percentage of base salary. The awards are not subject to performance
conditions and accordingly there is no percentage vesting “at threshold”.
Directors’ Interests in Options (Audited)
Interests in options over ordinary shares of €0.01 each in the Company
Plan
Exercise period
Total at
1 March 2020
(or date of
appointment if later)
Awarded
in year
Exercised
in year
Lapsed in
year
Directors
David Forde
Andrea Pozzi
Date of
grant
3/11/20
3/11/20
2/12/20
Exercise
price
€0.00
€0.00
€0.00
21/5/14
€0.00
29/10/15 €0.00
€0.00
1/6/17
€3.40
1/6/17
€0.00
31/5/18
€2.99
31/5/18
€0.00
23/5/19
€0.00
2/12/20
Patrick McMahon 01/08/17 €0.00
11/02/19 €0.00
€0.00
2/12/20
R&R
R&R
LTIP
ESOS
LTIP
ESOS
LTIP
LTIP
LTIP
LTIP
LTIP
Mark Chilton
11/2/19
€0.00
LTIP
Buy-out 1 3/11/22-3/11/30
Buy-out 2 3/11/23-3/11/30
LTIP
2/12/23 – 2/12/30
Total
21/5/17 – 20/5/21
17/5/17 – 28/10/22
1/6/20 – 31/5/27
1/6/20 – 31/5/27
31/5/21 – 30/5/28
31/5/21 – 30/5/28
23/5/22 - 31/5/29
2/12/23 – 2/12/30
Total
01/08/20 – 01/08/27
11/02/22 – 28/02/29
2/12/23 – 2/12/30
Total
11/2/24 – 10/2/29
Total
421,318
421,318
363,357
1,205,993
4,360
7,128
97,888
188,421
188,421
109,376
75,980
221,174
221,174
75,980
4,360
7,128
97,888
146,833
110,845
166,268
142,904
676,226
75,980
124,794
200,774
86,334
86,334
Total at
28 February
2021
421,318
421,318
363,357
1,205,993
146,833
110,845*
166,268*
142,904
188,421
755,271
124,794
221,174
345,968
86,334
86,334
Key: ESOS – Executive Share Option Scheme; LTIP – Long Term Incentive Plan approved in 2015; R&R – Recruitment & Retention Plan (legacy awards and not applicable to
Executive Directors)
* The May 2018 LTIP and ESOS Awards lapsed in full subsequent to the FY2021 year-end.
No price was paid for any award of options. The price of the Company’s ordinary shares as quoted on the London Stock Exchange at
the close of business on 26 February 2021 (being the last working day) was £2.58 (29 February 2020: £3.28). The price of the Company’s
ordinary shares ranged between £1.45 and £3.36 during the year.
There was no movement in the interests of the Directors in options over the Company ordinary shares between 28 February 2021 and 26
May 2021.
Corporate GovernanceBusiness & StrategyFinancial Statements 128
Directors’ Remuneration Committee Report
(continued)
Single Total Figure of Remuneration – Non-Executive Directors (Audited)
The table below reports the total fees receivable in respect of qualifying services by each Non-Executive Director during the year ended 28
February 2021 and the prior year. Stewart Gilliland was interim Executive Chair from 15 January 2020 until 2 November 2020, at which point
he reverted to his role as Non-Executive Chair; given his role, his remuneration for the whole year is included in the following Single Total
Figure of Remuneration Table.
Each Non-Executive Director agreed to waive their fees for the year in relation to their services on Stakeholder Engagement due to the
outbreak of COVID-19. Fees are the only element of the Non-Executive Directors’ remuneration.
Year ended February
Non-Executive Directors
Jill Caseberry
Jim Clerkin
Vincent Crowley1
Emer Finnan
Stewart Gilliland2
Geoffrey Hemphill3
Richard Holroyd4
Helen Pitcher
Jim Thompson
Total
Salary/fees
2021
€’000
64
61
80
84
377
-
-
82
71
819
2020
€’000
69
65
86
92
278
11
19
85
69
774
1. Vincent Crowley was appointed as Senior Independent Director from 1 June 2019.
2. The fees paid to Stewart Gilliland for the year ending 28 February 2021 reflect his appointment as Interim Executive Chair from 16 January 2020 until 2 November 2020.
3. Geoffrey Hemphill stepped down from the Board on 1 May 2019; the figures reflect his remuneration until his departure.
4. Richard Holroyd stepped down from the Board on 31 May 2019; the figures reflect his remuneration until his departure.
Fees paid to Non-Executive Directors are determined and approved by the Board as a whole. The Committee recommends the
remuneration of the Chair to the Board.
Fees are reviewed from time to time and adjusted to reflect market positioning and any change in responsibilities.
Non-Executive Directors receive a base fee and an additional fee for further duties as set out on in the following table:
Non-Executive Role / Position
Base fee
Senior Independent Director
Audit Committee Chair
Remuneration Committee Chair
ESG Committee Chair
Audit Committee member
ESG Committee member
Remuneration Committee member
Nomination Committee member
Stakeholder engagement - one segment of business
Stakeholder engagement - two segments of business
Fees
€
65,000
15,000
25,000
20,000
20,000
5,000
5,000
5,000
3,000
3,000
5,000
C&C Group plc Annual Report 2021 129
Shareholding guidelines
Non-Executive Directors are required to build up (and maintain) a minimum holding of shares in the Company of at least 50% of their base
fee, within three years of their appointment or within 3 years of the date approval of the 2021 Policy, if later.
Non-Executive Directors’ Interests in Share Capital of the Company (Audited)
The beneficial interests, including family interests, of the Non-Executive Directors who served during the year in the share capital of the
Company are detailed below:
Directors
Jill Caseberry
Jim Clerkin
Vincent Crowley
Emer Finnan
Stewart Gilliland
Helen Pitcher
Jim Thompson
Total
28 February 2021
(or date of
retirement from
the board if earlier)
Total
1 March 2020
(or date of
appointment
if later)
Total
5,000
45,000
20,000
7,954
129,165
-
157,780
364,899
5,000
40,000
20,000
7,954
89,165
-
157,780
319,899
There were no changes in the above Non-Executive Directors’ share interests between 28 February 2021 and 26 May 2021.
Performance graph and table
This graph shows the value, at 28 February 2021, of £100 invested in the Company on 28 February 2011 compared to the value of £100
invested in the FTSE 250 Index. The Company became a member of the FTSE 250 Index on the London Stock Exchange on 23 December
2019 and the Committee believes that this is the most appropriate index against which to compare the performance of the Company (prior
to this the Company had its primary listing on the Irish Stock Exchange).
Total shareholder return
300
250
200
150
100
50
Feb 2011
Feb 2012
Feb 2013
Feb 2014
Feb 2015
Feb 2016
Feb 2017
Feb 2018
Feb 2019
Feb 2020
Feb 2021
C&C Group
FTSE 250
Source: Thomson
Corporate GovernanceBusiness & StrategyFinancial Statements 130
Directors’ Remuneration Committee Report
(continued)
Chief Executive Officer
The following table sets out information on the remuneration of the Chief Executive Officer for the ten years to 28 February 2021:
FY2012
John Dunsmore (to 31/12/11)
FY2012
Stephen Glancey (from 1/1/12)
FY2013
Stephen Glancey
FY2014
Stephen Glancey
FY2015
Stephen Glancey
FY2016
Stephen Glancey
FY2017
Stephen Glancey
FY2018
Stephen Glancey
FY2019 Stephen Glancey
FY2020 Stephen Glancey (to 15/01/20)
FY2020 Stewart Gilliland (from 16/01/20)
FY2021
Stewart Gilliland (to 02/11/20)
FY2021 David Forde (from 02/11/20)
Total Remuneration
€’000
Annual Bonus
(as % of maximum
opportunity)
Long term incentives
vesting
(as % of maximum
number of shares)
1,126
956
1,321
1,152
980
1,230
1,052
994
1,777
2,219
71
301
1,731
75%
75%
Nil
18.75%
Nil
25%
Nil
18%
100%
25%
N/A
N/A
Nil
100%
100%
100%
7%
Nil
Nil
Nil
Nil
Nil
100%
N/A
N/A
Nil
The amounts set out in the above table were translated from Sterling based on the average exchange rate for the relevant year.
FY2020 and FY2021: Stephen Glancey retired as Group Chief Executive Officer on 15 January 2020 and Stewart Gilliland was appointed
Interim Executive Chair from 16 January 2020 until 2 November 2020 when David Forde was appointed Chief Executive Officer. The salary,
taxable benefits, annual bonus, long term incentives and pension figures are calculated for the period in office.
Total remuneration for David Forde includes the Buy-Out awards granted to compensate him for remuneration forfeited to join C&C as
referred to on pages 105 to 106.
Ratio of the pay of the CEO to that of the UK lower quartile, median and upper quartile employees
The table below shows the ratio of the pay of the CEO to that of the UK lower quartile, median and upper quartile full-time equivalent
employees in FY2020 and FY2021. For the wider workforce, the value of benefits provided in the year has not been included as the data is
not readily available. In the view of the Company, this does not have a meaningful impact on the pay ratios.
The FY2020 figures are presented on the same basis as in the Directors’ Remuneration Report for the prior year.
In FY2021, Stewart Gilliland was interim Executive Chair from 1 March 2020 until 2 November 2020 when David Forde was appointed Chief
Executive Officer, at which point he reverted to his role as Non-Executive Chair. Stewart Gilliland’s remuneration as interim Executive Chair
and David Forde’s total remuneration as Group Chief Executive Officer during FY2021 have been included in the calculations of the CEO pay
ratio.
The UK regulations provide three methods for the calculation of the CEO Pay Ratio, A, B and C with Option A (modified) being the preferred
method as it is the most statistically accurate one. Remuneration for other employees for the purposes of the calculation is for the financial
year FY2021. In calculating the ratio, the Company determined full time equivalent annual remuneration for UK employees, employed in
the business as at 28 February 2021. Set out below is the remuneration and salary component of that remuneration for the CEO and for
employees in the 25th, 50th (median) and 75th quartiles.
C&C Group plc Annual Report 2021
131
Year
2020
2021
Salary Only Ratios
Year
2020
2021
CEO total remuneration
(salary) €
25th percentile employee
remuneration
(salary) €
Median employee remuneration
(salary) €
75th percentile employee
remuneration
(salary) €
2,218,941
697,964
2,031,946
531,161
Method
Option A
Option A
26,146
24,080
23,465
22,146
32,257
30,024
29,667
27,894
45,075
39,232
42,290
38,358
25th percentile ratio
Median ratio
75th percentile ratio
29.0:1
24.0:1
23.2:1
19.0:1
17.8:1
13.8:1
Total Remuneration Ratios
Year
2020
2021
Method
Option A
Option A
25th percentile ratio
Median ratio
75th percentile ratio
84.9:1*
86.6:1
68.8:1*
68.5:1
49.2:1*
48.0:1
*The total remuneration ratios for 2020 have been restated to correct an error in the prior year ratio calculation.
The Company believes that the median pay ratio for FY2021 is consistent with the pay, reward and progression policies for the UK
employees. The change in the ratios between FY2020 and FY2021 are attributable to a number of factors including the FY2021 CEO
remuneration being the aggregate of the Executive Chair’s and CEO’s remuneration, the reduction in Directors’ remuneration in FY2021 and
a significant proportion of employees being placed on furlough during FY2021, as a result of the COVID-19 pandemic.
Annual Percentage Change in Remuneration of Directors and Employees
To reflect the most recent UK regulations in relation to remuneration reporting, this year we are reporting the percentage change in salary/
fees and bonus of the Directors and employees. The UK Regulations also require that this disclosure be included in relation to benefits
however due to the difficulty in obtaining this data, we have decided not to include benefits for the purpose of the calculation, consistent with
our approach to the CEO Pay Ratio. The table below shows the percentage change in each Director’s salary/fees and bonus between the
year ended 29 February 2020 and the year ended 28 February 2021, and the average percentage change in the same remuneration over
the same period in respect of the Company’s UK full time equivalent employees, by reported numbers. We have used the Company’s UK full
time equivalent employees as the comparator group for consistency with the approach to the CEO Pay Ratio calculation.
The average employee change has been calculated by reference to the mean of employee pay. David Forde and Patrick McMahon were
appointed to the Board during FY2021 and, accordingly, they have been excluded from the table below. Jonathan Solesbury has also been
excluded as he stepped down from the Board on 23 July 2020.
Salary/Fees
Annual Bonus
Average
Employee1
Andrea
Pozzi2
Stewart
Gilliland2
Jill
Caseberry2
(4.2%)
(15.6%)
35.6%
(7.2%)
Jim
Clerkin2
(6.2%)
Vincent
Crowley2
(7.0%)
Emer
Finnan2
(8.7%)
Helen
Pitcher2
(3.5%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Jim
Thompson2
2.9%
N/A
1. Due to the impact of COVID-19, a significant proportion of employees were placed on furlough during FY2021, resulting in a reduction in the salaries they earned.
2. Each Director took a voluntary reduction in salary in FY2021 due to the impact of COVID-19 which had an impact on the fees given for additional services. Jim Thompson’s fee
increased during FY2021 due to his appointment as Chair of the ESG Committee in September 2020.
3. The increase in Stewart Gilliland’s salary/fee was not attributable to an increase in the remuneration paid for a role, but rather a change in role. Stewart was interim Executive
Chair until 2 November 2020 when David Forde was appointed Chief Executive Officer, at which point Stewart reverted back to his position as Non-Executive Chair.
Corporate GovernanceBusiness & StrategyFinancial Statements
132
Directors’ Remuneration Committee Report
(continued)
Shareholder Voting at 2018 and 2020 Annual General Meeting
The following table sets out the votes at our most recent AGM in respect of the Report and the votes at the 2018 AGM in relation to the
Policy.
Directors’ Remuneration Report
AGM
2020
For
245,928,278
Against
1,701,080
Directors’ Remuneration Policy
AGM
2018
For
230,550,915
Against
46,281
Withheld
9,738
Withheld
557,974
The Company is committed to ongoing shareholder dialogue and takes shareholder views into consideration when formulating remuneration
policy and practice. To the extent that there are substantial numbers of votes against resolutions in relation to directors’ remuneration, the
Company will seek to understand the reasons for any such vote and will provide details of any actions in response to such a vote.
The Company is incorporated in Ireland and is therefore not subject to the UK company law requirement to submit its Directors’
Remuneration Policy (‘Policy’) to a binding vote. Nonetheless, in line with our commitment to best practice, at the AGM in July 2018, our
revised Policy was approved by our shareholders on an advisory basis. At the 2021 AGM, shareholders are invited to vote on the 2021
Annual Remuneration Report and the proposed Remuneration Policy for 2021-2024.
This report was approved by the Board and signed on its behalf by
Helen Pitcher OBE
Chair of the Remuneration Committee
26 May 2021
C&C Group plc Annual Report 2021 Statement of Directors’ Responsibilities
133
The Directors are responsible for
preparing the Annual Report and the
Group and Company financial statements,
in accordance with applicable law and
regulations.
include a management report containing a
fair review of the business and the position
of the Group and the parent Company
and a description of the principal risks and
uncertainties facing the Group.
Company law requires the Directors to
prepare Group and Company financial
statements for each financial year. Under
that law, the Directors are required to
prepare the Group financial statements
in accordance with International Financial
Reporting Standards (‘IFRSs’) as adopted
by the EU, and have elected to prepare
the Company financial statements in
accordance with Irish Law (Irish Generally
Accepted Accounting Practice), including
FRS 101 ‘Reduced Disclosure Framework’
(‘FRS 101’).
Under Irish Company law, the Directors
must not approve the financial statements
unless they are satisfied that they give a true
and fair view of the assets, liabilities and
financial position of the group and parent
company as at the end of the financial year,
and the profit or loss for the Group for the
financial year, and otherwise comply with
Companies Act 2014.
In preparing each of the Group and
Company financial statements the Directors
are required to:
• select suitable accounting policies and
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• state that the Group financial statements
comply with IFRS as adopted by the EU
and as regards the Company, comply with
FRS 101 together with the requirements of
Irish Company Law; and
• prepare the financial statements on
the going concern basis, unless it is
inappropriate to presume that the Group
and Company will continue in business.
The Directors are also required by the
Transparency (Directive 2004/109/EC0)
Regulations 2007 and the Transparency
rules of the Central Bank of Ireland to
The Directors are responsible for adequate
accounting records which disclose with
reasonable accuracy at any time the assets,
liabilities, financial position and profit or loss
of the Company, and which will enable them
to ensure that the financial statements of
the Group are prepared in accordance with
applicable IFRS as adopted by the European
Union and comply with the provisions of
Irish Company Law, and, as regards to the
Group financial statements, Article 4 of
the European Communities (International
Financial Reporting Standards and
Miscellaneous Amendments) Regulations
2005 (the ‘IAS Regulation’). They are also
responsible for safeguarding the assets
of the Company and the Group, and
hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
The Directors have appointed appropriate
accounting personnel, including a
professionally qualified Finance Director, in
order to ensure that those requirements are
met.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website (www.candcgroupplc.
com). Legislation in Ireland concerning the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
Responsibility Statement As
Required By The Transparency
Directive And UK Corporate
Governance Code
Each of the Directors, whose names and
functions are listed on pages 74 and 75 of
this Annual Report, confirm that, to the best
of each person’s knowledge and belief:
• So far as they are aware, there is no
relevant audit information of which
the company’s statutory auditors are
unaware;
• They have taken all steps that they ought
to have taken as Directors in order to
make themselves aware of any relevant
audit information and to establish that the
Company’s statutory auditors are aware
of that information.
• The Group Financial Statements,
prepared in accordance with IFRS as
adopted by the European Union and the
Company financial statements prepared in
accordance with FRS 101 give a true and
fair view of the assets, liabilities, financial
position of the Group and Company at 28
February 2021 and of the profit or loss of
the Group for the year then ended;
• The Directors’ report contained in the
Annual Report includes a fair review of
the development and performance of the
business and the position of the Group
and Company, together with a description
of the principal risks and uncertainties that
they face; and
• The Annual Report and Financial
Statements, taken as a whole, provides
the information necessary to assess
the Group’s performance, business
model and strategy and is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the company’s position and
performance, business model and
strategy.
Signed
On behalf of the Board
David Forde
Group Chief
Executive Officer
26 May 2021
Patrick McMahon
Group Chief
Financial Officer
Corporate GovernanceBusiness & StrategyFinancial Statements 134
Independent Auditor’s Report
to the Members of C&C Group Plc
Report on the audit of the financial statements
Opinion
We have audited the financial statements of C&C Group plc (‘the
Company’) and its subsidiaries (‘the Group’) for the year ended 28
February 2021, which comprise;
• the Consolidated Income Statement and the Consolidated
Statement of Comprehensive Income for the year then ended;
• the Consolidated Balance Sheet and the Company Balance Sheet
as at 28 February 2021;
• the Consolidated Cash Flow Statement for the year then ended;
• the Consolidated Statement of Changes in Equity and the
Company Statement of Changes in Equity for the year then
ended; and
• the notes forming part of the financial statements, including the
Statement of Accounting Policies set out on pages 151 to 166.
The financial reporting framework that has been applied in their
preparation is Irish Law and International Financial Reporting
Standards (IFRS) as adopted by the European Union and, as regards
the Company financial statements as applied in accordance with the
provisions of the Companies Act 2014 and Accounting Standards
including FRS 101 Reduced Disclosure Framework.
In our opinion:
• the Group financial statements give a true and fair view of the
assets, liabilities and financial position of the Group as at 28
February 2021 and of the Group’s loss for the year then ended;
• the Company financial statements gives a true and fair view of the
assets, liabilities and financial position of the Company as at 28
February 2021;
• the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union;
• the Company financial statements have been properly prepared in
accordance with FRS 101 Reduced Disclosure Framework; and
• the Group financial statements and Company financial statements
have been properly prepared in accordance with the requirements
of the Companies Act 2014 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Group and
Company in accordance with ethical requirements that are relevant
to our audit of financial statements in Ireland, including the Ethical
Standard as applied to public interest entities issued by the Irish
Auditing and Accounting Supervisory Authority (IAASA), and we
have fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the Group and Company’s ability to
continue to adopt the going concern basis of accounting included:
Risk assessment procedures
• Obtained an understanding of management’s process for the use
of the going concern basis of accounting. Events or conditions
were identified, and audit procedures designed to evaluate the
effect of these on the Group’s and the Company’s ability to
continue as a going concern; and
• Involved members of our internal corporate finance and modelling
specialists as part of the audit team to support procedures in
respect of the model used and the scenarios considered.
Management’s process for assessing going concern
• In conjunction with our walkthrough of the Group’s financial
statement close process, engaged with management early to
ensure key factors were considered in their assessment including
controls;
• Obtained management’s board-approved forecast cash flows and
covenant calculations covering the period of assessment from the
date of signing to 31 August 2022 (“going concern assessment
period”), along with the Group’s assessment models for the going
concern base case and reasonable worse case scenarios;
• Using our understanding of the business and through inspection
and testing, evaluated and determined, whether the forecasting
model and methods adopted by management in assessing going
concern were appropriately sophisticated to be able to make an
assessment for the entity; and
• Considered the consistency of information obtained from other
areas of the audit such as the forecasts used for impairment
assessments.
Assumptions
• Considered past historical accuracy of management’s forecasting
(prior to COVID-19);
• Tested the assumptions included in each modelled scenario.
Noting that the model was prepared on a top down basis, driven
by volumes sold within each business unit and channel with
different assumptions around the phased reopening of the on-
trade channel for England, Scotland and Ireland, we reviewed
and challenged the phasing assumptions. The assumptions were
predicated on available Government guidance for each region;
C&C Group plc Annual Report 2021
135
Our key observations
The going concern assessment is most sensitive to the level of
phased re-opening of the on-trade business during the assessment
period. Under both the base case and reasonable worse case
scenarios, the Group is not forecasted to breach the Minimum
Liquidity Requirement during the going concern assessment
period. Our sensitivity testing indicated that there was still liquidity
headroom when the additional stress assumptions outlined above
were applied, with periods of lower headroom caused by the timing
of working capital flows and the timing of specifically identified
outflows.
Conclusion
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group
and Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are
authorised for issue.
In relation to the Group and Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’
statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions can
be predicted, this statement is not a guarantee as to the Group’s or
the Company’s ability to continue as a going concern.
• Tested the forecast models for each scenario to ensure that they
were mathematically accurate;
• Evaluated the relevance and reliability of the underlying data
used to make the assumptions included in the assessment by
corroborating underlying data to available Government guidance,
trading experienced throughout 2020 amid varying degrees of
restrictions and social distancing guidance in each region; and
• Considered industry reports and market data for indicators of
contradictory evidence, including a review of profit warnings within
the sector.
Debt facilities / liquidity
• Performed a detailed review of all borrowing facilities to assess
their continued availability to the Group through the going concern
assessment period and to ensure completeness of covenants
identified by management;
• Verified the covenant waivers in place covering the August 2021
and February 2022 measurement dates, which were replaced
by a gross debt cap and the requirement to maintain a minimum
level of available liquidity (the “Minimum Liquidity Requirements”)
amounting to €150m with a reduction to €120m for the month
ending 31 July 2021; reduction to €80m for the month ending 30
June 2022; and a reduction to €100m for the month ending 31
July 2022; and
• Considered the accuracy of management’s forecast model in
complying with the Minimum Liquidity Requirements by reference
to the above amounts.
Stress testing and Management’s plans for future actions
• Performed sensitivity analysis assuming a further lockdown and
cessation of on trade business for the October to December 2021
period with a gradual re-opening in January and February 2022,
which indicated that there was still liquidity headroom under this
scenario;
• Assessed the plausibility of management’s reasonable worse
case scenario by evaluating the actual COVID-19 impact on the
Group subsequent to the year end and considering industry
outlook analysis; and
• Evaluated management’s ability to undertake mitigating actions
to reduce cash outflows during the going concern assessment
period in order to determine whether such actions are feasible.
Disclosures
Reviewed the Group’s going concern disclosures in the financial
statements to ensure they are in accordance with International
Financial Reporting Standards.
Corporate GovernanceBusiness & StrategyFinancial Statements 136
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of 10 components and performed audit procedures
on specific balances for a further 8 components
• We performed specified procedures at a further 6 components that were determined by the Group audit team in
response to specific risk factors
• The components where we performed either full or specific audit procedures accounted for 98.7% of the Group’s
loss before tax from continuing operations, 97.0% of the Group’s Net Revenue and 97.8% of the Group’s Total
Assets
• Components represent business units across the Group considered for audit scoping purposes
Key audit matters
• Going concern – presented in the ‘Conclusions relating to going concern’ section above
• Recoverability of on-trade receivable balances and advances to customers
• Impairment assessment of goodwill and intangible brand assets
• Assessment of the valuation of property, plant and equipment (PP&E) and impairment assessment of equity
accounted investments
• Revenue recognition
Materiality
• Overall Group materiality was assessed to be €3.7 million which represents approximately 0.5% of the Group’s
Net Revenue. In our prior year audit, we adopted a materiality of €4.8 million based on 5% of the Group’s profit
before tax before non-recurring exceptional items.
What has changed?
• In the current year, our auditor’s report includes an amendment to the key audit matter Assessment of the
valuation of property, plant and equipment (PP&E), where this key audit matter has been broadened to include
impairment assessment of equity accounted investments.
• In the prior year, our auditor’s report included a key audit matter in relation to IFRS 16 Implementation which is no
longer considered a key audit matter in the current year.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Risk
Our response to the risk
Recoverability of on-trade receivable balances and
advances to customers (Trade receivables 2021:
€75.9m, 2020: €93.1m, advances to customers 2021:
€42.1m, 2020: €44.7m)
The Group has a risk through exposure to on-trade
receivable balances and advances to customers who
may experience financial difficulty given the ongoing
national and international lockdowns and restrictions
in Ireland, the UK and across the world following the
outbreak of COVID-19 which has resulted in the closure
of pubs, bars, clubs and restaurants.
Refer to the Audit Committee Report (page 88); and
Statement of Accounting Policies (pages 163 to 164);
and Note 15 of the Consolidated Financial Statements
(pages 199 to 200).
We have performed a thorough review of the
Expected Credit Loss (ECL) model in relation
to on-trade receivables and advances with
customers considering C&C’s use of top-
down ‘management overlays’ to account
for current macro-economic scenarios. As
part of this review we critically assessed
management’s assumptions and estimates
for accuracy and robustness.
We have also benchmarked assumptions
used within the model to third party data
where possible.
Given the level of uncertainty and the
sensitivity of judgements and estimates
used, we reviewed all key assumptions used
and judgements made in estimating ECL.
Key observations communicated to the
Audit Committee
We completed our planned
audit procedures with no
exceptions noted.
Our observations included our
assessment of management’s
methodology for calculating
expected credit losses in
accordance with IFRS 9. We
focused on the significant
judgements made by
management, benchmarked
key assumptions and the
appropriate disclosure of these
in the financial statements.
C&C Group plc Annual Report 2021 137
Key observations communicated to the
Audit Committee
We completed our planned
audit procedures with no
exceptions noted.
Our observations included our
assessment of management’s
impairment model methodology
and then for each CGU and
intangible brand model:
• whether the discount rates lay
within an acceptable range
• the level of headroom of the
present value of cash flows
over the CGU and asset
carrying amounts
• analysis of the 5-year forecast
EBIT growth rate when
viewed against the prior
year and current year actual
growth
• the results of our sensitivity
analysis
• all disclosures are appropriate
to the requirements of IAS 36.
Risk
Our response to the risk
Impairment assessment of goodwill & intangible
brand assets (2021: €646.0m, 2020: €652.9m)
The Group holds significant amounts of goodwill
& intangible brand assets on the balance sheet. In
line with the requirements of IAS 36: ‘Impairment of
Assets’ (‘IAS 36’), management tests goodwill balances
annually for impairment, and also tests intangible assets
where there are indicators of impairment.
The annual impairment testing was significant to our
audit because of the financial quantum of the assets
it supports as well as the fact that the testing relies
on a number of critical judgements, estimates and
assumptions by management. Judgemental aspects
include cash-generating unit (‘CGU’) determination for
goodwill purposes, assumptions of future profitability,
revenue growth, margins and forecast cash flows, and
the selection of appropriate discount rates, all of which
may be subject to management override.
Refer to the Audit Committee Report (pages 88 to 89);
Statement of Accounting Policies (pages 157 to 158);
and Note 12 of the Consolidated Financial Statements
(pages 190 to 195).
Valuations specialists within our team
performed an independent assessment
against external market data of key inputs
used by management in calculating
appropriate discount rates, principally risk-
free rates, country risk premia and inflation
rates.
We carefully considered the determination
of the Group’s 6 CGUs, and flexed our audit
approach relative to our risk assessment
and the level of excess of value-in-use
over carrying amount in each CGU for
goodwill purposes and in each model for
the impairment assessment for intangible
brand assets. For all models, we assessed
the historical accuracy of management’s
estimates, corroborated key assumptions
and benchmarked growth assumptions to
external economic forecasts.
We evaluated management’s sensitivity
analyses and performed our own sensitivity
calculations to assess the level of excess of
value-in-use over the goodwill and intangible
brand carrying amount and whether a
reasonably possible change in assumptions
could cause the carrying amount to exceed
its recoverable amount.
We considered the adequacy of
management’s disclosures in respect
of impairment testing and whether the
disclosures appropriately communicate
the underlying sensitivities, in particular the
requirement to disclose further sensitivities
for CGUs and intangible brands where
a reasonably possible change in a key
assumption would cause an impairment.
The above procedures were performed by
the Group audit team.
Corporate GovernanceBusiness & StrategyFinancial Statements Key observations communicated to the
Audit Committee
We completed our planned
audit procedures with no
exceptions noted.
Our observations included:
• an overview of the risk
• an outline of the procedures
performed
• the judgements we focused
on
• the results of our testing on
the outcome of the valuations
and in respect of the related
disclosures.
138
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Risk
Our response to the risk
Assessment of the valuation of property, plant and
equipment (PP&E) (2021: €139.3m, 2020: €146.7m)
and impairment assessment of equity accounted
investments (2021: €63.1m, 2020: €83.9m)
The Group carries its land and buildings at estimated
fair value, its plant and machinery using a depreciated
replacement cost approach and motor vehicles and
other equipment at cost less accumulated depreciation
and impairment losses.
During the year, all land and buildings and plant
and machinery were subject to independent expert
valuations.
We considered the valuation of these assets to be a
risk area due to the size of the balances and the lack of
comparable market data and observable inputs such
as market based assumptions, plant replacement costs
and plant utilisation levels due to the specialised nature
of the Group’s assets. The valuation of PP&E involves
significant judgement and therefore is susceptible to
management override.
The Group’s interest in equity accounted investments
comprise interests in associates and joint ventures. In
line with the requirements of IAS 36: ‘Impairment of
Assets’ (‘IAS 36’), management tests equity accounted
investments where there are indicators of impairment.
The impairment testing was significant to our audit
because of the financial quantum of the assets it
supports as well as the fact that the testing relies
on a number of critical judgements, estimates and
assumptions by management. Judgemental aspects
include assumptions of future profitability, revenue
growth, margins and forecast cash flows, and the
selection of appropriate P/E multiple, all of which may
be subject to management override.
Refer to the Audit Committee Report (page 89);
Statement of Accounting Policies (pages 155 to
156 and 154 to 155); and note 11 and note 13 of the
Consolidated Financial Statements (pages 185 to
189 and 195 to 198) for PP&E and Equity accounted
investments respectively.
For PP&E, we inspected the independent
expert valuation reports in order to assess
the integrity of the data and key assumptions
underpinning the valuations.
Our specialist valuation team performed
an independent assessment on the
reasonableness of the key assumptions and
judgements underlying the valuations.
We corroborated the key assumptions and
considered consistency to market data and
observable inputs.
We considered the adequacy of
management’s disclosures in respect of
the valuation and whether the disclosures
appropriately communicate the underlying
sensitivities.
For equity accounted investments our focus
was on Admiral Taverns which is the Group’s
most significant joint venture.
We considered all quantative and qualitative
factors in assessing management’s market
based valuation. We assessed the historical
accuracy of management’s estimates,
corroborated key assumptions which
included the reopening of on trade in
England, the location and composition of the
portfolio of pubs, the real estate value and
assessed the level of trade since the pubs
reopened for external trading in England.
We have reviewed the adequacy of
management’s disclosures in respect
of the market valuation and whether the
disclosures appropriately communicate the
underlying sensitivities.
All of the above procedures were performed
predominantly by the Group audit team.
C&C Group plc Annual Report 2021 139
Key observations communicated to the
Audit Committee
We completed our planned
audit procedures with no
exceptions noted.
Our observations included:
• an overview of the risk
• an outline of the procedures
performed
• the judgements we focused
on and the results of our
testing.
Risk
Our response to the risk
Revenue recognition (2021: €736.9m, 2020:
€1,719.3m)
The Group generates revenue from a variety of
geographies and across a large number of separate
legal entities spread across the Group’s four business
segments.
The Group’s revenue particularly on supply, complex
and non-standard customer contracts agreements
may not have been accounted for correctly. In this
regard we focused our risk on revenue generated in
connection with certain of the Group’s arrangements
with third parties entered into in order to utilise excess
capacity and other material complex arrangements with
customers.
Revenue is an important element of how the Group
measures its performance, and revenue recognition
is therefore inherently susceptible to the risk of
management override.
Refer to the Audit Committee Report (page 89);
Statement of Accounting Policies (pages 160 to 161);
and note 1 of the Consolidated Financial Statements
(pages 167 to 170).
We considered the appropriateness of the
Group’s revenue recognition accounting
policies; in particular, those related to supply,
complex and non-standard customer
contracts.
For the purpose of our audit, the procedures
we carried out included the following:
• We have evaluated the systems and key
controls, designed and implemented
by management, related to revenue
recognition
• We considered the appropriateness of the
Group’s revenue recognition policy
• We discussed with management the key
assumptions, estimates and judgements
related to recognition, measurement and
classification of revenue in accordance
with IFRS 15: Revenue
• In addition, we have discussed significant
and complex customer contracts,
discounts and the treatment of marketing
contribution to ensure that accounting
policies are applied correctly
• We performed journal entry testing and
verification of proper cut-off at year-end.
Our application of materiality
We apply the concept of materiality in planning and performing the
audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent of
our audit procedures.
We determined materiality for the Group and Company to be €3.7
million, which is approximately 0.5% of the Group’s Net Revenue,
(2020: €4.8 million based on 5% of the Group’s profit before tax
before non-recurring exceptional items). We believe that Net
Revenue provides us with the most appropriate performance metric
on which to base our materiality calculation as we consider it to be
the most relevant performance measure to the stakeholders of the
Group.
During the course of our audit, we reassessed initial materiality and
considered that no further changes to materiality were necessary.
Performance materiality
Performance materiality is the application of materiality at the
individual account or balance level. It is set at an amount to reduce
to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment
of the Group’s overall control environment, our judgement was
that performance materiality was 50% of our planning materiality,
namely €1.85 million (2020: €2.38 million). We have set performance
materiality at this percentage based on our assessment of the risk of
misstatements, both corrected and uncorrected, consistent with the
prior year.
Corporate GovernanceBusiness & StrategyFinancial Statements 140
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
The reporting components where we performed audit procedures
accounted for 98.9% (2020: 99.6%) of the Group’s loss before tax,
99.6% (2020: 98.6%) of the Group’s net revenue and 99.5% (2020:
99.4%) of the Group’s total assets.
We agreed with the Audit Committee that we would report to them
all uncorrected audit differences in excess of €0.18 million (2020:
€0.24 million), which is set at 5% of planning materiality, as well
as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
An overview of the scope of our audit report
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our
allocation of performance materiality determine our audit scope for
each entity within the Group. Taken together, this enables us to form
an opinion on the Consolidated Financial Statements.
In determining those components in the Group to which we perform
audit procedures, we utilised size and risk criteria when assessing
the level of work to be performed at each entity.
In assessing the risk of material misstatement to the Group financial
statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, we selected
18 (2020: 20) components covering entities across Ireland, UK,
Luxembourg and the US, which represent the principal business
units within the Group.
Of the 18 (2020: 20) components selected, we performed an audit
of the complete financial information of 10 (2020: 10) components
(“full scope components”) which were selected based on their size
or risk characteristics. For the remaining 8 (2020: 10) components
(“specific scope components”), we performed audit procedures on
specific accounts within that component that we considered had the
potential for the greatest impact on the significant accounts in the
financial statements either because of the size of these accounts or
their risk profile.
In addition to the 18 components discussed above, we selected a
further 6 (2020: 6) components where we performed procedures at
the component level that were specified by the Group audit team in
response to specific risk factors.
For the current year, the full scope components contributed 85.0%
(2020: 85.0%) of the Group’s loss before tax, 97.0% (2020: 97.1%)
of the Group’s net revenue and 97.3% (2020: 93.3%) of the Group’s
total assets. The specific scope component contributed 13.7%
(2020: 12.6%) of the Group’s loss before tax, 0.0% (2020: 0.0%) of
the Group’s net revenue and 0.5% (2020: 0.4%) of the Group’s total
assets. The components where we performed specified procedures
that were determined by the Group audit team in response to
specific risk factors contributed 0.2% (2020: 1.9%) of the Group’s
loss before tax, 2.6% (2020: 1.5%) of the Group’s net revenue and
1.7% (2020: 5.7%) of the Group’s total assets. The audit scope of
these components may not have included testing of all significant
accounts of the component but will have contributed to the
coverage of significant tested for the Group.
Of the remaining components that together represent 1.1%
(2020: 0.4%) of the Group’s loss before tax, none are individually
greater than 5% (2020: 5%) of the Group’s loss before tax before
non-recurring exceptional items. For these components, we
performed other procedures, including analytical review, testing of
consolidation journals and intercompany eliminations and foreign
currency translation recalculations to respond to any potential risks
of material misstatement to the Group financial statements.
The charts below illustrate the coverage obtained from the work
performed by our audit teams.
