Intertek Group Annual Report 2021

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FY2021 Annual Report · Intertek Group

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Annual Report & Accounts 2021

A Force for Good

Contents

Intertek is a force for good,
bringing quality, safety
and sustainability to life.

GIC REP O

g 4
p

E
T
A
R
T
S

SUSTAIN

P
O
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T

A
For(cid:27) for
G(cid:23)d

FIN

ANCIAL R E P
pg 172

We are a purpose-led force for good,
committed to delivering sustainable
value for all stakeholders.

We never stop reinventing ourselves to take Intertek
to greater heights.

I truly believe that one of our responsibilities to
our stakeholders is to communicate clearly and
with total transparency.

I am therefore pleased to share with you a new
format for the 2021 Annual Report that captures,
in a systemic end-to-end architecture, what
we did in 2021 in three distinct reports: Strategic,
Sustainability and Financial.

These three separate, and yet connected, reports
have been designed to make it easier for our
stakeholders to fully understand our business,
how we bring quality, safety and sustainability to life,
what we offer our clients, and the opportunities
we have ahead of us.

André Lacroix
Chief Executive Officer

Intertek Group plc | Annual Report & Accounts 2021

Contents

PAGES

4-61
Strategic
Report

PAGES

62-171
Sustainability
Report

Financial
Report

PAGES

172-232

Where we discuss our growth opportunities
and strategic performance.

Where we discuss our environmental,
social and governance progress.

Where we record our financial activities,
performance and position.

6 Chief Executive Officer's letter

64 Chief Executive Officer's Sustainability letter

173 Consolidated income statement

14 Our 5x5 strategy

16 Investment case

18 Our business model

19 Who we are

20 What we do

21 Our sectors

22 How we do it

23 The value we create

26 Key performance indicators

30 Financial review

36 Operating reviews

36 Products

40 Trade

42 Resources

44 Principal risks and uncertainties

50 TCFD statement

55 Section 172 statement

66 2021 Highlights

68 Sustainability Excellence

98 Corporate Governance

100 Chairman's introduction

102 Board of Directors

105 Direct reports to the CEO

106 Board Leadership and
Company Purpose

122 Division of Responsibilities

124 Composition, Succession and Evaluation

126 Nomination Committee report

130 Audit Committee report

136 Remuneration Committee report

163 Other statutory information

174

Consolidated statement
of comprehensive income

175 Consolidated statement
of financial position

176 Consolidated statement
of changes in equity

178 Consolidated statement of cash flows

179 Notes to the financial statements

218 Intertek Group plc – Company balance sheet

219 Intertek Group plc – Company statement

of changes in equity

220 Notes to the Company financial statements

223 Independent Auditors' Report

230 Glossary

– Alternative performance measures

166 Statement of Directors’ responsibilities

232 Shareholder and corporate information

167 Risk management

170 Total Sustainability Assurance

61 Group non-financial information statement

171 Transparency

ABOUT THIS REPORT

This report has been produced in
landscape format to optimise the
reading experience online.

Look out for these
throughout the report:
Return to contents page

Reference to another

page in the report

Reference to external web pages

Intertek Sustainability
Disclosure Index

Online Review 2021

intertek.com

Intertek Group plc | Annual Report & Accounts 2021

Contents

Highlights

Strategic highlights

Sustainability highlights

We have a clear purpose of making the world ever
better and our leading ATIC solutions are what
society needs to build back ever better.

Intertek has been included in
the FTSE4Good Index for the
fifth year running.

The growth in our end-markets is accelerating
as our clients have realised during Covid-19 that
too many risks in their supply chains were not
properly mitigated.

Given our strong market leadership positions
and our Science-based Customer Excellence,
we are well positioned to seize the exciting
growth opportunities ahead.

In 2021, Intertek received a rating
of 'AAA' in the MSCI ESG Ratings
assessment.

Intertek is an accredited Living
Wage Employer in the UK.

We operate a high-quality earnings model
with a track record of continuous growth
in revenue, margin, cash and dividends with
an excellent Return on Invested Capital.

2050

Continuous focus on reducing
our direct GHG emissions and
targeting net zero emissions
by 2050.

We are a high-quality global business delivering
sustainable value for all stakeholders:
customers, employees, suppliers, shareholders,
regulators and our communities.

Proud member of the
Valuable 500.

Read our Strategic Report on pages 4-61

Read our Sustainability Report on pages 62-171

Intertek Group plc | Annual Report & Accounts 2021

ContentsHighlights
Continued

Financial highlights

Read our Financial Report on pages 172-232

– Strong progress in revenue, margin, earnings and cash
– Revenue of £2,786.3m: +6.5% at constant rates

and +1.6% at actual rates

– Robust LfL revenue of 5.6% at constant rates:
Products: +7.6%, Trade: +3.0%, Resources +1.7%
– Strong H2 with LfL revenue, profit and margin

– Strong adjusted operating margin of 17.0%: +130bps

at constant rates and +140bps at actual rates
– Strong free cash flow of £401.8m driven by cash
discipline improving the negative Group working
capital further

– Statutory operating profit of £433.2m, up 19.6% YoY

ahead of 2019

at constant rates

– Double-digit adjusted operating profit growth of

– Statutory net profit after tax of £306.7m, up 22.4%

+15.4% at constant rates and +10.8% at actual rates

at constant rates and 16.8% at actual rates

£2,786m

Revenue
(2020: £2,742m)

£474m

Adjusted operating profit1,2
(2020: £428m)

17.0%

Adjusted operating margin1,2
(2020: 15.6%)

£2,744m

Like-for-like revenue1
(2020: £2,722m)

£433m

Statutory operating profit
(2020: £378m)

15.5%

Statutory operating margin
(2020: 13.8%)

190.8p

Adjusted diluted earnings per share1,2
(2020: 170.9p)

177.9p

Statutory diluted earnings per share
(2020: 152.4p)

£402m

Adjusted free cash flow2
(2020: £435.6m)

24.4%

Organic Return on Invested Capital1
(2020: 21.6%)

105.8p

Dividend per share3
(2020: 105.8p)

1. Definitions of the alternative performance measures, metrics and

constant rates can be found on page 230.

2. Adjusted operating profit, adjusted operating profit margin,

adjusted diluted earnings per share (‘EPS’) and adjusted free cash
flow are non-GAAP measures. Adjusted measures are stated
before Separately Disclosed Items, which are described in note 3
to the financial statements. Reconciliations between statutory
and adjusted measures, as well as return on invested capital and
cash conversion, are shown in the Financial review.

3. Dividend per share for 2021 is based on the interim dividend paid
of 34.2p (2020: 34.2p) plus the proposed final dividend of 71.6p
(2020: 71.6p).

Intertek Group plc | Annual Report & Accounts 2021

ContentsStrategic Report

A
For(cid:27) for
G(cid:23)d

We are a force for good, bringing
quality, safety and sustainability to
life for our clients, with a long-term
5x5 differentiated strategy for
growth that has ensured another
strong performance in 2021.

