S172 statement

Directors’ Duties – Companies Act requirements

The Board of Directors consider that they have adhered to the requirements of the Companies Act 2006 (the ‘Act’), and have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its stakeholders as a whole, and in doing so have had regard to and recognised the importance of considering all stakeholders and other matters (as set out in s.172(1)(a-f) of the Act) in its decision-making.

General

The Board of Directors (Board) fulfil their duties partly through a governance framework that enables the Board to make strategic decisions with material and long term implications, as well as allowing the Directors to delegate day-to-day decision making to senior management of the Group.

Long term decisions

The Directors design their strategic plans for the Group with the aim of having a long-term beneficial impact on the Group and its stakeholders, and contributing towards its success in growing awareness of our brands and enjoyment of our products.

Regular Board meetings are held in which material decisions are made by the Directors based on well prepared briefing papers, assessment of impact by all relevant stakeholders, the Group’s high standards of business conduct, the environment and the wider community, supported by comprehensive financial information including budgets, forecast, actual results and analyses.

Strategic decisions are delegated to senior management who design action plans to execute the decisions. The Board recognises that such delegation needs to be part of a robust governance structure. This involves frequent reviews by the Board of progress of action plans and implementation of Board decisions.

Group employees

The Directors ensure that the Group continues to be a responsible employer, communicates and engages with the employees regularly in a variety of ways, and that the voice of the workforce is heard and taken into account when making decisions. The Directors recognise that employees are fundamental to the long-term success of the business. Their health, safety and wellbeing is one of the Group’s primary considerations.

The Board leads a culture that promotes trust, collaboration and integrity. They build diverse and inclusive teams, develop and empower people to create our leaders for the future.

Business relationships

Under the strategic plans developed by the Board, the business partners with its customers to ensure appropriate portfolio of wine products are supplied to the right markets and customers. It also works closely with its suppliers to improve quality of the wine and efficiency of the supply chain. The Group’s focus is to become partner of choice for our key business partners with engagement, insight and innovation.

Community and environment

The Group has a long-term obligation to managing our business in an environmentally responsible manner at all levels, from our vineyards through to our production facilities and distribution networks. The Directors are also highly aware of the environmental risks to our industry generated by climate change, resourcing challenges and security of supply.

The Directors are committed to create positive change to the community and environment around the business. The Group has been pushing for sustainability, reduction of greenhouse gas emissions, and the sites have implemented measures to use green energy and achieve carbon neutrality.

Business conduct

The Group strives for high standards in all its business conduct.  It is committed to encouraging the responsible consumption of alcohol.

In Australia we are active supporters of Drink Wise Australia. In the UK we support Drinkaware, as well as the national ‘Why Let Good Times Go Bad?’ smarter drinking campaign. Accolade Wines also funds the Alcohol In Moderation’s (AIM) educational programme.

Principal decisions made during the year and impact

Principal decisions made during the year included the strategy to deal with COVID-19, closure of the US domestic business and the divestment of the Australian wineries and vineyards.

Response to COVID-19

With COVID-19 impacting the community, the Board continues to uphold its policy that the Group’s number one priority remains the health and safety of its employees, partners, suppliers and customers, and takes into account these stakeholders’ interests in making their decisions on relevant measures.

With significant uncertainty created by the COVID-19 pandemic, the Board oversaw the Group’s response with the aim of ensuring we emerged from the crisis well positioned for long-term success, whilst supporting our employees and their safety and continuing to work with our suppliers and deliver for our customers.

Employee health, safety and wellbeing have been the Group’s top priority. Due consideration was given to ensure well thought-out procedures are implemented for employees who are required to be on-site. For those able to work from home, the Board considered the infrastructure to support this and working efficiency. Regular updates of policy and best practice have been sent, and access to wellbeing support has also been encouraged and recommended to the workforce to help deal with anxiety in this uncertain situation.

With regard to customers and suppliers, the Board considered continuity plans and the Group’s ability to continue delivering for the customers in the event of a significant proportion of the workforce being unable to work due to sickness. The Board also considered near-term demand and how customers’ priorities might change over a longer period of time.

The Directors have also kept the investors and the lenders up to date with their plans for dealing with COVID-19 disruptions. Scenario analyses have been performed with no concerns around the impact of COVID-19 on the business in an optimistic, conservative and pessimistic scenario.

US domestic business

On 1 November 2019, the Group announced its intention to close the US domestic business and initiate an active plan to locate a buyer for its domestic US brands and inventory. Completion of the sale is expected to occur in H2 FY20.

Divestment of Australia wineries and vineyards

During the financial year an agreement was signed for the sale of three Australian wineries which were classified as assets held for sale at 30 June 2019.