Loss before tax
Revenue
Total Assets
85.0% Full scope
components
13.7% Specific scope
components
0.2%
1.1%
Specified
procedures
Other
procedures
97.1% Full scope
components
0.0%
2.6%
0.4%
Specific scope
components
Specified
procedures
Other
procedures
97.3% Full scope
components
0.5%
1.7%
Specific scope
components
Specified
procedures
0.5%
Other
procedures
C&C Group plc Annual Report 2021
Loss before tax
141
Revenue
Total Assets
85.0% Full scope
components
13.7% Specific scope
components
0.2%
1.1%
Specified
procedures
Other
procedures
97.1% Full scope
components
0.0%
2.6%
0.4%
Specific scope
components
Specified
procedures
Other
procedures
97.3% Full scope
components
0.5%
1.7%
0.5%
Specific scope
components
Specified
procedures
Other
procedures
Involvement with component teams
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at each
of the components by us, as the primary audit engagement team,
or by component auditors from other EY global network firms
operating under our instruction. Where the work was performed
by component auditors, we determined the appropriate level of
involvement to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as a
whole.
We issued detailed instructions to each component auditor in
scope for the Group audit, with specific audit requirements and
requests across key areas. The Group audit team would normally
have completed a programme of planned visits designed to ensure
that senior members of the Group audit team, including the Audit
Engagement Partner, visit a number of overseas locations each year.
During the current year’s audit cycle, due to travel restrictions as a
result of the Covid-19 pandemic, no physical visits were possible
by the Group audit team. Instead, the Group audit team performed
virtual visits in respect of our key component teams in the U.K., and
Ireland. These visits involved discussing the audit approach and any
issues arising with the component team and holding discussions
with local management and attending closing meetings.
The Group audit team interacted regularly with the component
teams where appropriate during various stages of the audit,
reviewed and evaluated the work performed by these teams,
including review of key reporting documents, in accordance with the
ISAs (Ireland) and were responsible for the overall planning, scoping
and direction of the Group audit process. Senior members of the
Group audit team also participated in component and divisional
planning, interim and closing meeting calls during which the planning
and results of the audits were discussed with the component
auditors, local management and Group management. This, together
with the additional procedures performed at Group level, gave
us appropriate evidence for our opinion on the Group financial
statements.
Other conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following information in
the annual report, in relation to which the ISAs (Ireland) require us
to report to you whether we have anything material to add or draw
attention to:
• the disclosures in the annual report (set out on pages 32 to 42)
that describe the principal risks and explain how they are being
managed or mitigated;
• the directors’ confirmation (set out on page 32) in the annual
report that they have carried out a robust assessment of the
principal risks facing the Group and the Company, including those
that would threaten its business model, future performance,
solvency or liquidity;
• the directors’ statement (set out on page 41) in the financial
statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting in preparing the
financial statements and the directors’ identification of any material
uncertainties to the Group’s and the Company’s ability to continue
to do so over a period of at least twelve months from the date of
approval of the financial statements;
• whether the directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
6.8.3(3) is materially inconsistent with our knowledge obtained in
the audit; or
• the directors’ explanation (set out on page 41) in the annual report
as to how they have assessed the prospects of the Group and the
parent company, over what period they have done so and why
they consider that period to be appropriate, and their statement
as to whether they have a reasonable expectation that the Group
and the parent company will be able to continue in operation
and meet its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Corporate GovernanceBusiness & StrategyFinancial Statements 142
Independent Auditor’s Report
to the Members of C&C Group plc (continued)
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the Annual Report
other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement
in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of
the other information where we conclude that those items meet the
following conditions:
• Fair, balanced and understandable (set out on page 89) – the
statement given by the Directors that they consider 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 and the Company’s
performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
• Audit Committee reporting (set out on pages 86 to 91) – the
section describing the work of the Audit Committee does not
appropriately address matters communicated by us to the Audit
Committee or is materially inconsistent with our knowledge
obtained in the audit; or
• Directors’ statement of compliance with the UK Corporate
Governance Code (set out on page 78) – the parts of the
Directors’ statement required under the Listing Rules relating to
the Company’s compliance with the UK Corporate Governance
Code containing provisions specified for review by the auditor
in accordance with Listing Rule 6.8.6 do not properly disclose
a departure from a relevant provision of the UK Corporate
Governance Code.
Opinions on other matters prescribed by the
Companies Act 2014
Based solely on the work undertaken in the course of the audit, we
report that:
• in our opinion, the information given in the Directors’ Report,
other than those parts dealing with the non-financial statement
pursuant to the requirements of S.I. No. 360/2017 on which we
are not required to report in the current year, is consistent with the
financial statements; and
• in our opinion, the Directors’ Report, other than those parts
dealing with the non-financial statement pursuant to the
requirements of S.I. No. 360/2017 on which we are not required to
report in the current year, has been prepared in accordance with
the Companies Act 2014.
We have obtained all the information and explanations which we
consider necessary for the purposes of our audit.
In our opinion the accounting records of the Company were
sufficient to permit the financial statements to be readily and
properly audited and the Company statement of financial position is
in agreement with the accounting records.
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the directors’
report.
The Companies Act 2014 requires us to report to you if, in our
opinion, the disclosures of directors’ remuneration and transactions
required by sections 305 to 312 of the Act, which relate to
disclosures of directors’ remuneration and transactions, are not
complied with by the Company. We have nothing to report in this
regard.
We have nothing to report in respect of section 13 of the European
Union (Disclosure of Non-Financial and Diversity Information by
certain large undertakings and groups) Regulations 2017 (as
amended), which require us to report to you if, in our opinion, the
Company has not provided in the non-financial statement the
information required by Section 5(2) to (7) of those Regulations, in
respect of year ended 29 February 2020.
Respective responsibilities
Responsibilities of directors for the financial statements
As explained more fully in the Directors’ Responsibility Statement set
out on page 133, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as they determine is
necessary to enable the preparation of financial statements that are
C&C Group plc Annual Report 2021 143
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Group and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or the Company
or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (Ireland) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
The objectives of our audit, in respect to fraud, are; to identify and
assess the risks of material misstatement of the financial statements
due to fraud; to obtain sufficient appropriate audit evidence
regarding the assessed risks of material misstatement due to fraud,
through designing and implementing appropriate responses; and to
respond appropriately to fraud or suspected fraud identified during
the audit. However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance of
the entity and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group across the various
jurisdictions globally in which the Group operates. We determined
that the most significant are those that relate to the form and
content of external financial and corporate governance reporting
including company law, tax legislation, employment law and
regulatory compliance
• We understood how C&C Group plc is complying with those
frameworks by making enquiries of management, internal audit,
those responsible for legal and compliance procedures and the
Company Secretary. We corroborated our enquiries through our
review of the Group’s Compliance Policies, board minutes, papers
provided to the Audit Committee and correspondence received
from regulatory bodies
• We assessed the susceptibility of the Group’s financial statements
to material misstatement, including how fraud might occur, by
meeting with management, including within various parts of
the business, to understand where they considered there was
susceptibility to fraud. We also considered performance targets
and the potential for management to influence earnings or the
perceptions of analysts. Where this risk was considered to be
higher, we performed audit procedures to address each identified
fraud risk. These procedures included testing manual journals and
were designed to provide reasonable assurance that the financial
statements were free from fraud or error
• Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations.
Our procedures included a review of board minutes to identify
any non-compliance with laws and regulations, a review of the
reporting to the Audit Committee on compliance with regulations,
enquiries of internal and external legal counsel and management
A further description of our responsibilities for the audit of the
financial statements is located on the IAASA’s website at: http://
www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/
Description_of_auditors_responsibilities_for_audit.pdf. This
description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Audit Committee following an AGM held
on 6 July 2017 to audit the financial statements for the year ending
28 February 2018 and subsequent financial periods. The period of
total uninterrupted engagement including previous renewals and
reappointments of the firm is 4 years.
The non-audit services prohibited by IAASA’s Ethical Standard were
not provided to the Group and we remain independent of the Group
in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
The purpose of our audit work and to whom we owe our
responsibilities
Our report is made solely to the Company’s members, as a body,
in accordance with section 391 of the Companies Act 2014. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members, as a
body, for our audit work, for this report, or for the opinions we have
formed.
Pat O’Neill
for and on behalf of
Ernst & Young
Chartered Accountants and Statutory Audit Firm
Dublin
26 May 2021
Corporate GovernanceBusiness & StrategyFinancial Statements 144
Consolidated Income Statement
For the financial year ended 28 February 2021
Before
exceptional items
€m
Year ended 28 February 2021
Exceptional items
(note 5)
€m
Notes
Revenue
Excise duties
Net revenue
Operating costs
Group operating (loss)/profit
Profit on disposal
Finance income
Finance expense
Share of equity accounted investments’
(loss)/profit after tax
1
1
2
1
5
6
6
Before
exceptional items
€m
Year ended 29 February 2020
Exceptional items
(note 5)
€m
1,022.8
(285.9)
736.9
(796.5)
-
-
-
(25.2)
Total
€m
1,022.8
(285.9)
2,145.5
(426.2)
736.9
(821.7)
1,719.3
(1,598.5)
(59.6)
(25.2)
(84.8)
120.8
-
-
(19.5)
5.8
-
(7.9)
5.8
-
(27.4)
-
0.5
(20.3)
-
-
-
(91.0)
(91.0)
0.9
-
-
13
(6.1)
(8.8)
(14.9)
3.1
(2.4)
(Loss)/profit before tax
Income tax credit/(expense)
Group (loss)/profit for the
financial year
Basic (loss)/earnings per share (cent)
Diluted (loss)/earnings per share (cent)
7
9
9
All of the results are related to continuing operations.
(85.2)
14.4
(36.1)
2.4
(121.3)
16.8
104.1
(12.3)
(92.5)
9.8
(70.8)
(33.7)
(104.5)
91.8
(82.7)
(33.8)
(33.8)
Total
€m
2,145.5
(426.2)
1,719.3
(1,689.5)
29.8
0.9
0.5
(20.3)
0.7
11.6
(2.5)
9.1
2.9
2.9
C&C Group plc Annual Report 2021
Consolidated Statement of Comprehensive Income
For the financial year ended 28 February 2021
Other Comprehensive Income:
Items that may be reclassified to Income Statement in subsequent years:
Foreign currency translation differences arising on the net investment in foreign operations
Gain relating to cash flow hedges
Deferred tax relating to cash flow hedges
Items that will not be reclassified to Income Statement in subsequent years:
Revaluation of property, plant & equipment
Deferred tax on revaluation of property, plant and equipment
Actuarial gain/(loss) on retirement benefits
Deferred tax (charge)/credit on actuarial gain/(loss) on retirement benefits
Share of equity accounted investments’ Other Comprehensive Income
Net (loss)/profit recognised directly within Other Comprehensive Income
Group (loss)/profit for the financial year
145
Notes
2021
€m
2020
€m
6
24
7
11
22
23
22
13
(17.4)
0.3
-
0.9
(0.2)
13.4
(1.6)
(0.4)
(5.0)
(104.5)
1.4
1.7
(0.3)
1.1
(0.1)
(4.4)
0.7
3.7
3.8
9.1
Comprehensive income for the financial year
(109.5)
12.9
Corporate GovernanceBusiness & StrategyFinancial Statements
146
Consolidated Balance Sheet
As at 28 February 2021
ASSETS
Non-current assets
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments/financial assets
Retirement benefits
Deferred tax assets
Trade & other receivables
Current assets
Inventories
Trade & other receivables
Cash
Assets held for sale
TOTAL ASSETS
EQUITY
Capital and reserves
Equity share capital
Share premium
Treasury shares
Other reserves
Retained income
Total Equity
LIABILITIES
Non-current liabilities
Lease liabilities
Interest bearing loans & borrowings
Retirement benefits
Provisions
Deferred tax liabilities
Current liabilities
Lease liabilities
Derivative financial liabilities
Trade & other payables
Interest bearing loans & borrowings
Provisions
Current income tax liabilities
Liabilities directly associated with the assets held for sale
Total liabilities
TOTAL EQUITY & LIABILITIES
On behalf of the Board
S Gilliland
Chair
D Forde
DATE
Chief Executive Officer
26 May 2021
Notes
2021
€m
2020
€m
11
12
13
23
22
15
14
15
16
25
25
25
25
19
20
23
18
22
19
24
17
20
18
16
204.0
646.0
63.1
10.4
24.6
41.8
989.9
121.3
102.8
107.7
331.8
13.9
345.7
223.4
652.9
83.9
8.8
11.9
25.8
1,006.7
145.8
166.0
123.4
435.2
-
435.2
1,335.6
1,441.9
3.2
171.3
(36.5)
83.1
225.0
446.1
60.7
420.3
5.5
6.5
17.3
510.3
18.9
-
296.2
49.7
6.2
5.8
376.8
2.4
379.2
889.5
3.2
171.0
(36.6)
102.4
315.4
555.4
74.4
323.8
16.7
5.1
16.5
436.5
18.9
0.3
390.7
33.2
4.1
2.8
450.0
-
450.0
886.5
1,335.6
1,441.9
C&C Group plc Annual Report 2021
Consolidated Cash Flow Statement
For the financial year ended 28 February 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Group (loss)/profit for the year
Finance income
Finance expense
Income tax (credit)/expense
Loss/(profit) on share of equity accounted investments
Impairment of intangible asset
Impairment of equity accounted investments
Impairment of property, plant & equipment
Depreciation of property, plant & equipment
Amortisation of intangible assets
Profit on disposal
Net profit on disposal of property, plant & equipment
Charge for equity settled share-based payments
Pension contributions: adjustment from charge to payment
Decrease in inventories
Decrease/(increase) in trade & other receivables
(Decrease)/increase in trade & other payables
Increase in provisions
Interest received
Interest and similar costs paid
Income taxes refunded/(paid)
Net cash (outflow)/inflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment
Purchase of intangible assets
Net proceeds on disposal of property, plant & equipment
Proceeds from sale of equity accounted investment
Sale of business
Cash outflow re acquisition of equity accounted investments/financial assets
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options/equity interests
Drawdown of debt
Repayment of debt
Payment of lease liabilities
Payment of issue costs
Shares purchased to satisfy share option entitlements
Shares purchased under share buyback programme
Dividends paid
Net cash inflow/(outflow) from financing activities
Decrease in cash
Reconciliation of opening to closing cash
Cash at beginning of year
Translation adjustment
Net decrease in cash
Cash at end of financial year
A reconciliation of cash to net debt is presented in note 21 to the financial statements.
147
2020
€m
9.1
(0.5)
20.3
2.5
(0.7)
36.6
-
1.0
30.3
2.5
(0.9)
(0.2)
2.5
0.3
102.8
38.6
(4.8)
51.9
1.9
190.4
0.5
(17.9)
(8.0)
165.0
(15.3)
(4.5)
0.4
6.1
(1.0)
(11.2)
(25.5)
0.9
192.6
(280.7)
(18.6)
(0.5)
(0.5)
(23.0)
(29.7)
(159.5)
Notes
6
6
7
13
12
5,13
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Corporate GovernanceBusiness & StrategyFinancial Statements
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*
C&C Group plc Annual Report 2021
Company Balance Sheet
As at 28 February 2021
ASSETS
Non-current assets
Financial assets
Current assets
Trade & other receivables
Cash
TOTAL ASSETS
EQUITY
Equity share capital
Share premium
Other reserves
Retained income
Total equity
LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings
Current liabilities
Interest bearing loans & borrowings
Trade & other payables
Total liabilities
TOTAL EQUITY & LIABILITIES
149
Notes
2021
€m
2020
€m
13
15
25
25
25
20
20
17
985.4
985.4
118.6
0.7
119.3
984.6
984.6
263.6
-
263.6
1,104.7
1,248.2
3.2
872.3
3.1
44.7
923.3
139.7
139.7
4.7
37.0
41.7
3.2
872.0
5.6
50.0
930.8
3.2
3.2
10.7
303.5
314.2
181.4
317.4
1,104.7
1,248.2
As permitted by section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its separate Income
Statement in the Financial Statements and from filing it with the Registrar of Companies. The Company’s loss for the financial year is €8.8m
(FY2020: profit €4.0m). This includes dividends received from subsidiaries of €76.6m (FY2020: €10.0m).
On behalf of the Board
S Gilliland
Chair
D Forde
DATE
Chief Executive Officer
26 May 2021
Corporate GovernanceBusiness & StrategyFinancial Statements
150
Company Statement of Changes in Equity
For the financial year ended 28 February 2021
Equity share
capital
€m
Share premium
€m
Other
undenominated
reserve
€m
Share-based
payments
reserve
€m
Retained
income
€m
Total
€m
3.2
853.6
0.8
2.7
116.6
976.9
Company
At 28 February 2019
Profit for the financial year
Total
Dividend on ordinary shares (note 8)
Exercised share options (note 25)
Shares purchased under share buyback programme
and subsequently cancelled (note 25)
Reclassification of share-based payments reserve
Equity settled share-based payments (note 4)
Total
-
-
0.1
-
(0.1)
-
-
-
-
-
18.0
0.4
-
-
-
18.4
At 29 February 2020
3.2
872.0
Loss for the financial year
Total
Dividend on ordinary shares (note 8)
Exercised share options (note 25)
Reclassification of share-based payments reserve
Equity settled share-based payments (note 4)
Total
At 28 February 2021
-
-
-
-
-
-
-
3.2
-
-
-
0.3
-
-
0.3
872.3
-
-
-
-
0.1
-
-
0.1
0.9
-
-
-
-
-
-
-
0.9
-
-
-
-
-
4.0
4.0
(48.1)
-
4.0
4.0
(30.0)
0.4
(23.0)
(23.0)
(0.5)
2.5
2.0
0.5
-
(70.6)
-
2.5
(50.1)
4.7
50.0
930.8
-
-
-
-
(3.3)
0.8
(2.5)
2.2
(8.8)
(8.8)
0.2
-
3.3
-
3.5
44.7
(8.8)
(8.8)
0.2
0.3
-
0.8
1.3
923.3
C&C Group plc Annual Report 2021 Statement of Accounting Policies
For the year ended 28 February 2021
151
Significant accounting policies
C&C Group plc (the ‘Company’) is a company incorporated and
tax resident in Ireland. The Group’s financial statements for the
year ended 28 February 2021 consolidate the individual financial
statements of the Company and all subsidiary undertakings
(together referred to as “the Group”) together with the Group’s share
of the results and net assets of equity accounted investments for the
year ended 28 February 2021.
The Company and Group financial statements, together the
“financial statements”, were authorised for issue by the Directors on
26 May 2021.
The accounting policies applied in the preparation of the financial
statements for the year ended 28 February 2021 are set out below.
Except if mentioned otherwise these have been applied consistently
for all periods presented in these financial statements and by all
Group entities.
Statement of compliance
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS), as adopted
by the EU and as applied in accordance with Companies Acts
2014. The individual financial statements of the Company have
been prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101). In accordance with
Section 304 of the Companies Act 2014, the Company is availing of
the exemption from presenting its individual Income Statement to
the Annual General Meeting and from filing it with the Registrar of
Companies.
In these financial statements, the Company has applied the
exemptions available under FRS 101 in respect of the following
disclosures:
• A cash flow statement and related notes;
• Comparative period reconciliations for share capital;
• Disclosures in respect of transactions with wholly owned
subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs; and
• Disclosures in respect of the compensation of Key Management
Personnel.
As the financial statements of the Group include the equivalent
disclosures, the Company has also taken exemptions under FRS
101 available in respect of the following disclosures:
• IFRS 2 Share-Based Payments in respect of Group settled share-
based payments.
Changes in accounting policies and disclosures
IFRS as adopted by the EU applied by the Company and Group in
the preparation of these financial statements are those that were
effective for accounting periods ending on or before 28 February
2021. The IASB have issued the following standards, policies,
interpretations and amendments which were effective for the Group
for the first time in the year ended 28 February 2021:
• Amendments to IFRS 3 Definition of a Business
The amendment to IFRS 3 Business Combinations clarifies that
to be considered a business, an integrated set of activities and
assets must include, at a minimum, an input and a substantive
process that, together, significantly contribute to the ability to
create output. Furthermore, it clarifies that a business can exist
without including all of the inputs and processes needed to create
outputs. These amendments had no impact on the consolidated
financial statements of the Group but may impact future periods
should the Group enter into any business combinations.
• Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate
Benchmark Reform
The amendments to IFRS 9 and IAS 39 Financial Instruments:
Recognition and Measurement provide a number of reliefs, which
apply to all hedging relationships that are directly affected by
interest rate benchmark reform. A hedging relationship is affected
if the reform gives rise to uncertainty about the timing and/or
amount of benchmark-based cash flows of the hedged item or the
hedging instrument. These amendments have no impact on the
consolidated financial statements of the Group as it does not have
any interest rate hedge relationships.
• Amendments to IAS 1 and IAS 8 Definition of Material
The amendments provide a new definition of material that states,
“information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis
of those financial statements, which provide financial information
about a specific reporting entity.” The amendments clarify that
materiality will depend on the nature or magnitude of information,
either individually or in combination with other information, in the
context of the financial statements. A misstatement of information
is material if it could reasonably be expected to influence
decisions made by the primary users. These amendments had no
impact on the consolidated financial statements of the Group, nor
is there expected to be any future impact to the Group.
• Conceptual Framework for Financial Reporting issued on 29
March 2018
The Conceptual Framework is not a standard, and none of the
concepts contained therein override the concepts or requirements
in any standard. The purpose of the Conceptual Framework is
to assist the IASB in developing standards, to help preparers
develop consistent accounting policies where there is no
applicable standard in place and to assist all parties to understand
and interpret the standards. This will affect those entities which
developed their accounting policies based on the Conceptual
Corporate GovernanceBusiness & StrategyFinancial Statements
152
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
Framework. The revised Conceptual Framework includes some
new concepts, updated definitions and recognition criteria for
assets and liabilities and clarifies some important concepts.
These amendments had no impact on the consolidated financial
statements of the Group.
• Amendments to IFRS 16 COVID-19 Related Rent
Concessions
On 28 May 2020, the IASB issued COVID-19 Related Rent
Concessions - amendment to IFRS 16 Leases. The amendments
provide relief to lessees from applying IFRS 16 guidance on
lease modification accounting for rent concessions arising as a
direct consequence of the COVID-19 pandemic. As a practical
expedient, a lessee may elect not to assess whether a COVID-19
related rent concession from a lessor is a lease modification. A
lessee that makes this election accounts for any change in lease
payments resulting from the COVID-19 related rent concession in
the same way it would account for the change under IFRS 16 if
the change were not a lease modification.
The amendment applies to annual reporting periods beginning on
or after 1 June 2020, however earlier application is permitted. This
amendment had no material impact on the consolidated financial
statements of the Group.
IFRS and IFRIC interpretations being adopted in subsequent
years
A number of new standards, amendments to standards and
interpretations are not yet effective for the year ended 28 February
2021 and have not been applied in preparing these consolidated
financial statements.
These following new standards, amendments and interpretations are
either not expected to have a material impact on the consolidated
financial statements once applied or are still under assessment by
the Group.
Accounting standard/interpretation (Effective date)
Interest Rate Benchmark Reform – Phase 2 – Amendments to
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
• The amendments enable entities to reflect the effects of
transitioning from benchmark interest rates, such as interbank
offer rates (IBORs) to alternative benchmark interest rates without
giving rise to accounting impacts that would not provide useful
information to users of financial statements. The amendments
apply to all entities and are not optional. The amendments are
effective for annual periods beginning on or after 1 January 2021
with early application permitted.
The amendments are currently under assessment but are not
expected to have a material impact on the Group.
Reference to the Conceptual Framework – Amendments to IFRS
3 (1 January 2022)
• In May 2020, the IASB issued Amendments to IFRS 3 Business
Combinations - Reference to the Conceptual Framework.
The amendments are intended to replace a reference to the
Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual
Framework for Financial Reporting issued in March 2018 without
significantly changing its requirements. The IASB also added
an exception to the recognition principle of IFRS 3 to avoid the
issue of potential ‘day 2’ gains or losses arising for liabilities and
contingent liabilities that would be within the scope of IAS 37
or IFRIC 21 Levies, if incurred separately. At the same time, the
IASB decided to clarify existing guidance in IFRS 3 for contingent
assets that would not be affected by replacing the reference to
the Framework for the Preparation and Presentation of Financial
Statements.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022 and apply prospectively.
Property, Plant and Equipment: Proceeds before Intended Use –
Amendments to IAS 16 (1 January 2022)
• In May 2020, the IASB issued Property, Plant and Equipment —
Proceeds before Intended Use, which prohibits entities deducting
from the cost of an item of property, plant and equipment, any
proceeds from selling items produced while bringing that asset
to the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an
entity recognises the proceeds from selling such items, and the
costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning
on or after 1 January 2022 and must be applied retrospectively to
items of property, plant and equipment made available for use on or
after the beginning of the earliest period presented when the entity
first applies the amendment. The amendments are not expected to
have a material impact on the Group.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments
to IAS 37 (1 January 2022)
• In May 2020, the IASB issued amendments to IAS 37 to specify
which costs an entity needs to include when assessing whether
a contract is onerous or loss-making. The amendments apply a
“directly related cost approach”. The costs that relate directly to
a contract to provide goods or services include both incremental
costs and an allocation of costs directly related to contract
activities. General and administrative costs do not relate directly to
a contract and are excluded unless they are explicitly chargeable
to the counterparty under the contract.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2022. The Group will apply these
amendments to contracts for which it has not yet fulfilled all its
C&C Group plc Annual Report 2021
153
obligations at the beginning of the annual reporting period in which it
first applies the amendments.
IFRS 1 First-time Adoption of International Financial Reporting
Standards – Subsidiary as a first-time adopter (1 January 2022)
• As part of its 2018-2020 annual improvements to IFRS standards
process, the IASB issued an amendment to IFRS 1 First-time
Adoption of International Financial Reporting Standards. The
amendment permits a subsidiary that elects to apply paragraph
D16(a) of IFRS 1 to measure cumulative translation differences
using the amounts reported by the parent, based on the parent’s
date of transition to IFRS. This amendment is also applied to an
associate or joint venture that elects to apply paragraph D16(a) of
IFRS 1.
The amendment is effective for annual reporting periods beginning
on or after 1 January 2022 with earlier adoption permitted.
IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test for
derecognition of financial liabilities (1 January 2022)
• As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IFRS 9. The amendment
clarifies the fees that an entity includes when assessing whether
the terms of a new or modified financial liability are substantially
different from the terms of the original financial liability. These fees
include only those paid or received between the borrower and the
lender, including fees paid or received by either the borrower or
lender on the other’s behalf. An entity applies the amendment to
financial liabilities that are modified or exchanged on or after the
beginning of the annual reporting period in which the entity first
applies the amendment.
The amendment is effective for annual reporting periods beginning
on or after 1 January 2022 with earlier adoption permitted. The
Group will apply the amendments to financial liabilities that are
modified or exchanged on or after the beginning of the annual
reporting period in which the entity first applies the amendment.
The amendments are not expected to have a material impact on the
Group.
IAS 41 Agriculture – Taxation in fair value measurements
• As part of its 2018-2020 annual improvements to IFRS standards
process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41
that entities exclude cash flows for taxation when measuring the
fair value of assets within the scope of IAS 41.
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement (“PS”) 2 (1 January 2023)
• On 12 February 2021, the IASB issued amendments to IAS 1
and the PS to provide guidance on the application of materiality
judgements to accounting policy disclosures. The amendments to
IAS 1 replace the requirement to disclose ‘significant’ accounting
policies with a requirement to disclose ‘material’ accounting
policies. Guidance and illustrative examples are added in the PS
to assist in the application of the materiality concept when making
judgements about accounting policy disclosures.
The amendments to IAS 1 will be effective for annual periods
starting on or after 1 January 2023. Group financial reporting in
subsequent years will be prepared in accordance with the new
definition, however this is not expected to result in significant
changes.
Amendments to IAS 8 Accounting Policies, Changes to
Accounting Estimates and Errors: Definition of Accounting
Estimates
• On 12 February 2021, the IASB issued amendments to IAS 8 to
introduce a new definition of accounting estimates. Accounting
estimates are defined as “monetary amounts in financial
statements that are subject to measurement uncertainty”. The
amendments clarify what changes in accounting estimates are
and how these differ from changes in accounting policies and
corrections of errors.
The amendments become effective for annual reporting periods
beginning on or after 1 January 2023, with earlier application
permitted. Group financial reporting in subsequent years will be
prepared in accordance with the new definition, however this is not
expected to result in significant changes.
Amendments to IAS 1: Classification of Liabilities as Current or
Non-current (1 January 2023)
• In January 2020, the IASB issued amendments to paragraphs 69
to 76 of IAS 1 to specify the requirements for classifying liabilities
as current or non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will
exercise its deferral right
- That only if an embedded derivative in a convertible liability is itself
an equity instrument would the terms of a liability not impact its
classification.
An entity applies the amendment prospectively to fair value
measurements on or after the beginning of the first annual reporting
period beginning on or after 1 January 2022 with earlier adoption
permitted. The amendments are not expected to have a material
impact on the Group.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and must be applied
retrospectively. The amendments are currently under assessment
but are not expected to have a material impact on the Group.
Corporate GovernanceBusiness & StrategyFinancial Statements 154
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
IFRS 17 Insurance Contracts (1 January 2023)
• In May 2017, the IASB issued IFRS 17. It is expected to be effective
for reporting periods beginning on or after 1 January 2023, with
presentation of comparative figures required.
place over that period and then build more gradually from that
point.
• The reasonable worse case projection contains linked working
capital assumptions reflecting a more challenged supplier credit
environment.
The Group will be unaffected by this standard given it does not issue
insurance contracts.
Significant accounting policies
The significant accounting policies applied by the Group in the
preparation of these financial statements are as follows:
Basis of preparation
The Group and the individual financial statements of the Company
are prepared on the going concern and historical cost basis, except
for, retirement benefits, the revaluation of certain items of property,
plant & equipment, share-based payments at date of grant and
derivative financial instruments. The accounting policies have been
applied consistently by Group entities and for all periods presented.
The financial statements are presented in Euro millions to one
decimal place.
(i) Going concern basis
The Directors have adopted the going concern basis in preparing the
financial statements after assessing the Group’s principal risks
including the risks arising from COVID-19. In assessing the impact
of the COVID-19 pandemic, the Directors considered a base case
scenario, along with a reasonable worse case scenario, both of
which exclude any upside from the potential rights issue. The
Directors assessed the Group’s cash flow forecasts for the period
ending 31 August 2022 (the going concern “assessment period”).
They also assessed the assumptions relating to the profitability
and cash generation of the business. The key assumption in the
assessment is the phased reopening of the on-trade business in the
Company’s main markets of England, Scotland and Ireland based on
available Government advice and roadmaps.
The Group’s scenarios are outlined below:
• The base case projection assumes on-trade recovery in England
and Scotland continuing from April and May 2021 respectively,
Ireland’s on-trade recovery commencing from June 2021.
• The pace of recovery is assumed to be similar across each territory
once on-trade restrictions are eased, with gradual improvement to
volumes.
• In aggregate on-trade volumes over the assessment period are
projected to be approximately 79% of FY2020 in the base case
scenario over the assessment period.
• The reasonable worst case projection assumes the same timeline
for re-opening of on-trade as the base case; however volumes
are projected to hold flat at modest levels for the remainder of the
summer as many on-trade restrictions are assumed to remain in
The going concern base case and reasonable worse case scenarios
also consider the achievement of cost saving measures, the Group’s
financing facilities, the use of temporary government supports
and projected dividend payments. The Group benchmarked the
impacts of both scenarios against the monthly liquidity and gross
debt covenant waiver tests through the going concern assessment
period. The Group has obtained waivers on its original covenant
requirements up to, but not including, the August 2022 test date
whether or not the rights issue is successful. The headroom on
the covenants within the financing facilities have been reviewed in
detail by management and assessed by the Directors. Refinancing
activities, including the extension of facilities, and the covenant
waivers obtained on the Group’s debt, have been reviewed by the
Directors, in addition to the projected revenue and profitability and
the related impact on projected cash flows.
Overall conclusion
Having considered these factors, the Directors have concluded
that monthly liquidity and gross debt covenant waiver tests will
be satisfied under both the base case and reasonable worse cast
scenarios (without any benefit of the proposed rights issue) and
therefore consider it appropriate to adopt the going concern basis
of accounting with no material uncertainties as to the Group’s ability
to continue to do so. In making this assessment, the Directors
considered the continued impact of COVID-19 and in particular
the assumptions in respect of forecasted level of the on-trade
business in each of the Group’s main trading locations. While it was
recognised that COVID-19 continues to have a negative impact on
the on-trade business, given the actions available to management,
the Directors do not expect any reasonably anticipated deterioration
in the forecasted revenues to impact the Group’s ability to continue
as a going concern.
Basis of consolidation
The Group’s financial statements consolidate the financial
statements of the Company and all subsidiary undertakings
together with the Group’s share of the results of equity accounted
investments for the year ended 28 February 2021.
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group 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 on which control commences until the date on which
control ceases.
C&C Group plc Annual Report 2021 155
On 30 April 2004, the Group, previously headed by C&C Group
International Holdings Limited, underwent a reorganisation by virtue
of which C&C Group International Holdings Limited’s shareholders
in their entirety exchanged their shares for shares in C&C Group plc,
a newly formed company, which then became the ultimate parent
company of the Group. Notwithstanding the change in the legal
parent of the Group, this transaction has been accounted for as a
reverse acquisition and the consolidated financial statements are
prepared on the basis of the new legal parent having been acquired
by the existing Group except that the capital structure shown is that
of the legal parent.
Non-controlling interests represents the portion of the equity of a
subsidiary not attributable either directly or indirectly to the Parent
Company and are presented separately in the Income Statement
and within equity in the Balance Sheet distinguished from Parent
Company shareholders’ equity, when relevant.
Acquisitions of non-controlling interests are accounted for as
transactions with equity holders in their capacity as equity holders
and therefore no goodwill is recognised as a result of such
transactions. On an acquisition by acquisition basis, the Group
recognises any non-controlling interest in the acquiree either at fair
value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets. If the Group loses control over a subsidiary,
it derecognises the related assets (including Goodwill), liabilities,
non-controlling interest and other components of equity, while any
resultant gain or loss is recognised in the Income Statement. Any
investment retained is recognised at fair value.
(ii) Investments in associates and jointly controlled entities
(equity accounted investments)
The Group’s interests in equity accounted investments comprise
interests in associates and joint ventures. Associates are those
entities in which the Group has significant influence, but not control
or joint control, over the financial and operating policies. A joint
venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the
joint venture. Joint control is the contractually agreed sharing of
control of the arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the parties
sharing control. The Group’s investments in its joint ventures are
accounted for using the equity method from the date joint control is
deemed to arise until the date on which joint control ceases to exist
or when the interest becomes classified as an asset held for sale.
The Income Statement reflects the Group’s share of profit after tax
of the related joint ventures. Investments in joint ventures are carried
in the Balance Sheet at cost, adjusted in respect of post-acquisition
changes in the Group’s share of net assets, less any impairment in
value. If necessary, impairment losses on the carrying amount of an
investment are reported within the Group’s share of equity accounted
investments results in the Income Statement.
Interests in associates are accounted for using the equity method.
They are initially recognised at cost, which includes transaction
costs. Subsequent to initial recognition, the consolidated financial
statements include the Group’s share of the profit or loss and Other
Comprehensive Income of associates, until the date on which
significant influence ceases. Dividends receivable from associates
reduce the carrying amount of the investment.
(iii) Transactions eliminated on consolidation
All intercompany balances and transactions, including unrealised
gains arising from inter-group transactions, have been eliminated
in full. Unrealised losses are eliminated in the same manner as
unrealised gains except to the extent that they provide evidence of
impairment.
Unrealised gains arising from transactions with equity accounted
investments are eliminated against the investment to the extent of
the Group’s interest in the investment.
(iv) Company Financial Statements
Investments in subsidiaries are carried at cost less provision for
impairment. Dividend income is recognised when the right to receive
payment is established.
Property, plant and equipment (note 11)
Property (comprising freehold land & buildings) is recognised
at estimated fair value with the changes in the value of the
property reflected in Other Comprehensive Income in the case
of a revaluation gain, to the extent it does not reverse previously
recognised losses, or as an impairment loss in the Income
Statement to the extent it does not reverse previously recognised
revaluation gains. The fair value is based on estimated market
value at the valuation date, being the estimated amount for which a
property could be exchanged in an arm’s length transaction, to the
extent that an active market exists. Such valuations are determined
based on benchmarking against comparable transactions for
similar properties in similar locations as those of the Group or on
the use of valuation techniques including the use of market yields
on comparable properties. If no active market exists or there are no
other observable comparative transactions, the fair value may be
determined using a valuation technique known as a Depreciated
Replacement Cost approach.
Plant & machinery is carried at its revalued amount. In view of the
specialised nature of the Group’s plant & machinery and the lack
of comparable market-based evidence of a similar plant sold, upon
which to base a market approach of fair value, the Group uses a
Depreciated Replacement Cost approach to determine a fair value
for such assets.
Corporate GovernanceBusiness & StrategyFinancial Statements
156
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
Depreciated Replacement Cost is assessed, firstly, by the
identification of the gross replacement cost for each class of plant
& machinery. A depreciation factor derived from both the physical
and functional obsolescence of each class of asset, taking into
account estimated residual values at the end of the life of each class
of asset, is then applied to the gross replacement cost to determine
the net replacement cost. An economic obsolescence factor, which
is derived based on current and anticipated capacity or utilisation
of each class of plant & machinery as a function of total available
production capacity, is applied to determine the Depreciated
Replacement Cost.
Motor vehicles & other equipment are stated at cost less
accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the
acquisition of the asset. When parts of an item of property, plant
& equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant & equipment.
Subsequent costs are included in an 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.
Property, plant & equipment, other than freehold land and assets
under construction, which are not depreciated, were depreciated
using the following rates which are calculated to write-off the value
of the asset, less the estimated salvage value of 5% for other plant &
machinery and 15% for storage tanks, over its expected useful life:
Land & Buildings
Land
n/a
Buildings – ROI, US, Portugal
2 - 6% straight-line
Buildings – UK
2 - 3% straight-line
Plant & Machinery
Storage tanks
Other plant & machinery
2 - 7% straight-line
6 - 32% reducing
balance
Motor vehicles & other equipment
Motor vehicles
Other equipment incl returnable
bottles, cases and kegs
15% straight-line
5 - 25% straight-line
Judgement is involved in the depreciation policy applied to certain
fixed assets where there is considered to be a salvage value. The
Group considers that such assets have a salvage value equal to
5% of cost for other plant & machinery and 15% for storage tanks,
based on the expected scrap value of the associated assets.