ATEGIC

R
T
S

6 Chief Executive Officer's letter

14 Our 5x5 strategy

16 Investment case

18 Our business model

19 Who we are

20 What we do

21 Our sectors

22 How we do it

23 The value we create

26 Key performance indicators

30 Financial review

36 Operating reviews

36 Products

40 Trade

42 Resources

44 Principal risks and uncertainties

50 TCFD statement

55 Section 172 statement

61 Group non-financial information statement

Intertek Group plc

| Annual Report & Accounts 2021

Strategic ReportContents

Our purpose-led approach and unrelenting
focus on what matters to our customers
is helping us to deliver sustainable value
for all stakeholders.

Read more about
our innovations
in the Operating
Review on
page 36

Purpose
Led

Outstanding solutions to
empower our customers

Intertek at its core is a network of science-
based, highly technically skilled individuals
and teams who are dedicated to helping
business become ever better. We understand
the challenges our clients face and have the
expertise to support them: whether it’s
making supply chains more resilient,
managing an increasing volume of Quality
Assurance related risks, making better use of
big data, or ensuring the health, safety and
wellbeing of their employees and consumers.

Customer
Excellence

Amazing people delivering
value every day

Further reading

More on page 92

Sustainability ReportContents72

Sustainability Excellence
Continued

Total Sustainability
Assurance Standards

The Total Sustainability Assurance
('TSA') programme is based on ten
corporate sustainability standards
that we believe define a truly
sustainable organisation today.
We believe that these TSA standards
are the most comprehensive
sustainability standards currently
available.

The TSA standards form the foundation of how we
approach sustainability, challenging us to view our
processes and procedures through this end-to-end lens.

Ten Corporate Sustainability
Certification Standards

Quality & Safety

People & Culture

Communities

Governance

Risk Management

Compliance

Financial

Environment

2. Materiality

We recognise the importance of determining and
prioritising the key sustainability topics relevant
to the business and our stakeholders. In 2019, we
conducted an independent materiality assessment
to ensure that views and emerging trends are being
addressed by Intertek. The methodology was aligned
to AccountAbility’s AA1000 Principles, the GRI
Standards, IIRC, CDP, UN SDGs, DJSI and SASB
guidelines. The process ensured that all relevant
topics have been considered appropriately
within the scope of the study.

We believe that the material topics identified remain
true, although some matters have been given
more prominence to reflect their increasing
importance to stakeholders. We have addressed
these within our Focus areas.

Our Material Topics

Working with customers

Employee care

Diversity and inclusion

Environment

Societal impact

Human and labour rights

Customer and product responsibility

Compliance and legislation

Enterprise Security

Privacy and security

Communications & Disclosures

Governance

To see more on TSA Standards visit
intertek.com/sustainability/corporate

Intertek Group plc | Annual Report & Accounts 2021

3. Engagement

We have always understood our role in society as
companies around the world have depended on us
to help ensure the quality, safety and sustainability
of their products, processes and systems.

Engagement with our stakeholders plays a critical
role in delivering long-term success. This dynamic
process provides valuable insights which in turn
enable us to align our sustainability initiatives, drive
progress against our Beyond Net Zero goals and
prioritise our focus areas.

4. Focus areas

Evaluating both the requirements of the TSA
standards and our material topics has helped
to shape our sustainability strategy.

We provide an update on our progress across the four
focus areas of People and Culture, Working with our
Customers, the Environment and our Communities.

Although less material, all other topics remain an
essential part of our ever better approach and
we systematically re-evaluate them to determine
whether they have become more material to the
organisation or our stakeholders.

5. Implementation

Sustainability is about more than protecting the
planet. Taking a broader view on sustainability,
we empower our local teams to address solutions
within their communities and create opportunities
to support a promising future for the next generation.

Our Sustainability Excellence framework is
underpinned by the highest standards of corporate
governance, our systemic risk management
processes and our continued evaluation against
the TSA standards.

6. Reporting

Reporting on our sustainability performance
indicators in a consistent and accurate manner
is essential to deliver transparency.

We recognise that corporate disclosure and
transparency are key catalysts for driving change.

We are committed to providing stakeholders with
accurate and timely updates on our sustainability
activities and performance and make every effort
to produce a report that is balanced and transparent
and meets their needs.

Completing external assessments and continuing
to engage with our stakeholder demonstrates our
commitment to continuous improvement and helps
us to prioritise focus areas for the next year.

Sustainability ReportContentsSustainability Excellence
Continued

People and
Culture
Intertek’s first corporate goal is to
have fully engaged employees
working in a safe environment.

We truly value our people. We
embrace diversity, inclusion and
equality, and our success is based
on a culture of trust among
colleagues globally.

Our People Strategy is all about energising our
colleagues to take our business to new heights.
Employee engagement, human rights and worker
health and wellness are core to the long-term
success of our business. We strive for a sustainable
workforce that is stable, engaged and committed to
the organisation, our goals and objectives. We
respect and protect the rights of our people across
operations and throughout our business
relationships.

Our Values
Our values aim to drive how we live every day,
supplementing our purpose, how we conduct our
business, and underpinning our desire to make the
world ‘ever better’.

>
>
>
>
>

We are a global family
that values diversity.

We always do the right thing,
with precision, pace and passion.

We trust each other and
have fun winning together.

We own and shape
our future.

We create sustainable growth.
For all.

Intertek Group plc | Annual Report & Accounts 2021

Ensuring the health, safety and wellbeing
of our employees
Only through having fully engaged employees
working in a safe environment are we able to deliver
our TQA Customer Promise.

Our aim is to encourage a culture of proactive Health
and Safety ('H&S') awareness, industry best practice
and continuous improvement to increase H&S
performance globally. Our Group-wide ‘General Safe
Working Guidelines’ provide the basis for a common
and aligned H&S standard for all Intertek sites.

urgent questions and plans for review and approval.
To support our employees further we launched a
new and enhanced Group-wide Health & Safety
policy, business continuity planning for smart home
working and policies on social distancing, hygiene
and sanitation as well as personal protective
equipment and temperature checks.

We are proud of the passion and commitment our
employees have shown to ensure that the essential
services we provide to our customers were not
disrupted during the Covid-19 pandemic.

This includes a dedicated fire warden, first aider and
H&S representative at each location. These
representatives are empowered not only to
investigate incidents and implement preventative
and corrective actions, but also to disseminate
safety information through training and targeting
continuous improvement.

With dedicated reporting each month for country and
business lines supplemented by inclusion in the 5x5
analysis for every site, our global network of H&S
‘Champions’ supports continuous improvement. By
improving our H&S communication network, we not
only have a known contact person in each country
and location but also a means of channelling and
sharing information and programmes globally.

The Group reacted with precision and pace to the
global pandemic and the implications for our
employees, forming a Group Covid-19 response team
as well as regional teams with the ability to escalate

Group1

Hazard Observations

Near Misses

First Aid

Lost Time Incidents

Medical Treatment Incidents

Fatalities

Total Recordable Incident

Rate ('TRIR')2

2021

19,172

3,044

1,043

120

101

0.51

With activities normalising in 2021, we saw
increased levels of Hazard Observations principally
reflecting the increased activity levels across our
sites as Covid-19 restrictions eased. We believe the
increase in First Aid reporting and Lost Time
Incidents are linked to greater awareness and our
rigorous approach to reporting and analysis. Though
incidents increased year-on-year, a comparison to
2019 shows a decrease of 21%.

