47153 AG Barr Annual Report 2025 AW4 SQ WEB - Flipbook - Page 182
A.G. BARR p.l.c. Annual Report and Accounts 2025
N OTE S
TO TH E
ACCO U NT S
CO N TI N U ED
25. Financial risk management continued
Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed transactions.
For banks and financial institutions where the company holds cash and cash equivalents, short-term investments and borrowing, only independently rated parties with a
minimum rating of “A” are accepted. If major customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control processes
assess the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set by senior management,
based on internal or external ratings. The utilisation of credit limits is regularly monitored.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit
facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, the Group maintains flexibility in funding by maintaining sufficient
cash reserves and the availability of borrowing facilities. See Note 21 for disclosures of committed facilities.
Management monitors rolling forecasts of the Group’s liquidity reserve (which comprises undrawn borrowing facilities and cash and cash equivalents) on the basis of expected
cash flows. This is carried out at a Group level and involves projecting forward cash flows and considering the level of liquid assets necessary to meet excesses of expenditure
relative to income.
The Group and Company also enters into forward commodity contracts that are not held on the balance sheet. Commitments are shown in the table below.
Total contractual outflow
180
Group and Company
2025
£m
2024
£m
Forward commodity contracts – payable within one year
Forward commodity contracts – payable within one to two years
19.5
4.4
26.2
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