The salvage value and useful lives of property, plant & equipment
are reviewed and adjusted if appropriate at each reporting date
to take account of any changes that could affect prospective
depreciation charges and asset carrying values. When determining
useful economic lives, the principal factors the Group takes into
account are the intensity at which the assets are expected to be
used, expected requirements for the equipment and technological
developments.
On disposal of property, plant & equipment, the cost or valuation
and related accumulated depreciation and impairments are removed
from the Balance Sheet and the net amount, less any proceeds, is
taken to the Income Statement and any amounts included within the
revaluation reserve transferred to the retained income reserve.
The carrying amounts of the Group’s property, plant & equipment
are reviewed at each balance sheet date to determine whether there
is any indication of impairment. An impairment loss is recognised
when the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount (being the greater of fair value less
costs to sell and value in use). Impairment losses are debited directly
to equity under the heading of revaluation reserve to the extent of
any credit balance existing in the revaluation reserve account in
respect of that asset with the remaining balance recognised in the
Income Statement.
Certain property, plant & equipment is remeasured to fair value at
regular intervals. In these cases, the revaluation surplus is credited
directly to Other Comprehensive Income and accumulated in
equity under the heading of revaluation reserve, unless it reverses
a revaluation decrease on the same asset previously recognised as
an expense, where it is first credited to the Income Statement to the
extent of the previous write down.
Leases (note 11 and note 19)
The Group enters into leases for a range of assets, principally
relating to freehold land & buildings, plant & machinery and motor
vehicles & other equipment. These leases have varying terms,
renewal rights and escalation clauses.
A contract contains a lease if it is enforceable and conveys the
right to control the use of a specified asset for a period of time in
exchange for consideration, which is assessed at inception.
Group as a lessee
(i) Right-of-use assets
The Group recognises a right-of-use asset at the commencement
date for contracts containing a lease. The commencement date is
the date at which the asset is made available for use by the Group.
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets
C&C Group plc Annual Report 2021
157
includes the lease liability adjusted for any payments made at or
before the commencement date, initial direct costs incurred, lease
incentives received and an estimate of the cost to dismantle or
restore the underlying asset or the site on which it is located at the
end of the lease term. The right-of-use asset is depreciated over
the lease term or, where a purchase option is reasonably certain to
be exercised, over the useful economic life of the asset in line with
depreciation rates for owned property, plant & equipment. The right-
of-use asset is tested periodically for impairment if any impairment
indicator is considered to exist.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The commencement date is the
date at which the asset is made available for use by the Group.
Lease payments include fixed payments less any lease incentives
receivable, variable payments that are dependent on a rate or
index known at the commencement date, payments for an optional
renewal period and purchase and termination option payments,
if the Group is reasonably certain to exercise those options.
Management applies judgement in determining whether it is
reasonably certain that a renewal, termination or purchase option
will be exercised.
The lease liability is initially measured at the present value of the
future lease payments, discounted using the incremental borrowing
rate or the interest rate implicit in the lease, if this is readily
determinable, over the remaining lease term. Incremental borrowing
rates are calculated using a portfolio approach, based on the risk
profile of the entity holding the lease and the term and currency of
the lease.
low. Lease payments on short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over
the lease term.
Business combinations (note 10)
Upon making any investment, the Group is required to determine
whether any control exists and hence whether the business
acquired is accounted for as a subsidiary. If control is not deemed to
exist then the investment is accounted for as either a joint venture,
associate or financial asset depending on the relevant agreement.
This determination is made based on an assessment of the Group’s
power to affect the activities of the investment and the extent to
which it has exposure to variable returns and the ability to affect
such returns. This assessment is based principally on shareholder
agreements and representation of the Group on the investment’s
management committee as well as any relevant other side
agreements.
Where an investment is made to the extent that the Group is
deemed to have control over the investee, the investment is
accounted for as a business combination using the acquisition
method. In applying the acquisition method, the Group determines
the cost of acquisition, being the fair value of consideration
transferred, and also determines the fair value of identifiable assets
and liabilities acquired.
Where the consideration to be transferred is contingent on future
events the consideration is initially recorded at fair value with any
changes recognised in the Income Statement. The only exception
to this is where the consideration transferred meets the definition
of an equity instrument, in which case the consideration is not
remeasured, and the settlement is accounted for within equity.
After initial recognition, the lease liability is measured at amortised
cost using the effective interest method. It is remeasured when there
is a change in future lease payments or when the Group changes its
assessment of whether it is reasonably certain to exercise an option
within the contract. A corresponding adjustment is made to the
carrying amount of the right-of-use asset.
The Group chooses whether or not to include certain non-lease
components, such as maintenance costs, in the measurement of
the right-of-use asset and lease liability on an underlying asset class
as afforded by the practical expedients in the standard. Where the
non-lease components are not included, the costs are separated
from lease payments and are expensed as incurred.
(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases (i.e. those leases that have a lease term of 12
months or less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value assets
recognition exemption to leases where the underlying asset value is
Goodwill is initially measured at cost, being the excess of the
aggregate of the cost of acquisition, non-controlling interests and
any previous interest held over the fair value of the net identifiable
assets acquired and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate consideration
transferred, the Group reassesses whether it has correctly identified
all of the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still results in
an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the Income
Statement immediately.
Goodwill (note 12)
As at the date of acquisition any goodwill acquired is allocated
to each cash-generating unit (CGU) (which may comprise more
than one cash-generating unit) expected to benefit from the
combination’s synergies. Impairment is determined by assessing the
recoverable amount of the CGU to which the goodwill relates. These
Corporate GovernanceBusiness & StrategyFinancial Statements 158
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
CGU’s represent the lowest level within the Group at which goodwill
is monitored for internal management purposes.
Where goodwill forms part of a CGU and part of the operation within
that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured on the basis of the
relative values of the operation disposed of and the proportion of the
business segment retained.
The useful lives of the Group’s intangible assets are as follows:
Trade relationship re Tennent’s acquisition
Trade relationship re Wallaces acquisition
Trade relationship re Gleeson acquisition
Trade relationship re Matthew Clark and
Bibendum acquisition
20 years
10 years
15 years
15 years
Software and licence costs
5 - 8 years
Goodwill relating to associates and joint ventures is included in the
carrying amount of the investment and is neither amortised nor
individually tested for impairment. Where indicators of impairment
of an investment arise in accordance with the requirements of IAS
36, the carrying amount is tested for impairment by comparing its
recoverable amount with its carrying amount.
Intangible assets (other than goodwill) (note 12)
Impairment of non-financial assets
Further disclosures relating to impairment of non-financial assets are
also provided in the following notes:
• Goodwill and intangible assets with indefinite lives: Note 12
• Intangible assets: Note 12
• Property, plant and equipment: Note 11
• Investments in associates and joint ventures: Note 13
An intangible asset, which is a non-monetary asset without a
physical substance, is capitalised separately from goodwill as part
of a business combination at cost (fair value at date of acquisition)
to the extent that it is probable that the expected future economic
benefits attributable to the asset will flow to the Group and that its
fair value can be reliably measured. Acquired brands and other
intangible assets are deemed to be identifiable and recognised
when they are controlled through contractual or other legal rights, or
are separable from the rest of the business, regardless of whether
those rights are transferable or separable from the Group or from
other rights and obligations.
The Group assesses, at each reporting date, whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Group
estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or CGU’s fair value less costs of
disposal and its value in use. The recoverable amount is determined
for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or
groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
Subsequent to initial recognition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated
impairment losses. The carrying values of intangible assets
considered to have an indefinite useful economic life are
reviewed for indicators of impairment regularly and are subject to
impairment testing on an annual basis unless events or changes
in circumstances indicate that the carrying values may not be
recoverable and impairment testing is required earlier.
Software costs incurred with respect to new systems and costs
incurred in acquiring software and licences that will contribute to
future period financial benefits through revenue generation and/or
cost reduction are capitalised. Costs capitalised include external
direct costs of materials and service and direct payroll and payroll
related costs of employees’ time spent on the development side of
the project.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other available
fair value indicators.
Impairment losses of continuing operations are recognised in
the Income Statement in expense categories consistent with the
function of the impaired asset, except for properties previously
revalued with the revaluation taken to Other Comprehensive
Income. For such properties, the impairment is recognised in
Other Comprehensive Income up to the amount of any previous
revaluation.
The amortisation charge on intangible assets considered to have
finite lives is calculated to write-off the book value of the asset over
its useful life on a straight-line basis on the assumption of zero
residual value.
For assets excluding goodwill, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have
C&C Group plc Annual Report 2021
159
decreased. If such indication exists, the Group estimates the asset’s
or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised
in the Income Statement unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation
increase.
Goodwill is subject to impairment testing on an annual basis and at
any time during the year if an indicator of impairment is considered
to exist. In the year in which a business combination is effected
and where some or all of the goodwill allocated to a particular
cash-generating unit arose in respect of that combination, the
cash-generating unit is tested for impairment prior to the end of
the relevant annual period. Where the carrying value exceeds the
estimated recoverable amount (being the greater of the fair value
less costs of disposal and value-in-use), an impairment loss is
recognised by writing down goodwill to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset. The recoverable amount of goodwill
is determined by reference to the cash-generating unit to which the
goodwill has been allocated. Impairment losses arising in respect of
goodwill are not reversed once recognised.
Intangible assets with indefinite useful economic lives are
reviewed for indicators of impairment regularly and are subject to
impairment testing on an annual basis unless events or changes
in circumstances indicate that the carrying values may not be
recoverable and impairment testing is required earlier.
Retirement benefit obligations (note 23)
The Group operates a number of defined contribution and defined
benefit pension schemes.
on market expectations at the reporting date. The discount rates
employed in determining the present value of the schemes’ liabilities
are determined by reference to market yields, at the reporting date,
on high-quality corporate bonds of a currency and term consistent
with the currency and term of the associated post-employment
benefit obligations. The fair value of scheme assets is based on
market price information, measured at bid value for publicly quoted
securities.
The resultant defined benefit pension net surplus or deficit is shown
within either non-current assets or non-current liabilities on the face
of the Balance Sheet and comprises the total for each plan of the
present value of the defined benefit obligation less the fair value of
plan assets out of which the obligations are to be settled directly.
The assumptions (disclosed in note 23) underlying these valuations
are updated at each reporting period date based on current
economic conditions and expectations (discount rates, salary
inflation and mortality rates) and reflect any changes to the terms
and conditions of the post retirement pension plans. The deferred
tax liabilities and assets arising on pension scheme surpluses
and deficits are disclosed separately within deferred tax assets or
liabilities, as appropriate.
When the benefits of a defined benefit scheme are improved,
the portion of the increased benefit relating to the past service of
employees is recognised as an expense immediately in the Income
Statement.
The expected increase in the present value of scheme liabilities
arising from employee service in the current period is recognised
in arriving at operating profit or loss together with the net
interest expense/(income) on the net defined benefit liability/
(asset). Differences between the actual return on plan assets and
the interest income, experience gains and losses on scheme
liabilities, together with the effect of changes in the current or
prior assumptions underlying the liabilities are recognised in Other
Comprehensive Income. The amounts recognised in the Income
Statement and Statement of Other Comprehensive Income and the
valuation of the defined benefit pension net surplus or deficit are
sensitive to the assumptions used.
Obligations to the defined contribution pension schemes are
recognised as an expense in the Income Statement as the related
employee service is received. Under these schemes, the Group has
no obligation, either legal or constructive, to pay further contributions
in the event that the fund does not hold sufficient assets to meet its
benefit commitments.
The liabilities and costs associated with the Group’s defined benefit
pension schemes, all of which are funded and administered under
trusts which are separate from the Group, are assessed on the
basis of the projected unit credit method by professionally qualified
actuaries and are arrived at using actuarial assumptions based
Company
The Company has no direct employees and is not the sponsoring
employer for any of the Group’s defined benefit pension schemes.
Income tax (note 7 and note 22)
Current income tax
Current tax expense represents the expected tax amount to be
paid in respect of taxable income for the current year and is based
on reported profit and the expected statutory tax rates, reliefs,
and allowances applicable in the jurisdictions in which the Group
operates. Current tax for the current and prior years, to the extent
that it is unpaid, is recognised as a liability in the Balance Sheet.
Corporate GovernanceBusiness & StrategyFinancial Statements 160
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
Deferred tax
Deferred tax is provided on the basis of the Balance Sheet
liability method on all temporary differences at the reporting date.
Temporary differences are defined as the difference between the
tax bases of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets and liabilities are not
subject to discounting and are measured at the tax rates that are
expected to apply in the period in which the asset is recovered or
the liability is settled based on tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date.
Deferred tax assets and liabilities are recognised for all temporary
differences except where they arise from:
• The initial recognition of goodwill or an asset or a liability in a
transaction that is not a business combination and affects neither
the accounting profit or loss nor the taxable profit or loss at the
time of the transaction, or,
• Taxable temporary differences associated with investments in
subsidiaries where the timing of the reversal of the temporary
difference is subject to the Group’s control and it is probable that
a reversal will not be recognised in the foreseeable future.
Deferred tax assets in respect of deductible temporary differences
are recognised only to the extent that it is probable that taxable
profits or taxable temporary differences will be available against
which to offset these items. The recognition or non-recognition of
deferred tax assets as appropriate also requires judgement as it
involves an assessment of the future recoverability of those assets.
The recognition of deferred tax assets is based on management’s
judgement and estimate of the most probable amount of future
taxable profits and taking into consideration applicable tax
legislation in the relevant jurisdiction. The carrying amounts of
deferred tax assets are subject to review at each reporting date and
are reduced to the extent that future taxable profits are considered
to be insufficient to allow all or part of the deferred tax asset to be
utilised.
The Group offsets deferred tax assets and deferred tax liabilities only
if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis,
or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Deferred tax and current tax are recognised as a component of the
tax expense in the Income Statement except to the extent that they
relate to items recognised directly in Other Comprehensive Income
or equity (for example, certain derivative financial instruments
and actuarial gains and losses on defined benefit pension
schemes), in which case the related tax is also recognised in Other
Comprehensive Income or equity.
Company financial assets
The change in legal parent of the Group on 30 April 2004, as
disclosed in detail in that year’s annual report, was accounted for as
a reverse acquisition. This transaction gave rise to a financial asset in
the Company’s accounts, which relates to the fair value at that date
of its investment in subsidiaries. Financial assets are reviewed for
impairment if there are any indications that the carrying value may
not be recoverable.
Share options granted to employees of subsidiary companies are
accounted for as an increase in the carrying value of the investment
in subsidiaries and the share-based payment reserve.
Revenue recognition
IFRS 15 Revenue from Contracts with Customers (IFRS 15)
establishes a five-step model to account for revenue arising from
contracts with customers. Under IFRS 15, revenue comprises an
amount that reflects the consideration to which an entity expects
to be entitled to in exchange for transferring goods or services to
a customer, these are exclusive of value added tax, after allowing
for discounts, rebates, allowances for customer loyalty and other
pricing related allowances and incentives. Provision is made for
returns where appropriate. The Group recognises revenue in the
amount of the price expected to be received for goods and services
supplied at a point in time or over time, as contractual performance
obligations are fulfilled, and control of goods and services passes
to the customer. Where revenue is earned over time as contractual
performance obligations are satisfied, the percentage-of-completion
method remains the primary method by which revenue recognition
is measured.
The Group manufactures and distributes branded cider, beer, wine,
spirits and soft drinks in which revenue is recognised at a point in
time when control is deemed to pass to the customer upon leaving
the Group’s premises or upon delivery to a customer depending on
the terms of sale. Contracts do not contain multiple performance
obligations (as defined by IFRS 15).
Across the Group, goods are often sold with discounts or rebates
based on cumulative sales over a period. The variable consideration
is only recognised when it is highly probable that it will not be
subsequently reversed and is recognised using the most likely
amount or expected value methods, depending on the individual
contract terms. In the application of appropriate revenue recognition,
judgement is exercised by management in the determination of the
likelihood and quantum of such items based on experience and
historical trading patterns.
The Group is deemed to be a principal to an arrangement when
it controls a promised good or service before transferring them to
a customer; and accordingly recognises the revenue on a gross
basis. The Group is determined to be an agent to a transaction, in
C&C Group plc Annual Report 2021 161
circumstances where the Group arranges for the provision of goods
or services by another third party, based on the principal of control;
the net amount retained after the deduction of any costs to the
principal is recognised as revenue.
unwinding the discount on provisions and leases. All borrowing
costs are recognised in the Income Statement using the effective
interest method.
Excise duty
Excise duty is levied at the point of production in the case of the
Group’s manufactured products and at the point of importation in
the case of imported products in the relevant jurisdictions in which
the Group operates. As the Group’s manufacturing and warehousing
facilities are revenue approved and registered excise facilities, the
excise duty liability generally crystallises on transfer of product from
duty in suspense to duty paid status which normally coincides with
the point of sale. The duty number disclosed represents the cash
cost of duty paid on the Group’s products. Where goods are bought
duty paid, and subsequently sold, the duty element is not included
in the duty line within Net revenue but is included within the cost of
goods sold.
Net revenue
Net revenue is defined by the Group as revenue less excise duty
paid by the Group.
Exceptional items
The Group has adopted an accounting policy and Income
Statement format that seeks to highlight significant items of income
and expense within the Group results for the year. The Directors
believe that this presentation provides a more useful analysis.
Such items may include significant restructuring and integration
costs, profits or losses on disposal or termination of operations
or significant contracts, litigation costs and settlements, profit or
loss on disposal of investments, significant impairment of assets,
acquisition related costs and unforeseen gains/losses arising on
derivative financial instruments. In the current and prior financial
year, the Group has accounted for the impact of the COVID-19
pandemic as an exceptional item. The Directors use judgement in
assessing the particular items, which by virtue of their scale and
nature, are disclosed in the Income Statement and related notes as
exceptional items.
Finance income and expenses
Finance income comprises interest income on funds invested and
any gains on hedging instruments that are recognised in the Income
Statement. Interest income is recognised as it accrues in the Income
Statement, using the effective interest method.
Research and development
Expenditure on research that is not related to specific product
development is recognised in the Income Statement as incurred.
Expenditure on the development of new or substantially improved
products or processes is capitalised if the product or process is
technically feasible and commercially viable.
Government grants
Grants are recognised at their fair value when there is a reasonable
assurance that the grant will be received, and all attaching
conditions have been complied with.
Capital grants received and receivable by the Group are credited to
government grants and are amortised to the Income Statement on
a straight-line basis over the expected useful lives of the assets to
which they relate.
Revenue grants are recognised as income over the periods
necessary to match the grant on a systematic basis to the costs that
it is intended to compensate.
Assets held for sale
Non-current assets, or disposal groups comprising of assets and
liabilities, are classified as held-for-sale if it is highly probable that
they will be recovered primarily through sale rather than through
continuing use. Such assets, or disposal groups, are generally
measured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allocated
first to goodwill, and then to the remaining assets and liabilities
on a pro rata basis, except that no loss is allocated to inventories,
financial assets, deferred tax assets or employee benefit assets,
which continue to be measured in accordance with the Group’s
other accounting policies as applicable.
Impairment losses on initial classification as held-for-sale and
subsequent gains and losses on remeasurement are recognised in
the Income Statement. Once classified as held-for-sale, intangible
assets and property, plant and equipment are no longer amortised
or depreciated, and any equity accounted investee is no longer
equity accounted.
Finance expenses comprise interest expense on borrowings,
interest expense on sale of trade receivables, bank guarantee
fees, amortisation of borrowing issue costs, losses on hedging
instruments that are recognised in the Income Statement, ineffective
portion of changes in the fair value of cash flow hedges and
Discontinued operations
A discontinued operation is a component of the Group’s business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which; represents a separate major
line of business or geographic area of operations; is part of a single
Corporate GovernanceBusiness & StrategyFinancial Statements
162
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
co-ordinated plan to dispose of a separate major line of business
or geographic area of operations; or is a subsidiary acquired
exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of
disposal or when the operation meets the criteria to be classified
as held-for-sale. When an operation is classified as a discontinued
operation, the comparative Income Statement and Other
Comprehensive Income is represented as if the operation had been
discontinued from the start of the comparative year.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal organisational and management structure of the Group and
the internal financial information provided to the Chief Operating
Decision-Maker, the executive Directors, who are responsible for
the allocation of resources and the monitoring and assessment of
performance of each of the operating segments. The Group has four
reportable operating segments consistent with the prior year.
The analysis by segment includes both items directly attributable to
a segment and those, including central overheads that are allocated
on a reasonable basis to those segments in internal financial
reporting packages.
Foreign currency translation
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 Euro, which
is the presentation currency of the Group and both the presentation
and functional currency of the Company.
Transactions in foreign currencies are translated into the functional
currency of each entity at the foreign exchange rate ruling at the
date of the transaction. Non-monetary assets carried at historic
cost are not subsequently retranslated. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are translated into functional currencies at the foreign exchange
rate ruling at that date. Foreign exchange movements arising
on translation are recognised in the Income Statement with the
exception of all monetary items designated as a hedge of a net
investment in a foreign operation, which are recognised in the
consolidated financial statements in Other Comprehensive Income
until the disposal of the net investment, at which time they are
recognised in the Income Statement for the year.
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on consolidation, are translated
to Euro at the foreign exchange rates ruling at the reporting date.
The revenues and expenses of foreign operations are translated to
Euro at the average exchange rate for the financial period where
that represents a reasonable approximation of actual rates. Foreign
exchange movements arising on translation of the net investment
in a foreign operation, including those arising on long-term intra-
group loans for which settlement is neither planned nor likely
to happen in the foreseeable future and as a consequence are
deemed quasi equity in nature, are recognised directly in Other
Comprehensive Income in the consolidated financial statements in
the foreign currency translation reserve. The portion of exchange
gains or losses on foreign currency borrowings or derivatives used
to provide a hedge against a net investment in a foreign operation
that is designated as a hedge of those investments, is recognised
directly in Other Comprehensive Income to the extent that they are
determined to be effective. The ineffective portion is recognised
immediately in the Income Statement for the year.
Any movements that have arisen since 1 March 2004, the date of
transition to IFRS, are recognised in the currency translation reserve
and are recycled through the Income Statement on disposal of the
related business. Translation differences that arose before the date
of transition to IFRS as adopted by the EU in respect of all non-Euro
denominated operations are not presented separately.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost includes all expenditure incurred in acquiring the inventories
and bringing them to their present location and condition and is
based on the first-in first-out principle.
In the case of finished goods and work in progress, cost includes
direct production costs and the appropriate share of production
overheads plus excise duties, where appropriate. Net realisable
value is the estimated selling price in the ordinary course of
business, less estimated costs necessary to complete the sale.
Provision is made for slow-moving or obsolete stock where
appropriate.
Provisions
A provision is recognised in the Balance Sheet when the Group
has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required to settle the
obligation at the balance sheet date and are discounted to present
value at an appropriate rate if the effect of the time value of money is
deemed material. The carrying amount of the provision increases in
each period to reflect the passage of time and the unwinding of the
discount. The increase in the provision due to the passage of time is
recognised in the Income Statement within finance expense.
A contingent liability is not recognised but is disclosed where the
existence of the obligation will only be confirmed by future events or
C&C Group plc Annual Report 2021 163
where it is not probable that an outflow of resources will be required
to settle the obligation or where the amount of the obligation cannot
be measured with reasonable reliability. Contingent assets are not
recognised but are disclosed where an inflow of economic benefits
is probable. Provisions are not recognised for future operating
losses; however, provisions are recognised for onerous contracts
where the unavoidable cost exceeds the expected benefit.
The proceeds received by the Company net of any directly
attributable transaction costs on the vesting of share entitlements
met by the issue of new shares are credited to share capital and
share premium when the share entitlements are exercised. Amounts
included in the share-based payments reserve are transferred to
retained income when vested options are exercised, forfeited post-
vesting or lapse.
Due to the inherent uncertainty with respect to such matters, the
value of each provision is based on the best information available
at the time, including advice obtained from third party experts, and
is reviewed by the Directors on a periodic basis with the potential
financial exposure reassessed. Revisions to the valuation of a
provision are recognised in the period in which such a determination
is made, and such revisions could have a material impact on the
financial performance of the Group.
Share-based payments
The Group operates a number of Share Option Schemes,
Performance Share Plans and cash settled award schemes, listed
below:
• Executive Share Option Scheme (the ‘ESOS’),
• Long-Term Incentive Plan (the ‘LTIP’),
• Recruitment and Retention Plan,
• Deferred Bonus Plan (‘DBP’)
• Partnership and Matching Share Schemes.
Equity settled share-based payment transactions
Group share schemes allow certain employees to acquire shares
in the Company. The fair value of share entitlements granted is
recognised as an employee expense in the Income Statement
with a corresponding increase in equity, while the cost of acquiring
shares on the open market to satisfy the Group’s obligations under
the Partnership and Matching Share Schemes is recognised in the
Income Statement as incurred.
All awards are subject to non-market vesting conditions only, the
details of which are set out in note 4.
The expense for the share entitlements shown in the Income
Statement is based on the fair value of the total number of
entitlements expected to vest and is allocated to accounting periods
on a straight-line basis over the vesting period. The cumulative
charge to the Income Statement at each reporting date reflects
the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately
vest. It is reversed only where entitlements do not vest because all
non-market performance conditions have not been met or where
an employee in receipt of share entitlements leaves the Group
before the end of the vesting period and forfeits those options in
consequence.
The dilutive effect of outstanding options, to the extent that they
are to be settled by the issue of new shares and to the extent that
the vesting conditions would have been satisfied if the end of the
reporting period was the end of the contingency period, is reflected
as additional share dilution in the determination of diluted earnings
per share.
Financial instruments
Trade & other receivables
Trade receivables are initially recognised at fair value (which usually
equals the original invoice value) and are subsequently measured
at amortised cost less loss allowance or impairment losses. The
Group applies the simplified approach permitted by IFRS 9 Financial
Instruments to measure expected credit losses for trade receivables,
which requires expected lifetime losses to be recognised from
initial recognition of the receivables. The carrying amount of these
receivables approximates their fair value as these are short-term in
nature; hence, the maximum exposure to credit risk at the reporting
date is the carrying value of each class of receivable.
Trade receivables are derecognised when the rights to receive cash
flows from the asset have expired or the Group has transferred
its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material
delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Cash
Cash in the Balance Sheet comprises of cash at bank and in hand
and short-term deposits with an original maturity of three months or
less. Bank overdrafts that are repayable on demand and form part
of the Group’s cash management are included as a component of
cash for the purpose of the statement of cash flows.
Advances to customers
Advances to customers, which can be categorised as either an
advance of discount or a repayment/annuity loan conditional on the
achievement of contractual sales targets, are initially recognised at
fair value, amortised to the Income Statement (and classified within
sales discounts as a reduction in revenue) over the relevant period
to which the customer commitment is made, and subsequently
carried at amortised cost less an impairment allowance. Where
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164
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
there is a volume target the amortisation of the advance is included
in sales discounts as a reduction to revenue. Regarding advances
to customers, the Group applies the general approach to measure
expected credit losses which requires a loss provision to be
recognised based on twelve month or lifetime expected credit
losses, provided a significant increase in credit risk has occurred
since initial recognition.
Trade & other payables
Trade & other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest rate method.
Interest-bearing loans & borrowings
Interest-bearing loans & borrowings are recognised initially at fair
value less attributable transaction costs and are subsequently
measured at amortised cost with any difference between the
amount originally recognised and redemption value being
recognised in the Income Statement over the period of the
borrowings on an effective interest rate basis. Where the early
refinancing of a loan results in a significant change in the present
value of the expected cash flows, the original loan is derecognised
and the replacement loan is recognised at fair value. The difference
between the original loan and the fair value of the replacement loan
is recognised in finance costs in the year.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date that
a derivative contract is entered into, and they are subsequently
remeasured to their fair value at the end of each reporting period.
The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument and,
if so, the nature of the item being hedged. The Group designates
certain derivatives as hedges of a particular risk associated with the
cash flows of recognised assets and liabilities and highly probable
forecast transactions (cash flow hedges). The gains or losses
related to derivatives not used as effective hedging instruments are
recognised in the Income Statement.
At inception of the hedge relationship, the Group documents the
economic relationship between hedging instruments and hedged
items, including whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows
of hedged items. The Group documents its risk management
objective and strategy for undertaking its hedge transactions. The
fair values of derivative financial instruments designated in hedge
relationships are disclosed in note 24. Movements in the hedging
reserve in shareholders’ equity are shown in note 24. The full fair
value of a hedging derivative is classified as a non-current asset
or liability when the remaining maturity of the hedged item is more
than 12 months; it is classified as a current asset or liability when
the remaining maturity of the hedged item is less than 12 months.
The Group only trades derivatives for hedging activities. The Group
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.
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives that
are designated and qualify as cash flow hedges is recognised in
the cash flow hedge reserve within equity. The gain or loss relating
to the ineffective portion is recognised immediately in the Income
Statement as finance expenses.
The Group uses forward contracts to hedge forecast transactions,
the Group generally designates the full change in fair value of the
forward contract, i.e. the forward rate including forward points, as
the hedging instrument. Gains or losses relating to the effective
portion of the change in fair value of the entire forward contract are
recognised in the cash flow hedge reserve within equity.
Amounts accumulated in equity are reclassified in the periods
when the hedged item affects profit or loss. Where the hedged item
subsequently results in the recognition of a non-financial asset (such
as inventory), the deferred hedging gains and losses are included
within the initial cost of the asset. The deferred amounts are
ultimately recognised in profit or loss, since the hedged item affects
profit or loss (for example, through operating costs).
When a hedging instrument expires, or is sold or terminated, or
when a hedge no longer meets the criteria for hedge accounting,
any cumulative deferred gain or loss in equity at that time remains
in equity until the forecast transaction is no longer expected to
occur, the cumulative gain or loss that were reported in equity are
immediately reclassified to profit or loss.
Cash flow hedge reserve
The cash flow hedge reserve is used to recognise the effective
portion of gains or losses on derivatives that are designated and
qualify as cash flow hedges, as described in note 24. Amounts are
subsequently either transferred to the initial cost of inventory or
reclassified to profit or loss as appropriate.
Net investment hedging
Any gain or loss on the effective portion of a hedge of a net
investment in a foreign operation using a foreign currency
denominated monetary liability is recognised in Other
Comprehensive Income while the gain or loss on the ineffective
portion is recognised immediately in the Income Statement.
Cumulative gains and losses remain in Other Comprehensive
Income until disposal of the net investment in the foreign operation
at which point the related differences are transferred to the Income
Statement as part of the overall gain or loss on disposal.
C&C Group plc Annual Report 2021 165
Share capital/premium
Ordinary shares are classified as equity instruments. Incremental
costs directly attributable to the issuance of new shares are shown
in equity as a deduction from the gross proceeds.
Treasury shares
Equity share capital issued under its Joint Share Ownership Plan,
which is held in trust by an Employee Trust is classified as treasury
shares on consolidation until such time as the Interests lapse and
the shares are cancelled or disposed of by the Trust.
Own shares acquired under share buyback programme
The cost of ordinary shares purchased by a subsidiary of the Group
on the open market is recorded as a deduction from equity on the
face of the Group Balance Sheet. When these shares are cancelled,
an amount equal to the nominal value of any shares cancelled is
included within other undenominated capital fund and the cost is
deducted from retained earnings.
Dividends
Final dividends on ordinary shares are recognised as a liability in
the financial statements only after they have been approved at an
Annual General Meeting of the Company. Interim dividends on
ordinary shares are recognised when they are paid.
Significant Judgements and Estimates
The preparation of the consolidated financial statements in
conformity with IFRS as adopted by the EU requires management
to make certain estimates, assumptions and judgements that affect
the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. The significant judgements,
estimates and assumptions used by management may differ from
the actual outcome of the transaction and consequently the realised
value of the associated assets and liabilities may vary. The significant
judgements and estimates which have been applied, and which are
expected to have a material impact, are as follows:
Significant judgements
Income Taxes
The Group is subject to income tax in a number of jurisdictions,
and judgement is required in determining the worldwide provision
for taxes. There are many transactions and calculations during
the ordinary course of business, for which the ultimate tax
determination is uncertain and the complexity of the tax treatment
may be such that the final tax charge may not be determined until
a formal resolution has been reached with the relevant tax authority
which may take extended time periods to conclude. The ultimate
tax charge may, therefore, be different from that which initially is
reflected in the Group’s consolidated tax charge and provision and
any such differences could have a material impact on the Group’s
income tax charge and consequently financial performance.
The determination of the provision for income tax is based on
management’s understanding of the relevant tax law and judgement
as to the appropriate tax charge, and management believe that
all assumptions and estimates used are reasonable and reflective
of the tax legislation in jurisdictions in which the Group operates.
Where the final tax charge is different from the amounts that were
initially recorded, such differences are recognised in the income tax
provision in the period in which such determination is made.
Deferred tax assets in respect of deductible temporary differences
are recognised only to the extent that it is probable that taxable
profits or taxable temporary differences will be available against
which to offset these items. The recognition or non-recognition of
deferred tax assets as appropriate also requires judgement as it
involves an assessment of the future recoverability of those assets.
The recognition of deferred tax assets is based on management’s
judgement and estimate of the most probable amount of future
taxable profits and taking into consideration applicable tax
legislation in the relevant jurisdiction.
Valuation of property, plant and equipment
The Group values its freehold land & buildings and plant &
machinery at market value/Depreciated Replacement Cost
and consequently, carries out an annual valuation. The Group
engages external valuers to value the Group’s property, plant &
machinery at a minimum every three years or as at the date of
acquisition for assets acquired as part of a business combination.
An external valuation was conducted at 28 February 2021 by
PricewaterhouseCoopers LLP to value the freehold land & buildings
and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark
(Glasgow) and Portugal sites.
The key assumptions used to determine the fair value of the freehold
land & buildings and plant & machinery and sensitivity analyses are
provided in note 11.
Equity accounted investment impairment
The Group accounts for investments in associates and joint ventures
using the equity method from the date joint control is deemed
to arise until the date on which joint control ceases to exist or
when the interest becomes classified as an asset held for sale.
They are initially recognised at cost, which includes transaction
costs. Subsequent to initial recognition, the consolidated financial
statements include the Group’s share of the profit or loss and Other
Comprehensive Income of associates adjusted in respect of post-
acquisition changes in the Group’s share of net assets, less any
impairment in value.
In the current year, after taking account of the Group’s share of
Admiral Taverns’ losses, the Group recorded within exceptional
operating costs (note 5), an impairment charge of €8.9m with
respect to the carrying value of its investment in Admiral Taverns at
28 February 2021. The hospitality and pub industry in the United
Kingdom have been significantly curtailed by lockdowns and trading
Corporate GovernanceBusiness & StrategyFinancial Statements 166
Statement of Accounting Policies
For the year ended 28 February 2021 (continued)
restrictions since March 2020. The Group assessed the carrying
value of its equity accounted investment in Admiral Taverns at 28
February 2021, considering the underutilisation of their pub assets
as a direct consequence of such lockdowns and recorded an
impairment charge of €8.9 million in this regard.
The key assumptions used to determine the recoverable value of the
Group’s investment in Admiral is provided in note 13.
Sources of estimation uncertainty
Recoverable amount of goodwill
The impairment testing process requires management to make
significant estimates regarding the future cash flows expected to
be generated by cash-generating units to which goodwill has been
allocated. Future cash flows relating to the eventual disposal of
these cash-generating units and other factors may also be relevant
to determine the fair value of goodwill. Management periodically
evaluates and updates the estimates based on the conditions
which influence these variables. The assumptions and conditions
for determining impairments of goodwill reflect management’s best
assumptions and estimates (discount rates, terminal growth rates,
forecasted volume, net revenue, operating profit) but these items
involve inherent uncertainties described above, many of which
are not under management’s control. As a result, the accounting
for such items could result in different estimates or amounts if
management used different assumptions or if different conditions
occur in future accounting periods.
The inputs to the value in use calculations are disclosed in note 12.
Incremental borrowing rates on leases
Management use estimation in determining the incremental
borrowing rates for leases which has a significant impact on the
lease liabilities and right-of-use assets recognised. The incremental
borrowing rates includes several key components such as, a
reference rate (incorporating currency, economic environment and
term of lease); a financing spread adjustment, an entity specific
adjustment (if applicable) and a lease specific adjustment (if
applicable, for example, a property lease compared to vehicle/other
leases, and the term of the lease).
Please refer to note 19 for the carrying amounts of the right-of-use
assets and the lease liability impacted.
Pension valuation
Significant estimates are used in the determination of the pension
obligation, the amounts recognised in the Income Statement and
Statement of Other Comprehensive Income and the valuation of
the defined benefit pension net surplus or deficit are sensitive to
the assumptions used. The assumptions underlying the actuarial
valuations (including discount rates, rates of increase in future
compensation levels, mortality rates, salary and pension increases,
future inflation rates and healthcare cost trends), from which the
amounts recognised in the consolidated financial statements are
determined, are updated annually based on current economic
conditions and for any relevant changes to the terms and conditions
of the pension and post-retirement plans. These assumptions
can be affected by (i) for the discount rate, changes in the rates of
return on high-quality corporate bonds; (ii) for future compensation
levels, future labour market conditions and (iii) for healthcare cost
trend rates, the rate of medical cost inflation in the relevant regions.
The weighted average actuarial assumptions used and sensitivity
analysis in relation to the significant assumptions employed in the
determination of pension and other post-retirement liabilities are
contained in note 23 to the consolidated financial statements.
Whilst management believes that the assumptions used are
appropriate, differences in actual experience or changes in
assumptions may affect the obligations and expenses recognised
in future accounting periods. The assets and liabilities of defined
benefit pension schemes may exhibit significant period-on-
period volatility attributable primarily to changes in bond yields
and longevity. In addition to future service contributions, cash
contributions may be required to remediate past service deficits. A
sensitivity analysis of the change in these assumptions is provided in
note 23.