Sadly, one fatality was recorded in the United States.
This occurred when a Driller Assistant from our
Building & Construction business line came into
contact with a moving auger.

0.51
Total Recordable Incident Rate (‘TRIR’)

2020

13,279

2,852

1,000

108

–

0.40

% change

44%

85%

(6%)

11bps

1. Data captured for the Group consists of individuals engaged through Intertek contracts of employment (full- and part-time and those on

fixed-term contracts of employment). Excludes JLA and SAI Global Assurance.

2. Rate refers to the number of Lost Time Incidents, Medical Treatment Incidents and Fatalities occurring per 200,000 hours worked.

Sustainability ReportContentsSustainability Excellence
Continued

The health and safety of our employees and
contractors are the utmost priority at Intertek.
All of our businesses have robust health and safety
training programmes during our induction/on-
boarding process, emergency responses procedures,
intervention and reporting of hazard observations,
near misses and safety incidents. We continue to
provide appropriate personal protective equipment
and continually expand on existing programmes and
controls to improve the health, safety and wellbeing
of our colleagues.

We are also committed to the continuous review,
monitoring and improvement of our H&S
performance. Our target remains for our TRIR to
equal or be less than 0.5. This target is part of the
next phase of our health and safety cultural journey
and supports our continued aim to achieve zero lost
time incidents.

Workplace mental health
At Intertek, we consider the health, safety and
wellbeing including mental health of our employees,
clients and third parties connected with our business
to be of paramount importance.

For our employees, we created and launched
KINDNESS – a pioneering programme designed to
boost overall wellbeing, including mental health
throughout Intertek. The programme has been widely
followed and feedback so far has been very positive.

Covid-19
For us, the health, safety and wellbeing of our people
is always our first priority. True to our commitment to
put in place the right protections for our people at
the right time, we put in place our Covid-19 Employee
Health & Wellbeing Policy in early 2020 and have
updated it regularly as circumstances and our
understanding of the virus have changed.

A number of employees have become ill during the
pandemic and it is a matter of great sadness for the
whole of the Intertek family that we lost colleagues
to the virus. Support was given to the families of
these colleagues and to their grieving colleagues and
our thoughts are with them.

See more at intertek.com/about/update-on-COVID-19

Intertek Group plc | Annual Report & Accounts 2021

Talent attraction, reward and recognition
We reach out to prospective employees in a variety
of ways, depending on location and role, in
compliance with local regulations for fair recruitment
practices and equal opportunities. We post vacancies
on our website (intertek.com/careers) and employ
various ways of sourcing talented people. These
include recruitment agencies, social media, printed
advertisements, employee referrals, professional
bodies and associations, schools, colleges and
universities. We are committed to recruiting talent
local to our operations where possible. To offer
career growth and progression within the Group, we
seek wherever possible to fill vacancies from within
the business first.

We fully recognise the importance of employee
engagement in driving sustainable performance for
all stakeholders. In order to measure our employee
engagement, we follow the Intertek ATIC
Engagement Index which is based on the key drivers
of sustainable value creation within our
differentiated ATIC business model and which
measures engagement on a monthly basis in every
operation with the following metrics: Net Promoter
Score, Customer Retention, Quality, Voluntary
Permanent Employee Turnover and Total Recordable
Incident Rate. For 2021, our ATIC Engagement Index
score was 79.9%, reflecting a more normal year in
respect of our Voluntary Permanent Employee
Turnover which impacted the score. We believe
engagement levels across the Group are high and our
target is to achieve an engagement index score of
90% moving forward.

During the year our Voluntary Permanent Employee
Turnover rate returned to similar levels seen prior to
Covid-19 with a rate of 13.0%, which is well within
acceptable industry standards. As we progress our
People Strategy we will continue to aim for a rate
below 15%.

Talent management
To seize the exciting growth opportunities arising
from our Total Quality Assurance ('TQA') value
proposition, we continually invest in the growth of
our people. We aim to hire, inspire, engage and retain
the best people to power our 5x5 strategy, providing
the skills to grow our business.

With an ‘ever better’ mindset we encourage our
people to continuously learn new skills that help
advance their careers and deliver our TQA Customer
Promise. Our talent-planning process is critical to our
future success in delivering our strategy and
fostering our culture and values throughout Intertek.

The Board as a whole is responsible for ensuring that
appropriate human resources are in place to achieve
our long-term strategy and deliver sustainable
performance. Global talent and succession planning
for the Leadership Team are discussed regularly.

In employment-related decisions, we comply with all
applicable anti-discrimination requirements in the
relevant jurisdictions. We have zero tolerance for
discrimination and harassment.

Reward and recognition
Reward plays a key role in attracting, motivating and
retaining talent. Intertek is compliant with minimum
wage and mandatory social contributions
requirements in all jurisdictions where we operate.

At Intertek, remuneration for all employees follows
the same policy and principles as for the senior
executives. The Remuneration Committee has
oversight of this and you can find more information
on pages 138 to 144.

We depend on local management to define and
maintain competitive compensation practices that
appeal to both existing and future talent.

All employees are remunerated in accordance with
local policies and guidelines. The remuneration
comprises elements which are fixed, and in some
cases, variable. The fixed elements are base salary
and benefits including pensions, where applicable.
The variable elements include incentives, both
short- and long-term.

Across the world, employees who are eligible for a
bonus follow the same metrics thus creating
alignment on our strategic goals throughout the
organisation.

We take every opportunity to recognise great
performance across the business through our
internal channels.

Case study
Spreading Kindness around
the world

Our colleagues’ safety and wellbeing are our #1
strategic priority, so last year we were delighted
to launch a new global wellbeing programme called
'Kindness'. Kindness is an online resource that helps
each of us to make sure that we do the simple
things that help build our own personal strength
and resilience – enabling us to re-energise, boost
our wellbeing, and unleash our potential.

In 2021, we have built on the programme by launching
a number of local Kindness-inspired initiatives around
the world. For example, Intertek Hong Kong worked
with the Hong Kong Federation of Youth Group
('HKFYG'), a Hong Kong NGO that provides youth
services, to put together a Wellness CheerUp Kit
containing a wide range of items including eye
masks, Chinese Herbalist-prescribed tea bags,
beautiful Chinese poems with candies, a Zentangle
drawing exercise that combines meditation with art,
and thank you cards to show our appreciation to our
colleagues for their hard work.

In October, Intertek Thailand launched an Employee
Assistance Programme ('EAP') with an outsourced
online counselling service, iStrong Mental Health
Solution, to support employees' mental health. The
programme is part of their local initiatives under our
Kindness programme, and aims to help colleagues
balance the pressures of work with their needs at
home and in their personal lives. The counselling
services are provided by professional well-trained
counsellors and are strictly confidential.

Other local Kindness initiatives during the year have
included a series of webinars organised by Intertek
South Asia to support employees with their health
and wellbeing, along with the opportunity to access
professional confidential counselling where needed.
Virtual wellbeing sessions were also organised in the
MENAP region, covering the topics of mental health,
yoga, cancer awareness, and health and nutrition.

