Annual report and accounts 2023 - Flipbook - Page 68
A.G. BARR p.l.c. Annual Report and Accounts 2023
Risk management continued
Movement:
No change
Risk
Impact
Controls and mitigating actions
Financial risks
The Group’s activities expose
it to a variety of financial risks
which include market risk
(including medium-term
movements in exchange
rates, interest rate risk and
commodity price risk), credit
risk and liquidity risk.
Financial risks are reviewed and managed by the Treasury
and Commodity Committee, which seeks to minimise
adverse effects on the Group’s financial performance through
hedging known currency exposures throughout the year.
The loss of continuity of
supply of raw material
ingredients and/or packaging
materials could impact our
ability to manufacture, with
an adverse impact on the
Group’s sales and operating
profits.
There is a robust supplier selection process in place. Supplier
performance is monitored on an ongoing basis and audits
are undertaken for major suppliers. Dual sources of supply
are sourced wherever possible.
Loss of continuity
of supply of major
raw materials
Increased
Decreased
Net risk
impact
Net risk
likelihood
Net risk
rating
Moderate
Low
Moderate
Moderate
Low
Moderate
Moderate
Low
Moderate
The Group’s finance team reviews cash flow forecasts
throughout the year, with headroom against banking
covenants assessed regularly. The finance team uses external
tools to assess credit limits offered to customers, manages
trade receivable balances vigilantly and takes prompt action
on overdue accounts. The Group’s financial control
environment is subject to review by both internal and external
audit. Internal audit’s focus is to work with and challenge
management to ensure an appropriate control environment
is maintained.
Commodity risks are managed by the procurement team and
reviewed by the Treasury and Commodity Committee.
Contingency measures are in place and are tested regularly.
During the early part of the year we continued to work closely
with key raw material suppliers in relation to the ongoing
impact of Covid-19 on their businesses.
Inability to protect
the Group’s
intellectual
property rights
66
Failure to protect the Group’s
intellectual property rights
could result in a loss of
brand value.
The Group invests considerable effort in proactively
protecting its intellectual property rights, for example through
trademark and design registrations and vigorous legal
enforcement as and when required.
New
Movement