Expected credit losses
The Group applies the simplified approach permitted by IFRS
9 Financial Instruments to measure expected credit losses for
trade receivables, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
Further to the impact of COVID-19 on the Group, estimates have
been made around the credit losses expected to be incurred on the
Group’s financial assets – principally being trade receivables and
trade loans. In determining the expected credit losses, the loss rates
are determined based on the grouping of trade receivables sharing
the same credit risk characteristics and past due days.
Regarding advances to customers, the Group applies the general
approach to measure expected credit losses which requires a
loss provision to be recognised based on twelve month or lifetime
expected credit losses, provided a significant increase in credit risk
has occurred since initial recognition.
Please refer to note 15 for the impact of the expected credit loss
approach on the Group’s trade receivables and advances to
customers.
Provision for obsolete stock
As a result of COVID-19, the Group has provided for obsolete
inventory with respect to inventory which has no alternate use or
right of return to the supplier and/or where inventory has become
obsolete due to COVID-19 restrictions in the on-trade.
C&C Group plc Annual Report 2021 Notes forming part of the financial statements
167
1. SEGMENTAL REPORTING
The Group’s business activity is the manufacturing, marketing and distribution of branded beer, cider, wine, spirits and soft drinks. Four
operating segments have been identified in the current and prior financial year; Ireland, Great Britain, Matthew Clark and Bibendum (“MCB”)
and International.
The Group continually reviews and updates the manner in which it monitors and controls its financial operations resulting in changes in
which information is classified and reported to the Chief Operating Decision Maker (“CODM”). The CODM, identified as the Executive
Directors, assesses and monitors the operating results of segments separately via internal management reports in order to effectively
manage the business and allocate resources.
The identified business segments are as follows:
(i) Ireland
This segment includes the financial results from sale of the Group’s own branded products across the Island of Ireland, principally Bulmers,
Magners, Tennent’s, Five Lamps, Clonmel 1650, Heverlee, Dowd’s Lane, Seven Summits hard seltzer, Roundstone Irish Ale, Linden Village,
Finches and Tipperary Water. The Group also operates the Bulmers Ireland drinks distribution business, a leading distributor of third party
drinks to the licensed on and off-trade in Ireland. The Group distributes San Miguel, Tsingtao and Budweiser Brewing Group beer brands
across the Island of Ireland. Since July 2020, the Group has also distributed the Budweiser brand on an exclusive basis. Our primary
manufacturing plant is located in Clonmel, Co. Tipperary, with major distribution and administration centres in Dublin and Culcavy, Northern
Ireland.
(ii) Great Britain (GB)
This segment includes the financial results from sale of the Group’s own branded products in Scotland, with Tennent’s, Caledonia Best,
Heverlee and Magners the main brands. This division includes the sale of the Group’s portfolio of owned cider brands across the rest
of GB, including Magners, Orchard Pig, K Cider and Blackthorn which are distributed in partnership with Budweiser Brewing Group. In
addition, the division includes the Tennent’s drinks distribution business in Scotland. The Group also distributes selected Budweiser Brewing
Group brands in Scotland and the Tsingtao and Menabrea international beer brands across the UK. Our primary manufacturing plant and
administration centre is located at the Wellpark Brewery in Glasgow.
(iii) Matthew Clark and Bibendum (MCB)
This segment includes the financial results from the Matthew Clark and Bibendum businesses. Matthew Clark is the largest independent
distributor to the UK on-trade drinks sector. It offers a range of over 13,000 products, including beers, wines, spirits, cider and soft drinks.
Matthew Clark and Bibendum also have a number of exclusive distribution agreements for third party products (mainly wines but also
including spirits) into the UK market and also has a limited range of own brand wines. It has a nationwide distribution network serving the
independent free trade and national accounts. Bibendum is one of the largest wine, spirits and craft beer distributors and wholesalers to the
UK on-trade and off-trade, with a particular focus on wine.
(iv) International
This segment includes the financial results from the sale and distribution of the Group’s own branded products, principally Magners and
Tennent’s outside of the UK and Ireland. The Group exports to over 40 countries globally, notably in continental Europe, Asia and Australia.
The Group operates mainly through local distributors in these markets and regions. This division includes the sale of the Group’s cider and
beer products in the US and Canada. In April 2021, the business divested our wholly-owned US subsidiary, Vermont Hard Cider Company
and its Woodchuck suite of brands.
The analysis by segment includes both items directly attributable to a segment and those, including central overheads, which are allocated
on a reasonable basis in presenting information to the CODM.
Inter-segmental revenue is not material and thus not subject to separate disclosure.
Corporate GovernanceBusiness & StrategyFinancial Statements 168
1. SEGMENTAL REPORTING (continued)
(a) Analysis by reporting segment
Ireland
Great Britain
Matthew Clark and Bibendum (MCB)
International
Revenue
€m
269.8
347.8
378.3
26.9
166.1
206.8
337.8
26.2
Total before exceptional items
1,022.8
736.9
Exceptional items (note 5)
Group operating (loss)/profit
Profit on disposal (note 5)
Finance income (note 6)
Finance expense (note 6)
Finance expense exceptional items (note 5)
Share of equity accounted investments’ (loss)/
profit after tax before exceptional items (note
13)
Share of equity accounted investments’
exceptional items (note 5)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
1,022.8
736.9
2021
Net revenue
€m
Operating loss
€m
2020
Net revenue
€m
Operating profit
€m
Revenue
€m
327.1
516.9
1,262.7
38.8
227.7
334.1
1,119.6
37.9
2,145.5
1,719.3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,145.5
1,719.3
(4.9)
(8.4)
(44.5)
(1.8)
(59.6)
(25.2)
(84.8)
5.8
-
(19.5)
(7.9)
(6.1)
(8.8)
(121.3)
40.5
44.9
29.0
6.4
120.8
(91.0)
29.8
0.9
0.5
(20.3)
-
3.1
(2.4)
11.6
Of the exceptional items in the current financial year of €25.2m, €8.3m loss relates to Ireland, €14.7m loss relates to Great Britain, €2.9m
loss relates to MCB and €0.7m credit relates to International. Of the exceptional items in the prior financial year of €91.0m, €7.2m related
to Ireland, €27.7m related to Great Britain, €16.2m related to MCB, €39.8m related to International and €0.1m was unallocated as it did not
relate to any particular segment.
Profit on disposal of €5.8m in the current financial year relates to Ireland. Profit on disposal of €0.9m in the prior financial year related to a
€2.6m profit on disposal included within International offset by a loss with respect to the sale of Peppermint within MCB of €1.7m.
The share of equity accounted investments’ loss after tax before exceptional items of €6.1m (FY2020: profit €3.1m) relates to Great Britain.
The share of equity accounted investments’ exceptional items of €8.8m (FY2020: €2.4m) relates to Great Britain.
Total assets for the year ended 28 February 2021 amounted to €1,335.6m (FY2020: €1,441.9m).
(b) Other operating segment information
Ireland
Great Britain
Matthew Clark and Bibendum
International
Total
2021
2020
Tangible and
intangible
expenditure
Lease additions
Depreciation
/amortisation /
impairment /
revaluation
Tangible and
intangible
expenditure
Lease additions
Depreciation /
amortisation /
impairment/
revaluation
€m
1.9
10.5
1.3
0.4
14.1
€m
0.9
6.1
4.9
-
11.9
€m
6.1
14.1
10.4
1.7
32.3
€m
8.5
6.7
3.4
1.2
19.8
€m
1.1
4.6
6.4
-
12.1
€m
5.4
12.2
13.3
39.5
70.4
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
169
1. SEGMENTAL REPORTING (continued)
(c) Geographical analysis of revenue and net revenue
Ireland
Great Britain
International
Total
Revenue
Net revenue
2021
€m
269.8
726.1
26.9
1,022.8
2020
€m
327.1
1,779.6
38.8
2,145.5
2021
€m
166.1
544.6
26.2
736.9
2020
€m
227.7
1,453.7
37.9
1,719.3
The geographical analysis of revenue and net revenue is based on the location of the third party customers.
(d) Geographical analysis of non-current assets
28 February 2021
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments/financial assets
Total
29 February 2020
Property, plant & equipment
Goodwill & intangible assets
Equity accounted investments
Total
Ireland
€m
Great Britain
€m
International
€m
68.5
158.1
0.4
227.0
130.2
462.7
62.5
655.4
5.3
25.2
0.2
30.7
Ireland
€m
Great Britain
€m
International
€m
73.6
158.5
0.4
232.5
136.5
469.2
83.3
689.0
13.3
25.2
0.2
38.7
Total
€m
204.0
646.0
63.1
913.1
Total
€m
223.4
652.9
83.9
960.2
The geographical analysis of non-current assets, with the exception of goodwill & intangible assets, is based on the geographical location of
the assets. The geographical analysis of goodwill & intangible assets is allocated based on the country of destination of sales at the date of
acquisition.
(e) Disaggregated net revenue
In the following table, net revenue is disaggregated by primary geographic market and by principal activities and products. Geography is the
primary basis on which management reviews its businesses across the Group.
Principal activities and products
Net revenue
Own brand alcohol
Matthew Clark and Bibendum
Other sources*
Total Group from continuing operations
Ireland
€m
41.2
-
124.9
166.1
2021
Great Britain
€m
International
€m
107.3
337.8
99.5
544.6
22.7
-
3.5
26.2
Total
€m
171.2
337.8
227.9
736.9
* Other sources include wholesale (excluding MCB), own label, contracts and non-alcoholic beverages (NABs) revenues.
Corporate GovernanceBusiness & StrategyFinancial Statements 170
1. SEGMENTAL REPORTING (continued)
Principal activities and products
Net revenue
Own brand alcohol
Matthew Clark and Bibendum
Other sources*
Total Group from continuing operations
Ireland
€m
85.1
-
142.6
227.7
2020
Great Britain
€m
International
€m
161.9
1,119.6
172.2
1,453.7
34.5
-
3.4
37.9
Total
€m
281.5
1,119.6
318.2
1,719.3
* Other sources include wholesale (excluding MCB), own label, contracts and non-alcoholic beverages (NABs) revenues.
2. OPERATING COSTS
Raw material cost of goods sold/bought in finished
goods
Inventory write-down (note 14)
Employee remuneration (note 3)
Direct brand marketing
Other operating, selling and administration costs
Foreign exchange
Depreciation (note 11) (note 19)
Amortisation (note 12)
Net profit on disposal of property, plant & equipment
Auditor’s remuneration (a)
Impairment of intangible assets (note 12)
Impairment of equity accounted investment (note 5)
Net revaluation/impairment of property, plant &
machinery (note 11)
Total operating expenses
Before
exceptional
items
€m
2021
Exceptional
items
(note 5)
€m
562.1
0.9
101.6
13.5
86.6
(0.6)
28.2
2.6
0.3
1.3
-
-
-
796.5
-
5.8
6.8
-
2.7
-
-
-
(0.7)
-
0.3
9.1
1.2
25.2
Before
exceptional
items
€m
1,280.5
2.2
144.4
18.2
119.6
0.1
30.3
2.5
(0.2)
0.9
-
-
1,598.5
Total
€m
562.1
6.7
108.4
13.5
89.3
(0.6)
28.2
2.6
(0.4)
1.3
0.3
9.1
1.2
821.7
2020
Exceptional
items
(note 5)
€m
-
-
3.0
-
50.4
-
-
-
-
-
36.6
1.0
91.0
Total
€m
1,280.5
2.2
147.4
18.2
170.0
0.1
30.3
2.5
(0.2)
0.9
36.6
1.0
1,689.5
(a) Auditor remuneration: The remuneration of the Group’s statutory auditor, being the Irish firm of the principal auditor of the Group, Ernst &
Young, Chartered Accountants is as follows:
Audit of the Group financial statements
Audit of subsidiaries
Tax compliance and advisory services
Total
EY Ireland 2021
€m
Other EY Offices
2021
€m
Total 2021
€m
EY Ireland 2020
€m
Other EY Offices
2020
€m
Total 2020
€m
0.5
0.4
-
0.9
-
0.4
-
0.4
0.5
0.8
-
1.3
0.2
0.1
-
0.3
-
0.6
-
0.6
0.2
0.7
-
0.9
The audit fee for the audit of the financial statements of the Company was less than €0.1m in the current and prior financial year. There were
no non-audit fees paid to Ernst & Young during the current or prior financial year.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
3. EMPLOYEE NUMBERS & REMUNERATION COSTS
The average number of persons employed by the Group (including Executive Directors) during the year, analysed by category, was as
follows:
Sales & marketing
Production & distribution
Administration
Total
The actual number of persons employed by the Group as at 28 February 2021 was 2,653 (29 February 2020: 3,061).
The aggregate remuneration costs of these employees can be analysed as follows:
Wages, salaries and other short-term employee benefits, net of government grants (a)
Restructuring costs (note 5)
Social welfare costs
Retirement benefits – defined benefit schemes (note 23)
Retirement benefits – defined contribution schemes, including pension related expenses
Equity settled share-based payments (note 4)
Other non-equity settled share-based payments and PRSI accrued with respect to share-based payments
2021
Number
519
1,536
895
2,950
2021
€m
82.9
6.8
10.7
0.9
5.8
0.8
0.5
171
2020
Number
599
1,614
940
3,153
2020
€m
121.5
3.0
13.0
0.7
5.6
2.5
1.1
Charged to the Income Statement
108.4
147.4
Actuarial (gain)/loss on retirement benefits recognised in Other Comprehensive Income (note 23)
Total employee benefits
Directors’ remuneration
Directors’ remuneration (note 28)
(13.4)
95.0
2021
€m
2.0
4.4
151.8
2020
€m
5.1
Corporate GovernanceBusiness & StrategyFinancial Statements
172
3. EMPLOYEE NUMBERS & REMUNERATION COSTS (continued)
(a) Government grants and assistance
In the current financial year, wages and salaries amounting to €82.9m are stated net of wage subsidies received by the Group from the
Irish and UK governments. These wage subsidies are offset against the related wages and salaries expense over the period in which they
were incurred. During FY2021, the Group availed of wage subsidies of €4.2m from the Irish government and €21.9m (£19.6m) from the UK
government.
Temporary Wage Subsidy Scheme (Ireland)
Employment Wage Subsidy Scheme (Ireland)
Coronavirus Job Retention Scheme (UK)
Grants related to income
2021
€m
1.3
2.9
21.9
26.1
2020
€m
-
-
-
-
The Group has availed of the Irish and UK government schemes as a direct consequence of the COVID-19 pandemic. The Group has
availed of the Temporary Wage Subsidy Scheme from 1 April 2020 to 31 August 2020 and the Employment Wage Subsidy Scheme from
1 September 2020 to 28 February 2021 in Ireland and the Coronavirus Job Retention Scheme in the UK from 1 April 2020 to 28 February
2021. The Group continues to avail of the wage subsidy schemes.
The Temporary Wage Subsidy Scheme was available to employers who lost a minimum of 25% of turnover as a result of the COVID-19
pandemic and who kept employees on their payroll during this time. The scheme was replaced by the Employment Wage Subsidy Scheme
from 1 September 2020 with similar conditions to the preceding scheme, but with a turnover decline of 30% required compared to a similar
period in FY2020.
In the UK, the Group availed of the Coronavirus Job Retention Scheme. Up to 30 June 2020, the scheme only applied to furloughed
employees and employees still working in the Group were not eligible. From 1 July 2020, the UK government introduced a flexible furlough
scheme where employees can work part time and an employer can claim subsidies which are passed on to employees for the hours not
worked. In order to be eligible for the scheme, employees must have been on at least a three week furlough period prior to 10 June 2020.
In the current financial year, the Group was in compliance with all the conditions of the respective schemes. The grant income received has
been offset against the related costs in operating costs in the Income Statement.
Government assistance
In addition, the Group received financial assistance by way of commercial rates waivers and deferrals of tax liabilities from the Irish and UK
governments.
In Ireland, the Group benefitted from a commercial rates waiver of €1.0m for the period March 2020 to February 2021.
Under the warehousing of tax liabilities legislation introduced by the Financial Provisions (COVID-19) (No. 2) Bill 2020 and Finance Act
2020 (Act 26 of 2020), Irish VAT liabilities of €19.1m and payroll tax liabilities of €1.3m relating to the year ended 28 February 2021 have
been deferred. It is envisaged that the deferred balance will be paid over a twelve month period, commencing 2 months post COVID-19
restrictions being removed in the on-trade in Ireland.
In the UK, VAT liabilities of £28.0m (€32.2m) were deferred at 28 February 2021. All UK payroll tax liabilities relating to FY2021 were paid
during the year ended 28 February 2021. Excise duty liabilities of £21.6m (€24.8m) payable during the year ended 28 February 2021 have
also been deferred. Both the deferred VAT liabilities and the deferred excise duties will be repaid in FY2022.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 173
4. SHARE-BASED PAYMENTS
Equity settled awards
The Group has an established equity settled Executive Share Option Scheme (“ESOS”) in place under which options to purchase shares
in C&C Group plc are granted to certain Executive Directors and members of management. Under the terms of the scheme, the options are
exercisable at the market price prevailing at the date of the grant of the option.
Options were granted in June 2017, November 2017 and May 2018 under this scheme. The vesting of these awards is based on compound
annual growth in underlying EPS over the three year performance period, commencing in the financial year when an award is granted. If
compound annual growth in underlying EPS over the performance period is 2% per annum, then 25% of the awards vest. If the compound
annual growth in underlying EPS over the performance period is 6% per annum then 100% of the awards vest. There is straight-line vesting
between both points and no reward for below threshold performance. Options granted in 2017 have achieved their performance conditions
and therefore vested in full. Options granted in 2018 have not met their performance conditions and therefore are deemed to have lapsed at
28 February 2021.
The Group also has an established Long-Term Incentive Plan (“LTIP”) under the terms of which options to purchase shares in C&C Group
plc are granted at nominal cost to certain Executive Directors and members of management. All such awards granted from June 2017 to
December 2019 are subject to the following three performance conditions:
• 33% of the award is subject to compound annual growth in underlying EPS over the three year performance period. If compound annual
growth in underlying EPS over the performance period is 3% per annum then 25% of the awards vest. If the compound annual growth in
underlying EPS over the performance period is 8% per annum then 100% of the awards vest.
• 33% of the award is subject to the performance condition that the Free Cash Flow Conversion ratio (‘FCF’) of the Group (excluding the
impact of exceptional items) would be 65% conversion, on average, over the three year performance period, at which case 25% of this
element of the award would vest. If the FCF is 75% on average, then 100% of this element of the award would vest.
• 33% of the award is subject to a Return on Capital Employed (‘ROCE’) target. If the ROCE is 9.3% then 25% of this element of the award
would vest. If the ROCE is 10% then 100% of this element of the award would vest.
In all three components of the performance conditions of the LTIP there is straight-line vesting between both points and no reward for below
threshold performance. Options granted in 2017 have achieved their performance conditions and therefore vested in full. The performance
conditions for options granted in May 2018, February 2019, May 2019 and December 2019 are deemed to be no longer capable of achieving
their performance conditions and therefore are deemed to have lapsed at 28 February 2021.
The vesting of LTIP awards granted in December 2020 will be subject to an assessment of the Group’s underlying financial performance
across the three year period FY2021 – FY2023. Each award will also be subject to the following three separate performance conditions:
• 30% of the award was subject to FY2021 liquidity, which was defined as the Group’s cash on hand plus availability from the Group’s
Revolving Credit Facility as at the 28 February 2021. If liquidity was €250.0m, 25% of this element of the award would have vested and if
liquidity was €300.0m, 100% of this element of the award would have vested.
• 35% of the award is subject to FY2022 Net Debt to FY2022 EBITDA. The targets will be disclosed in the Group’s FY2022 Annual Report.
• 35% of the award is subject to FY2023 financial measures. The details of these measures will be determined by the Board by no later than
the start of the FY2023 performance period.
Threshold vesting in respect of any year will be no more than 25%, but subject to the overriding three-year financial performance
assessment. No award will vest until the end of the full three year performance period, and Executive Directors’ awards will then be subject
to a further two-year holding period.
Following the appointment of David Forde as Group Chief Executive Officer, the Group made an award of 842,636 shares to David
Corporate GovernanceBusiness & StrategyFinancial Statements 174
4. SHARE-BASED PAYMENTS (continued)
on 3 November 2020 (“Buy-Out Awards”). These shares were to compensate David for remuneration which he forfeited from his
previous employment upon joining the Group. Reflecting the fact that the forfeited remuneration bought out was guaranteed cash-based
remuneration, the closing share price on the day before the date of grant was used to calculate the number of shares to ensure the value
was equal to the remuneration forfeited. The award will vest in respect of 50% of the shares in November 2022 (“Buy-Out 1”) and 50% of
the shares in November 2023 (“Buy-Out 2”). After sales of shares to cover tax, David Forde will be required to retain 50% of the shares
acquired in satisfaction of the Group’s Executive Director shareholding requirement.
In June 2010, the Group established a Recruitment and Retention Plan (“R&R”) under the terms of which options to purchase shares in
C&C Group plc at nominal cost are granted to certain members of management, excluding Executive Directors.
The performance conditions and/or other terms and conditions for awards granted under this plan are specifically approved by the Board of
Directors at the time of each individual award, following a recommendation by the Remuneration Committee. Performance conditions vary
per award but include, some or all, of the following conditions; continuous employment, performance targets linked to the business unit to
which the recipient is aligned or a requirement to have a personal shareholding in the Company at the end of the performance period.
Obligations arising under the Recruitment and Retention Plan will be satisfied by the purchase of existing shares on the open market. Upon
settlement, any difference between the amount included in the share-based payment reserve account and the cash paid to purchase the
shares is recognised in retained income via the Statement of Changes in Equity.
The Group also has a Deferred Bonus Plan (“DBP”) under the terms of which options to purchase shares in C&C Group plc at nominal
cost are granted to certain members of management. Awards under this plan are subject to a continuous employment performance
condition only.
In November 2011, the Group set up Partnership and Matching Share Schemes for all ROI and UK based employees of the Group
under the approved profit sharing schemes referred to below. Under these schemes, employees can invest in shares in C&C Group plc
(partnership shares) that will be matched on a 1:1 basis by the Company (matching shares) subject to Revenue approved limits. Both the
partnership and matching shares are held on behalf of the employee by the Scheme trustee, Link Group Limited. The shares are purchased
on the open market on a monthly basis at the market price prevailing at the date of purchase with any remaining cash amounts carried
forward and used in the next share purchase. The shares are held in trust for the participating employee, who has full voting rights and
dividend entitlements on both partnership and matching shares. Matching shares may be forfeited and/or tax penalties may apply if the
employee leaves the Group or removes their partnership shares within the Revenue-stipulated vesting period. The Revenue stipulated
vesting period for matching shares awarded under the ROI scheme is three years and under the UK scheme is up to five years.
The Group held 564,152 matching shares (1,128,304 partnership and matching) in trust at 28 February 2021 (FY2020: 298,016 matching
shares (596,032 partnership and matching shares held)).
In the prior financial year the Group, recognising that some employees of Matthew Clark and Bibendum (“MCB”), which the Group acquired
in FY2019, had previously lost money in a share scheme operated by the previous owners of MCB and prior to MCB being acquired by the
Group, committed to allocating to those employees, C&C Group plc shares in May 2021, equivalent in value to the amount they had lost in
the share scheme of the previous owners of MCB. The employees must also be investing in the Group’s partnership and matching share
scheme to qualify for the award.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 175
4. SHARE-BASED PAYMENTS (continued)
Award valuation
The fair values assigned to the equity settled awards granted were computed in accordance with a Black Scholes valuation methodology.
As per IFRS 2 Share-based Payment, non-market or performance related conditions were not taken into account in establishing the fair
value of equity instruments granted, instead these non-market vesting conditions are taken into account by adjusting the number of equity
instruments included in the measurement of the transaction amount so that, ultimately the amount recognised for time and services received
as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest, unless the failure to
vest is due to failure to meet a market condition.
The main assumptions used in the valuations for equity settled share-based payment awards granted in the current and prior financial years
were as follows:
LTIP options
granted
Dec 20
Buy-Out
1 options
granted
Nov 20
Buy-Out
2 options
granted
Nov 20
Fair value at date of grant
€2.64
€1.61
€1.61
R&R
options
granted
Nov 20
€1.61
-
-
R&R
options
granted
Oct 20
€1.98
DBP options
granted
Oct 20
€1.98
-
-
-
-
R&R
options
granted
Feb 20
€4.17
-
0.55%
25.3%
R&R options
granted
Dec 19
LTIP options
granted
Dec 19
€4.27
€4.66
-
0.63%
24.9%
-
0.63%
24.9%
LTIP
options
granted
May 19
€3.71
-
0.63%
24.5%
-
-
-
-
-
-
36.8%
38.3%
34.6%
41.0%
37.8%
37.8%
3
-
2
-
3
-
1.5
-
2
-
2
-
2.3
2.5
3.57%
3.40%
2.5
-
5
-
Exercise price
Risk free interest rate
Expected volatility
Expected term until exercise
–years
Dividend yield
Expected volatility is calculated by reference to historic share price movements prior to the date of grant over a period of time commensurate
with the expected term until exercise. The dividends which would be paid on a share reduces the fair value of an award since, in not owning
the underlying shares, a recipient does not receive the dividend income on these shares. Due to the Group not paying dividends in the
current financial year dividend yield has been set to zero. For LTIP, DBP and the Buy-Out awards, the participants are entitled to receive
dividends, and therefore the dividend yield has been set to zero to reflect this.
Corporate GovernanceBusiness & StrategyFinancial Statements
176
4. SHARE-BASED PAYMENTS (continued)
Details of the share entitlements and share options granted under these schemes together with the share option expense are as follows:
Expense
/ (income)
in Income
Statement
2021
€m
Expense
/ (income)
in Income
Statement
2020
€m
Fair value at
date of grant
€
Grant date
Vesting period
Number of
options/ equity
Interests
granted
Number
deemed
outstanding
at 28
February
2021*
Executive Share Option Scheme
1 June 2017
13 November 2017
31 May 2018
Long-Term Incentive Plan
1 June 2017
1 August 2017
13 November 2017
31 May 2018
11 February 2019
23 May 2019
12 December 2019
2 December 2020
Buy-Out Award
3 November 2020
Recruitment & Retention Plan
30 October 2015
12 May 2016
1 August 2017
11 February 2019
12 December 2019
18 February 2020
22 October 2020
3 November 2020
Deferred Bonus Plan
11 February 2019
22 October 2020
MCB compensation awards
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
830,702
146,833
246,211
146,211
939,466
553,799
-
-
494,646
87,634
164,140
626,311
478,343
605,249
293,961
-
-
-
-
-
772,952
772,952
2-3 years
842,636
842,636
2 years
490,387
7,205
1.5 – 2.5
years
193,817
2,775
1.8 years
64,469
16,634
2 – 3 years
448,936
448,936
2.5 years
446,081
446,081
2 years
2 years
56,383
16,704
56,383
16,704
1.5 years
139,657
139,657
2 years
2 years
13,513
16,704
13,513
16,704
8,735,067 3,160,858
Grant
price
€
3.40
2.93
2.99
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Partnership and Matching Share Schemes
1,128,304**
* Excludes awards that are deemed to be not capable of achieving their performance conditions at 28 February 2021.
** Includes both partnership and matching shares.
Market
value at
date
of grant
€
3.364
2.880
2.99
3.364
3.069
2.880
2.990
3.05
3.71
4.66
2.54
0.328
0.219
0.255
3.364
3.069
2.880
2.990
3.05
3.71
4.66
2.64
-
-
(0.1)
-
0.1
0.1
(0.6)
(0.4)
(0.3)
(0.1)
0.2
1.685
1.61
0.2
3.60 3.27 – 3.53
4.041 3.71 – 3.84
2.8172
2.8172
3.05 2.64 – 2.77
4.66
4.52
1.98
1.61
3.05
1.98
4.27
4.17
1.98
1.61
3.05
1.98
-
-
-
0.4
0.8
0.1
-
0.1
-
-
0.5
0.3
0.8
0.7
0.1
-
-
0.4
0.1
0.2
0.1
0.4
0.3
0.1
-
-
-
-
-
0.4
0.2
-
-
-
-
-
2.3
0.2
2.5
0.3
The amount charged to the Income Statement includes a credit of €1.5m (FY2020: €0.5m), being the reversal of previously expensed
charges on equity settled option schemes where the non-market performance conditions were deemed no longer capable of being
achieved or the employee has left the Group.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 177
4. SHARE-BASED PAYMENTS (continued)
A summary of activity under the Group’s equity settled share option schemes with the weighted average exercise price of the share options
is as follows:
Outstanding at beginning of year
Granted
Exercised
Forfeited/lapsed
Outstanding at end of year
2021
2020
Number of
options/ equity
interests
4,788,136
1,788,653
(1,002,587)
(2,413,344)
3,160,858
Weighted average
exercise price
€
Number of
options/ equity
interests
Weighted average
exercise price
€
1.00
5,491,198
-
1,415,187
0.29
1.47
0.30
(259,166)
(1,859,083)
4,788,136
1.33
-
1.40
1.16
1.00
The aggregate number of share options/equity interests exercisable at 28 February 2021 was 469,977 (FY2020: 345,015).
The unvested share options/equity Interests (excluding those awards which are not deemed capable of vesting) outstanding at 28 February
2021 have a weighted average vesting period outstanding of 1.9 years (FY2020: 1.3 years). The weighted average contractual life outstanding
of vested and unvested share options/equity interests (excluding those which are not deemed capable of vesting) is 6.6 years (FY2020: 7.1
years).
The weighted average market share price at date of exercise of all share options/equity Interests exercised during the year was £2.22 or
€2.48 euro equivalent (FY2020: €4.39); the average share price for the year was £2.15 or €2.41 euro equivalent (FY2020: €4.03); and the
market share price as at 28 February 2021 was £2.58 or €2.96 euro equivalent (29 February 2020: £3.28 or €3.84 euro equivalent).
5. EXCEPTIONAL ITEMS
Operating costs
COVID-19 (a)
Restructuring costs (b)
Impairment of equity accounted investment (c)
Impairment of property, plant & equipment (d)
Impairment of intangible assets (e)
Contract termination (f)
Other (g)
Operating (loss)/profit exceptional items
Profit on disposal (h)
Finance expense (i)
Share of equity accounted investments’ exceptional items (c)
Included in loss before tax
Income tax credit (j)
Included in loss after tax
2021
€m
(4.6)
(8.1)
(9.1)
(1.2)
-
-
(2.2)
(25.2)
5.8
(7.9)
(8.8)
(36.1)
2.4
(33.7)
2020
€m
(47.6)
(3.0)
-
(1.0)
(34.2)
(4.4)
(0.8)
(91.0)
0.9
-
(2.4)
(92.5)
9.8
(82.7)
Corporate GovernanceBusiness & StrategyFinancial Statements
178
5. EXCEPTIONAL ITEMS (continued)
(a) COVID-19
The Group has continued to account for the ongoing COVID-19 pandemic as an exceptional item and has incurred an exceptional charge
of €4.6m from operating activities at 28 February 2021 in this regard (FY2020: €47.6m). The Group reviewed the recoverability of its debtor
book and advances to customers and booked a credit of €6.1m with respect to its provision against trade debtors (FY2020: charge of
€19.4m) and a charge of €1.2m with respect to its provision for advances to customers (FY2020: €5.8m). The Group incurred exceptional
charges of €5.8m with respect to inventory (FY2020: €10.6m), this related to inventory that became obsolete, all as a consequence of the
COVID-19 restrictions. The Group incurred costs of €1.7m with respect to a provision for lost kegs, €0.3m with respect to the write off of
an IT intangible asset where the project will now not be completed (FY2020: €2.4m) due to COVID-19 and a net credit of €0.6m (FY2020:
charge €9.4m) with respect to the release of a trade provision. Other costs of €2.3m were incurred, which included site improvement costs,
impairment of brand dispense equipment and an excess holiday accrual all directly linked to the pandemic.
(b) Restructuring costs
Restructuring costs of €8.1m were incurred in the current financial year. These included severance costs of €6.8m, of which €4.9m was
incurred with respect to the restructuring of the Group as a consequence of the COVID-19 pandemic and €1.9m arose as a consequence
of the optimisation of the delivery networks in England and Scotland. The Group also incurred additional costs of €2.0m with respect to the
optimisation of the delivery networks in England and Scotland which was offset by a credit of €0.7m relating to the profit on disposal of a
property as a direct consequence of the optimisation project.
Restructuring costs of €3.0m were incurred in the prior financial year. These costs primarily related to severance costs arising from the
acquisition and subsequent integration of Matthew Clark and Bibendum of €2.3m. Restructuring costs of €0.5m related to the centralisation
of accounting services. Other restructuring initiatives across the Group in the prior financial year resulted in a further charge of €0.2m.
(c) Equity accounted investments’ exceptional items
The hospitality and pub industry in the United Kingdom have been significantly curtailed by lockdowns and trading restrictions since March
2020. The Group assessed the carrying value of its equity accounted investments at 28 February 2021, in light of the underutilisation of their
pub assets as a direct consequence of such lockdowns, and recorded an impairment charge of €8.9m with respect to its carrying value of
its investment in Admiral Taverns and €0.2m with respect to the carrying value of its investment in Drygate Brewing Company Limited.
The Group also incurred €8.8m with respect to its share of Admiral Taverns’ exceptional items. These included a charge of €7.0m (FY2020:
€2.7m) with respect to the Group’s share of the revaluation loss arising from the fair value exercise to value Admiral’s property assets at 28
February 2021. As a result of the same valuation exercise, a loss of €0.4m (FY2020: a gain of €3.7m) with respect to the Group’s share of the
revaluation, was recognised in Other Comprehensive Income. The Group also recognised €1.8m with respect to its share of Admiral’s other
exceptional items for the year, including €0.8m with respect to a provision against trade debtors as a consequence of COVID-19, €0.5m with
respect to an Asbestos provision with the remaining €0.5m in relation to other charges directly attributable to COVID-19.
In the prior financial year, the Group invested €10.7m which gave rise to capital duties to be expensed in relation to the acquisition (the
Group’s share of this expense was €2.9m). This was offset by recognition of the Group’s share of an adjustment made by the investee to
recognise a higher deferred tax asset in respect of timing differences on fixed assets in respect of prior years (the Group’s share of this gain
was €3.2m).
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 179
5. EXCEPTIONAL ITEMS (continued)
(d) Impairment of property, plant & equipment
Property (comprising freehold land & buildings) and plant & machinery are valued at fair value on the Consolidated Balance Sheet and
reviewed for impairment on an annual basis. During the current financial year, as outlined in detail in note 11, the Group engaged external
valuers to value the freehold land & buildings and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal
sites. Using the valuation methodologies, this resulted in a net revaluation loss of €1.2m (FY2020: €1.0m) accounted for in the Consolidated
Income Statement and a gain of €0.9m (FY2020: €1.1m) accounted for within Other Comprehensive Income.
(e) Impairment of intangible assets
To ensure that goodwill and brands considered to have an indefinite useful economic life are not carried at above their recoverable amount,
impairment reviews are performed annually or more frequently if there is an indication that their carrying amount(s) may not be recoverable,
comparing the carrying value of the assets with their recoverable amount using value in use computations. The Group performed an
impairment review at 28 February 2021 and all assets were deemed to be recoverable.
In the prior financial year, the Group recorded an impairment charge of €34.1m with respect to the Group’s North America segment and in
particular the Woodchuck suite of brands. An impairment of €0.1m was also taken with respect to the Group’s Matthew Clark Bibendum
cash generating unit directly attributable to a discontinued brand.
(f) Contract termination
In the prior financial year, the Group terminated a number of its long-term apple contracts, which were deemed surplus to requirements,
incurring a cost of €4.4m.
(g) Other
Other exceptional costs of €2.2m were incurred by the Group in the year with respect to a provision against legal disputes. In the prior
financial year, the Group incurred costs of €0.2m associated with a previous acquisition and incurred €0.6m with respect to incremental
costs associated with the dual running of warehouse management systems in Scotland due to system implementation delays.
(h) Profit on disposal
During the current financial year, as outlined in further detail in note 10, the Group disposed of its Tipperary Water Cooler business for an
initial consideration of €7.4m, realising a profit of €5.8m on disposal.
During the prior financial year, the Group disposed of its equity accounted investment in a Canadian company for cash proceeds of €6.1m,
realising a profit of €2.6m on disposal. The Group also disposed of its investment and non-controlling interest in Peppermint Events Limited
at a loss of €1.7m.
(i) Exceptional finance charges
During the current financial year, the Group successfully negotiated covenant waivers due to the impact of COVID-19 with its lenders. Costs
of €7.9m were incurred directly associated with these waivers including waiver fees, increased margins payable and other professional fees
associated with covenant waivers.
(j) Income tax credit
The tax credit in the current financial year, with respect to exceptional items amounted to €2.4m (FY2020: €9.8m).