Sustainability ReportContentsEmployee representation and consultation
We respect the rights of our employees to form
and join trade unions and take part in collective
bargaining where this is accepted by local law.

Case study
Kickstart programme

We also take care that employee representatives do
not suffer discrimination and that they have open
access to members in the workplace. We strictly
adhere to tariff structures and arrangements
negotiated with trade unions, while we also inform
and consult employees on relevant business
activities: for example, we respect statutory
minimum notice periods and give reasonable notice
of any significant operational changes in line with
local practices and labour markets. Our affiliates’
communication and consultation processes are
tailored to local needs.

33% of our employees are represented by
independent trade unions or employee
representative bodies. We do not report information
on employee union membership due to differences in
national legislation in countries where we operate.

We are committed to supporting the UK Government
Kickstart scheme, an initiative designed to help
young people between the ages of 18 and 24, who
have experienced unemployment, access work.

Kickstart funds six-month placements with firms for
young people who are claiming Universal Credit and
are at risk of long-term unemployment.

Our Intertek Checkpoint business supplies
Total Quality Assurance services to the Travel and
Leisure industry, and is based in Stevenage. Intertek
Checkpoint was successful in securing a grant for
five placements and have filled four of them so far.

They have also worked closely with a local training
company, who assisted in the application, shared
connections with the local job centre, and are
facilitating 'employability' training for each
kickstarter to enhance their CVs in order to help
secure employment in the future.

By supporting the Kickstart scheme, Intertek
Checkpoint have been able to augment their
workforce with young, bright and enthusiastic people.

Sustainability Excellence
Continued

Skills development
We believe in personal growth for every employee
and we know that when each of us is growing and
developing, we move faster along our good-to-great
journey. Over the years we have made great progress
with our Leadership Development agenda.

At Intertek, our leaders strive to be of the highest
quality in the industry and we believe in the spirit
of ‘ever better’ and know that the ability our leaders
have to develop and grow employees in their teams
is one of the biggest factors that will influence the
exciting growth journey we have ahead of us.

We now have in place many Group-wide programmes
to support this agenda including talent planning
processes, the 10X Journey that provides structure
for individual growth planning, our 10X Energies that
help define winning behaviours and ‘10X Way!’
training to help address key development and
training needs. There are many more programmes
across the business, providing in-house and external
learning opportunities.

All Group employees have access to our ‘10X Way!’
platform or an alternative Learning Management
System, enabling them to complete their onboarding,
access our ‘10X Way!’ training, and complete
mandatory Code of Ethics and compliance,
CyberSecurity and Core Mandatory Controls training.

282,600
e-training hours completed through our Learning
Management Systems

As we operate across a wide range of sectors,
different types of technical training, education and
support are required. We offer:

> Apprenticeships
> Internship programmes
> College degrees
> Professional qualifications
> Formal and informal workshops

and seminars

> Coaching

Hours spent participating in these training
programmes is not currently tracked.

Intertek Group plc | Annual Report & Accounts 2021

All employees receive adequate coaching,
development and training to ensure they are
fully competent to carry out their role.

100%
of our employees are offered, as a minimum,
yearly discussions on growth and development

Protecting human rights
We are committed to ensuring that our employees
are subject to fair working practices and are treated
with respect. Within our business, the rights of our
employees are respected by the implementation of
our Labour and Human Rights policy and Code of
Ethics. Intertek’s policies and codes are based on and
fully respect the International Bill of Human Rights
and the International Labour Organization’s
declaration on Fundamental Principles and Rights
at Work and the Children’s Rights and Business
Principles.

We continually review our approach to human rights
to reflect legal developments, emerging issues and
to meet societal expectations.

Our Code of Ethics training aims to educate all
employees about potential integrity issues, including
human rights, bribery, corruption, non-discrimination
and employee relations. The Code of Ethics contains
clear guidance on the grievance mechanisms and
whistleblowing procedures that we have in place.
Further information can be found on page 168.

Our Modern Slavery Act Statement, outlining the
steps we are taking internally, in our supply chain
and through partnerships and advocacy to avert
modern slavery and human trafficking is available
on our website.

Read more at
intertek.com/about/compliance-governance

Sustainability ReportContentsSustainability Excellence
Continued

Diversity has always been
at the heart of who we are
and will continue to provide
the power behind our success
in the future.”

Inclusion, diversity and gender equality
Embracing all talents
At Intertek, achieving ‘ever better’
performance depends on being constantly
open to pioneering new ideas that enable us
to improve what we do and how we do it.
For us, this means having an organisation
that is truly diverse and inclusive in ways
that extend far beyond the ‘standard’
measurements of race, nationality
and gender.

Intertek has a history that goes back over 130 years,
evolving from the combined growth of a number of
innovative companies from around the globe.
Diversity has always been at the heart of who we are
and will continue to provide the power behind our
success in the future. With team members from over
100 countries – all with different backgrounds,
cultures and beliefs – our diverse workforce makes us
the leading company we are today.

We demonstrate that we are an inclusive and diverse
global family by applying all employment policies and
practices in a way that is informed, fair and objective.
This covers all policies relating to recruitment,
promotion, reward, working conditions and
performance management.

Our Inclusion and Diversity policy facilitates a culture
of inclusiveness where people are able to perform at
their best, where their views, opinions and talents
are respected, harnessed and not discriminated
against. We are committed to maintaining the
highest standards of fairness, respect and safety.

As a business we want to ensure that we have the
right capabilities to deliver our strategy. We
recognise the value that individuals of different
backgrounds and capabilities bring to the business.
Our diverse workforce helps us to understand,
communicate and trade with our vast client base
through their understanding of local issues and
cultures. They add value in assuring our services are
tailored to our customer needs, which underpins
sales growth, customer retention and satisfaction.

We recognise the importance of gender diversity, in
management and across all levels of our business.
Following the conclusion of the Hampton-Alexander
Review, as well as supporting gender diversity on our
Board, we continue to contribute our data on the
gender balance across our senior executive team and
their direct reports to the FTSE Women Leaders
Review and detail it in the table below. The data for
2021 reflects organisation changes which have
resulted in fewer layers in the leadership structure.

Board

Executive Management Team (‘Exec’)2

Direct reports (‘DR’)

Combined:
Exec + DR

We will continue to promote and endorse fair,
consistent and thoughtful working practices that are
in accordance with our values. At Intertek, we are
proud to be an equal opportunities employer. We
consider all qualified applicants for employment
regardless of gender, ethnicity, religion, age,
disabilities and other protected characteristics.

We also ensure that men and women are paid equally
for doing equivalent roles and we are committed to a
number of measures to ensure we provide an
energising workplace, free of any gender bias, where
employees can flourish based on their talent and
effort. To strengthen this, we ensure that our
shortlists of external hire candidates have a balance
of gender diversity.

We remain committed to equality, and provide
flexible working where possible and provide
mentorship to women to address the gap in gender
numbers at senior levels. It is vital that our workforce
represents the best available talent, reflects the
communities in which we operate and is free of
gender or other biases.

