Annual report and accounts 2023 - Flipbook - Page 88
A.G. BARR p.l.c. Annual Report and Accounts 2023
Audit and Risk Committee Report continued
- reviewed and recommended the Group’s
enterprise risk management framework, including
the Group’s risk appetite statement, to the Board;
- discussed and agreed the nature and scope of the
work to be performed by the internal auditor;
- reviewed the results of this audit work and the
response of management to matters raised;
- reviewed the effectiveness of the Group’s risk
management and internal control systems
(including financial, operational, compliance
and risk management controls); and
- reviewed and approved the Company’s viability
and going concern statements.
Consideration of the effectiveness of the Group’s risk
management and internal control systems is set out in
the Corporate Governance Report on pages 83 and 84.
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Policies and procedures:
- reviewed and approved the Treasury policy,
Commodities management policy and the terms
of reference for the Group’s Treasury and
Commodity Committee;
- reviewed and recommended the Group’s Tax risk
management policy to the Board;
- reviewed and approved the Group’s Antifacilitation of tax evasion policy;
- reviewed the effectiveness of the Group’s
Anti-bribery systems and controls and reviewed
and approved the Group’s Anti-bribery and
Corruption policy;
- reviewed the Group’s delegated authority limits;
- approved the reappointment of the internal auditor;
- made recommendations to the Board on the
appointment and remuneration of the external
auditor and monitored the performance of
the auditor;
- monitored and reviewed the performance of the
incumbent internal auditor and the effectiveness
of the Group’s internal audit activities;
- reviewed its policies on the supply of non-audit
services by the external auditor and on the
employment of former employees of the Group’s
external auditor;
- reviewed the non-audit services provided to the
Group by the external auditor and monitored and
assessed the independence of both the external
and internal auditors; and
- reviewed the performance of the ARC and its
terms of reference.
At the request of the Board, the ARC also considered
whether the Annual Report and Accounts for the year
ended 29 January 2023, taken as a whole, are fair,
balanced and understandable and provide the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy. Following review of management’s
processes in this regard and consideration of the draft
Annual Report and Accounts, the ARC recommended
to the Board that it could make the required disclosure
as set out in the Directors’ Responsibilities Statement on
page 128.
Significant areas
The significant matters and key accounting judgements
independently assessed and considered by the ARC
in respect of the period under review were:
• Revenue recognition – brand support accruals:
judgement is required by management when
determining the level of brand support accruals at
the year end. During the year, the ARC received and
considered reports from management on the
improvements made to the internal processes and
controls in place with regard to brand support
accruals, and the level of accruals at the half year
and at the year end. It also received and considered
reports from the external auditor following their
review of net revenue and brand support accruals
during the period. The ARC considered these
reports and was satisfied that the estimates and
judgements made by management are appropriate.
• Management override of controls: there is a risk of
fraud associated with the potential override of
internal controls by management. During the year,
the ARC assessed this risk, and received and
considered a report from the external auditor which
stated that its procedures, which included the use of
data analytics, did not identify any errors or
significant deficiencies in internal controls. The ARC
was content that there were no issues arising.
Other areas
Other matters independently assessed and considered
by the ARC in respect of the period under review were:
• Impairment of intangible assets: the ARC considered
a report from management in relation to their
impairment reviews of the intangible asset base and
was satisfied with management’s conclusion that,
following impairment assessments carried out as
part of the interim and full year reporting processes,
which concluded that the carrying values of
intangible assets on the balance sheet remained
supportable, no impairment was required. The
external auditor concurred with management’s
assessment.
• Assumptions used in the Company’s defined
benefit pension scheme: the Company operates the
A.G. BARR p.l.c. (2008) Pension and Life Assurance
Scheme, which includes a defined benefit section.
The Company engages a third party, Hymans
Robertson, to assist in the valuation of the defined
benefit pension scheme liability. There is a risk
related to judgements made by management in
valuing the defined benefit pension scheme liability,
including the appropriateness of the discount rate
and inflation rate assumptions. These variables can
have a material impact in calculating the quantum of
the defined benefit liability. During the year the ARC
were satisfied that management had considered and
were comfortable with the assumptions used by
Hymans Robertson (the “Assumptions”), and
received and considered a report from the external
auditor which stated that it had carried out a review
and benchmarking exercise of the Assumptions
and concluded that they were within an acceptable
range. After discussion and challenge the ARC
was satisfied that the Assumptions proposed
were reasonable and these were approved.
• Going concern: the ARC considered and challenged
reports from management regarding the going
concern assumption and the key environmental and
trading sensitivities applied, and was satisfied that
this assumption was appropriate.