Corporate GovernanceBusiness & StrategyFinancial Statements 180
6. FINANCE INCOME AND EXPENSE
Recognised in Income Statement
Finance income:
Interest income
Total finance income
Finance expense:
Interest expense
Other finance expense
Interest on lease liabilities
Total finance expense
Exceptional finance expense:
Interest expense
Total finance expense exceptional items
Net finance expense
Recognised directly in Other Comprehensive Income
Foreign currency translation differences arising on the net investment in foreign operations
Net (expense)/income recognised directly in Other Comprehensive Income
2021
€m
-
-
(13.1)
(2.9)
(3.5)
(19.5)
(7.9)
(7.9)
2020
€m
0.5
0.5
(12.8)
(3.9)
(3.6)
(20.3)
-
-
(27.4)
(19.8)
2021
€m
(17.4)
(17.4)
2020
€m
1.4
1.4
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
7. INCOME TAX
(a) Analysis of (credit)/expense in year recognised in the Income Statement
Current tax:
Irish corporation tax
Foreign corporation tax
Adjustment in respect of previous years
Deferred tax:
Irish
Foreign
Adjustment in respect of previous years
Rate change impact
Total income tax (credit)/expense recognised in Income Statement
Relating to continuing operations
– continuing operations before exceptional items
– continuing operations exceptional items
Total
181
2020
€m
2.2
9.6
(2.7)
9.1
0.6
(7.2)
-
-
(6.6)
2.5
12.3
(9.8)
2.5
2021
€m
2.3
(4.0)
(2.0)
(3.7)
0.6
(14.2)
0.2
0.3
(13.1)
(16.8)
(14.4)
(2.4)
(16.8)
The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the Republic of Ireland, as explained
below:
(Loss)/profit before tax
Less: Group’s share of equity accounted investments’ loss/(profit) after tax
Adjusted (loss)/profit before tax
Tax at standard rate of corporation tax in the Republic of Ireland of 12.5%
Actual tax (credit)/expense is affected by the following:
(Non-taxable income)/expenses not deductible for tax purposes
Adjustments in respect of prior years
Income taxed at rates other than the standard rate of tax
Other differences
Non-recognition of deferred tax assets
Total income tax (credit)/expense
2021
€m
(121.3)
14.9
(106.4)
(13.3)
(4.8)
(1.8)
(4.1)
0.5
6.7
(16.8)
2020
€m
11.6
(0.7)
10.9
1.4
10.8
(2.7)
(3.1)
(4.1)
0.2
2.5
Corporate GovernanceBusiness & StrategyFinancial Statements
182
7. INCOME TAX (continued)
(b) Deferred tax recognised directly in Other Comprehensive Income
Deferred tax arising on movement of derivatives designated as cash flow hedges
Deferred tax arising on revaluation of property, plant & machinery reflected in revaluation reserve
Deferred tax arising on movement of retirement benefits
Total
2021
€m
-
0.2
1.6
1.8
2020
€m
0.3
0.1
(0.7)
(0.3)
(c) Factors that may affect future charges
Future income tax charges may be impacted by changes to the corporation tax rates, for example the proposed but un-enacted UK
corporation tax rate of 25% (increased from 20%) due to come into effect on 1 April 2023, and/or changes to corporation tax legislation in
force in the jurisdictions in which the Group operates.
8. DIVIDENDS
Dividends charged to Income Statement:
Final: €nil dividend paid (FY2020: 9.98c paid in July 2019)
Interim: €nil dividend paid (FY2020: 5.50c paid in December 2019)
Credit with respect to share-based payments dividend entitlements
Total equity dividends
Settled as follows:
Paid in cash
Scrip dividend
(Credit)/charge with respect to share-based payments dividend entitlements
2021
€m
-
-
(0.2)
(0.2)
-
-
(0.2)
(0.2)
2020
€m
30.8
17.3
-
48.1
29.7
18.1
0.3
48.1
In order to achieve better alignment of the interest of share-based remuneration award recipients with the interests of shareholders,
shareholder approval was given at the 2012 AGM to a proposal that awards made and that vest under the LTIP incentive programme should
reflect the equivalent value to that which accrues to shareholders by way of dividends during the vesting period. The Deferred Bonus Plan
and the Buy-Out Awards also accrue dividends during the vesting period. A credit of €0.2m (FY2020: €0.3m charge) in the current financial
year is a consequence of dividend accruing share-based payment awards deemed to have lapsed and their related dividend accrual being
released.
A payment of €0.4m was made in the current financial year to recipients of dividend accruing share based payment awards, where the
award was exercised in the current financial year and the resulting dividends accrued over the vesting period were paid (FY2020: €nil).
Due to COVID-19, no interim dividend was paid and no final dividend is being declared with respect to FY2021. Total dividend for the prior
financial year was 5.50 cent. Total dividends of €nil (final dividend with respect to FY2020 and interim dividend with respect to FY2021) were
recognised as a deduction from the retained income reserve in the year ended 28 February 2021 (FY2020: 15.48 cent). A credit of €0.2m
was recorded in the current financial year as a consequence of dividend accruing share-based payment awards deemed to have lapsed and
their related dividend accrual being released.
Final dividends on ordinary shares are recognised as a liability in the financial statements only after they have been approved at an Annual
General Meeting of the Company. Interim dividends on ordinary shares are recognised when they are paid.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
183
2021
Number
‘000
2020
Number
‘000
319,495
320,354
-
985
-
4,624
142
(5,625)
320,480
319,495
309,149
308,906
-
1,690
309,149
310,596
2021
€m
(104.5)
33.7
(70.8)
2020
€m
9.1
82.7
91.8
Cent
Cent
(33.8)
(22.9)
(33.8)
(22.9)
2.9
29.7
2.9
29.6
9. EARNINGS PER ORDINARY SHARE
Denominator computations
Number of shares at beginning of year
Shares issued in lieu of dividend
Shares issued in respect of options exercised
Share repurchased and subsequently cancelled
Number of shares at end of year (note 25)
Weighted average number of ordinary shares (basic)*
Adjustment for the effect of conversion of options
Weighted average number of ordinary shares, including options (diluted)
* Excludes 10.8m treasury shares (FY2020: 10.8m).
(Loss)/profit attributable to ordinary shareholders
Group (loss)/profit for the financial year
Adjustment for exceptional items, net of tax (note 5)
(Loss)/earnings as adjusted for exceptional items, net of tax
Basic (loss)/earnings per share
Basic (loss)/earnings per share
Adjusted basic (loss)/earnings per share
Diluted (loss)/earnings per share
Diluted (loss)/earnings per share
Adjusted diluted (loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the Group (loss)/profit for the financial year by the weighted average number of
ordinary shares in issue during the year, excluding ordinary shares purchased/issued by the Group and accounted for as treasury shares (at
28 February 2021: 10.8m shares; at 29 February 2020: 10.8m shares).
Diluted (loss)/earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all potential dilutive ordinary shares. The average market value of the Company’s shares for purposes of calculating the dilutive
effect of share options was based on quoted market prices for the period of the year that the options were outstanding.
Employee share awards (excluding awards which were granted under plans where the rules stipulate that obligations must be satisfied by
the purchase of existing shares (note 4)), which are performance-based are treated as contingently issuable shares because their issue is
contingent upon satisfaction of specified performance conditions in addition to the passage of time. In accordance with IAS 33 Earnings
per Share, these contingently issuable shares are excluded from the computation of diluted earnings per share where the vesting conditions
would not have been satisfied as at the end of the reporting period (1,930,864 at 28 February 2021 and 175,492 at 29 February 2020). If
dilutive other contingently issuable ordinary shares are included in diluted EPS based on the number of shares that would be issuable if the
end of the reporting period was the end of the contingency period.
Corporate GovernanceBusiness & StrategyFinancial Statements
184
10. BUSINESS COMBINATIONS/DIVESTMENTS AND NON-CONTROLLING INTERESTS
As part of a strategic review in the current financial year, the Group disposed of €1.3m of net assets with respect to its non-core Tipperary
Water Cooler business for an initial consideration of €7.4m. Further consideration may be payable dependent on further revenue targets
being achieved. Transaction costs of €0.3m were also incurred (included in the cash flows from operating activities) resulting in a profit on
disposal of €5.8m (note 5).
The net identifiable assets disposed were as follows:
Non-current assets
Property, plant & equipment (note 11)
Leased right-of-use assets (note 19)
Total non-current assets
Current assets
Cash
Inventories
Trade & other receivables
Current income tax asset
Current assets
Non-current liabilities
Lease liabilities (note 19)
Non-current liabilities
Current liabilities
Lease liabilities (note 19)
Trade & other payables
Current liabilities
Total net identifiable assets disposed
Total consideration
Net identifiable assets disposed
Transaction costs incurred
Profit on disposal
Satisfied by:
Cash consideration received
Deferred consideration
Total consideration
Analysis of cash flows on disposal:
Cash consideration received
Cash and cash equivalents disposed of
Net cash inflow
Asset value on
disposal
€m
0.9
0.4
1.3
0.5
0.1
0.3
0.1
1.0
(0.2)
(0.2)
(0.2)
(0.6)
(0.8)
1.3
7.4
(1.3)
(0.3)
5.8
7.2
0.2
7.4
7.2
(0.5)
6.7
Year ended 29 February 2020
In the prior financial year, the Group disposed of its investment and non-controlling interest in Peppermint Events Limited which it acquired
in FY2019 as part of the acquisition of Matthew Clark (Holdings) Limited and Bibendum PLB (Topco) Limited and their subsidiaries (together
“Matthew Clark and Bibendum”). A loss of €1.7m was incurred on disposal.
On disposal of Peppermint Events Limited the Group reversed the adjustment to Goodwill amounting to €0.6m for non-controlling interest.
Acquisition of equity accounted investments
Details of the Group’s equity accounted investments in the current and prior financial year are outlined in note 13.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 185
Freehold land &
buildings
€m
Plant &
machinery
€m
Motor vehicles &
other equipment
€m
Total
€m
90.3
191.4
0.6
3.9
2.2
1.5
-
0.6
7.8
(2.1)
(1.8)
(0.6)
98.5
195.3
(1.3)
0.4
3.2
(5.1)
-
(7.1)
-
(1.2)
10.4
(3.5)
(2.6)
-
7.1
-
88.6
205.5
67.2
0.3
3.6
-
0.3
(4.2)
67.2
(1.1)
1.7
-
(0.3)
(5.7)
-
(5.9)
55.9
348.9
1.5
15.3
0.1
-
(4.8)
361.0
(3.6)
12.5
(0.3)
(8.0)
(5.7)
-
(5.9)
350.0
15.0
138.4
51.0
204.4
0.1
-
(0.1)
1.8
0.2
(0.5)
0.2
4.9
0.2
(3.1)
(0.1)
6.3
16.8
143.2
54.3
(0.2)
-
(0.4)
-
2.1
18.3
70.3
81.7
(0.7)
-
(1.8)
-
4.7
145.4
60.1
52.1
(0.8)
(5.3)
(0.2)
(4.8)
3.8
47.0
8.9
12.9
0.5
(3.6)
-
13.0
214.3
(1.7)
(5.3)
(2.4)
(4.8)
10.6
210.7
139.3
146.7
11. PROPERTY, PLANT & EQUIPMENT
Group
Cost or valuation
At 1 March 2019
Translation adjustment
Additions
Revaluation/impairment of property, plant & machinery
Group transfer reclassification
Disposals
At 29 February 2020
Translation adjustment
Additions
Revaluation/impairment of property, plant & machinery
Assets held for sale (note 16)
Disposal of subsidiary (note 10)
Reclassification
Disposals
At 28 February 2021
Depreciation
At 1 March 2019
Translation adjustment
Disposals
Group transfer reclassification
Charge for the year
At 29 February 2020
Translation adjustment
Disposals
Assets held for sale (note 16)
Disposal of subsidiary (note 10)
Charge for the year
At 28 February 2021
Net book value
At 28 February 2021
At 29 February 2020
Corporate GovernanceBusiness & StrategyFinancial Statements
186
11. PROPERTY, PLANT & EQUIPMENT (continued)
28 February 2021
Leased right-of-use assets
At 28 February 2021, net carrying amount (note 19)
Total property, plant and equipment
29 February 2020
Leased right-of-use assets
At 29 February 2020, net carrying amount (note 19)
Total property, plant and equipment
Freehold land &
buildings Plant & machinery
€m
€m
Motor vehicles &
other equipment
€m
Total
€m
30.3
100.6
35.2
116.9
0.9
61.0
1.3
53.4
33.5
42.4
64.7
204.0
40.2
53.1
76.7
223.4
Cash outflow with respect to property, plant and equipment was €8.4m (FY2020: €15.3m) due to an increase in closing capital accruals at
28 February 2021. No depreciation is charged on freehold land which had a book value of €16.2m at 28 February 2021.
Valuation of freehold land & buildings and plant & machinery - 28 February 2021
In the current financial year, the Group engaged the Real Estate & Capital Equipment Valuation team of PricewaterhouseCoopers LLP to
value the Group’s freehold land & buildings and plant & machinery at the Group’s manufacturing facilities in Clonmel (Tipperary), Wellpark
(Glasgow) and the Group’s facility in Castel Branco in Portugal. The valuers are members of the Royal Institution of Chartered Surveyors with
experience of undertaking property, plant and equipment valuations on a global basis.
For specialised assets, comprising the production facilities at Clonmel, Wellpark Brewery and Portugal the Depreciated Replacement Cost
approach has been applied to value land & buildings. The Depreciated Replacement Cost approach was also used to derive fair value for the
plant & machinery at the Group’s manufacturing facilities given their specialised nature.
The result of these external valuations, as at 28 February 2021, was an increase in the value of freehold land & buildings of €3.2m of which
€2.3m was credited to the Income Statement and €0.9m was credited to Other Comprehensive Income. The value of plant & machinery
decreased by €3.5m which was expensed to the Income Statement as there was no previously recognised gain in the revaluation reserve
against which to offset.
For all other items of land & buildings and plant & machinery the Group completed an internal assessment of the appropriateness of their
carrying value. Assisted by a market overview provided by the valuation team from PricewaterhouseCoopers LLP, with respect to the
geographic locations of the Group’s assets, the Group concluded that the carrying value was appropriate at 28 February 2021 and no
adjustment was recorded in this regard.
Valuation of freehold land & buildings and plant & machinery - 29 February 2020
In the prior financial year, the Group also engaged the Real Estate & Capital Equipment Valuation team of PricewaterhouseCoopers LLP to
value the Group’s freehold land & buildings and plant & machinery at the Group’s manufacturing facilities in Clonmel (Tipperary), Wellpark
(Glasgow), and Vermont (USA) along with the Group’s depots in Ireland and the Group’s facility in Castel Branco in Portugal.
Two methodologies were also applied to value the land & buildings in the prior financial year depending upon the type of asset. For
specialised assets, such as the production facilities at Clonmel, Wellpark Brewery, Vermont and Portugal the Depreciated Replacement Cost
approach was applied. The distribution warehouses comprise standard distribution facilities with an active market and therefore they were
valued using a market approach. The Depreciated Replacement Cost approach was also used to derive fair value for the plant & machinery
at the Group’s manufacturing facilities given their specialised nature.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 187
11. PROPERTY, PLANT & EQUIPMENT (continued)
The result of these external valuations, as at 29 February 2020, was an increase in the value of freehold land & buildings of €2.2m of which
€1.1m was credited to the Income Statement and €1.1m was credited to the revaluation reserve via Other Comprehensive Income. The value
of plant & machinery decreased by €2.1m which was expensed to the Income Statement as there was no previously recognised gain in the
revaluation reserve against which to offset.
Useful Lives
The following useful lives were attributed to the assets:
Asset category
Tanks
Process equipment
Bottling & packaging equipment
Process automation
Buildings
Useful life
30 – 35 years
20 – 25 years
15 – 20 years
10 years
50 years
Net book value (pre right-of-use assets)
Carrying value at 28 February 2021 post revaluation
Carrying value at 28 February 2021 pre revaluation
Gain/(loss) on revaluation
28 February 2021 classified within:
Income Statement
Other Comprehensive Income
Net book value (pre right-of-use assets)
Carrying value at 29 February 2020 post revaluation
Carrying value at 29 February 2020 pre revaluation
Gain/(loss) on revaluation
29 February 2020 classified within:
Income Statement
Other Comprehensive Income
Freehold land &
buildings Plant & machinery
€m
€m
Motor vehicles &
other equipment
€m
70.3
67.1
3.2
60.1
63.6
(3.5)
8.9
8.9
-
Freehold land &
buildings
€m
Plant &
machinery
€m
Motor vehicles &
other equipment
€m
81.7
79.5
2.2
52.1
54.2
(2.1)
12.9
12.9
-
Total
€m
139.3
139.6
(0.3)
(1.2)
0.9
Total
€m
146.7
146.6
0.1
(1.0)
1.1
Corporate GovernanceBusiness & StrategyFinancial Statements
188
11. PROPERTY, PLANT & EQUIPMENT (continued)
Fair value hierarchy
The valuations of freehold land & buildings and plant & machinery, excluding right-of-use assets, are derived using data from sources which
are not widely available to the public and involve a degree of judgement. For these reasons, the valuations of the Group’s freehold land &
buildings and plant & machinery are classified as ‘Level 3’ as defined by IFRS 13 Fair Value Measurement, and as illustrated below:
Recurring measurements
Freehold land & buildings measured at market value
Freehold land & buildings measured at Depreciated Replacement Cost
Plant & machinery measured at Depreciated Replacement Cost
At 28 February 2021
Recurring measurements
Freehold land & buildings measured at market value
Freehold land & buildings measured at Depreciated Replacement Cost
Plant & machinery measured at Depreciated Replacement Cost
At 29 February 2020
Carrying amount
€m
Quoted prices
Level 1
€m
Significant
observable
Level 2
€m
Significant
unobservable
Level 3
€m
14.7
55.6
60.1
130.4
-
-
-
-
-
-
-
-
14.7
55.6
60.1
130.4
Carrying amount
€m
Quoted prices
Level 1
€m
Significant
observable
Level 2
€m
Significant
unobservable
Level 3
€m
21.8
59.9
52.1
133.8
-
-
-
-
-
-
-
-
21.8
59.9
52.1
133.8
Measurement techniques
The Group used the following techniques to determine the fair value measurements categorised in Level 3:
• The Group’s depots are valued using a market value approach. The market value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date.
• The Group’s specialised assets such as the production facilities at Clonmel, Wellpark and Portugal are valued using the Depreciated
Replacement Cost approach. Depreciated Replacement Cost is assessed, firstly, by the identification of the gross replacement cost
for each class of asset at each of the Group’s plants. A depreciation factor derived from both the physical and functional obsolescence
of each class of asset, taking into account estimated residual values at the end of the life of each class of asset, is then applied to the
gross replacement cost to determine the net replacement cost. An economic obsolescence factor, which is derived based on current
and anticipated capacity or utilisation of each plant and machinery asset, at each of the Group’s plants, as a function of total available
production capacity, is applied to determine the Depreciated Replacement Cost.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
189
11. PROPERTY, PLANT & EQUIPMENT (continued)
Unobservable inputs
The significant unobservable inputs used in the market value measurement of land & buildings is as follows:
Valuation technique
Significant unobservable inputs
Comparable market
transactions
Price per square foot/
acre
Range of unobservable inputs –
Land (‘000)
Range of unobservable inputs –
Buildings
Relationship of unobservable
inputs to fair value
The higher the price per
square foot/acre, the
higher the fair value.
Republic of Ireland
€50 – €150 per hectare
Portugal
€40 per hectare
€64 – €1,119 per square
metre
€96 - €571 per square
metre
United States
$39 per acre
$48 per square foot
United Kingdom
£175-£225 per acre
£251 to £1,524 per
square metre
The significant unobservable inputs used in the Depreciated Replacement Cost measurement of freehold land & buildings and plant &
machinery are as follows:
Gross replacement cost adjustment
Economic obsolescence adjustment
factor
Increase in gross replacement cost of 0% (FY2020: 0%), based on management’s judgment
supported by discussions with valuers
Economic obsolescence, considered on an asset by asset basis, for each plant, ranging from
0% to 100% (FY2020: 0% to 100%). The weighted average obsolescence factor by site is
as follows: Cidery, Ireland – 21%; Brewery Scotland – 3% and Cidery, United States – 41%,
Portugal – 0%
Physical and functional obsolescence
adjustment factor
Adjustment for changes to physical and functional obsolescence ranging from 63% to 85%
(FY2020: 49% to 76%)
The carrying value of depot freehold land & buildings would increase/(decrease) by €0.7m if the comparable open market value increased/
(decreased) by 5%.
The carrying value of freehold land & buildings which is valued on the Depreciated Replacement Cost basis, would increase/(decrease) by
€2.2m if the economic obsolescence adjustment factor was (decreased)/increased by 5%. The estimated carrying value of the same land &
buildings would increase/(decrease) by €0.9m if the gross replacement cost was increased/(decreased) by 2%.
The carrying value of plant & machinery in the Group which is valued on the Depreciated Replacement Cost basis, would increase by €2.9m
if the economic obsolescence adjustment factor was decreased by 5%. If the economic obsolescence adjustment increased by 5% the
value would increase by €3.2m. If the gross replacement cost was increased by 2% the carrying value of the Group’s plant & machinery
would increase by €0.6m. If the gross replacement cost decreased by 2% the carrying value of the Group’s plant & machinery would
decrease by €0.9m.
Company
The Company has no property, plant & equipment.
Corporate GovernanceBusiness & StrategyFinancial Statements
190
12. GOODWILL & INTANGIBLE ASSETS
Cost
At 1 March 2019
Additions
Write-back relating to non-controlling interest
Disposals
Translation adjustment
At 29 February 2020
Additions
Translation adjustment
At 28 February 2021
Amortisation and impairment
At 1 March 2019
Disposals
Impairment charge for the year
Amortisation charge for the year
At 29 February 2020
Impairment charge for the year
Amortisation charge for the year
At 28 February 2021
Net book value
At 28 February 2021
At 29 February 2020
Goodwill
€m
Brands
€m
Other intangible
assets
€m
601.2
322.1
-
0.6
-
1.1
602.9
-
(3.1)
599.8
76.2
-
-
-
76.2
-
-
-
-
-
2.0
324.1
-
(2.2)
321.9
180.4
-
34.2
-
214.6
-
-
Total
€m
958.0
4.5
0.6
(0.1)
3.2
34.7
4.5
-
(0.1)
0.1
39.2
966.2
1.6
(0.3)
40.5
17.7
(0.1)
2.4
2.5
22.5
0.3
2.6
1.6
(5.6)
962.2
274.3
(0.1)
36.6
2.5
313.3
0.3
2.6
76.2
214.6
25.4
316.2
523.6
526.7
107.3
109.5
15.1
16.7
646.0
652.9
Goodwill
Goodwill has been attributed to cash generating units (as identified under IAS 36 Impairment of Assets) as follows:
At 1 March 2019
Write-back relating to non-controlling
interest
Translation adjustment
At 29 February 2020
Translation adjustment
At 28 February 2021
Ireland
€m
154.5
-
-
154.5
-
154.5
Scotland
€m
59.5
-
0.3
59.8
(0.7)
59.1
C&C Brands
€m
North America
€m
180.8
-
0.1
180.9
(0.3)
180.6
9.2
-
-
9.2
-
9.2
Export
€m
16.0
-
-
MCB
€m
105.0
0.6
0.7
Total
€m
525.0
0.6
1.1
16.0
106.3
526.7
-
16.0
(2.1)
104.2
(3.1)
523.6
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
191
12. GOODWILL & INTANGIBLE ASSETS (continued)
Goodwill consists both of goodwill capitalised under Irish GAAP which at the transition date to IFRS was treated as deemed cost and
goodwill that arose on the acquisition of businesses since that date which was capitalised at cost and subsequently at fair value and
represents the synergies arising from cost savings and the opportunity to utilise the extended distribution network of the Group to leverage
the marketing of acquired products.
In line with IAS 36 Impairment of Assets goodwill is allocated to each cash generating unit (CGU) which is expected to benefit from the
combination synergies. These CGU’s represent the lowest level within the Group at which goodwill is monitored for internal management
purposes.
All goodwill is regarded as having an indefinite life and is not subject to amortisation under IFRS but is subject to annual impairment testing.
In the prior financial year, on disposal of Peppermint Events Limited the Group reversed the adjustment to Goodwill amounting to €0.6m for
non-controlling interest.
Brands
Brands are expected to generate positive cash flows for as long as the Group owns the brands and have been assigned indefinite lives.
Capitalised brands include the Tennent’s beer brands and the Gaymers cider brands acquired during FY2010, Waverley wine brands
acquired during FY2013 and the Matthew Clark and Bibendum brands acquired during FY2019.
The Tennent’s, Gaymers, Waverley wine brands and Matthew Clark and Bibendum brands were valued at fair value on the date of
acquisition in accordance with the requirements of IFRS 3 (2008) Business Combinations by independent professional valuers. The Waverley
wine brands were valued at cost.
The carrying value of the Tennent’s beer brand as at 28 February 2021 amounted to €73.5m (FY2020: €75.0m) and has an indefinite life
which is subject to annual impairment testing. The movement in the current financial year is due to translation adjustment.
The carrying amount of brands with indefinite lives are allocated to operating segments as follows:
At 1 March 2019
Impairment charge for the year
Translation adjustment
At 29 February 2020
Translation adjustment
At 28 February 2021
Great Britain
€m
International
€m
91.7
-
0.6
92.3
(1.8)
90.5
32.8
(34.1)
1.3
-
-
-
MCB
€m
17.2
(0.1)
0.1
17.2
(0.4)
16.8
Total
€m
141.7
(34.2)
2.0
109.5
(2.2)
107.3
The brands are protected by trademarks, which are renewable indefinitely in all major markets where they are sold and it is the Group’s
policy to support them with the appropriate level of brand advertising. In addition, there are not believed to be any legal, regulatory or
contractual provisions that limit the useful lives of these brands. Accordingly, the Directors believe that it is appropriate that the brands be
treated as having indefinite lives for accounting purposes.
No intangible assets were acquired by way of government grant, there is no title restriction on any of the capitalised intangible assets and
no intangible assets are pledged as security. There are no contractual commitments in relation to the acquisition of intangible assets at year
end.
In the prior financial year, the Group recognised an impairment charge of €34.1m relating to the North America cash generating unit and
€0.1m relating to Matthew Clark Bibendum cash generating unit.
Corporate GovernanceBusiness & StrategyFinancial Statements
192
12. GOODWILL & INTANGIBLE ASSETS (continued)
Other intangible assets
Other intangible assets have been attributed to operating segments (as identified under IFRS 8 Operating Segments) as follows:
Cost
At 1 March 2019
Additions
Disposals
Translation adjustment
At 29 February 2020
Additions
Translation adjustment
At 28 February 2021
Amortisation and impairment
At 1 March 2019
Disposals
Impairment charge for the year
Amortisation charge for the year
At 29 February 2020
Impairment charge for the year
Amortisation charge for the year
At 28 February 2021
Net book value
At 28 February 2021
At 29 February 2020
Ireland
€m
Great Britain
€m
International
€m
6.8
-
-
-
6.8
0.2
-
7.0
2.1
-
-
0.7
2.8
-
0.6
3.4
3.6
4.0
15.8
2.1
-
-
17.9
0.8
(0.1)
18.6
14.2
-
-
0.2
14.4
-
0.5
14.9
3.7
3.5
0.3
-
-
-
0.3
-
-
0.3
0.2
-
-
0.1
0.3
-
-
0.3
-
-
MCB
€m
11.8
2.4
(0.1)
0.1
14.2
0.6
(0.2)
14.6
1.2
(0.1)
2.4
1.5
5.0
0.3
1.5
6.8
7.8
9.2
Total
€m
34.7
4.5
(0.1)
0.1
39.2
1.6
(0.3)
40.5
17.7
(0.1)
2.4
2.5
22.5
0.3
2.6
25.4
15.1
16.7
In the current financial year, the Group wrote off an IT intangible asset where the project was not completed, as a direct consequence of
COVID-19 of €0.3m (FY2020: €2.4m).
Other intangible assets comprise the fair value of trade relationships acquired as part of the acquisition of Matthew Clark and Bibendum in
FY2019, trade relationships acquired as part of the acquisition of TCB Wholesale during FY2015, the Gleeson trade relationships acquired
during FY2014 and 20 year distribution rights for third party beer products acquired as part of the acquisition of the Tennent’s business
during FY2010. These were valued at fair value on the date of acquisition in accordance with the requirements of IFRS 3 (2008) Business
Combinations by independent professional valuers. The intangible assets have a finite life and are subject to amortisation on a straight-line
basis. Also included within Other Intangible assets are software and licences.
The amortisation charge for the year ended 28 February 2021 with respect to intangible assets was €2.6m (2020: €2.5m).
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
193
12. GOODWILL & INTANGIBLE ASSETS (continued)
Impairment testing
To ensure that goodwill and brands that are considered to have an indefinite useful economic life are not carried at above their recoverable
amount, impairment testing is performed comparing the carrying value of the assets with their recoverable amount using value-in-use
computations. Impairment testing is performed annually or more frequently if there is an indication that the carrying amount may not be
recoverable. Where the value-in-use exceeds the carrying value of the asset, the asset is not impaired.
As permitted by IAS 36 Impairment of Assets, the value of the Group’s goodwill has been allocated to groups of cash generating units (CGU),
which are not larger than an operating segment determined in accordance with IFRS 8 Operating Segments. These business segments
represent the lowest levels within the Group at which the associated goodwill is monitored for management purposes.
The recoverable amount is calculated using value-in-use computations based on estimated future cash flows discounted to present value
using a discount rate appropriate to each cash generating unit and brand. Terminal values are calculated on the assumption that cash flows
continue in perpetuity.
The key assumptions used in the value-in-use computations using level 3 inputs in accordance with fair value hierarchy are:
• Expected volume, net revenue and operating profit growth rates – cash flows for each CGU and brand are based on detailed financial
projections for years one and two which were then projected out for years three, four and five.
• Long-term growth rate – cash flows after the first five years were extrapolated using a long-term growth rate, on the assumption that cash
flows for the first five years will increase at a nominal growth rate in perpetuity.
• Discount rate.
The key assumptions were based on management’s assessment of anticipated market conditions for each CGU. The key assumption for the
Group in the current financial year is COVID-19, how and when restrictions are lifted and the corresponding impact on the trade as the sector
reopens. The Group took into account historical experience and in particular the Group’s experience over the last twelve month period. The
Group also considers its core strengths and weaknesses in the markets in which it operates and external factors such as macro-economic
factors, inflation expectations by geography, regulation and expected changes in regulation (such as expected changes to duty rates and
minimum pricing), market growth rates, sales price trend, competitor activity, market share targets and strategic plans and initiatives.
A terminal growth rate of 1.75%-2.00% (FY2020: 1.75%-2.00%) in perpetuity was assumed based on an assessment of the likely long-term
growth prospects for the sectors and geographies in which the Group operates. The resulting cash flows were discounted to present value
using a range of discount rates between 7.11%-8.41% (FY2020: 5.60%-8.25%); these rates are in line with the Group’s estimated pre-tax
weighted average cost of capital for the three main geographies in which the Group operates (Ireland, Great Britain and North America),
arrived at using the Capital Asset Pricing Model as adjusted for asset and country specific factors.
In the prior financial year, with regard to the Group’s North America segment and in particular the Woodchuck suite of brands, the projected
cash flows no longer supported the carrying value of the brand and an impairment of €34.1m was taken at 29 February 2020.
In the prior financial year, the Group also booked an impairment of €0.1m with respect to the Group’s Matthew Clark Bibendum cash
generating unit directly related to a discontinued brand.
Corporate GovernanceBusiness & StrategyFinancial Statements
194
12. GOODWILL & INTANGIBLE ASSETS (continued)
The Group has performed the detailed impairment testing calculations by cash generating units with the following discount rates being
applied:
Market
Ireland
Scotland
C&C Brands
North America
Export
Matthew Clark Bibendum (MCB)
Discount rate
2021
Discount rate
2020
Terminal growth
rate 2021
Terminal growth
rate 2020
8.41%
7.56%
7.56%
7.11%
7.56%
7.56%
7.25%
7.25%
7.25%
8.25%
5.60%
7.25%
2.00%
2.00%
2.00%
1.75%
2.00%
2.00%
2.00%
2.00%
2.00%
1.75%
2.00%
2.00%
The impairment testing carried out at year end identified headroom in the recoverable amount of all the Group’s goodwill and intangible
assets (FY2020: impairment of €34.1m in North America).
Significant goodwill amounts
The goodwill allocated to Ireland, C&C Brands and MCB CGU’s amount to 30% (FY2020: 29%), 34% (FY2020: 34%) and 20% (FY2020:
20%) of the total carrying amount of goodwill respectively.
Goodwill allocated to the cash generating unit
at balance sheet date
Discount rate applied to the cash flow
projections (real pre-tax)
Ireland
2021
2020
C&C Brands
2021
2020
MCB
2021
2020
154.5
154.5
180.6
180.9
104.2
106.3
8.41%
7.25%
7.56%
7.25%
7.56%
7.25%
Sensitivity analysis
In the current financial year, the impairment testing carried out as at 28 February 2021 identified headroom in the recoverable amount of the
brands and goodwill compared to their carrying values.
The key sensitivities for the impairment testing are net revenue and operating profit assumptions, discount rates applied to the resulting cash
flows and the expected long-term growth rates.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
195
12. GOODWILL & INTANGIBLE ASSETS (continued)
The value-in-use calculations indicate significant headroom in respect of all cash generating units. The cash generating unit with the least
headroom, is the C&C Brands cash generating unit although the headroom is in excess of €68m. The table below identifies the impact of a
movement in the key inputs with respect to C&C Brands.
Increase/(decrease) in operating profit
Increase in discount rate
Decrease in discount rate
Increase in terminal growth rate
Decrease in terminal growth rate
2021
2020
Movement
%
2.5/(2.5)
0.25
(0.25)
0.25
(0.25)
Increase/
(decrease) on
headroom
€m
6.9/(6.9)
(12.0)
13.1
10.6
(9.7)
Movement
%
2.5/(2.5)
0.25
(0.25)
0.25
(0.25)
Increase/
(decrease) on
headroom
€m
7.0/(7.0)
(10.2)
11.2
11.7
(10.7)
The Group concludes that no reasonable movement in any of the underlying assumptions would result in a material impairment in any of the
Group’s cash generating units or brands.
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS
(a) Equity accounted investments/financial assets – Group
Investment in equity accounted investments/
financial assets
Carrying amount at 1 March 2019
Purchase price paid
Disposal
Share of profit/(loss) after tax
Share of exceptional loss after tax (note 5)
Share of Other Comprehensive Income
Translation adjustment
Carrying amount at 29 February 2020
Purchase price paid
Share of loss after tax
Share of exceptional loss after tax (note 5)
Impairment of equity investment (note 5)
Equity accounted investment asset adjustment
Share of Other Comprehensive Income
Translation adjustment
Carrying amount at 28 February 2021
Joint ventures
Admiral Taverns
€m
Drygate Brewing
Company
Limited
€m
Canadian
Investment
€m
Associates
Whitewater
Brewing
Company
Limited
€m
Other
€m
Total
€m
67.3
10.7
-
3.1
(2.4)
3.7
0.4
82.8
6.7
(6.0)
(8.8)
(8.9)
(1.1)
(0.4)
(2.2)
62.1
0.3
-
-
-
-
-
-
0.3
-
(0.1)
-
(0.2)
-
-
-
-
3.5
-
(3.5)
-
-
-
-
-
-
-
-
-
-
-
-
-
0.3
-
-
0.1
-
-
-
0.4
-
-
-
-
-
-
-
0.4
-
0.5
-
(0.1)
-
-
-
0.4
0.2
-
-
-
-
-
-
0.6
71.4
11.2
(3.5)
3.1
(2.4)
3.7
0.4
83.9
6.9
(6.1)
(8.8)
(9.1)
(1.1)
(0.4)
(2.2)
63.1
Corporate GovernanceBusiness & StrategyFinancial Statements
196
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
Summarised financial information for the Group’s investment in joint ventures and associates which are accounted for using the equity
method is as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Revenue
(Loss)/profit before tax
Other Comprehensive Income
Admiral Taverns*
2021
€m
Joint ventures
2021
€m
Associates
2021
€m
379.4
36.1
(239.0)
(27.2)
149.3**
42.7
(37.9)
(0.8)
2.4
0.8
(1.7)
(1.3)
0.2
2.5
3.2
1.4
(2.1)
(0.7)
1.8
0.3
(0.2)
-
- -
Admiral
Taverns*
2020
€m
417.7
30.9
(242.6)
(32.5)
173.5
86.6
3.8
7.7
Joint ventures
2020
€m
Associates
2020
€m
2.6
1.0
(1.9)
(1.3)
0.4
4.3
(0.2)
-
3.3
1.8
(2.2)
(1.0)
1.9
3.1
(0.2)
-
*
Included in current assets for Admiral Taverns is cash and cash equivalents of €15.0m (FY2020: €12.9m). Admiral Taverns also had depreciation and amortisation of €10.0m
(FY2020: €8.6m), net interest costs of €16.8m (FY2020: €11.2m) and tax credit of €7.5m (FY2020: tax charge €2.3m)
** Net assets of €149.3m by the Group’s share in equity at 28 February 2021 of 48.85% amounts to €72.9m however the percentage ownership of the Group has changed since
original investment (including during the current financial year) and therefore the weighted share of net assets attributable to the Group at 28 February 2021 was €71.0m. The
Group also booked an impairment charge of €8.9m in the current financial year which results in a carrying value at 28 February 2021 of €62.1m
A listing of the Group’s equity accounted investments is contained in note 29.
Admiral Taverns
On 6 December 2017, the Group entered into a joint venture arrangement for a 49.9% share in Brady P&C Limited (“Admiral Taverns”), a
UK incorporate entity with Proprium Capital Partners (50.1%). Brady P&C Limited subsequently incorporated a UK company, Brady Midco
Limited where Admiral management acquired 6.5% of the shares. Brady Midco Limited incorporated Brady Bidco Limited which acted as
the acquisition vehicle to acquire the entire share capital of AT Brit Holdings Limited (trading as Admiral Taverns) on the 6 December 2017.
The equity investment by the Group was £37.4m (€42.4m euro equivalent on date of investment) representing 46.65% of the issued share
capital of Admiral Taverns. The Group has 50% representation on the board and no decision can be made without 100% agreement by all
Directors. The Group determined that Admiral Taverns was to be accounted for as a joint venture.
In the prior financial year, Admiral management disposed of 2% of their shareholding which in turn increased C&C’s shareholding from
46.65% to 47.7%. In the current financial year, the Group made an equity investment in Admiral Taverns for €6.7m (£6.0m). Also, during the
current financial year, Admiral management disposed of 2.4% of their shareholding which in turn increased C&C’s shareholding from 47.7%
to 48.85%.
In the current financial year, the share of loss before exceptional items of Admiral Taverns attributable to the Group was €6.0m (FY2020:
profit €3.1m). The Group also incurred €8.8m with respect to its share of Admiral’s exceptional items. These included a charge of €7.0m
(FY2020: €2.7m) with respect to the Group’s share of the revaluation loss arising from the fair value exercise to value Admiral’s property
assets at 28 February 2021. As a result of the same valuation exercise, a loss of €0.4m (FY2020: a gain of €3.7m) with respect to the Group’s
share of the revaluation, was recognised in Other Comprehensive Income. The Group also recognised a charge of €1.8m with respect
to its share of other exceptional items for the year, including €0.8m with respect to a provision against trade debtors as a consequence
of COVID-19, €0.5m with respect to an Asbestos provision with the remaining €0.5m in relation to other charges directly attributable to
COVID-19.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 197
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
The Group also recorded, within exceptional operating costs (note 5), an impairment charge of €8.9m with respect to the carrying value of its
investment in Admiral Taverns at 28 February 2021. The hospitality and pub industry in the United Kingdom have been significantly curtailed
by lockdowns and trading restrictions since March 2020. The Group assessed the carrying value of its equity accounted investment in
Admiral Taverns at 28 February 2021, in light of the underutilisation of their pub assets as a direct consequence of such lockdowns, and
recorded an impairment charge of €8.9m in this regard.