20211

20201

Male

Female

Male

Female

207

224

1 Data relating to the Board and the Exec and DR is as at 31 December and as at 31 October of each year, respectively.

2 As defined by the FTSE Women Leaders Review. This comprises the CEO and his direct reports (N-1).

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContentsOur Intertek TQA Experts

Gender by region

Americas

EMEA (inc. Central)

Asia

3,183

7,890

Total 11,073

3,725

8,178

Total 11,903

8,770

12,317

Total 21,087

Female
Male

Revenue and headcount

2,567
42,452

2,769
43,905

2,801
44,720

2,987
45,653

2,742
43,769

2,786
44,063

2016

2017

2018

2019

2020

2021

Revenue (£m)
Headcount

Total employees by gender

2019

2020

2021

28,974

16,679

28,690

15,079

28,385

15,678

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents

Sustainability Excellence
Continued

Our ‘Embracing
Diversity’ model

We promote diversity in all its forms, including
gender parity, sexual orientation, disability, as
well as having an ethnic and social makeup that
reflects broader society.

Diversity measured

Gender diversity
We are determined to develop and retain
more women in senior roles.

Talent across all generations
We value all of our colleagues, regardless of
age, and have practices in place to develop
and retain workers of all ages.

Disability inclusion
Adopting a universal design mindset.

Cultural diversity
(arising from country of origin)

Cultural diversity supports our global
business and is key to our success.

2021 update

• 6% increase in women in senior management

roles since 2017.

• 36% of our global TQA Experts are women.

The technical expertise needed in many parts of our complex
business is acquired over several years which is reflected in a
relatively high average age in parts of our Group. The overall
average age is 40.

We believe that in order to create rapid, system-level change
specific to disability inclusion and equity, we must actively
seek out opportunities to collaborate with other businesses
who hold the same values and are equally committed to
affecting change.

Our global workforce is representative of the countries in
which we operate and our senior leadership represents
48 different nationalities.

Our goals

Improving gender balance is critical for us. We continue to
focus on gender diversity by attracting, developing and
retaining more talented women, particularly at senior levels.
The percentage of women in senior management roles has
continually increased over the last five years and we continue
to pursue our goal to increase this to 30% by 2025.

We will continue to develop proactive approaches to
recruitment to ensure we have an age-diverse and balanced
employee age profile.

To adopt a disability inclusive mindset as well as deliver on
our commitment to the Valuable 500. This is centred around
incorporating disability inclusion criteria into the full spectrum
of products and services we offer our clients.

We are committed to cultural diversity and will ensure that
Intertek’s colleagues are representative of the countries
where we do business.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents79

Sustainability Excellence
Continued

Case study

Valuable 500 – changing business
around the world

Case study
Inspiring the female
engineers of tomorrow

‘Introduce a Girl to Engineering Day’ is a digital
initiative from Womengineer, a Swedish
non-profit organisation dedicated to increasing
the number of women in engineering. For the
second year running, Intertek Sweden took part
in the event, welcoming a group of seven girls
between the ages of 13 and 19, who logged on
to Microsoft Teams for a get-together with
some of our female engineering staff. By
introducing young girls to the world of
engineering, Womengineer aims to inspire them
to choose a career in the field. Across the
country, more than 1,100 girls and 73
companies took part in the event this year.

Supporting our clients in this area, Intertek Cristal
recently launched AccessCheck, an assessment
protocol which provides independent verification
of how hotels, restaurants, and others in the
travel, tourism and hospitality industry meet the
accessibility needs of their disabled guests.

We were delighted to be
welcomed into the Valuable 500
and will continue to create a truly
inclusive workplace at Intertek,
while encouraging those we work
with to join us in contributing
to a more inclusive world."

André Lacroix
CEO

Furthering our commitment to a more
inclusive future for people living with
disabilities
As a purpose-led company, Intertek’s mission is to
make the world a better, safer and more inclusive
place. We bring Quality, Safety and Sustainability
to life through the work we do, not only for our
own business but also for our clients' businesses
worldwide. By joining the Valuable 500, we have
confirmed our commitment to bringing about
systemic change by adopting a disability inclusive
mindset, and applying this ethos to our business
and the services we offer our clients.

The Valuable 500 remains the only global
community of CEOs dedicated to changing
business across the entirety of the supply chain
for the benefit of persons living with disabilities
across the world. It is a growing community that is
committed to making disability inclusion a key part
of corporate agendas and using business as a
force for good. To ensure this happens, each
Valuable 500 CEO has agreed to make at least one
public commitment to positive action.

Inclusion has long been at the core of everything
we do at Intertek. Achieving ‘ever better’
performance depends on having an organisation
that is truly diverse and inclusive in ways that
extend far beyond the ‘standard’ measurements
of race, nationality and gender. We work to ensure
those with disabilities experience our culture of
inclusiveness at every stage – whether they are
interviewing for a position with us, or have been
with Intertek for a number of years.

Intertek Group plc | Annual Report & Accounts 2021

Case study
Championing professional
growth through pioneering
apprenticeships

The UK Intertek Pharmaceutical Services team
(Chemicals & Pharmaceutical BL) support some
of the World's most innovative gene therapy
companies in their drug development activities.
We are proud to be part of the pioneering
Advanced Therapies Apprenticeship Community
that is supporting the development of the next
generation of Pharma scientists.

As part of the Cell and Gene Therapy team at the
new Manchester laboratory, Lucy Nash has been
working as a Technician Scientist apprentice.
The training programme she is taking part in has
given her valuable practical experience as she
continues to study towards a degree. In addition
to allowing Lucy to develop professionally and
personally, the role has also given her direct
experience in the pharmaceutical industry.

Lucy is proud of the role she plays: "I get
involved with so many different projects with
clients. I don't just make brews for everyone!
As an apprentice I carry out actual work,
conducting stability testing for clients' drugs,
such as testing the shelf life and storage
conditions. The apprenticeship is really
hands-on, which has grown my confidence
with the practical skills I need in the workplace."

Apprenticeships like Lucy’s are an
opportunity to upskill our workforce as well
as a route to recruiting passionate people into
our organisation who will positively contribute
to the global cell and gene therapy sector.
Anthony Upton, Head of Bioanalysis, explains:
"As a result of training provided by Intertek
and the apprenticeship programme, Lucy
has started working on projects, made an
important contribution, and demonstrated
truly inspirational and winning energies."

Sustainability ReportContentsSustainability Excellence
Continued

Working with
our customers
Innovative sustainability services
have been core to our global
business for more than 100 years.

Customer focus
To become the most trusted partner for Quality
Assurance, we have made a promise to our
customers: Intertek Total Quality Assurance
expertise, delivered consistently with precision,
pace and passion, enabling our customers to power
ahead safely.

Intertek has a strong focus on customers, at all levels
of the organisation, and our customer relationship
management is integrated into our approach through
a key account management structure and dedicated
sales teams. Our Marketing & Sales Operations team
works closely with business lines and country
leadership to drive continued improvements across
marketing, sales and digital tools to ensure that
every aspect of customer engagement aligns with
our TQA Customer Promise.

Through our leading-edge
innovations and integrated
Assurance, Testing, Inspection and
Certification (‘ATIC’) solutions, we are
uniquely placed to help our
customers understand, achieve and
validate their existing and emerging
sustainability goals.

Capturing the right data
to optimise operations
Identifying and managing risks that can impact our
service quality is key to ensuring customer
satisfaction. Our 5x5 metrics tool and processes
enable the collection and review of performance
metrics across the areas of sales, customers, people,
finance and operational excellence that are
fundamental to disciplined performance
management. The 5x5 metrics provide every Intertek
site and team leader with 360º insight into their
business to guide their decision-making and
ultimately lead to superior business performance.

Intertek Group plc | Annual Report & Accounts 2021

Customer Promise
Intertek's Total Quality Assurance
expertise, delivered consistently
with precision, pace and passion,
enabling our customers to power
ahead safely.

Listening to our customers
Since 2015, we have used the Net Promoter Score
(‘NPS’) process to listen to our customers. These
insights give us a deep understanding of what our
customers need and want, fuelling our innovations.
Our customer interviews keep us laser-focused on
delivering an ‘ever better’ service. During 2021, we
continued to conduct an average of 6,000 interviews
each month.

We will continue to aim to conduct at least 6,000
NPS interviews per month.

Average NPS interviews per month

6,000

7,000

6,000

2017

2018

2019

2021

Accelerating positive sustainability impact
Recognising the importance of sharing our own
sustainability journey with our customers, we
actively engage with requests to support individual
sustainability and carbon performance assessments.

EcoVadis recently awarded us with a Silver EcoVadis
Medal, placing us in the top 25 percent of companies
assessed by them.

We aim to collaborate as a trusted supply chain
partner to deliver improvements over the long-term
and accelerate sustainability impacts.

Channels of customer interactions

Customer meetings

Workshops and seminars

Emails and phone calls

Social media communications

Web enquiry responses

Sustainability ReportContentsSustainability Excellence
Continued

Supporting our customers with
their sustainability agendas

Case study
Promoting quality and traceability of face masks

Since the outbreak of Covid-19, sky-rocketing
demand for face masks has resulted in sub-
standard and counterfeit masks as well as
fraudulent testing reports plaguing the market.

It is often difficult for buyers and wearers alike to
identify safe and quality mask products. They
could only trust the testing reports provided or
claims on the packaging of masks without any
means to validate them.

To help our customers communicate the verified
quality and performance attributes of their masks
while promoting quality and traceability of mask
products on the market, Intertek Softlines has
created an innovative Mask Label Program. Using a
label that shows the testing standard or the
guidance and classification attained, this also
features a unique QR code that links to verified
information, including a full testing report, on our
PPE Centre of Excellence Directory.

The Mask Label Program is voluntary and free of
charge for customers who have successfully
tested their mask products at any of our PPE
Centres of Excellence against national and
international standards.

An example: Mask Label of Chargeurs

Innovative sustainability services
have been core to our global business
for more than 100 years.

Through our leading-edge innovations and
integrated Assurance, Testing, Inspection and
Certification (‘ATIC’) solutions, we are uniquely
placed to help our customers understand, achieve
and validate their existing and emerging
sustainability goals.

Case study
Supporting Saudi Arabia’s
vision for a thriving
economy

Since 2016, Intertek Saudi Arabia has supported
the Inspection Technology and Quality
Assurance National Institute (ITQAN) by
sponsoring more than 100 high-school
graduates through one of its training
programmes. An independent, not-for-profit
training institute, ITQAN aims to inspire young
Saudis with a passion for excellence through
world-class training. The Intertek-sponsored
training is in the field of testing, inspection and
certification, and qualifies its graduates to work
in the energy sector. This is not only helping to
meet market needs; it is also contributing to
community growth, helping to reduce
unemployment and supporting the Kingdom’s
workforce and nationalisation efforts in line
with Saudi Vision 2030’s goals for a thriving
economy and vibrant society.

Intertek Group plc | Annual Report & Accounts 2021

Case study
Lab invests in more
sustainable food-testing
techniques

Intertek Poland has implemented a new range
of accredited testing techniques that are
enabling us to significantly reduce energy
consumption at our Food Laboratory. This is
directly in line with our commitment to enabling
a safer and more sustainable future for the
food industry, while minimising the use
of resources.

The new equipment now being used includes a
3M™ Molecular Detection System ('MDS') based
on loop-mediated isothermal DNA amplification
('LAMP') technology to cut the time taken to
deliver salmonella-analysis results from 72 to
just 12 hours. It simultaneously drives
important reductions in the use of energy,
consumables and manpower.

The lab has also started to use 3M™ Petrifilm™
Plates for the microbial testing of food, which
also significantly reduces energy and water
consumption while driving down waste and
CO2 emissions.

Sustainability ReportContents

Case study
Helping PANGAIA become
earth positive

Case study
Intertek is accredited to
certify the Global Organic
Textile Standard ('GOTS')

Case study
Flooring company gains
standard to demonstrate
responsible sourcing

PANGAIA is a material science brand that uses
as many organic, natural and sustainable
resources as possible in its everyday essential
garments. Examples include a down-fill material
made from wildflowers (FLWRDWN™) and a
biobased textile created from food waste,
turning banana leaf fibre, pineapple leaf fibre
and bamboo (FRUTFIBER™).

One of the company’s key goals is to become
more earth positive and it aims to put more back
into the environment than it takes. Our team
helped PANGAIA make measurable progress
towards this. We developed a vendor manual
that considered sustainability and Quality
Assurance at every stage, from vendor
selection through to manufacturing and
product launches.

We have also offered ad hoc support on topics
including claim validation, recycled content,
compostability and biodegradability, water
wash evaluation and product shedding/waste.

The USA’s ANSI National Accreditation Board,
which plays an important role in ensuring the
safety and quality of goods and services and in
protecting the environment, has accredited
Intertek Business Assurance as an approved
certification body for the Global Organic Textile
Standard ('GOTS').

As well as defining high-level environmental
criteria along the entire organic-textile-supply
chain, GOTS also requires compliance with social
criteria. As such, it sets the international
benchmark for a common understanding of
environmentally friendly production and social
accountability in the organic textile sector.

When Aspecta wished to let its customers
know about the social, ethical and
environmental approach it takes to sourcing
materials, it engaged Intertek Assuris to help it
attain the BES 6001 Framework Standard for
Responsible Sourcing.

The company, a member of global flooring
manufacturer HMTX Industries, saw this as a
key step to complement its existing quality
systems and strategic sustainability activities.

Following our appointment, we brought
together the wide-ranging evidence required to
achieve the ‘Good’ level of certification and
position Aspecta as an industry leader in ethical
performance. This has given the company an
important differentiator in its market that
enables it to clearly demonstrate its
commitment to sustainable business practice.

Sustainability Excellence
Continued

Case study
Assuring natural and
sustainable practices in
growing areas

Intertek SAI Global has developed a Bio-
Inclusive protocol called PROOF (Protection and
Recovery of Original Fauna), for the agriculture
production industry. Aimed at assuring natural
and sustainable practices in growing areas, this
protocol is designed to protect wildlife, the
environment, to recover flora and fauna in
cultivated areas, as well as to produce healthier
products, and preserve biodiversity. Intertek SAI
Global has also developed a robust certification
system to ensure members meet all the
standard’s requirements.