Also in the current financial year, the Group recognised the Group’s share of an adjustment to the net asset allocation between the joint
venture partners and the minority shareholder of €1.1m resulting from the repurchase of shares from the minority shareholder.
In the prior financial year, the Group invested €10.7m which gave rise to capital duties to be expensed in relation to the acquisition (the
Group’s share of this expense was €2.9m). This was offset by recognition of the Group’s share of an adjustment made by the investee to
recognise a higher deferred tax asset, in FY2020, in respect of timing differences on fixed assets in respect of prior years (the Group’s share
of this gain was €3.2m).
Sensitivity analysis
In determining the recoverable amount of the Group’s investment in Admiral Taverns, the Group utilised a market approach leveraging
EBITDA and other relevant information generated by market transactions involving similar businesses. The key sensitivities for the impairment
testing are the EBITDA forecast and the multiple assumption in the valuation calculation.
An increase of 2.5% in the EBITDA or EBITDA multiple assumption would lead to an increase of €4.4m in the carrying value of the Admiral
investment, whilst a decrease of the same assumptions would lead to a €4.4m decrease of the Admiral carrying amount.
Drygate Brewing Company Limited
In 2015, the Group entered into a joint venture arrangement with Heather Ale Limited, run by the Williams brothers who are recognised
as leading family craft brewers in Scotland, to form a new entity Drygate Brewing Company Limited. The joint venture, which is run
independently of the joint venture partners existing businesses, operates a craft brewing and retail facility adjacent to Wellpark brewery.
In light of the impact of COVID-19 on the hospitality and pub industry the Group assessed the carrying value of its investment in Drygate
Brewing Company Limited at 28 February 2021 and recorded an impairment charge of €0.2m (£0.2m) within exceptional operating costs
(note 5).
Canadian Investment
During the prior financial year, the Group disposed of its equity accounted investment in a Canadian company for cash proceeds of €6.1m,
realising a profit of €2.6m on disposal.
Whitewater Brewing Company Limited
On 20 December 2016, the Group acquired 25% of the equity share capital of Whitewater Brewing Company Limited, an Irish Craft brewer
for £0.3m (€0.3m).
Other
During the current financial year, the Group made a 1% investment in an English entity Bramerton Condiments Limited for €0.1m (£0.1m) and
a 50% investment in 3 Counties Spirits Limited for €nil consideration.
Corporate GovernanceBusiness & StrategyFinancial Statements 198
13. EQUITY ACCOUNTED INVESTMENTS/FINANCIAL ASSETS (continued)
On 7 January 2021, the Group also acquired an 8% shareholding in Innis & Gunn Holdings Limited at €nil cost. Share subscription costs of
€0.1m (£0.1m) were incurred in this regard.
On 5 March 2019, the Group made a 10% investment in an English registered entity Jubel Limited, a craft beer producer for €0.3m (£0.3m).
In the prior financial year, the Group made an additional investment in CVBA Braxatorium Parcensis of €0.2m following on from a less than
€0.1m investment in FY2019. The Group has a 33% investment in the Belgium entity.
The Group also has an equity investment in Shanter Inns Limited, Beck & Scott (Services) Limited (Northern Ireland) and The Irish Brewing
Company Limited (Ireland). The value of each of these investments is less than €0.1m in the current and prior financial year.
(b) Financial Assets – Company
Equity investment in subsidiary undertakings at cost
At beginning of year
Capital contribution in respect of share options granted to employees of subsidiary undertakings
At end of year
2021
€m
984.6
0.8
985.4
2020
€m
982.1
2.5
984.6
The total expense of €0.8m (FY2020: €2.5m) attributable to equity settled awards granted to employees of subsidiary undertakings has been
included as a capital contribution in financial assets.
In the opinion of the Directors, the shares in the subsidiary undertakings are worth at least the amounts at which they are stated in the
Consolidated Balance Sheet. Details of subsidiary undertakings are set out in note 29.
14. INVENTORIES
Group
Raw materials & consumables
Finished goods & goods for resale
Total inventories at lower of cost and net realisable value
2021
€m
38.4
82.9
121.3
2020
€m
46.2
99.6
145.8
An analysis of the Group’s raw material cost of goods sold/bought in finished goods is provided in note 2 to the consolidated financial
statements.
Inventory write-down recognised within operating costs before exceptional items amounted to €0.9m (FY2020: €2.2m). The inventory write-
down in the current and prior financial year was with respect to breakages and write off of damaged and obsolete stock. The Group incurred
exceptional charges of €5.8m with respect to inventory (FY2020: €10.6m), this related to inventory that became obsolete as a consequence
of the COVID-19 restrictions.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
199
Group
Company
2021
€m
75.9
-
3.8
23.1
2020
€m
93.1
-
21.6
51.3
2021
€m
-
118.6
-
-
2020
€m
-
263.4
-
0.2
102.8
166.0
118.6
263.6
38.3
3.5
41.8
144.6
23.1
2.7
25.8
191.8
-
-
-
-
-
-
118.6
263.6
15. TRADE & OTHER RECEIVABLES
Amounts falling due within one year:
Trade receivables
Amounts due from Group undertakings
Advances to customers
Prepayments and other receivables
Amounts falling due after one year:
Advances to customers
Prepayments and other receivables
Total
Amounts due from Group undertakings are a combination of interest bearing and interest free receivables and are all repayable on demand.
The Group manages credit risk through the use of a receivables purchase arrangement, for an element of its trade receivables. Under
the terms of this arrangement, the Group transfers the credit risk, late payment risk and control of the receivables sold. This arrangement
contributed €45.0m to Group cash (FY2020: €131.4m) at 28 February 2021. The Group’s debtors would therefore have been €45.0m higher
(FY2020: €131.4m) had the programme not been in place. The Group’s trade receivables programme is not recognised on the Consolidated
Balance Sheet as it meets the de-recognition criteria under IFRS 9 Financial Instruments.
The aged analysis of trade receivables and advances to customers analysed between amounts that were not past due and amounts past
due at 28 February 2021 and 29 February 2020 were as follows:
Group
Not past due
Past due:
Past due 0-30 days
Past due 31-120 days
Past due 121-365 days
Past due more than one year
Total
Trade receivables
Gross
2021
€m
Impairment
2021
€m
Advances to customers
Impairment
2021
€m
Gross
2021
€m
Total
Gross
2021
€m
Impairment
2021
€m
Total
Gross
2020
€m
Impairment
2020
€m
57.8
(1.4)
49.7
(9.4)
107.5
(10.8)
131.6
(25.6)
5.6
13.2
8.4
7.3
92.3
(1.0)
(3.6)
(4.5)
(5.9)
0.2
0.4
0.6
2.5
-
(0.1)
(0.4)
(1.4)
5.8
13.6
9.0
9.8
(1.0)
(3.7)
(4.9)
(7.3)
15.9
10.4
8.7
11.2
(1.2)
(3.7)
(2.5)
(7.0)
(16.4)
53.4
(11.3)
145.7
(27.7)
177.8
(40.0)
Trade receivables, advances to customers and other receivables are recognised initially at fair value and subsequently measured at
amortised cost less loss allowance or impairment losses.
Specifically, for advances to customers, any difference between the present value and the nominal amount at inception is treated as an
advance of discount prepaid to the customer and is recognised in the Income Statement in accordance with the terms of the agreement.
The discount rate calculated by the Group is at least based on the risk-free rate plus a margin, which takes into account the risk profile of the
customer.
Corporate GovernanceBusiness & StrategyFinancial Statements
200
15. TRADE & OTHER RECEIVABLES (continued)
The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for trade
receivables, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
To measure the expected credit losses, trade receivables are assessed collectively in groups that share similar credit risk characteristics,
such as customer segments and in particular the Group’s view of how COVID-19 and related restrictions impacted particular customer
segments over the last twelve month period and how they are expected to impact them going forward, historical information on payment
patterns including the payment patterns over the last twelve month period, terms of payment, the expected impact of government schemes
coming to an end as markets reopen and what impact that might have on the Group’s customers including an assessment of the risk of
insolvencies due to lack of liquidity when the extended government payment terms cease. COVID-19 had and continues to have a material
impact on the assessment of credit losses of the Group’s receivables balances. The Group booked an exceptional provision of €19.4m
in FY2020 with respect to the Group’s receivables balances and has recorded an exceptional credit of €6.1m in this regard in the current
financial year (note 5).
Regarding advances to customers, the Group applies the general approach to measure expected credit losses which requires a loss
provision to be recognised based on twelve month or lifetime expected credit losses, provided a significant increase in credit risk has
occurred since initial recognition. The Group assesses the expected credit losses for advances to customers based on historical information
on repayment patterns including the repayment patterns over the last twelve month period, the expected impact of government schemes
coming to an end as markets reopen and what impact that might have on the Group’s advances to customers including an assessment
of the risk of insolvencies due to lack of liquidity when the extended government payment terms cease. The credit risk on advances to
customers can be reduced through the value of security and/or collateral given. In the current and prior financial year, COVID-19 had a
material impact on the assessment of credit losses with regard to advances to customers at year end and the Group booked an exceptional
provision of €1.2m (FY2020: €5.8m) in this regard (note 5).
Trade receivables are on average receivable within 33 days (FY2020: 21 days) of the balance sheet date, are unsecured and are not interest
bearing. For more information on the Group’s credit risk exposure refer to note 24.
The movement in the allowance for impairment in respect of trade receivables and advances to customers during the year was as follows:
Group
At beginning of year
Recovered during the year
Provided during the year
Derecognised on disposal
Written off during the year
Translation adjustment
At end of year
Trade receivables
2021
€m
Advance to
customers
2021
€m
29.6
(10.7)
2.9
(0.2)
(4.5)
(0.7)
16.4
10.4
(0.7)
2.4
-
(0.6)
(0.2)
11.3
Total
2021
€m
40.0
(11.4)
5.3
(0.2)
(5.1)
(0.9)
27.7
Total
2020
€m
17.2
(3.9)
32.3
-
(5.6)
-
40.0
At 28 February 2021, regarding the impact of the expected loss model on trade receivables and advances to customers, the Group has
provided for expected credit losses over the next twelve months of €6.2m (FY2020: €22.3m) and expected lifetime losses of €21.5m
(FY2020: €17.7m).
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 201
16. DISPOSAL GROUP
Post year end, the Group announced the sale of its wholly owned US subsidiary, Vermont Hard Cider Company (“VHCC”) to Northeast
Kingdom Drinks Group, LLC (NKDG) for a total consideration of USD 20.0m. The sale was completed on 2 April 2021. VHCC was classified
as a disposal group, held for sale, as at 28 February 2021.
The major classes of assets and liabilities of VHCC classified as held for sale as at 28 February 2021 were, as follows:
Assets held for sale
Property, plant & equipment (note 11)
Leased right-of-use assets (note 19)
Inventories
Trade & other receivables
Current income tax asset
Total assets held for sale
Liabilities directly associated with assets held for sale
Trade & other payables
Lease liabilities (note 19)
Total liabilities directly associated with assets held for sale
Net assets directly associated with the disposal group
2021
€m
5.6
0.2
3.9
4.1
0.1
13.9
2.2
0.2
2.4
11.5
The cumulative foreign exchange gain recognised in other comprehensive income in relation to the disposal group as at 28 February 2021
was €3.9m.
Other commitments
At 28 February 2021, the value of the contracts placed for future expenditure by VHCC was €1.6m. This related to the following:
Payable in less than one year
17. TRADE & OTHER PAYABLES
Trade payables
Payroll taxes & social security
VAT
Excise duty
Accruals
Amounts due to Group undertakings
Total
Glass
€m
0.6
0.6
Apples
€m
0.3
0.3
Aluminium
€m
0.1
0.1
Sugar
€m
0.6
0.6
Total
€m
1.6
1.6
Group
Company
2021
€m
135.2
4.1
41.4
40.0
75.5
-
2020
€m
271.7
3.1
23.9
21.9
70.1
-
296.2
390.7
2021
€m
2020
€m
-
-
-
-
3.1
33.9
37.0
-
-
-
-
1.0
302.5
303.5
Amounts due to Group undertakings are a combination of interest bearing and interest free payables and are all payable on demand.
The Group’s exposure to currency and liquidity risk related to trade & other payables is disclosed in note 24.
Corporate GovernanceBusiness & StrategyFinancial Statements
202
17. TRADE & OTHER PAYABLES (continued)
Company
The Company has entered into financial guarantee contracts to guarantee the indebtedness of the liabilities of certain of its subsidiary
undertakings. As at 28 February 2021, the Directors consider these to be in the nature of insurance contracts and do not consider it
probable that the Company will have to make a payment under these guarantees and as such discloses them as a contingent liability as
detailed in note 27.
18. PROVISIONS
At 28/29 February
Adjustment on initial application of IFRS 16
At 1 March (adjusted)
Translation adjustment
Charged during the year
Released during the year
Utilised during the year
At end of year
Classified within:
Current liabilities
Non-current liabilities
Restructuring
2021
€m
Dilapidation
2021
€m
-
-
-
0.1
8.1
-
(6.2)
2.0
5.5
-
5.5
(0.1)
0.2
(0.1)
(1.7)
3.8
Other
2021
€m
3.7
-
3.7
-
5.5
(2.1)
(0.2)
6.9
Total
2021
€m
9.2
-
9.2
-
13.8
(2.2)
(8.1)
12.7
6.2
6.5
12.7
Total
2020
€m
15.7
(8.5)
7.2
0.1
3.3
-
(1.4)
9.2
4.1
5.1
9.2
Restructuring
Restructuring costs of €8.1m were incurred in the current financial year. These included severance costs of €6.8m, of which €4.9m was
incurred with respect to the restructuring of the Group as a consequence of the COVID-19 pandemic and €1.9m arose as a consequence
of the optimisation of the delivery networks in England and Scotland. The Group also incurred additional costs of €2.0m with respect to the
optimisation of the delivery networks in England and Scotland which was offset by a credit of €0.7m relating to the profit on disposal of a
property as a direct consequence of the optimisation project. €6.2m of these costs were paid during the year with €2.0m outstanding at year
end.
Dilapidation
The Group has a dilapidation provision of €3.8m at 28 February 2021 (FY2020: €5.5m). The Group’s dilapidation provision at 28 February
2021 is with respect to dilapidation costs for leased depots of €3.5m (FY2020: €5.2m) and leased fleet of €0.3m (FY2020: €0.3m).
Other
Other provisions carried forward from FY2020 relate to provisions for various legal claims, a provision for an onerous trade contract and a
provision for the Group’s exposure to employee and third-party insurance claims. Under the terms of employer and public liability insurance
policies, the Group bears a portion of the cost of each claim up to the specified excess. The provision is calculated based on the expected
portion of settlement costs to be borne by the Group in respect of specific claims arising before the Balance Sheet date.
The amount charged in the current financial year, is primarily in respect of an increase in a provision against legal disputes and a provision
with respect to lost kegs. The amount released during the year relates to a release of a legal provision which ultimately was not required and
the release of an element of a provision for an onerous trade contract on exit of that contract.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
203
19. LEASES
The Group adopted IFRS 16 Leases from 1 March 2019 and has lease contracts for various items of freehold land & buildings, plant &
machinery and motor vehicles & other equipment.
Set out below are the carrying amounts of right-of-use assets (included under property, plant & equipment note 11) recognised and the
movements during the year:
Leased right-of-use assets
At 1 March 2019, net carrying amount
Translation adjustment
Additions
Disposals
Depreciation charge for the year
At 29 February 2020
Translation adjustment
Additions
Remeasurement
Disposals
Disposal of subsidiary (note 10)
Asset held for sale (note 16)
Depreciation charge for the year
At 28 February 2021
Leased liabilities
At 1 March 2019, net carrying amount
Translation adjustment
Additions to lease liabilities
Disposals
Payments*
Discount unwinding
At 29 February 2020
Translation adjustment
Additions to lease liabilities
Remeasurement
Disposals
Disposal of subsidiary (note 10)
Payments*
Asset held for sale (note 16)
Discount unwinding
At 28 February 2021
Freehold land &
buildings
€m
Plant &
machinery
€m
Motor vehicles &
other equipment
€m
40.1
0.3
1.4
(0.5)
(6.1)
35.2
(0.8)
2.7
(1.0)
-
-
(0.2)
(5.6)
30.3
1.7
-
-
-
(0.4)
1.3
-
-
-
-
-
-
(0.4)
0.9
40.1
0.2
10.7
-
(10.8)
40.2
(0.9)
9.2
(2.9)
(0.1)
(0.4)
-
(11.6)
33.5
Freehold land &
buildings
€m
Plant &
machinery
€m
Motor vehicles &
other equipment
€m
(55.3)
(0.3)
(1.4)
0.5
9.5
(2.3)
(49.3)
1.0
(2.7)
1.0
-
-
8.7
0.2
(1.9)
(43.0)
(1.7)
-
-
-
0.4
-
(1.3)
-
-
-
-
-
0.5
-
-
(0.8)
(42.6)
(0.2)
(10.7)
-
12.1
(1.3)
(42.7)
1.0
(9.2)
2.9
0.1
0.4
13.3
-
(1.6)
(35.8)
Total
€m
81.9
0.5
12.1
(0.5)
(17.3)
76.7
(1.7)
11.9
(3.9)
(0.1)
(0.4)
(0.2)
(17.6)
64.7
Total
€m
(99.6)
(0.5)
(12.1)
0.5
22.0
(3.6)
(93.3)
2.0
(11.9)
3.9
0.1
0.4
22.5
0.2
(3.5)
(79.6)
* Payments are apportioned between finance charges €3.5m (FY2020 €3.4m) and payment of lease liabilities €19.0m (FY2020: €18.6m) in the Cash Flow Statement
Corporate GovernanceBusiness & StrategyFinancial Statements 204
19. LEASES (continued)
Lease liabilities classified within:
Current liabilities
Non-current liabilities
Total
2021
€m
(18.9)
(60.7)
(79.6)
Total
2020
€m
(18.9)
(74.4)
(93.3)
The table below shows a maturity analysis of the discounted and undiscounted lease liability arising from the Group’s leasing activities. The
projections are based on the foreign exchange rates at the end of the relevant financial year and on interest rates (discounted projections
only) applicable to the lease portfolio.
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
Discounted
€m
As at 28 February 2021
Undiscounted
€m
Discounted
€m
As at 29 February 2020
Undiscounted
€m
(18.9)
(17.4)
(10.5)
(8.1)
(7.3)
(17.4)
(79.6)
(21.7)
(19.5)
(12.2)
(9.4)
(8.3)
(19.8)
(90.9)
(18.9)
(18.4)
(14.9)
(9.7)
(7.4)
(24.0)
(93.3)
(22.6)
(21.6)
(17.4)
(11.8)
(9.0)
(27.9)
(110.3)
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are
met. The following lease costs have been charged to the Income Statement as incurred:
Expense relating to short-term leases (included in operating costs)
Total
20. INTEREST BEARING LOANS & BORROWINGS
Current liabilities
Unsecured loans repayable by one repayment on maturity
Unsecured loans repayable by instalment
Private Placement notes repayable by one repayment on maturity
Non-current liabilities
Unsecured loans repayable by one repayment on maturity
Unsecured loans repayable by instalment
Private Placement notes repayable by one repayment on maturity
2021
€m
0.7
0.7
Group
Company
2021
€m
0.8
(50.6)
0.1
(49.7)
(241.3)
(37.5)
(141.5)
(420.3)
2020
€m
0.8
(34.0)
-
(33.2)
(235.5)
(88.3)
-
(323.8)
2021
€m
0.8
(5.6)
0.1
(4.7)
1.8
-
(141.5)
(139.7)
2020
€m
2.1
2.1
2020
€m
0.8
(11.5)
-
(10.7)
2.6
(5.8)
-
(3.2)
Total borrowings
(470.0)
(357.0)
(144.4)
(13.9)
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
205
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Group and Company
Outstanding borrowings of the Group and Company are net of unamortised issue costs. During the current financial year, the Group
completed the successful issue of new US Private Placement (“USPP”) notes and incurred additional issue costs of €1.4m in this regard.
All unamortised issue costs are being amortised to the Income Statement over the remaining life of the multi-currency revolving facilities
agreement, the Euro term loan and the US Private Placement notes to which they relate. The value of unamortised issue costs at 28
February 2021 was €3.9m (FY2020: €3.7m) of which €1.0m (FY2020: €1.0m) is netted against current liabilities and €2.9m (FY2020: €2.7m) is
netted against non-current liabilities.
Terms and debt repayment schedule
Group
Unsecured loans repayable by one repayment
on maturity
Unsecured loans repayable by instalment
Unsecured loans repayable by instalment
Private Placement notes repayable by one
repayment on maturity
Currency
Nominal rates of interest at 28
February 2021
Year of maturity
2021
Carrying value
€m
2020
Carrying value
€m
Multi
Euro
GBP
Euribor/Libor + 2.4%
Euribor + 2.85%
Libor + 2.0%
2024
2022
2021
Euro/GBP
1.6%-2.74%
2030/2032
243.1
82.5
5.7
142.6
473.9
238.1
105.0
17.6
-
360.7
Company
Currency
Nominal rates of interest at 28
February 2021
Year of maturity
2021
Carrying value
€m
2020
Carrying value
€m
Unsecured loans repayable by instalment
GBP
Libor + 2.0%
2021
5.7
Private Placement notes repayable by one
repayment on maturity
Euro/GBP
1.6%-2.74%
2030/2032
142.6
148.3
17.6
-
17.6
Borrowing facilities
Group
The Group manages its borrowing requirements by entering into committed loan facility agreements and in the current financial year also
completed the successful issue of new USPP notes which diversifies the Group’s sources of debt finance.
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed
a three-year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro
Bank, Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank and Ulster Bank. In FY2020 the Group availed
of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further 364 days from termination
date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024. During the current financial
year, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and the last instalment is now
payable on 12 July 2022.
In March 2020, the Group completed the successful issue of new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included
a mandatory prepayment clause from the issuance of any Debt Capital Market instruments however a waiver of the prepayment was
successfully negotiated in addition to a waiver of a July 2020 repayment, as a consequence of COVID-19, which now becomes payable with
the last instalment in July 2022.
Under the terms of the multi-currency facility and the Euro term loan, the Group must pay a commitment fee based on 35% of the applicable
margin on undrawn committed amounts and variable interest on drawn amounts based on variable Euribor/Libor interest rates plus a
margin, the level of which is dependent on the Net Debt: EBITDA ratio, plus a utilisation fee, the level of which is dependent on percentage
utilisation. The Group may select an interest period of one, two, three or six months.
Corporate GovernanceBusiness & StrategyFinancial Statements
206
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Under the terms of the USPP, the Group pays a margin of 1.6% with respect to €19.0m USPP notes with a 10 year tenure; 1.73% with
respect to €57.0m USPP notes with a 12 year tenure and 2.74% with respect to £58.0m notes with a 10 year tenure. A waiver fee was
payable with respect to the covenant waivers secured during the current financial year, a reduced EBITDA fee is also payable while EBITDA
is below €120.0m and a below investment grade fee is payable when the Group’s credit rating is below investment grade. The maximum
payable under the three components is 1.5%. A further fee of 1.5% is payable due to the Group not completing a right’s issue within a pre-
determined timeframe specified by the note holders.
The Group has further financial indebtedness of €5.7m at 28 February 2021 (FY2020: €17.6m), which is repayable by instalments with the
last instalment paid on 3 April 2021. The Group paid variable interest on these drawn amounts based on a variable Libor interest rate plus a
margin of 2%.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility.
All bank loans drawn are unsecured and rank pari passu. All borrowings of the Group are guaranteed by a number of the Group’s subsidiary
undertakings. The Euro term loan and multi-currency facilities agreement allows the early repayment of debt without incurring additional
charges or penalties. The USPP allows the early prepayment of the notes at any time subject to the payment of a make whole amount to
compensate the note holders for the interest that would have been received on the notes had they not been prepaid early.
All borrowings of the Group at 28 February 2021 are repayable in full on change of control of the Group.
Company
The Company is an original borrower under the terms of the Group’s Euro term loan and multi-currency revolving credit facility but is not a
borrower in relation to the Group’s Euro term loan and multi-currency revolving credit facility drawn debt at 28 February 2021.
The Company is a borrower with respect to the Group’s USPP notes of €142.6m (FY2020: €nil) as at 28 February 2021. Under the terms
of the USPP, the Company pays a margin of 1.6% with respect to €19.0m notes with a 10 year tenure, 1.73% with respect to €57.0m notes
with a 12 year tenure and 2.74% with respect to £58.0m notes with a 10 year tenure. A waiver fee was payable with respect to the covenant
waiver secured. A reduced EBITDA fee is also payable while EBITDA of the Group is below €120.0m and a below investment grade fee is
payable when the Group’s credit rating is below investment grade. The maximum payable under the three components during the period
is 1.5%. A further fee of 1.5% is payable due to the Group not completing a rights issue within a pre-determined timeframe specified by the
note holders.
The Company is also a borrower with respect to the Group’s non-bank debt of €5.7m at 28 February 2021 (FY2020: €17.6m). This debt is
repayable by instalment with the last instalment paid on 3 April 2021. The Company paid variable interest on these drawn amounts based on
a variable Libor interest rate plus a margin of 2%.
Covenants
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date whether or not the
rights issue, announced by the Group on 26 May 2021, is successful. Conditional on a Minimum Equity Raise being achieved, the debt
covenants for 31 August 2022 were also renegotiated to increase the threshold of the Group’s Net Debt/Adjusted EBITDA covenant to not
exceed 4.5x and to reduce the Interest cover covenant to be not less than 2.5x. The Minimum Equity Raise is defined as the receipt of at
least £125.0m of gross cash proceeds from the issuance of new ordinary shares in the Company including in such proceeds the gross
amount received by the Company upon issuance of any right to acquire any new ordinary shares in the Company.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been
put in place. Where the Minimum Equity Raise is not achieved, the minimum liquidity requirement and a gross debt restriction will remain in
place until the Group is able to show compliance with its original debt covenant levels at the 31 August 2022 or any subsequent test date,
and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month (except for July
2021 and December 2021 when the minimum amount of liquidity is €120.0m, June 2022 when the minimum amount of liquidity is €80.0m
and July 2022 when the minimum amount of liquidity is €100.0m). A monthly gross debt cap of €750.0m in the current financial year applied
which will continue during FY2022.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 207
20. INTEREST BEARING LOANS & BORROWINGS (continued)
Where the Minimum Equity Raise is achieved, the minimum liquidity requirement and a gross debt restriction will remain in place until the
Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or any subsequent test date, and, with
respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month. A monthly gross debt cap
of €750.0m in the current financial year also applied which will continue during FY2022 but will reduce to €700.0m post a Minimum Equity
Raise being achieved. The minimum liquidity requirement and a gross debt restriction can be lifted earlier in certain circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
The Group’s Euro term loan and multi-currency debt facility incorporates the following financial covenants for the prior year (before the
current waivers were secured):
• Interest cover: The ratio of EBITDA to net interest for a period of 12 months ending on each half-year date will not be less than 3.5:1
• Net debt: EBITDA: The ratio of net debt on each half-year date to EBITDA for a period of 12 months ending on a half-year date will not
exceed 3.5:1
The Company and Group also had covenants with respect to its non-bank financial indebtedness for the prior year (before the current
waivers were secured), this debt was repaid in full on 3 April 2021.
• Interest cover: The ratio of EBITDA to net interest for a period of 12 months ending on each half-year date will not be less than 3.5:1
• Net debt: EBITDA: The ratio of net debt on each half-year date to EBITDA for a period of 12 months ending on a half-year date will not
exceed 3.5:1
There is no effect on the Group’s covenants as a result of implementing IFRS 16 Leases in the prior financial year as all covenants are
calculated on a pre IFRS 16 Leases adoption basis.
Further information about the Group’s exposure to interest rate, foreign currency and liquidity risk is disclosed in note 24.
21. ANALYSIS OF NET DEBT
Group
Interest bearing loans & borrowings
Cash
Net debt excluding leases
Lease liabilities (note 19)
Net debt including leases
1 March 2020
€m
Translation
adjustment
€m
Additions/
disposals/
remeasurement
€m
Cash Flow, net
€m
Non-cash
changes
€m
28 February 2021
€m
(357.0)
123.4
(233.6)
(93.3)
(326.9)
(6.3)
1.7
(4.6)
2.0
(2.6)
-
-
-
(7.3)
(7.3)
(105.5)
(17.4)
(122.9)
22.5
(100.4)
(1.2)
-
(1.2)
(3.5)
(4.7)
(470.0)*
107.7
(362.3)
(79.6)
(441.9)
* Interest bearing loans & borrowings at 28 February 2021 are net of unamortised issue costs of €3.9m.
Group
Interest bearing loans & borrowings
Cash
Net debt excluding leases
Lease liabilities (note 19)
Net debt including leases
1 March 2019
€m
Translation
adjustment
€m
Additions/
Disposals
€m
Cash Flow, net
€m
Non-cash
changes
€m
29 February 2020
€m
(446.0)
144.4
(301.6)
(99.6)
(401.2)
1.8
(1.0)
0.8
(0.5)
0.3
-
-
-
(11.6)
(11.6)
88.6
(20.0)
68.6
22.0
90.6
(1.4)
-
(1.4)
(3.6)
(5.0)
(357.0)*
123.4
(233.6)
(93.3)
(326.9)
* Interest bearing loans & borrowings at 29 February 2020 are net of unamortised issue costs of €3.7m.
Corporate GovernanceBusiness & StrategyFinancial Statements 208
21. ANALYSIS OF NET DEBT (continued)
Company
Interest bearing loans & borrowings
Cash
1 March 2020
€m
Translation
adjustment
€m
Cash Flow, net
€m
Non-cash
changes
€m
28 February
2021
€m
(13.9)
-
(13.9)
(2.4)
-
(2.4)
(126.9)
0.7
(126.2)
(1.2)
-
(1.2)
(144.4)*
0.7
(143.7)
* Interest bearing loans & borrowings at 28 February 2021 are net of unamortised issue costs of €3.9m.
Company
Interest bearing loans & borrowings
Cash
1 March 2019
€m
Translation
adjustment
€m
Cash Flow, net
€m
Non-cash
changes
€m
29 February 2020
€m
(24.5)
-
(24.5)
0.1
-
0.1
11.9
-
11.9
(1.4)
-
(1.4)
(13.9)*
-
(13.9)
* Interest bearing loans & borrowings at 29 February 2020 are net of unamortised issue costs of €3.7m.
The non-cash change to the Company and Group’s interest bearing loans and borrowings in the current financial year relates to the
amortisation of issue costs of €1.2m (FY2020: €1.4m). The non-cash changes for the Group’s lease liabilities in the current financial year
relate to discount unwinding of €3.5m (FY2020: €3.6m).
As outlined in further detail in note 27, the Company, together with a number of its subsidiaries, gave a letter of guarantee to secure its
obligations in respect of all debt drawn by the Company and Group at 28 February 2021.
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
Group
Property, plant & equipment
Intangible assets
Retirement benefits
Trade related items & losses
2021
2020
Assets
€m
Liabilities
€m
Net assets/
(liabilities)
€m
Assets
€m
Liabilities
€m
Net assets/
(liabilities)
€m
2.1
5.3
0.7
16.5
24.6
(8.7)
(6.1)
(2.5)
-
(17.3)
(6.6)
(0.8)
(1.8)
16.5
7.3
3.4
5.1
2.1
1.3
11.9
(8.8)
(5.0)
(2.3)
(0.4)
(16.5)
(5.4)
0.1
(0.2)
0.9
(4.6)
The Group has not recognised deferred tax in relation to temporary differences applicable to investments in subsidiaries on the basis that
the Group can control the timing and the realisation of these temporary differences and it is unlikely that the temporary differences will
reverse in the foreseeable future. The aggregate amount of temporary differences applicable to investments in subsidiaries and equity
accounted investments in respect of which deferred tax liabilities have not been recognised is immaterial on the basis that the participation
exemptions and foreign tax credits should be available such that no material temporary differences arise. There are no other unrecognised
deferred tax liabilities.
In addition, no deferred tax asset has been recognised in respect of certain tax losses incurred by the Group on the basis that the recovery
is considered unlikely in the foreseeable future or due to the complexity and uncertainty of the tax treatment in connection with certain items
giving rise to some of the losses. The cumulative value of such tax losses is €49.6m (FY2020: €35.9m). In the event that sufficient taxable
profits arise or the tax treatment becomes sufficiently certain in the relevant jurisdictions in future years, these losses may be utilised. With
the sale of Vermont Hard Cider Company, which occurred post year end, the losses in connection with this business are due to expire in
2021/2022 and the majority of the remaining losses are due to expire in 2035/2038.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
209
22. RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES (continued)
Company
The Company had no deferred tax assets or liabilities at 28 February 2021 or at 29 February 2020.
Analysis of movement in net deferred tax (liabilities)/assets
1 March 2020
€m
Recognised in
Income Statement
€m
Recognised
in Other
Comprehensive
Income
€m
Translation
adjustment
€m
28 February 2021
€m
0.7
(6.1)
0.9
0.1
(0.2)
(4.6)
(0.3)
(0.5)
14.8
(0.9)
-
13.1
-
(0.2)
-
-
(1.6)
(1.8)
-
(0.2)
0.8
-
-
0.6
0.4
(7.0)
16.5
(0.8)
(1.8)
7.3
1 March 2019
€m
Recognised in
Income Statement
€m
Recognised
in Other
Comprehensive
Income
€m
Arising on
adoption of
IFRS 16
Leases
€m
Translation
adjustment
€m
29 February 2020
€m
1.2
(7.3)
1.3
(7.2)
(0.9)
(12.9)
(0.5)
(0.4)
-
7.5
-
6.6
-
(0.1)
(0.3)
-
0.7
0.3
-
1.5
-
-
-
1.5
-
0.2
(0.1)
(0.2)
-
(0.1)
0.7
(6.1)
0.9
0.1
(0.2)
(4.6)
Group
Property, plant & equipment: ROI
Property, plant and equipment: other
Trade related items & losses
Intangible assets
Retirement benefits
Group
Property, plant & equipment: ROI
Property, plant and equipment: other
Trade related items & losses
Intangible assets
Retirement benefits
23. RETIREMENT BENEFITS
The Group operates a number of defined benefit pension schemes for certain employees, past and present, in the Republic of Ireland (ROI)
and in Northern Ireland (NI), all of which provide pension benefits based on final salary and the assets of which are held in separate trustee
administered funds. The Group closed its defined benefit pension schemes to new members in March 2006 and provides only defined
contribution pension schemes for employees joining the Group since that date. The Group provides permanent health insurance cover for
the benefit of certain employees and separately charges this to the Income Statement.
The defined benefit pension scheme assets are held in separate trustee administered funds to meet long-term pension liabilities to past and
present employees. The trustees of the funds are required to act in the best interest of the funds’ beneficiaries. The appointment of trustees
to the funds is determined by the schemes’ trust documentation. The Group has a policy in relation to its principal staff pension fund that
members of the fund should nominate half of all fund trustees.
There are no active members remaining in the executive defined benefit pension scheme (FY2020: no active members). There are 52 active
members, representing less than 10% of total membership, in the ROI Staff defined benefit pension scheme (FY2020: 55 active members)
Corporate GovernanceBusiness & StrategyFinancial Statements
210
23. RETIREMENT BENEFITS (continued)
and 2 active members in the NI defined benefit pension scheme (FY2020: 2 active members). The Group’s ROI defined benefit pension
reform programme concluded during the financial year ended 29 February 2012 with the Pensions Board issuing a directive under Section
50 of the Pensions Act 1990 to remove the mandatory pension increase rule, which guaranteed 3% per annum increase to certain pensions
in payment, and to replace it with guaranteed pension increases of 2% per annum for each year 2012 to 2015 and thereafter for all future
pension increases to be awarded on a discretionary basis.
Actuarial valuations – funding requirements
Independent actuarial valuations of the defined benefit pension schemes are carried out on a triennial basis using the attained age method.
An actuarial valuation process is currently ongoing. The most recently completed actuarial valuations of the ROI defined benefit pension
schemes were carried out with an effective date of 1 January 2018 while the date of the most recent actuarial valuation of the NI defined
benefit pension scheme was 31 December 2017. The actuarial valuations are not available for public inspection; however the results of the
valuations are advised to members of the various schemes.
The funding requirements in relation to the Group’s ROI staff defined benefit pension schemes are assessed at each valuation date and are
implemented in accordance with the advice of the actuaries. Arising from the formal actuarial valuations of the Group’s staff defined benefit
pension scheme, the Group has committed to contributions of 27.5% of pensionable salaries. There is no funding requirement with respect
to the Group’s ROI executive defined benefit pension scheme or the Group’s NI defined benefit pension scheme, both of which are in
surplus. The Group has an unconditional right to any surplus remaining in these schemes in the event the scheme concludes.
The Group is exposed to a number of risks in relation to the funding position of these schemes, namely:
Asset volatility: It is the Group’s intention to pursue a long-term investment policy that emphasises investment in secure monetary assets to
provide for the contractual benefits payable to members. The investment portfolio has exposure to equities, other growth assets and fixed
interest investments, the returns from which are uncertain and may fluctuate significantly in line with market movements. Assets held are
valued at fair value using bid prices where relevant.
Discount rate: The discount rate is the rate of interest used to discount post-employment benefit obligations and is determined by reference
to market yields at the balance sheet date on high quality corporate bonds with a currency and term consistent with the currency and
estimated term of the Group’s post employment benefit obligations. Movements in discount rates have a significant impact on the value of
the schemes’ liabilities.
Longevity: The value of the defined benefit obligations is influenced by demographic factors such as mortality experience and retirement
patterns. Changes to life expectancy have a significant impact on the value of the schemes’ liabilities.