The farms participating in this innovative
initiative in Spain have reduced water
consumption, energy consumption and have
reduced the need for phytosanitary treatments
almost completely, minimising toxic load. As a
result, there has been a marked improvement to
natural ecosystems and biodiversity on the
farmed areas.

Intertek Group plc

| Annual Report & Accounts 2021

Sustainability ReportContents
83

Sustainability Excellence
Continued

Case study
Lundin Energy is first client to achieve
CarbonZero certification

The new Intertek CarbonZero™ solution, launched
during 2021, provides additional value to the
unique CarbonClear™ programme we launched in
2020 to give organisations across many industries
access to an independent third-party certification
that verifies actual emissions incurred per
unit produced.

Now, with CarbonZero™ we can certify the
achievement of carbon neutrality by adding
verification of carbon capture or reduction
investments to CarbonClear™ certification. This is
enabling companies across the world to market
qualifying products and services as Intertek
CarbonZero™ verified, so demonstrating auditable
progress towards carbon neutrality.

Lundin Energy, one of the world’s leading oil and
gas exploration and production companies, had
added to its success in becoming the world´s first
organisation to gain CarbonClear™ certification, by
being first to gain CarbonZero™ verification as
well. The achievements relate to both the Edvard
Grieg and Johan Sverdrup fields offshore in Norway.
All of Lundin Energy’s net production at Johan
Sverdrup holds the CarbonZero™ mark and is sold
as carbon neutrally produced, which is a world first.

Investors, traders, regulators and all other
stakeholders can find details of all certifications
on Intertek’s Global Sustainability
Certification Directory (sustainabilitydirectory.
intertek.com/home.)

Intertek Group plc

| Annual Report & Accounts 2021

Case study
Driving sustainability and
safety with bioinformatics

Case study
Employing indoor
air quality testing
to reopen schools

More sustainable ways of producing food are
urgently needed, leading companies to explore
new methods of producing edible and nutritious
goods. By providing innovative solutions for
companies to analyse genetic and genomic
information of their novel products, we assist
with obtaining regulatory approval and offer a
way to address safety concerns ethically and
sustainably using the latest science.

Intertek Assuris’s bioinformatic assessments
are allowing companies to characterise and
demonstrate the safety of innovative
microorganisms and microbial-derived products.
They evaluate aspects such as antimicrobial
resistance, pathogenicity, toxigenicity, and
allergenicity and provide an alternative to
animal-based studies.

Case study
Helping REWE Group
assure the sustainability
of its materials

Intertek helped retail and tourism co-operative
REWE’s Far East procurement arm assure the
sustainability of an item in its clothing range. It
needed third-party confirmation on whether a
quilted men’s jacket was genuinely made from
recycled polyester, and if the material had been
sourced from rPET bottles.

Our work comprised a Textile Exchange GRS
(Global Recycled Standard) audit and due
diligence testing (a rPET verification test),
offering REWE proof that recycled content was
present from the source in raw materials.

The Covid-19 pandemic has highlighted the
impact that effective ventilation and air
filtration can have on disease prevention and
our general health and wellbeing. Yet issues
such as a lack of funding or deferred system
maintenance can cause indoor air quality ('IAQ')
to fall below an acceptable level.

In anticipation of the return of classroom
learning for more than 50,000 students,
Washington’s largest public school district,
Seattle Public Schools, wanted to evaluate and
improve the IAQ across its 100+ schools.
Together with district staff, Engineering
Economics Inc. ('EEI'), Intertek Building &
Construction conducted a systematic
evaluation of each school’s ventilation system
to help create a better learning environment.

Once EEI’s health risk-reduction
recommendations had been implemented, our
Intertek building scientists and industrial
hygienists performed IAQ testing across the
premises. Our work was able to confirm the
effectiveness of measures and acted as a
quality control check to ensure no space was
left under ventilated.

Sustainability ReportContentsCase study
Supporting a global initiative to end hunger and poverty

Intertek’s AgriTech team is working with global
research partnership CGIAR to identify routes to
a food-secure future for all. Its network of
world-class researchers is dedicated to identifying
sustainable ways to improve natural resources and
empower local food producers, aiming to
alleviate poverty and nutrition insecurity.

We’ve been a proud partner of CGIAR since 2017,
offering High Throughput Genotyping lab
services. We have been able to aggregate
volumes by working together, allowing us to
offer services to developing countries at an

affordable price and fulfil our commitment to
Corporate Social Responsibility.

Our AgriTech team is also working with the CGIAR
Excellence in Breeding ('EiB') Platform, which works
across CGIAR and national partners to accelerate
the modernisation of crop breeding programmes
that serve farmers in low- and middle-income
countries. Our work with CGIAR is ensuring local
farmers can feed their communities without
compromising the climate.

Photo by Dr. Kristofer Vemling

Sustainability Excellence
Continued

Case study
Supporting the
development of more
sustainable medicines

Case study
Quantifying BASF’s
sustainable synthetic
leather claims

Hydrofluorocarbon (HFC) propellants used
today in pressurised metered-dose inhalers
(pMDIs) have global warming potential (GWP)
many times that of carbon dioxide. This is
driving the pharma industry and governments
to look for new ways of making effective
inhaled drugs such as those to treat respiratory
diseases like asthma, without the harmful
environmental impact.
.
The Intertek Melbourn team, who are based
near Cambridge, UK, are playing a key role in this
effort by helping clients to develop new inhaled
medicines, or reformulate existing pressurised
pMDIs, using more sustainable approaches, such
as formulating with new propellants (e.g.
HFA-152a and HFO-1234ze) with lower GWP.

Current projects in the laboratory involve
developing novel delivery systems such as dry
powder inhalers and soft-mist inhalers or
reformulating existing inhaled drug product
with new low GWP propellants.

Intertek Group plc | Annual Report & Accounts 2021

Intertek China helped BASF, the world’s largest
chemical producer, prove that its unique
Haptex® synthetic leather is a significantly
more sustainable alternative to solvent-based
polyurethane and other synthetic leathers.

We carried out a Life Cycle Assessment ('LCA')
on Haptex®'s complete value chain, from
chemical production to the finished synthetic
leather products. Additionally, the LCA
calculated and measured the greenhouse
effect, cumulative energy demand and water
consumption data of this innovative material.

This process helped BASF unequivocally prove
that Haptex®, which is made without organotin
catalysts or plasticisers, uses 30% less water
and requires 20% less energy to produce than
traditional synthetic leather, resulting in a 52%
reduction in Greenhouse Gas emissions.

Sustainability ReportContents85

Case study
Bringing renewable power
from Australia to
Singapore

Case study
Helping Greenlink secure
the marine consents for its
proposed interconnector

Case study
Providing specialist water
quality modelling services
to Irish Water

Intertek’s Energy & Water team is working with
Sun Cable, the largest solar energy
infrastructure network company in the world,
to oversee the quality control and safety of the
Australia-Asia PowerLink – a proposed 4,200km
marine cable that will direct renewable solar
energy from Northern Australia to Singapore.