Method and assumptions
The schemes’ independent actuary, Mercer (Ireland) Limited, has employed the projected unit credit method to determine the present value
of the defined benefit obligations arising and the related current service cost.
The financial assumptions that have the most significant impact on the results of the actuarial valuations are those relating to the discount
rate used to convert future pension liabilities to current values and the rate of inflation/salary increase. These and other assumptions used to
determine the retirement benefits and current service cost under IAS19(R) Employee Benefits are set out below.
Mortality rates also have a significant impact on the actuarial valuations, as the number of deaths within the scheme have been too small
to analyse and produce any meaningful scheme-specific estimates of future levels of mortality, the rates used have been based on the
most up-to-date mortality tables, (the S2PMA CMI 2016 1.5% (males) and S2PFA CMI 2016 1.5% (females) for the ROI schemes and S2PA
CMI 2016 1.5% for the NI scheme) with age ratings and loading factors to allow for future mortality improvements. These tables conform
to best practice. The growing trend for people to live longer and the expectation that this will continue has been reflected in the mortality
assumptions used for this valuation as indicated below. This assumption will continue to be monitored in light of general trends in mortality
experience. Based on these tables, the assumed life expectations on retirement are:
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
211
23. RETIREMENT BENEFITS (continued)
Future life expectations at age 65
ROI
2021
No. of years
2020
No. of years
2021
No. of years
2020
No. of years
NI
Current retirees – no allowance for future improvements
Male
22.6-23.5
22.5-23.4
Female
24.5-25.4
24.4-25.3
Future retirees – with allowance for future improvements
Male
23.5-24.3
23.4-24.2
Female
25.5-26.3
25.4-26.2
22.6
24.5
24.4
26.3
22.5
24.2
24.3
26.2
Scheme liabilities
The average age of active members is 50 and 51 years (FY2020: 50 years) for the ROI Staff and the NI defined benefit pension schemes
respectively (the executive defined benefit pension scheme has no active members), while the average duration of liabilities ranges from 14 to
23 years (FY2020: 14 to 24 years).
The principal long-term financial assumptions used by the Group’s actuaries in the computation of the defined benefit liabilities arising on
pension schemes as at 28 February 2021 and 29 February 2020 are as follows:
Salary increases
Increases to pensions in payment
Discount rate
Inflation rate
2021
ROI
NI
2020
ROI
0.0%-2.3%
1.6%-1.7%
1.3%-1.5%
1.6%-1.7%
3.6% 0.0%-2.0%
1.9%
1.3%-1.4%
2.2% 0.8%-1.0%
3.2%
1.3%-1.4%
NI
3.3%
1.6%
1.7%
2.9%
A reduction in discount rate used to value the schemes’ liabilities by 0.25% would increase the valuation of liabilities by €9.7m while an
increase in inflation/salary increase expectations of 0.25% would increase the valuation of liabilities by €9.5m. The sensitivity is calculated by
changing the individual assumption while holding all other assumptions constant.
The pension assets and liabilities have been prepared in accordance with IAS19(R) Employee Benefits.
(a) Impact on Income Statement
Analysis of defined benefit pension
expense:
Current service cost
Interest cost on scheme liabilities
Interest income on scheme assets
Total (expense)/income recognised in Income
Statement
2021
2020
ROI
€m
(0.8)
(1.9)
1.8
(0.9)
NI
€m
-
(0.2)
0.2
-
Total
€m
(0.8)
(2.1)
2.0
(0.9)
ROI
€m
(0.6)
(3.6)
3.4
(0.8)
NI
€m
Total
€m
-
(0.2)
0.3
0.1
(0.6)
(3.8)
3.7
(0.7)
Corporate GovernanceBusiness & StrategyFinancial Statements
212
23. RETIREMENT BENEFITS (continued)
Analysis of amount recognised in Other Comprehensive Income:
Actual return on scheme assets
Expected interest income on scheme assets
Experience gains and losses on scheme
liabilities
Effect on changes in financial assumptions
Effect of changes in demographic assumptions
Total income/(expense)
Scheme assets
Scheme liabilities
Deficit in scheme
Surplus in scheme
2021
2020
ROI
€m
6.1
(1.8)
2.7
6.5
-
13.5
187.1
(187.5)
(5.5)
5.1
NI
€m
-
(0.2)
-
0.1
-
(0.1)
13.7
(8.4)
-
5.3
Total
€m
6.1
(2.0)
2.7
6.6
-
13.4
200.8
(195.9)
(5.5)
10.4
ROI
€m
18.8
(3.4)
2.2
(26.3)
4.4
(4.3)
186.8
(200.2)
(16.7)
3.3
NI
€m
1.9
(0.3)
-
(1.7)
-
(0.1)
14.1
(8.6)
-
5.5
Total
€m
20.7
(3.7)
2.2
(28.0)
4.4
(4.4)
200.9
(208.8)
(16.7)
8.8
(b) Impact on Balance Sheet
The retirement benefits deficit at 28 February 2021 and 29 February 2020 is analysed as follows:
Analysis of net pension deficit:
Investments quoted in active markets
Bid value of assets at end of year:
Equity*
Bonds
Alternatives
Cash
Investments unquoted
Property
2021
2020
ROI
€m
NI
€m
Total
€m
ROI
€m
NI
€m
Total
€m
40.0
107.9
26.5
0.2
12.5
187.1
2.9
10.8
-
-
-
13.7
42.9
118.7
26.5
35.1
113.4
24.9
0.2
0.2
12.5
200.8
13.2
186.8
2.6
11.5
-
-
-
14.1
37.7
124.9
24.9
0.2
13.2
200.9
Actuarial value of scheme liabilities
(187.5)
(8.4)
(195.9)
(200.2)
(8.6)
(208.8)
Deficit in the scheme
Surplus in the scheme
(Deficit)/surplus in the scheme
Related deferred tax asset (note 22)
Related deferred tax liability (note 22)
Net pension (deficit)/surplus
(5.5)
5.1
(0.4)
0.7
(0.7)
(0.4)
-
5.3
5.3
-
(1.8)
3.5
(5.5)
10.4
4.9
0.7
(2.5)
3.1
(16.7)
3.3
(13.4)
2.1
(0.4)
(11.7)
-
5.5
5.5
-
(1.9)
3.6
(16.7)
8.8
(7.9)
2.1
(2.3)
(8.1)
* The defined benefit pension schemes have a passive self-investment in C&C Group plc of €nil (FY2020: €nil).
The alternative investment category includes investments in various asset classes including equities, commodities, currencies and funds.
The investments are managed by fund managers.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
23. RETIREMENT BENEFITS (continued)
Reconciliation of scheme assets
Assets at beginning of year
Movement in year:
Translation adjustment
Expected interest income on scheme assets
Actual return less interest income on scheme assets
Employer contributions
Member contributions
Benefit payments
Assets at end of year
2021
NI
€m
ROI
€m
186.8
14.1
-
1.8
4.3
0.4
0.1
(6.3)
187.1
(0.3)
0.2
(0.2)
-
-
(0.1)
13.7
Total
€m
200.9
(0.3)
2.0
4.1
0.4
0.1
(6.4)
200.8
2020
NI
€m
ROI
€m
173.5
12.3
-
3.4
15.4
0.4
0.1
(6.0)
186.8
-
0.3
1.6
-
-
(0.1)
14.1
The expected employer contributions to fund defined benefit scheme obligations for year ending 28 February 2022 is €0.4m.
The scheme assets had the following investment profile at the year end:
Investments quoted in active markets
Equities
Bonds
Alternatives
Cash
Investments unquoted
Property
2021
ROI
21%
58%
14%
-
7%
100%
NI
21%
79%
-
-
-
100%
Reconciliation of actuarial value of scheme liabilities
Liabilities at beginning of year
Movement in year:
Translation adjustment
Current service cost
Interest cost on scheme liabilities
Member contributions
Actuarial (gain)/loss immediately recognised in equity
Benefit payments
Liabilities at end of year
ROI
€m
200.2
2021
NI
€m
8.6
Total
€m
208.8
ROI
€m
182.2
-
0.8
1.9
0.1
(9.2)
(6.3)
187.5
(0.2)
-
0.2
-
(0.1)
(0.1)
8.4
(0.2)
0.8
2.1
0.1
(9.3)
(6.4)
-
0.6
3.6
0.1
19.7
(6.0)
195.9
200.2
2020
ROI
19%
61%
13%
-
7%
100%
2020
NI
€m
6.8
-
-
0.2
-
1.7
(0.1)
8.6
213
Total
€m
185.8
-
3.7
17.0
0.4
0.1
(6.1)
200.9
NI
18%
82%
-
-
-
100%
Total
€m
189.0
-
0.6
3.8
0.1
21.4
(6.1)
208.8
Corporate GovernanceBusiness & StrategyFinancial Statements
214
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group’s multinational operations expose it to various financial risks in the ordinary course of business that include credit risk, liquidity
risk, commodity price risk, currency risk and interest rate risk. This note discusses the Group’s exposure to each of these financial risks and
summarises the risk management strategy for managing these risks. The note is presented as follows:
(a) Overview of the Group’s risk exposures and management strategy
(b) Financial assets and liabilities as at 28 February 2021/29 February 2020 and determination of fair value
(c) Market risk
(d) Credit risk
(e) Liquidity risk
(a) Overview of the Group’s risk exposures and management strategy
The main financial market risks that the Group is exposed to include foreign currency exchange rate risk, commodity price fluctuations,
interest rate risk and financial counterparty creditworthiness. The Board continues to monitor and manage this and all other financial risks
faced by the Group very closely.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. This is
executed through various committees to which the Board has delegated appropriate levels of authority. An essential part of this framework
is the role undertaken by the Audit Committee, supported by the internal audit function, and the Group Chief Financial Officer. The Board,
through its Committees, has reviewed the internal control environment and the risk management systems and process for identifying and
evaluating the significant risks affecting the business and the policies and procedures by which these risks will be managed effectively. The
Board has embedded these structures and procedures throughout the Group and considers them to be a robust and efficient mechanism
for creating a culture of risk awareness at every level of management.
The Group’s risk management programme seeks to minimise the potential adverse effects, arising from fluctuations in financial markets, on
the Group’s financial performance in a non-speculative manner at a reasonable cost when economically viable to do so. The Group achieves
the management of these risks in part, where appropriate, through the use of derivative financial instruments. All derivative financial contracts
entered into in this regard are in liquid markets with credit rated parties. Treasury activities are performed within strict terms of reference that
have been approved by the Board. See currency risk section for further details.
(b) Financial assets and liabilities
The carrying and fair values of financial assets and liabilities by measurement category were as follows:
Group
28 February 2021
Financial assets:
Cash
Trade receivables
Advances to customers
Financial liabilities:
Interest bearing loans & borrowings
Lease liabilities*
Trade & other payables
Provisions
* See note 19 for maturity analysis of the discounted and undiscounted lease liability.
Other financial
assets
€m
Other financial
liabilities
€m
Carrying value
€m
Fair value
€m
107.7
75.9
42.1
-
-
-
-
225.7
-
-
-
(470.0)
(79.6)
(296.2)
(12.7)
(858.5)
107.7
75.9
42.1
(470.0)
(79.6)
(296.2)
(12.7)
(632.8)
107.7
75.9
42.1
(473.9)
(79.6)
(296.2)
(12.7)
(636.7)
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
215
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Group
29 February 2020
Financial assets:
Cash
Trade receivables
Advances to customers
Financial liabilities:
Interest bearing loans & borrowings
Lease liabilities*
Derivative contracts
Trade & other payables
Provisions
* See note 19 for maturity analysis of the discounted and undiscounted lease liability.
Company
28 February 2021
Financial assets:
Cash
Amounts due from Group undertakings
Financial liabilities:
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
Company
29 February 2020
Financial assets:
Other financial
assets
€m
Other financial
liabilities
€m
Carrying value
€m
Fair value
€m
123.4
93.1
44.7
-
-
-
-
-
261.2
-
-
-
(357.0)
(93.3)
(0.3)
(390.7)
(9.2)
(850.5)
123.4
93.1
44.7
(357.0)
(93.3)
(0.3)
(390.7)
(9.2)
(589.3)
123.4
93.1
44.7
(360.7)
(93.3)
(0.3)
(390.7)
(9.2)
(593.0)
Other financial
assets
€m
Other financial
liabilities
€m
Carrying value
€m
Fair value
€m
0.7
118.6
-
-
-
119.3
-
-
0.7
118.6
0.7
118.6
(144.4)
(33.9)
(3.1)
(181.4)
(144.4)
(148.3)
(33.9)
(3.1)
(62.1)
(33.9)
(3.1)
(66.0)
Other financial
assets
€m
Other financial
liabilities
€m
Carrying value
€m
Fair value
€m
Amounts due from Group undertakings
263.4
-
263.4
263.4
Financial liabilities:
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
-
-
-
263.4
(13.9)
(302.5)
(1.0)
(317.4)
(13.9)
(302.5)
(1.0)
(54.0)
(17.6)
(302.5)
(1.0)
(57.7)
Corporate GovernanceBusiness & StrategyFinancial Statements
216
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Determination of Fair Value
Set out below are the main methods and assumptions used in estimating the fair values of the Group’s financial assets and liabilities. There is
no material difference between the fair value of financial assets and liabilities falling due within one year and their carrying amount as due to
the short-term maturity of these financial assets and liabilities their carrying amount is deemed to approximate fair value.
Short-term bank deposits and cash
The nominal amount of all short-term bank deposits and cash is deemed to reflect fair value at the balance sheet date.
Advances to customers
Advances to customers adjusted for advances of discount prepaid is considered to reflect fair value.
Trade & other receivables/payables
The nominal amount of all trade & other receivables/payables after provision for impairment is deemed to reflect fair value at the balance
sheet date with the exception of provisions which are discounted to fair value.
Interest bearing loans & borrowings
The fair value of all interest bearing loans & borrowings has been calculated by discounting all future cash flows to their present value using a
market rate reflecting the Group’s cost of borrowing at the balance sheet date.
Lease liabilities
The fair value of lease liabilities is initially calculated by measuring the present value of the future lease payments, discounted using the
incremental borrowing rate or the interest rate implicit in the lease, if this is readily determinable, over the remaining lease term. Incremental
borrowing rates are calculated using a portfolio approach, based on the risk profile of the entity holding the lease and the term and currency
of the lease. After initial recognition, the lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments or when the Group changes its assessment of whether it is reasonably certain to exercise
an option within the contract.
(c) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates and interest rates, will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return on risk.
Commodity price risk
The Group is exposed to variability in the price of commodities used in the production or in the packaging of finished products, such
as apples, glass, barley, aluminium, polymer, wheat and sugar/glucose. Commodity price risk is managed, where economically viable,
through fixed price contracts with suppliers incorporating appropriate commodity hedging and pricing mechanisms. The Group does not
directly enter into commodity hedge contracts. The cost of production is also sensitive to variability in the price of energy, primarily gas and
electricity. It is Group policy to fix the cost of a certain level of its energy requirement through fixed price contractual arrangements directly
with its energy suppliers.
Currency risk
The Company’s functional and reporting currency is Euro. The Euro is also the Group’s reporting currency and the currency used for
all planning and budgetary purposes. The Group is exposed to currency risk in relation to sales and purchase transactions by Group
companies in currencies other than their functional currency (transaction risk), and fluctuations in the Euro value of the Group’s net
investment in foreign currency (primarily Sterling and US Dollar) denominated subsidiary undertakings (translation risk). Currency exposures
for the entire Group are managed and controlled centrally. The Group seeks to minimise its foreign currency transaction exposure, when
possible, by offsetting the foreign currency input costs against the same foreign currency receipts, creating a natural hedge. When the
remaining net currency exposure is material, the Group enters into foreign currency forward contracts to mitigate and protect against
adverse movements in currency risk and remove uncertainty over the foreign currency equivalent cash flows. At 28 February 2021 the Group
had no forward foreign currency cash flow hedges outstanding (FY2020: €24.6m).
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
217
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
In addition, the Group has a number of long-term intra-group loans for which settlement is neither planned nor likely to happen in the
foreseeable future, and as a consequence of which are deemed quasi equity in nature and are therefore part of the Group’s net investment
in its foreign operations. The Group does not hedge the translation exposure arising on the translation of the profits of foreign currency
subsidiaries.
The net currency gains and losses on transactional currency exposures are recognised in the Income Statement and the changes arising
from fluctuations in the Euro value of the Group’s net investment in foreign operations are reported separately within Other Comprehensive
Income.
Derivatives
Cash flow hedges – currency forwards
Total
2021
€m
-
-
2020
€m
(0.3)
(0.3)
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not meet the
hedge accounting criteria, they are classified as “held for trading” for accounting purposes and are accounted for at fair value through the
Income Statement. They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the
end of the reporting period.
Hedging reserves
Opening balance 1 March
Change in fair value of hedging recognised in Other Comprehensive Income for the year
Reclass to retained earnings
Deferred tax on cash flow hedges
Closing balance 28/29 February – continuing hedges
2021
€m
0.3
0.3
(0.6)
-
-
2020
€m
(1.1)
1.7
-
(0.3)
0.3
Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments,
to ensure that an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical terms of the hedging instrument
match exactly with the terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness. If changes in
circumstances affect the terms of the hedged item, such that the critical terms no longer match exactly with the critical terms of the hedging
instrument, the Group uses the hypothetical derivative method to assess effectiveness.
In hedges of foreign currency purchases, ineffectiveness might arise if the timing of the forecast transaction changes from what was
originally estimated, or if a degree of forecast purchases are no longer highly probable to occur. The hedging ratio is 1:1 as the quantity of
purchases designated matches the notional amount of the hedging instrument.
No ineffectiveness was recognised in the Income Statement in the current or prior financial year.
Corporate GovernanceBusiness & StrategyFinancial Statements
218
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
The currency profile of the Group and Company’s financial instruments subject to transactional exposure as at 28 February 2021 is as
follows:
Group
Cash
Trade receivables
Advances to customers
Interest bearing loans & borrowings
Lease liabilities
Trade & other payables
Provisions
Gross currency exposure
Euro
€m
Sterling
€m
USD
€m
CAD/AUD
€m
6.2
2.5
-
-
-
4.3
3.9
-
-
-
(12.6)
(39.7)
-
-
(3.9)
(31.5)
2.3
1.3
-
-
-
(2.4)
-
1.2
1.8
0.4
-
-
-
(0.6)
-
1.6
Company
Cash
Interest bearing loans & borrowings
Net amounts due to Group undertakings
Accruals
Total
NZD
€m
0.1
-
-
-
-
(0.9)
-
(0.8)
USD
€m
-
-
(0.4)
-
(0.4)
SGD
€m
ZAR
€m
Not at risk
€m
Total
€m
0.3
0.8
-
-
-
-
-
-
-
-
-
-
-
-
91.9
67.8
42.1
107.7
75.9
42.1
(470.0)
(470.0)
(79.6)
(79.6)
(240.0)
(296.2)
(12.7)
(12.7)
0.3
0.8
(600.5)
(632.8)
Sterling
€m
Not at risk
€m
Total
€m
-
(5.7)
(30.1)
(1.6)
(37.4)
0.7
(138.7)
115.2
(1.5)
(24.3)
0.7
(144.4)
84.7
(3.1)
(62.1)
A 10% strengthening in the Euro against all currencies noted above, based on outstanding financial assets and liabilities at 28 February
2021, would have a €2.9m positive impact (FY2020: €4.7m) on the Income Statement. A 10% weakening in the Euro against all currencies
noted above would have a €3.6m negative effect (FY2020: €3.9m) on the Income Statement. This analysis assumes that all other variables,
in particular interest rates, remain constant.
The currency profile of the Group and Company’s financial instruments subject to transactional exposure as at 29 February 2020 is as:
Group
Cash
Trade receivables
Advances to customers
Interest bearing loans & borrowings
Lease liabilities
Trade & other payables
Provisions
Gross currency exposure
Euro
€m
Sterling
€m
USD
€m
CAD/AUD
€m
NZD
€m
SGD
€m
ZAR
€m
Not at risk
€m
Total
€m
8.2
4.0
-
-
-
(16.1)
-
(3.9)
0.9
0.1
-
(17.6)
-
(24.9)
-
(41.5)
2.9
1.3
-
-
-
(3.3)
-
0.9
2.3
0.8
-
-
-
(0.5)
-
2.6
-
-
-
-
-
(1.8)
-
(1.8)
0.5
0.5
-
-
-
-
-
-
-
-
-
-
-
-
108.1
86.9
44.7
123.4
93.1
44.7
(339.4)
(357.0)
(93.3)
(93.3)
(344.1)
(390.7)
(9.2)
(9.2)
0.5
0.5
(546.3)
(589.0)
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
219
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Company
Interest bearing loans & borrowings
Net amounts due to Group undertakings
Accruals
Total
Sterling
€m
Not at risk
€m
(17.6)
(19.6)
(0.1)
(37.3)
3.7
(19.5)
(0.9)
(16.7)
Total
€m
(13.9)
(39.1)
(1.0)
(54.0)
Interest rate risk
The interest rate profile of the Group and Company’s interest-bearing financial instruments at the reporting date is summarised as follows:
Variable/fixed rate instruments
Interest bearing loans & borrowings
Cash
Group
2021
€m
(473.9)
107.7
(366.2)
2020
€m
(360.7)
123.4
(237.3)
Company
2021
€m
(148.3)
0.7
(147.6)
2020
€m
(17.6)
-
(17.6)
The Group exposure to interest rate risk arises principally from its long-term debt obligations. A 0.25% increase/decrease in Euribor and
Libor rates would result in a €1.9m impact on the Income Statement, over the duration of the tenure, with respect to the interest charge on
interest bearing loans & borrowings.
(d) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s trade receivables, its cash advances to customers, cash including deposits with banks
and derivative financial instruments contracted with banks. The Group has an indirect exposure to European Sovereigns via its defined
benefit pension scheme investment portfolio. In the context of the Group’s operations, credit risk is mainly influenced by the individual
characteristics of individual counterparties and is not considered particularly concentrated as it primarily arises from a wide and varied
customer base; there are no material dependencies or concentrations of individual customers which would warrant disclosure under IFRS 8
Operating Segments.
The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables and advances to customers
based on experience, customer track records and historic default rates and forward looking information, such as concentration maturity
and the macroeconomic circumstances within the Group’s primary trading markets. The impact of COVID-19 resulted in the Group booking
exceptional provisions in the current and prior financial year (note 5).
Generally, individual ‘risk limits’ are set by customer and risk is only accepted above such limits in defined circumstances. A strict credit
assessment is made of all new applicants who request credit-trading terms. The utilisation and revision, where appropriate, of credit limits
is regularly monitored. Impairment provision accounts are used to record impairment losses unless the Group is satisfied that no recovery
of the amount owing is possible. At that point, the amount is considered irrecoverable and is written off directly against the trade receivable/
advance to customer. The Group also manages credit risk through the use of a receivables purchase arrangement, for an element of its
trade receivables. Under the terms of this arrangement, the Group transfers the credit risk, late payment risk and control of the receivables
sold. As at 28 February 2021, the Group’s year end cash had benefited by €45.0 (FY2020: €131.4m) with respect to this purchase
arrangement. The Group’s trade receivables purchase arrangement is not recognised on the Balance Sheet as it meets the de-recognition
criteria under IFRS 9 Financial Instruments.
Corporate GovernanceBusiness & StrategyFinancial Statements
220
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Advances to customers are generally secured by, amongst others, rights over property or intangible assets, such as the right to take
possession of the premises of the customer. During the financial year, the Group did not exercise their right to take possession of any
material collateral that would require disclosure. At 28 February 2021, the Group held collateral of €2.7m (FY2020: €2.7m) on financial assets
that are credit impaired and recognised no expected credit loss on financial assets of €9.8m (FY2020:€12.1m) due to collateral.
Interest rates calculated on repayment/annuity advances are generally based on the risk-free rate plus a margin, which takes into account
the risk profile of the customer and value of security given. The Group establishes an allowance for impairment of customer’s advances that
represents its estimate of potential future losses.
From time to time, the Group holds significant cash balances, which are invested on a short-term basis and disclosed under cash in the
Balance Sheet. Risk of counterparty default arising on short-term cash deposits is controlled within a framework of dealing primarily with
banks who are members of the Group’s banking syndicate, and by limiting the credit exposure to any one of these banks or institutions.
Management does not expect any counterparty to fail to meet its obligations.
The Company also bears credit risk in relation to amounts owed by Group undertakings and from guarantees provided in respect of the
liabilities of wholly owned subsidiaries as disclosed in note 27.
The carrying amount of financial assets, net of impairment provisions represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Trade receivables
Advances to customers
Amounts due from Group undertakings
Cash
Group
2021
€m
75.9
42.1
-
107.7
225.7
2020
€m
93.1
44.7
-
123.4
261.2
Company
2021
€m
-
-
118.6
0.7
119.3
2020
€m
-
-
263.4
-
263.4
The ageing of trade receivables and advances to customers together with an analysis of movement in the Group’s impairment provisions
against these receivables are disclosed in note 15. The Group does not have any significant concentrations of risk.
(e) Liquidity risk
Liquidity risk is the risk that the Group or Company will not be able to meet its financial obligations as they fall due.
The Group’s policy is to ensure that sufficient resources are available either from cash balances, cash flows or committed bank facilities to
meet all debt obligations as they fall due. To achieve this, the Group (a) maintains adequate cash balances; (b) prepares detailed 2 year cash
projections; and (c) keeps refinancing options under review. In addition, the Group maintains an overdraft facility that is unsecured.
Cash and liquidity have been a key focus for the Group throughout FY2021. Post year end, on 26 May 2021, the Group announced a rights
issue. The rights issue is intended, alongside the other actions that the Group has already announced and implemented, to reduce leverage
and improve the Group’s overall liquidity position thereby providing the Group with the capital structure to both support the business during
further potential disruptions from COVID-19 and to deliver on its strategy as normalised trading conditions return.
In March 2020, the Group completed the successful issue of the new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included a
mandatory prepayment clause from the issuance of any Debt Capital Market instruments however, as a consequence of COVID-19, a waiver
of the prepayment was successfully negotiated in addition to a waiver of a July 2020 repayment which now becomes payable with the last
instalment in July 2022.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
221
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed
a three year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro
Bank, Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank, and Ulster Bank.
In FY2020 the Group availed of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further
364 days from termination date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024.
During the current financial year, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and
the last instalment is now payable on 12 July 2022.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility. At 28 February 2021 the Group had €325.6m drawn down from the term loan and multi-currency revolving facilities (FY2020:
€343.1m), €142.6m drawn down from Private Placement notes (FY2020: €nil) and €5.7m from its non-bank financial indebtedness (FY2020:
€17.6m).
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date whether or not
the rights issue is successful. Conditional on a Minimum Equity Raise being achieved, the debt covenants for 31 August 2022 were also
renegotiated to increase the threshold of the Group’s Net Debt/Adjusted EBITDA covenant to not exceed 4.5x and to reduce the Interest
cover covenant to be not less than 2.5x.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been
put in place. Where the Minimum Equity Raise is not achieved, the minimum liquidity requirement and a gross debt restriction will remain in
place until the Group is able to show compliance with its original debt covenant levels at the 31 August 2022 or any subsequent test date,
and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month (except for July
2021 and December 2021 when the minimum amount of liquidity is €120.0m, June 2022 when the minimum amount of liquidity is €80.0m
and July 2022 when the minimum amount of liquidity is €100.0m). A monthly gross debt cap of €750.0m in the current financial year applied
which will continue during FY2022.
Where the Minimum Equity Raise is achieved, the minimum liquidity requirement and a gross debt restriction will remain in place until the
Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or any subsequent test date, and, with
respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month. A monthly gross debt cap
of €750.0m in the current financial year also applied which will continue during FY2022 but will reduce to €700.0m post a Minimum Equity
Raise being achieved. The minimum liquidity requirement and a gross debt restriction can be lifted earlier in certain circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
The Company and Group has further financial indebtedness of €5.7m at 28 February 2021 (2020: €17.6m), which is repayable by instalment
with the last instalment paid on 3 April 2021.
All bank loans drawn are unsecured and rank pari passu. All borrowings of the Group are guaranteed by a number of the Group’s subsidiary
undertakings. The euro term loan and multi-currency facilities agreement allows the early repayment of debt without incurring additional
charges or penalties. The USPP allows the early prepayment of the notes at any time subject to the payment of a make whole amount to
compensate the note holders for the interest that would have been received on the notes had they not been prepaid early.
All borrowings of the Company and Group at 28 February 2021 are repayable in full on change of control of the Group.
The Company and the Group complied with all covenants at each reporting date in the current and prior financial year. There is no effect on
the Group’s covenants as a result of implementing IFRS 16 Leases in the prior financial year as all covenants are calculated on a pre IFRS 16
Leases adoption basis.
Corporate GovernanceBusiness & StrategyFinancial Statements 222
24. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
During the current financial year, the Group also implemented various working capital initiatives, including the negotiation of temporary
extensions to suppliers, and UK and Irish tax authorities’ payments terms. Payment of dividends were paused, and the Group availed of
Government furlough schemes across the UK and Ireland to support 2,000 colleagues’ jobs that were directly and adversely impacted
by the pandemic and restrictions on the hospitality sector. Post year end, the Group has also announced a cost reduction programme
expected to deliver annualised savings of €18m against its pre COVID-19 cost base.
The following are the contractual maturities of financial liabilities, including interest payments:
Contractual cash
Carrying amount
€m
flows 6 months or less
€m
€m
6 – 12 months
€m
1 – 2 years
€m
Greater than 2
years
€m
Group
2021
Interest bearing loans & borrowings
Trade & other payables
Lease liabilities
Provisions
Total contracted outflows
Group
2020
Interest bearing loans & borrowings
Trade & other payables
Lease liabilities
Provisions
Total contracted outflows
Company
2021
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
Total contracted outflows
2020
Interest bearing loans & borrowings
Amounts due to Group undertakings
Accruals
Total contracted outflows
(470.0)
(296.2)
(79.6)
(12.7)
(858.5)
(357.0)
(390.7)
(93.3)
(9.2)
(850.2)
(144.4)
(33.9)
(3.1)
(181.4)
(13.9)
(302.5)
(1.0)
(317.4)
(531.6)
(296.2)
(90.9)
(12.7)
(931.4)
(391.6)
(390.7)
(95.9)
(9.2)
(887.4)
(178.6)
(33.9)
(3.1)
(215.6)
(17.9)
(302.5)
(1.0)
(321.4)
(35.3)
(296.2)
(10.9)
(3.6)
(346.0)
(10.0)
(390.7)
(11.2)
(2.5)
(414.4)
(7.3)
(33.9)
(3.1)
(44.3)
(6.1)
(302.5)
(1.0)
(309.6)
(29.3)
(49.9)
(417.1)
-
(10.8)
(2.6)
(42.7)
(33.3)
-
(10.6)
(1.6)
(45.5)
-
(19.5)
(3.3)
(72.7)
(97.2)
-
(20.7)
(1.7)
(119.6)
-
(49.7)
(3.2)
(470.0)
(251.1)
-
(53.4)
(3.4)
(307.9)
(1.6)
(3.1)
(166.6)
-
-
-
-
-
-
(1.6)
(3.1)
(166.6)
(6.0)
(5.8)
-
-
-
-
(6.0)
(5.8)
-
-
-
-
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 223
25. SHARE CAPITAL AND RESERVES
At 28 February 2021
Ordinary shares of €0.01 each
At 29 February 2020
Ordinary shares of €0.01 each
At 28 February 2019
Ordinary shares of €0.01 each
*
**
Inclusive of 10.8m (3%) treasury shares.
Inclusive of 10.9m (3%) treasury shares.
All shares in issue carry equal voting and dividend rights.
Reserves
Group
As at 1 March
Shares issued in lieu of dividend
Shares issued in respect of options exercised
Shares cancelled following share buyback programme
As at 28/29 February
Authorised
Number
Allotted and
called up
Number
Authorised
€m
Allotted and
called up
€m
800,000,000
320,480,164*
8.0
3.2
800,000,000
319,495,110*
8.0
3.2
800,000,000
320,354,042**
8.0
3.2
Allotted and called up
Ordinary Shares
2021
‘000
2020
‘000
319,495
320,354
-
985
-
4,624
142
(5,625)
320,480*
319,495*
*
Includes 9.025m shares bought by the Group during the financial year ended 28 February 2015 which continue to be held as Treasury Shares and Ordinary Shares held by the
Trustee of the Employee Trust as outlined below.
As at 1 March
Shares disposed of or transferred to Participants
As at 28/29 February
Ordinary Shares held by the
Trustee of the Employee Trust
Other
Treasury Shares
2021
‘000
1,785
(19)
1,766
2020
‘000
1,909
(124)
1,785
2021
‘000
9,025
-
9,025
2020
‘000
9,025
-
9,025
Total Treasury Shares
2021
‘000
2020
‘000
10,810
10,934
(19)
(124)
10,791
10,810
Movements in the year ended 28 February 2021
All shares held by Kleinwort Benson (Guernsey) Trustees Limited as trustees of the C&C Employee Trust which were neither cancelled nor
disposed of by the Trust at 28 February 2021 continue to be included in the treasury share reserve. During the financial year, 18,532 shares
were sold by the Trustees and are no longer accounted for as treasury shares.
Corporate GovernanceBusiness & StrategyFinancial Statements
224
25. SHARE CAPITAL AND RESERVES (continued)
Movements in the year ended 29 February 2020
In July 2019, 3,377,441 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary shares at a
price of €3.7071 per share, instead of part or all the cash element of their final dividend entitlement for the year ended 29 February 2020. In
December 2019, 1,246,538 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary shares
at a price of €4.45916 per share, instead of part or all of the cash element of their interim dividend entitlement for the year ended 29 February
2020.
All shares held by Kleinwort Benson (Guernsey) Trustees Limited as trustees of the C&C Employee Trust which were neither cancelled nor
disposed of by the Trust at 29 February 2020 continue to be included in the treasury share reserve. During the prior financial year, 123,889
shares were sold by the Trustees and are no longer accounted for as treasury shares.
Also during the prior financial year, as part of the Group’s capital management strategy, the Group invested €22.7m (€23.0m inclusive of
commission and related costs) in an on-market share buyback programme in which it repurchased and subsequently cancelled 5,625,000
of the Group’s shares. This was in accordance with shareholder authority granted at the Group’s AGM, to make market purchases of up to
10% of its own shares.
Share premium – Group
The change in legal parent of the Group on 30 April 2004, as disclosed in detail in that year’s annual report, was accounted for as a reverse
acquisition. This transaction gave rise to a reverse acquisition reserve debit of €703.9m, which, for presentation purposes in the Group
financial statements, has been netted against the share premium in the Balance Sheet.
The current financial year movement relates to the exercise of share options €0.3m (FY2020: €0.4m). The prior financial year movement also
relates to the issuance of a scrip dividend to those who elected to receive additional ordinary shares in place of a cash dividend €18.0m.
Share premium – Company
The share premium, as stated in the Company Balance Sheet, represents the premium recognised on shares issued and amounts to
€872.3m as at 28 February 2021 (FY2020: €872.0m).
The current financial year movement relates to the exercise of share options €0.3m (FY2020: €0.4m). The prior financial year movement also
relates to the issuance of a scrip dividend to those who elected to receive additional ordinary shares in place of a cash dividend €18.0m.
Other undenominated reserve and capital reserve
These reserves initially arose on the conversion of preference shares into share capital of the Company and other changes and
reorganisations of the Group’s capital structure.
Cash flow hedge reserve
The hedging reserve includes the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet occurred.
Share-based payment reserve
The reserve relates to amounts expensed in the Income Statement in connection with share option grants falling within the scope of IFRS
2 Share-Based Payment, less reclassifications to retained income following exercise/forfeit post vesting or lapse of such share options and
interests, as set out in note 4.
Currency translation reserve
The translation reserve comprises all foreign exchange differences from 1 March 2004, arising from the translation of the Group’s net
investment in its non-Euro denominated operations, including the translation of the profits of such operations from the average exchange rate
for the year to the exchange rate at the Balance Sheet date, as adjusted for the translation of foreign currency borrowings designated as net
investment hedges and long-term intra group loans for which settlement is neither planned nor likely to happen in the foreseeable future, and
as a consequence are deemed quasi equity in nature and are therefore part of the Group’s net investment in foreign operations.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
225
25. SHARE CAPITAL AND RESERVES (continued)
Revaluation reserve
Since 2009 the Group has completed a number of external and internal valuations on its property, plant and equipment. Gains arising from
such revaluations are posted to the Group’s revaluation reserve, unless it reverses a revaluation decrease on the same asset previously
recognised as an expense, where it is first credited to the Income Statement to the extent of the write down. Any decreases in the value of
the Group’s property, plant and equipment as a result of external or internal valuations are recognised in the Income Statement except where
there had been a previously recognised gain in the revaluation reserve as a result of the same asset, in which case, the gain is eliminated
from the revaluation reserve to offset the loss in the first instance.
During the current financial year, as outlined in detail in note 11, the Group engaged external valuers to value the freehold land & buildings
and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal sites. Using the valuation methodologies, this
resulted in a net revaluation loss of €1.2m accounted for in the Income Statement and a gain of €0.9m accounted for within the revaluation
reserve via Other Comprehensive Income.
During the prior financial year, as outlined in detail in note 11, the Group engaged external valuers to value the freehold land & buildings and
plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow), Vermont (USA) and Portugal sites, along with the Group’s various
Depots. Using the valuation methodologies, this resulted in a net revaluation loss of €1.0m accounted for in the Income Statement and a gain
of €1.1m accounted for within the revaluation reserve via Other Comprehensive Income.
Treasury shares
Included in this reserve is where the Company issued equity share capital under its Joint Share Ownership Plan, which was held in trust
by the Group’s Employee Trust. All interests have now vested or lapsed and all vested interests have now been exercised. Remaining in
the Trust are shares that lapsed and shares that were withheld by the Trust in lieu of some, or all, of the consideration due with respect to
exercised Interests. Also included in the reserve is the purchase of 9,025,000 of the Company’s own shares in the financial year ended 28
February 2015 at an average price of €3.29 per share under the Group’s share buyback programme.
The current and prior year movement in the reserve relates to the sale of excess shares by the Trust to satisfy other share entitlements.
Capital management
The Board’s policy is to maintain a strong capital base so as to safeguard the Group’s ability: to continue as a going concern for the benefit
of shareholders and stakeholders; to maintain investor, creditor and market confidence; and, to sustain the future development of the
business through the optimisation of the value of its debt and equity shareholding balance.
The Board considers capital to comprise of long-term debt and equity. The Board periodically reviews the capital structure of the Group,
considering the cost of capital and the risks associated with each class of capital. The Board approves any material adjustments to the
capital structure in terms of the relative proportions of debt and equity. In order to maintain or adjust the capital structure, the Group may
issue new shares, dispose of assets to reduce debt, alter dividend policy by increasing or reducing the dividend paid to shareholders, return
capital to shareholders and/or buyback shares.
On 26 May 2021, the Group has announced a rights issue. The rights issue is intended, alongside the other actions that the Group has already
announced and implemented, to reduce leverage and improve the Group’s overall liquidity position thereby providing the Group with the capital
structure to both support the business during further potential disruptions from COVID-19 and to deliver on its strategy as normalised trading
conditions return. The Board has considered a number of different scenarios and assumptions and the impact these might have on the Group’s
financial position in deciding on the appropriate quantum. These included the potential length of the current lockdown, the impact of ongoing
restrictions, the unwinding of temporary working capital supports from government and tax authorities, the potential economic impact on demand
through the recovery and the likelihood of any further waves of lockdown. Taking these into consideration, the Board believes that a rights issue will
not only reduce the Group’s leverage but allow it to continue to deliver upon its strategy.
In March 2020, the Group completed the successful issue of the new USPP notes. The unsecured notes, denominated in both Euro and
Sterling, have maturities of 10 and 12 years and diversify the Group’s sources of debt finance. The Group’s Euro term loan included a
mandatory prepayment clause from the issuance of any Debt Capital Market instruments however, as a consequence of COVID-19, a waiver
of the prepayment was successfully negotiated in addition to a waiver of a July 2020 repayment which now becomes payable with the last
instalment in July 2022.
Corporate GovernanceBusiness & StrategyFinancial Statements
226
25. SHARE CAPITAL AND RESERVES (continued)
In July 2018, the Group amended and updated its committed €450m multi-currency five year syndicated revolving loan facility and executed
a three year Euro term loan. Both the multi-currency facility and the Euro term loan were negotiated with eight banks, namely ABN Amro
Bank, Allied Irish Bank, Bank of Ireland, Bank of Scotland, Barclays Bank, HSBC, Rabobank, and Ulster Bank.
In FY2020 the Group availed of an option within the Group’s multi-currency revolving loan facility agreement to extend the tenure for a further
364 days from termination date. The multi-currency facility agreement is therefore now repayable in a single instalment on 11 July 2024.
During the current financial year, the Group renegotiated an extension of the repayment schedule of the Euro term loan with its lenders and
the last instalment is now payable on 12 July 2022.
The Euro term loan and multi-currency revolving facilities agreement provides for a further €100m in the form of an uncommitted accordion
facility. At 28 February 2021 the Group had €325.6m drawn down from the term loan and multi-currency revolving facilities (FY2020:
€343.1m), €142.6m drawn down from Private Placement notes (FY2020: €nil) and €5.7m from its non-bank financial indebtedness (FY2020:
€17.6m).
As outlined previously, as a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants
from its lending group for FY2021, and these have been extended up to, but not including, the August 2022 test date whether or not
the rights issue is successful. Conditional on a Minimum Equity Raise being achieved, the debt covenants for 31 August 2022 were also
renegotiated to increase the threshold of the Group’s Net Debt/Adjusted EBITDA covenant to not exceed 4.5x and to reduce the Interest
cover covenant to be not less than 2.5x.
As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have been
put in place. Where the Minimum Equity Raise is not achieved, the minimum liquidity requirement and a gross debt restriction will remain in
place until the Group is able to show compliance with its original debt covenant levels at the 31 August 2022 or any subsequent test date,
and, with respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month (except for July
2021 and December 2021 when the minimum amount of liquidity is €120.0m, June 2022 when the minimum amount of liquidity is €80.0m
and July 2022 when the minimum amount of liquidity is €100.0m). A monthly gross debt cap of €750.0m in the current financial year applied
which will continue during FY2022.
Where the Minimum Equity Raise is achieved, the minimum liquidity requirement and a gross debt restriction will remain in place until the
Group is able to show compliance with its original debt covenant levels at the 28 February 2023 or any subsequent test date, and, with
respect to the minimum liquidity requirement, the Group must maintain liquidity of at least €150.0m each month. A monthly gross debt cap
of €750.0m in the current financial year also applied which will continue during FY2022 but will reduce to €700.0m post a Minimum Equity
Raise being achieved. The minimum liquidity requirement and a gross debt restriction can be lifted earlier in certain circumstances.
The Group complied with these new minimum liquidity and gross debt requirements during the financial year.
In respect of the financial year ended 28 February 2021, due to the emergence of COVID-19, no final dividend is being declared and no
interim dividend was paid (FY2020: 5.50 cent per share). Total dividend for the year is €nil (FY2020: 5.50 cent per share).
The Group participated in a share buyback programme during the prior financial year. At the AGM held on 4 July 2019, shareholders granted
the Group authority to make market purchases of up to 10% of its own shares. In the prior financial year, the Group invested €22.7m (€23.0m
including commission and related fees) as part of this on-market buyback programme, purchasing 5,625,000 of the Company’s shares
at an average euro equivalent price of €4.03. All shares acquired as part of the share buyback programme in the prior financial year were
subsequently cancelled by the Group. In the financial year ended 28 February 2015, a subsidiary of the Group invested €30.0m as part of an
on-market share buyback programme, purchasing 9,025,000 of the Company’s shares at an average price of €3.29. All shares acquired as
part of this share buyback programme are held as Treasury shares.
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 227
26. COMMITMENTS
(a) Capital commitments
At the year end, the following capital commitments authorised by the Board had not been provided for in the consolidated financial
statements:
Contracted
Not contracted
2021
€m
5.7
5.0
10.7
2020
€m
2.3
7.7
10.0
The contracted capital commitments at 28 February 2021 are with respect of contracts that support the Group in achieving its environmental
targets and optimising its operational footprint.
(b) Other commitments
At the year end, the value of contracts placed for future expenditure was:
Payable in less than one year
Payable between 1 and 5 years
Payable greater than 5 years
Apples
€m
6.3
12.1
17.9
36.3
Glass
€m
1.7
-
-
1.7
2021
Marketing
€m
3.0
7.5
-
10.5
Barley
€m
7.1
14.3
-
21.4
Sugar/ glucose
€m
6.3
-
-
6.3
Total*
€m
24.4
33.9
17.9
76.2
* Commitment obligations range from between 1 year to 24 years. Other commitments do not include commitments relating to the Group’s disposal group, see note 16 for further
details.
Payable in less than one year
Payable between 1 and 5 years
Payable greater than 5 years
8.1
13.3
23.6
45.0
Apples
€m
Glass Marketing*
€m
€m
Barley Aluminium
€m
€m
Polymer
€m
2020
4.7
-
-
7.6
6.4
-
7.6
14.8
-
0.8
0.3
-
-
-
-
Wheat
€m
0.9
-
-
Sugar/
glucose
€m
7.5
-
-
Natural
gas Electricity
€m
0.3
-
-
€m
0.1
-
-
4.7
14.0
22.4
0.8
0.3
0.9
7.5
0.3
0.1
Total*
€m
37.9
34.5
23.6
96.0
In the prior financial year, an element of committed marketing spend was deemed to be onerous in light of COVID-19 (note 5).
*
** Commitment obligations range from between 1 year to 25 years.
27. GUARANTEES, COMMITMENTS AND CONTINGENCIES
Where the Group or subsidiaries enters into financial guarantee contracts to guarantee the indebtedness of other companies or joint
ventures and associates within the Group, the Group/subsidiaries consider these to be insurance arrangements and account for them
as such. The Group/subsidiary treats the guarantee contract as a contingent liability until such time as it becomes probable that it will be
required to make a payment under the guarantee.
As outlined in note 20, the Group has a euro term loan, US Private Placement notes, non-bank borrowings and a multi-currency revolving
facility in place at year end. The Company has non-bank borrowings and US Private Placement notes in place at year end. The Company,
together with a number of its subsidiaries, gave a letter of guarantee to secure its obligations in respect of all borrowings as at 28 February
2021. The actual loans outstanding for the Group at 28 February 2021 amounted to €473.9m (FY2020: €360.7m).
Corporate GovernanceBusiness & StrategyFinancial Statements
228
27. GUARANTEES, COMMITMENTS AND CONTINGENCIES (continued)
During the financial year ended 28 February 2015, a subsidiary of the Group entered into guarantees in favour of HSBC Bank plc, HSBC
Asset Finance (UK) Limited and HSBC Equipment Finance Limited whereby it guaranteed drawn debt plus interest charges by Drygate
Brewing Company Limited to HSBC Bank plc of up to £540,000 and to HSBC Asset Finance (UK) Limited and HSBC Equipment Finance
Limited of up to £225,000 in aggregate. The guarantees reduce on a pound for pound basis to the extent of capital repayments in respect
of the drawn debt and any amounts realised by the bank pursuant to any security provided in respect of the debt. The Guarantee with
respect to HSBC Bank plc expires on the earlier of eleven years and three months from the date on which the guarantee became effective,
the secured liabilities are repaid, or by mutual agreement with HSBC Bank plc. The Guarantees with HSBC Asset Finance (UK) Limited and
HSBC Equipment Finance Limited expire after the secured liabilities are repaid, or by mutual agreement with HSBC Asset Finance (UK)
Limited and HSBC Equipment Finance Limited respectively.
During the 2011 financial year, a subsidiary of the Group entered into a guarantee with Clydesdale Bank plc whereby it guaranteed £250,000
plus interest and charges of the drawn debt of one of its customers. The guarantee expired in the current financial year.
Invest Northern Ireland funding, in the form of an employment grant of €0.2m was received during FY2015. The funds were fully repayable
should the recipient subsidiary of the Group at any time during the term of the agreement be in breach of the terms and conditions of the
agreement. The term of the agreement expired in the prior financial year.
Pursuant to the provisions of Section 357 of the Companies Act 2014, the Company has guaranteed commitments entered into and liabilities
of certain of its subsidiary undertakings incorporated in the Republic of Ireland for the financial year to 28 February 2021 and as a result such
subsidiaries are exempt from certain filing provisions.
28. RELATED PARTY TRANSACTIONS
The principal related party relationships requiring disclosure in the consolidated financial statements of the Group under IAS 24 Related Party
Disclosures pertain to the existence of subsidiary undertakings and equity accounted investments, transactions entered into by the Group
with these subsidiary undertakings and equity accounted investments and the identification and compensation of and transactions with key
management personnel.
(a) Group
Transactions
Transactions between the Group and its related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Subsidiary undertakings
The consolidated financial statements include the financial statements of the Company and its subsidiaries. A listing of all subsidiaries
is provided in note 29. Sales to and purchases from subsidiary undertakings, together with outstanding payables and receivables, are
eliminated in the preparation of the consolidated financial statements in accordance with IFRS 10 Consolidated Financial Statements.
Equity accounted investments
See note 13 for details on equity accounted investments.
Loans extended by the Group to equity accounted investments are considered trading in nature and are included within advances to
customers in trade & other receivables (note 15).
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 229
28. RELATED PARTY TRANSACTIONS (continued)
Details of transactions with equity accounted investments during the year and related outstanding balances at the year end are as follows:
Net revenue
Trade & other receivables
Purchases
Trade & other payables
Loans
Joint ventures
Associates
2021
€m
0.9
0.2
0.3
-
1.5
2020
€m
1.7
0.4
0.7
-
1.6
2021
€m
0.1
-
0.2
-
1.0
2020
€m
0.5
-
0.8
0.3
1.1
All outstanding trading balances with equity accounted investments, which arose from arm’s length transactions, are to be settled in cash
within 60 days of the reporting date.
Key management personnel
For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the Group has defined the term ‘key management
personnel’, as its Executive and Non-Executive Directors. Executive Directors participate in the Group’s equity share award schemes (note
4), permanent health insurance (or reimbursement of premiums paid into a personal policy) and death in service insurance programme.
Executive Directors may also benefit from medical insurance under a Group policy (or the Group will reimburse premiums). No other non-
cash benefits are provided. Non-Executive Directors do not receive share-based payments nor post employment benefits.
Details of key management remuneration, charged to the Income Statement, are as follows:
Number of individuals
Salaries and other short-term employee benefits
Post employment benefits
Equity settled share-based payment (credit)/charge and related dividend accrual
Pay in lieu of notice
Total
2021
Number
10
2020
Number
10
€m
1.9
0.2
(0.7)
0.6
2.0
€m
2.8
0.4
1.2
0.7
5.1
During the current and prior financial year, there were no transactions or balances between the Group and its key management personnel or
members of their close family apart from:
• The Group sells stock to Tesco plc, of which Stewart Gilliland is a Non-Executive Director;
• The Group purchases stock from St Austell Brewery Company Limited, of which Jill Caseberry is a Non-Executive Director; and
• In the prior financial year the Group was provided with consultancy services from Advanced Boardroom Excellence Limited, of which
Helen Pitcher is a Non-Executive Director.
All transactions with related parties involve the normal supply of goods or services and are priced on an arm’s length basis.
For the purposes of the Section 305 of the Companies Act 2014, the aggregate gains by Directors on the exercise of share options during
FY2021 was €0.6m (FY2020: €nil).
Corporate GovernanceBusiness & StrategyFinancial Statements
230
28. RELATED PARTY TRANSACTIONS (continued)
(b) Company
The Company has a related party relationship with its subsidiary undertakings. Details of the transactions in the year between the Company
and its subsidiary undertakings are as follows:
Dividend income
Expenses paid on behalf of and recharged by subsidiary undertakings to the Company
Equity settled share-based payments for employees of subsidiary undertakings
Drawdown of cash funding and other movements with subsidiary undertakings
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS
2021
€m
76.6
(2.1)
0.8
49.3
2020
€m
10.0
(2.3)
2.5
58.8
Notes
Nature of business
Class of shares held as at 28 February 2021
(100% unless stated)
Trading subsidiaries
Incorporated and registered in Republic of Ireland
Bulmers Limited
C&C Financing DAC
(a) (n)
Cider
(b) (n) (o)
Financing company
Ordinary
Ordinary
C&C Group International Holdings Limited
(a) (n) (o)
Holding company
Ordinary & Convertible
C&C Group Irish Holdings Limited
(a) (n)
Holding company
C&C Group Sterling Holdings Limited
C&C (Holdings) Limited
C&C Management Services Limited
(b) (n)
(a) (n)
(a) (n)
Holding company
Holding company
Provision of management
services
Ordinary
Ordinary
Ordinary
6% Cumulative Preference,
5% Second Non-Cumulative
Preference & Ordinary Stock
C&C Finco Limited
(b) (n) (o)
Financing company
Cantrell & Cochrane Limited
Latin American Holdings Limited
M&J Gleeson & Co Unlimited Company
Tennent’s Beer Limited
The Annerville Financing Company Unlimited
Company
The Five Lamps Dublin Beer Company Limited
Wm. Magner Limited
Wm. Magner (Trading) Limited
Bibendum Wine Ireland Limited
Incorporated and registered in Northern Ireland
C&C Holdings (NI) Limited
Gleeson N.I. Limited
Tennent’s NI Limited
(a) (n)
(b) (n)
(b) (n)
(a) (n)
(a) (n)
(b) (n)
(a) (n)
(a) (n)
(b) (n)
(c)
(c)
(c)
Holding company
Holding company
Wholesale of drinks
Beer
Financing company
Beer
Cider
Financing company
Wine
Holding company
Wholesale of drinks
Cider and beer
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary & 3.25% Cumulative
Preference
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021
231
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Notes
Nature of business
Class of shares held as at 28 February 2021
(100% unless stated)
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Incorporated and registered in England and Wales
Bibendum Group Limited
Bibendum PLB (Topco) Limited
C&C Management Services (UK) Limited
Magners GB Limited
Matthew Clark Bibendum (Holdings) Limited
Matthew Clark Bibendum Limited
Bibendum Off Trade Limited
The Orchard Pig Limited
Walker & Wodehouse Wines Limited
C&C IP UK Limited
(l)
(k)
(k)
(k)
(k)
(k)
(l)
(i)
(l) (p)
(k)
Holding company
Holding company
Provision of management
services
Cider and beer
Holding company
Wholesale of drinks
Wholesale of drinks
Cider
Wine
Licensing activity
The Wondering Wine Company Limited
(k) (p)
Wine
(d)
(e)
(d)
(e)
(e)
(d)
(f)
(f)
(f)
(g)
(g)
(g)
Incorporated and registered in Scotland
Badaboom Limited
Macrocom (1018) Limited
Tennent Caledonian Breweries UK Limited
Tennent Caledonian Breweries Wholesale Limited
Wallaces Express Limited
Wellpark Financing Limited
Incorporated and registered in Luxembourg
C&C IP Sàrl
C&C IP (No. 2) Sàrl
C&C Luxembourg Sàrl
Incorporated and registered Portugal
Frutíssima - Concentrados de Frutos da Cova da
Beira, Lda
Frontierlicious Limitada
Incredible Prosperity Limitada
Incorporated and registered in Delaware, US
Green Mountain Beverage Management
Corporation, Inc
Vermont Hard Cider Company Holdings, Inc.
Vermont Hard Cider Company, LLC
Wm. Magner, Inc.
Marketing
Investment
Beer and cider
Wholesale of drinks
Holding company
Financing company
Licensing activity
Licensing activity
Class A to J Units
Class A to J Units
Holding and financing company
Class A to J Units
Ingredients
Orchard management
Orchard management
Ordinary
Ordinary
Ordinary
(h) (q)
Licensing activity
Common Stock
(h)
(h) (q)
(h)
Holding company
Common Stock
Cider
Cider
Membership Units
Common Stock
Corporate GovernanceBusiness & StrategyFinancial Statements 232
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Incorporated and registered in Singapore
C&C International (Asia) Pte. Ltd.
(j)
Sales & Marketing
Ordinary
Notes
Nature of business
Class of shares held as at 28 February 2021
(100% unless stated)
Non-trading subsidiaries
Incorporated and registered in Republic of Ireland
C&C Brands Limited
C&C Gleeson Group Pension Trust Limited
C&C Group Pension Trust Limited
C&C Group Pension Trust (No. 2) Limited
C&C Profit Sharing Trustee Limited
Ciscan Net Limited
Cooney & Co. Unlimited Company
Cravenby Limited
Crystal Springs Water Company Limited
Dowd’s Lane Brewing Company Limited
Edward and John Burke (1968) Limited
Findlater (Wine Merchants) Limited
Fruit of the Vine Limited
Gleeson Logistic Services Limited
Gleeson Wines & Spirits Limited
Greensleeves Confectionery Limited
M.& J. Gleeson (Investments) Limited
M&J Gleeson Nominees Limited
M. and J. Gleeson (Manufacturing) Company u.c.
M and J Gleeson (Manufacturing) Company Holdings
Limited
M and J Gleeson and Company Holdings Limited
M & J Gleeson Property Development Limited
Magners Irish Cider Limited
Sceptis Limited
Showerings (Ireland) Limited
Tennmel Limited
Thwaites Limited
Tipperary Natural Mineral Water Company Holdings
Limited
(a) (n)
(b) (n)
(a) (n)
(a) (n)
(a) (n)
(a) (n)
(b) (n)
(a) (n)
(b) (n)
(a) (n)
(a) (n)
(a) (n)
(a) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(b) (n)
(a) (n)
(a) (n)
(a) (n)
(b) (n)
(a) (n)
(b) (n)
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary & A Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary & A Ordinary
Ordinary & A Ordinary
Ordinary
Ordinary
Ordinary
Ordinary, 12% Cumulative
Convertible Redeemable
Preference & 3% Cumulative
Redeemable Convertible
Preference
Ordinary
Ordinary & Preference
Ordinary
Ordinary & Non-Voting Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary & A-E Non-Voting
A & B Ordinary
Ordinary
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 233
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Tipperary Natural Mineral Water (Sales) Holdings
Limited
Tipperary Pure Irish Water Unlimited Company
Vandamin Limited
Notes
(b) (n)
(a) (n)
(a) (n)
Nature of business
Non-trading
Non-trading
Non-trading
Class of shares held as at 28 February 2021
(100% unless stated)
Ordinary
Ordinary
A & B Ordinary
Incorporated and registered in Northern Ireland
C&C Profit Sharing Trustee (NI) Limited
(c)
Non-trading
Ordinary
Incorporated and registered in England and Wales
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A2 Contractors Limited
Bibendum Limited
Bibendum Wine Limited
Catalyst-PLB Brands Limited
Chalk Farm Wines Limited
Elastic Productions Limited
Gaymer Cider Company Limited
Instil Drinks Limited
Matthew Clark and Sons Limited
Matthew Clark Limited
Matthew Clark (Scotland) Limited
Matthew Clark Wholesale Bond Limited
Mixbury Drinks Limited
Odyssey Intelligence Limited
PLB Wines Limited
The Real Rose Company Limited
The Wine Studio Limited
The Yorkshire Fine Wines Company Limited
(k)
(k)
Non-trading
Non-trading
(l) (p)
Non-trading
(k)
(k)
(k)
(k)
(k)
(k)
(k)
(d)
(k)
(k)
(k)
(k)
(k)
(k)
(k)
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
West Country Beverages Limited
(m)
Non-trading
Notes (a) – (q)
The address of the registered office of each of the above companies and notes is as follows:
(a) Annerville, Clonmel, Co. Tipperary, E91 NY79, Ireland.
(b) Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702, Ireland.
(c) 6 Aghnatrisk Road, Culcavy, Hillsborough, Co Down, Northern Ireland, BT26 6JJ.
(d) Wellpark Brewery, 161 Duke Street, Glasgow, G31 1JD, Scotland.
(e) Crompton Way, North Newmoor Industrial Estate, Irvine, Strathclyde, KA11 4HU, Scotland.
(f) L-2132 Luxembourg, 18 Avenue Marie-Therese, Luxembourg.
(g) Quinta Da Ferreira De Baxio, Castelo Branco, Fundão Parish, 6230 610 Salgueiro, Portugal.
(h) 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, US.
(i) West Bradley Orchards, West Bradley, Glastonbury, Somerset, BA6 8LT.
(j) 143, Cecil Street, #03-01, GB Building, Singapore – 069542.
(k) Whitchurch Lane, Bristol, BS14 0JZ.
(l) 109A Regents Park Road, London, NW1 8UR
(m) C/O Tlt, 1 Redcliff Street, Bristol, United Kingdom, BS1 6TP.
(n) Companies covered by Section 357, Companies Act 2014 guarantees (note 27).
(o) Immediate subsidiary of C&C Group plc.
(p) Entities that have availed of the audit exemption set out within Section 479A of the Companies Act 2006.
(q) Disposed in April 2021.
Corporate GovernanceBusiness & StrategyFinancial Statements 234
29. SUBSIDIARIES AND EQUITY ACCOUNTED INVESTMENTS (continued)
Equity accounted investments
Joint venture
Beck & Scott (Services) Limited (Northern Ireland)
Brady P&C Limited (England)
Drygate Brewing Company Limited (Scotland)
The Irish Brewing Company Limited (Ireland)
3 Counties Spirits Limited (Ireland)
Associate
CVBA Braxatorium Parcensis
Shanter Inns Limited (Scotland)
Whitewater Brewing Co. Limited (Northern Ireland)
Financial asset
Jubel Limited
Innis & Gunn Holdings Limited
Bramerton Condiments Limited
Notes
Nature of business
Class of share held as at 28 February 2021
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
Wholesale of drinks
Ordinary, 50%
Holding Company
Brewing
Non-trading
Spirits
Brewing
Public houses
Brewing
Brewing
Brewing
Ordinary, 49.9%
B Ordinary, 49%
Ordinary, 45.61%
Ordinary, 50%
33.33%
Ordinary, 33%
Ordinary, 25%
Ordinary, 10%
8%
Food and beverage
Ordinary, 1%
Notes: (a) – (k)
The address of the registered office of each of the above equity accounted investments is as follows:
(a) Unit 1, Ravenhill Business Park, Ravenhill Road, Belfast, BT6 8AW, Northern Ireland.
(b) 49 Berkeley Square, 2nd Floor, London W1J 5AZ.
(c) 85 Drygate, Glasgow, G4 0UT, Scotland.
(d) Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702, Ireland.
(e) Gilligan & Co, Silversprings House, Saint Patrick’s Road, Clonmel, Co. Tipperary, E91 NT32, Ireland.
(f) 3001 Leuven-Heverlee, Abdij van Park 7, Belgium.
(g) 230 High Street, Ayr, KA7 1RQ, Scotland.
(h) Lakeside Brae, Castlewellan, Northern Ireland, BT31 9RH.
(i) Office 311 Edinburgh House, 170 Kennington Lane, London, England, SE11 5DP.
(j) 6 Randoplh Crescent, Edniburgh, EH3 7TH
(k) 5th Floor 14-16 Dowgate Hill, London, England, EC4R 2SU
Notes forming part of the financial statements(continued)C&C Group plc Annual Report 2021 235
30. POST BALANCE SHEET EVENTS
On 26 May 2021, the Group announced a rights issue. The rights issue is intended, alongside the other actions that the Group has already
announced and implemented, to reduce leverage and improve the Group’s overall liquidity position thereby providing the Group with the
capital structure to both support the business during further potential disruptions from COVID-19 and to deliver on its strategy as normalised
trading conditions return.
As a direct consequence of the impact of COVID-19, the Group successfully negotiated waivers on its debt covenants from its lending group
for FY2021, and these have been extended up to, but not including, the August 2022 test date whether or not the rights issue is successful.
Conditional on a Minimum Equity Raise being achieved, the debt covenants for 31 August 2022 were also renegotiated to increase the
threshold of the Group’s Net Debt/Adjusted EBITDA covenant to not exceed 4.5x and to reduce the Interest cover covenant to be not less
than 2.5x. As part of the agreement reached to waive the debt covenants, a minimum liquidity requirement and a gross debt restriction have
been put in place, both in the scenario of a Minimum Equity Raise being achieved and a Minimum Equity Raise not being achieved. Please
refer to Note 20 for further details.
Post year end the Group announced that the outcome of a cost reduction programme it had undertaken would deliver annualised savings of
€18m against its pre COVID-19 cost base.
On 2 April 2021, the Group completed the sale of its wholly owned US subsidiary, Vermont Hard Cider Company (“VHCC”) to Northeast
Kingdom Drinks Group, LLC for a total consideration of USD 20.0m. VHCC was classified as a disposal group, held for sale, as at 28
February 2021.
In April 2021, the Group’s wholly owned subsidiary, Matthew Clark Bibendum Limited (“MCB”), was the subject of a cybersecurity incident,
which impacted both Matthew Clark and Bibendum. MCB responded quickly, enacting its cybersecurity response plan, and taking steps
to protect its IT systems. Additionally, C&C engaged a leading forensic information technology firm and legal counsel to assist the Group
in investigating the incident and restoring the IT systems as quickly and as safely as possible. As part of the cybersecurity response plan,
the Group contacted all stakeholders on the actions the Group had taken and notified the relevant authorities, including the Information
Commissioner’s Office. This incident did not affect the IT systems of the wider C&C Group, which continued to operate as normal. The
recent incident affecting Matthew Clark and Bibendum IT systems has emphasised the need for continued focus on information security.
The Group has commenced a detailed review of its information security and cyber preparedness policies and processes.
There were no other events affecting the Group that have occurred since the year end which would require disclosure or amendment of the
consolidated financial statements.
31. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were approved by the Directors on 26 May 2021.
Corporate GovernanceBusiness & StrategyFinancial Statements 236
Financial Definitions
Adjusted earnings
(Loss)/profit for the year attributable to equity shareholders as adjusted for exceptional items
Company
C&C Group plc
Constant Currency
DWT
EBITDA
Prior year revenue, net revenue and operating profit for each of the Group’s reporting segments is
restated to constant exchange rates for transactions by subsidiary undertakings in currencies other
than their functional currency and for translation in relation to the Group’s non-Euro denominated
subsidiaries by revaluing the prior year figures using the current year average foreign currency rates
Dividend Withholding Tax
(Loss)/earnings before Interest, Tax, Depreciation and Amortisation charges excluding the Group’s
share of equity accounted investments’ profit/(loss) after tax
Adjusted EBITDA
EBITDA as adjusted for exceptional items
EBIT
(Loss)/earnings before Interest and Tax
Adjusted EBIT
EBIT as adjusted for exceptional items
Effective tax rate (%)
Income and deferred tax charges relating to continuing activities before the tax impact of exceptional
items calculated as a percentage of (loss)/profit before tax for continuing activities before exceptional
items and excluding the Group’s share of equity accounted investments’ profit/(loss) after tax
EPS
EU
Exceptional
Free Cash Flow
GB
Group
HL
IAS
IASB
IFRIC
IFRS
Interest cover
Export
LAD
(Loss)/earnings per share
European Union
Significant items of income and expense within the Group results for the year which by virtue of their
scale and nature are disclosed in the Income Statement and related notes as exceptional items
Free Cash Flow is a measure that comprises cash flow from operating activities net of capital
investment cash outflows which form part of investing activities. Free Cash Flow highlights the
underlying cash generating performance of the ongoing business
Great Britain (i.e. England, Wales and Scotland)
C&C Group plc and its subsidiaries
Hectolitre (100 Litres)
kHL = kilo hectolitre (100,000 litres)
mHL = millions of hectolitres (100 million litres)
International Accounting Standards
International Accounting Standards Board
International Financial Reporting Interpretations Committee
International Financial Reporting Standards as adopted by the EU
Calculated by dividing the Group’s EBITDA excluding exceptional items and discontinued activities
by the Group’s interest expense, excluding IFRS 16 Leases finance charges, issue cost write-offs,
fair value movements with respect to derivative financial instruments and unwind of discounts on
provisions, for the same period
Sales in territories outside of Ireland, Great Britain and North America
Long Alcoholic Drinks
C&C Group plc Annual Report 2021 237
Liquidity
Net debt
Net debt/EBITDA
Net revenue
Liquidity is defined as cash plus undrawn amounts under the Group’s revolving credit facility
Net debt comprises borrowings (net of issue costs) less cash. Net debt including leases comprises
borrowings (net of issue costs) less cash plus lease liabilities capitalised under IFRS 16 Leases
A measurement of leverage, calculated as the Group’s Net debt divided by its EBITDA excluding
exceptional items and discontinued activities. The net debt to EBITDA ratio is a debt ratio that shows
how many years it would take for the Group to pay back its debt if net debt and EBITDA are held
constant
Net revenue is defined by the Group as revenue less excise duty. The duty number disclosed
represents the cash cost of duty paid on the Group’s products. Where goods are bought duty paid
and subsequently sold, the duty element is not included in the duty line but within the cost of goods
sold. Net revenue therefore excludes duty relating to the brewing and packaging of certain products.
Excise duties, which represent a significant proportion of revenue, are set by external regulators over
which the Group has no control and are generally passed on to the consumer
NI
Northern Ireland
Non-controlling interest
Non-controlling interest is the share of ownership in a subsidiary entity that is not owned by the
Group
Off-trade
On-trade
Operating (loss)/profit
PPE
Revenue
ROI
TSR
UK
US
All venues where drinks are sold for off-premise consumption including shops, supermarkets and
cash & carry outlets selling alcohol for consumption off the premises
All venues where drinks are sold at retail for on-premise consumption including pubs, hotels and
clubs selling alcohol for consumption on the premises
(Loss)/profit earned from the Group’s core business operations before net financing and income tax
costs and excluding the Group’s share of equity accounted investments’ profit/(loss) after tax. In line
with the Group’s accounting policies certain items of income and expense are separately classified
as exceptional items on the face of the Income Statement
Property, plant & equipment
Revenue comprises the fair value of goods supplied to external customers exclusive of intercompany
sales and value added tax, after allowing for discounts, rebates, allowances for customer loyalty and
other pricing related allowances and incentives
Republic of Ireland
Total Shareholder Return
United Kingdom (Great Britain and Northern Ireland)
United States of America
Corporate GovernanceBusiness & StrategyFinancial Statements 238
Shareholder and Other Information
C&C Group plc is an Irish registered company (registered number:
383466). Its ordinary shares are quoted on the London Stock
Exchange (ISIN: IE00B010DT83 SEDOL: B010DT8).
C&C Group plc also has a Level 1 American Depository Receipts
(ADR) programme for which Deutsche Bank acts as depository
(symbol CCGGY). Each ADR share represents three C&C Group plc
ordinary shares.
Dividend Payments
The Company may, by ordinary resolution declare dividends in
accordance with the respective rights of shareholders, but no
dividend shall exceed the amount recommended by the Directors.
The Directors may also declare and pay interim dividends if they
believe they are justified by the profits of the Company available for
distribution.
The authorised share capital of the Company at 28 February 2021
was ordinary 800,000,000 ordinary shares at €0.01 each. The
issued share capital at 28 February 2021 was 320,480,164 ordinary
shares of €0.01 each.
Due to the emergence of COVID-19 and the impact this has on
global economies and on business generally, the Board concluded
it was not appropriate to pay an interim dividend or a final dividend
for FY2021.
Euroclear Bank
Following the migration in March 2021 of securities settlement in the
securities of Irish registered companies listed on the London Stock
Exchange (such as the Company) and/or Euronext Dublin from the
CREST settlement system to the replacement system, Euroclear
Bank, the Company’s shares are held and transferred in certificated
form (that is, represented by a share certificate) or in electronic form
indirectly through the Euroclear System or through CREST in CDI
(CREST Depository Interest) form. Shareholders have the choice
of holding their shares in electronic form or in the form of share
certificates. Shareholders should consult their stockbroker if they
wish to hold their shares in electronic form.
SHARE PRICE DATA
Share price at year end
2021
£2.58
2021
Number
2020
£3.28
2020
Number
Dividend Withholding Tax (‘DWT’) must be deducted from dividends
paid by an Irish resident company, unless a shareholder is entitled to
an exemption and has submitted a properly completed exemption
form to the Company’s Registrars. DWT applies to dividends paid
by way of cash or by way of shares under a scrip dividend scheme
and is deducted at the standard rate of income tax (currently 20%).
Non-resident shareholders and certain Irish companies, trusts,
pension schemes, investment undertakings, companies resident
in any member state of the European Union and charities may be
entitled to claim exemption from DWT. DWT exemption forms may
be obtained from the Irish Revenue Commissioners website: http://
www.revenue.ie/en/tax/dwt/forms/index.html. Shareholders should
note that DWT will be deducted from dividends in cases where a
properly completed exemption form has not been received by the
relevant record date. Shareholders who wish to have their dividend
paid direct to a bank account, by electronic funds transfer, should
contact Link Registrars to obtain a mandate form. Tax vouchers
will be sent to the shareholder’s registered address under this
arrangement.
No of Shares in issue at year end
320,480,164
319,495,110
Market capitalisation 28/29 February
£827k
£1,048m
Holders through Euroclear Bank
Share price movement during the financial year
– high
– low
£3.36
£1.45
£4.11
£3.28
Investors who hold their shares via Euroclear Bank or (in CDI form)
through CREST will automatically receive dividends in Euro unless
they elect otherwise.
Certificated shareholders
Shareholders who hold their shares in certificated form will
automatically receive dividends in Euro with the following exceptions:
• Shareholders with an address in the United Kingdom (UK) will
automatically receive dividends in Sterling,
• Shareholders who had previously elected to receive dividends
in a particular currency will continue to receive dividends in that
currency.
Shareholders who wish to receive dividends in a currency other than
that which will be automatically used should contact the Company’s
Registrars.
C&C Group plc Annual Report 2021 239
Electronic Communications
Principal Bankers
In order to promote a more cost effective and environmentally
friendly approach, the Company provides the Annual Report
electronically to shareholders via the Group’s website and only
sends a printed copy to those who specifically request one.
Shareholders who wish to alter the method by which they receive
communications should contact the Company’s registrar. All
shareholders will continue to receive printed proxy forms, dividend
documentation, shareholder circulars, and, where the Company
deems it appropriate, other documentation by post.
Company Secretary and Registered Office
Mark Chilton, C&C Group plc
Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702
Tel: +353 1 506 3900
Registrars
Shareholders with queries concerning their holdings, dividend
information or administrative matters should contact the Company’s
registrars:
Link Registrars Limited (trading as Link Assets Services)
P.O. Box 7117, Dublin 2, Ireland
Tel: +353 1 553 0050
Fax: +353 1 224 0700
Email: enquiries@capita.ie
Website: www.linkassetservices.com
American Depositary Receipts (ADR)
Shareholder with queries concerning their ADR holdings should
contact:
Deutsche Bank Trust Company Americas
C/o American Stock Transfer & Trust Company, 6201 15th Avenue,
Brooklyn, NY 11219.
Tel: Toll free +1 866 249 2593
International +1 718 921 8137
Email: db@astfinancial.com
Investor Relations
FTI Consulting
10 Merrion Square, Dublin 2, D02 DW94
ABN Amro Bank
Allied Irish Bank
Bank of Ireland
Bank of Scotland
Barclays Bank
HSBC
Rabobank
Ulster Bank
Solicitors
McCann FitzGerald
Riverside One, Sir John Rogerson’s Quay, Dublin 2, D02 X576
Stockbrokers
Davy
Davy House, 49 Dawson Street, Dublin 2, D02 PY05
Barclays Bank plc
5 The North Colonnade, Canary Wharf, London E14 4BB
Numis Securities Limited
10 Paternoster Square, London, EC4M 7LT
Auditor
Ernst & Young
Chartered Accountants
Harcourt Building,
Harcourt Street,
Dublin 2.
Website
Further information on C&C Group plc is available at www.
candcgroupplc.com
Corporate GovernanceBusiness & StrategyFinancial Statements
240
C&C Group plc Annual Report 2021
Notes
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e
i
.
n
g
s
e
d
e
c
r
u
o
s
Bulmers House, Keeper Road, Crumlin, Dublin 12, D12 K702.
www.candcgroupplc.com