Our experts will provide a Total Quality
Assurance solution, comprising a marine
hydrographic, geophysical and shallow
geotechnical survey and marine consultancy,
that aligns with the client's safety, health,
environmental and quality vision and technical
specifications.

This complex offshore infrastructure project
will connect a 10GW solar farm in Elliott, in
Australia’s Northern Territory, to the Darwin
and Singapore grids, offering them renewable
energy and extra battery storage. The project
will help Singapore meet its Paris Agreement
Greenhouse Gas reduction targets, by providing
enough renewable energy to cover up to 15%
of the country’s energy needs.

We have helped Greenlink secure the marine
consents in Ireland and Wales for its €500
million (£420 million), 190km Greenlink
Interconnector. This 500MW capacity
interconnector will link Wales and the Republic
of Ireland, allowing power to flow either way
and increasing energy security for both
countries.

This achievement is just the latest in our long
relationship, which has focused on environmental
risk management. Intertek’s Energy & Water
team has provided expert marine Quality
Assurance solutions, including marine route
development, landfall identification, survey
management, environmental studies and
assessment.

One of our most noteworthy de-risking
strategies was to engage stakeholders early.
We connected with Natural Resources Wales
throughout the process, ensuring this significant
infrastructure project could go ahead without
compromising sensitive offshore habitats.

Intertek’s Energy & Water team is working with
Irish engineering and environmental
consultancy, Nicholas O’Dwyer, to deliver a
strategic modelling study of Cork Harbour for
Irish Water.

Our work, which will include microbiological
impact assessments using our industry-leading
STORM-IMPACT compliance assessment tool,
will help Irish Water understand how to make
essential infrastructural improvements in a
cost-effective and legislatively compliant way.

The project is comprised of two phases. The
first will see us work with Nicholas O'Dwyer to
complete a data review and gap analysis to
identify essential missing information, which
will be collected through dedicated field
surveys. In the second, we will develop a 3D
hydrodynamic and water quality model of the
harbour, allowing us to carry out impact
assessments of both the current and predicted
future scenarios.

Sustainability Excellence
Continued

Case study
Using oceanographic
modelling to harness clean
energy from tides and
oceanic currents

We are a preferred supplier of Minesto, a
Swedish marine energy technology developer,
to offer technical support on its advanced
oceanographic modelling projects. Our Energy &
Water team will also work alongside the
Swedish Meteorological and Hydrological
Institute ('SMHI') and tidal energy experts from
the universities of Bangor, Plymouth, Cardiff,
Swansea and Manchester.

Minesto’s innovative ‘Deep Green’ technology
allows clean, renewable energy to be generated
from tidal and ocean currents, even at low
current speeds. Its devices are being trialled or
used across the world, from the UK to France to
Taiwan, and Minesto has forged partnerships
with sector giants such as EDF.

Over the next three years, we will provide
specialist technical services, including tidal
current resource modelling, array energy
extraction modelling, ocean circulation
modelling, sediment transport modelling, and
extreme and operational wave modelling.

Intertek Group plc

| Annual Report & Accounts 2021

Sustainability ReportContentsSustainability Excellence
Continued

Environment
All of us have a responsibility to
protect the future of the planet.

At Intertek, we look to understand
our organisation’s impacts on the
environment and mitigate them in
regard to climate change, use of
resources, ecosystems, and waste
management.

Our global reach spans thousands of employees,
clients and suppliers. This scale represents both
commercial opportunity as well as responsibility; a
responsibility to our people, the communities in
which we operate and the wider environment. Good
management of these topics is therefore critical to
meeting increasing expectations of all our
stakeholders .

Intertek plays an important role in raising awareness
of climate change, impacts on biodiversity and
national resource constraints among our employees,
suppliers and customers. As such, our aim is to
improve operational and natural resource efficiency
in a consistent manner across all our sites.

Intertek Group plc | Annual Report & Accounts 2021

Governance
Environmental governance flows from the Board to
every Intertek site. We monitor site-level activities
across a range of environmental metrics and work
with our sites to reduce energy consumption and
limit Greenhouse Gas (‘GHG’) emissions. Governance
for managing climate-related risks and opportunities
across the Group is incorporated into our existing
governance framework as shown on pages 53
and 99.

Intertek’s part in a low-carbon economy
We recognise that we need to play our part within
the move to a low-carbon economy. To make real
change happen, we believe all our people need to
have ownership of their carbon footprint and be
empowered and inspired to take ambitious actions to
reduce it – our Sustainability Excellence approach.

Identify
Sustainability
champion or
team

Evaluate
baseline
performance

Establish
target setting

Develop 10X
action plans

Implementation Performance

tracking

Reporting and
Recognition

Sustainability Report

In 2021, we continued to track progress through our
emissions dashboards which allow the regional teams
to understand their total carbon emissions. The
dashboards give insights to their performance and
helps the teams take ownership of their
environmental impacts at site level and to take
actions to reduce them.

This process is supported by our Environmental and
Climate Change policy, which is implemented by
country management to ensure compliance with
local guidelines and regulations.

Our activities across the world are diversified, with a
spread of both laboratories and offices. Our carbon
emissions intensity is higher in businesses that are
more capital intensive, such as our global laboratory
network, while our audit and office-based operations
have much lower capital intensity.

Our carbon emissions reduction targets
Intertek clients depend on our safety, quality and
environmental expertise to ensure their products
meet global market expectations. Intertek will
continue to strive for emissions reductions internally
as the world’s leading Total Quality Assurance
('TQA') provider.

We first set an emissions reduction target in 2017 to
reduce our CO2 emissions per employee by 5%
year-on-year up to 2023. The target has remained in
place during the year, however, teams are
encouraged to target absolute reductions.

Recognising the importance of bold ambitions, we
are setting targets to improve environmental
performance across our operations. To clearly
demonstrate our commitment, we are aligning our
business with the most ambitious aim of the Paris
Agreement, to limit global temperature rise to 1.5°C
above pre-industrial levels and reach net zero by
2050 for the best chance of avoiding the worst
impacts of climate change.

During 2021, we have carried out both a top-down
and bottom-up exercise, building on our emissions
dashboards to clearly identify our baseline emissions
and to enable our countries to put in place concrete
measurable action plans to reach our
reduction targets.

Having identified our plans we will seek to have our
new reduction targets validated and approved by the
Science Based Target initiative. Once validated, we
will report on these in more detail.

Environmental management
The delivery of our Sustainability strategy is
supported by our Group-wide Quality Management
System – which is aligned with internationally
recognised standards on health, safety and the
environment. We operate this across 80% of our
operations and, in 2021, 110 sites achieved or
maintained one or both ISO 14001 and ISO 45001
(OSHAS 18001) certifications.

At Intertek, we take an ‘ever better’ approach to
ensure our data is wholly accurate and consistent
year on year. Data collection continues to improve,
with over 130 users adding site-level data every
month to our Global Sustainability Environmental
software platform.

Energy use

Global energy use¹
by source (MWh)

Standard electricity

2021

2020

247,741

253,849

Renewable electricity

11,410

7,487

Vehicle fuels energy

30,710

40,146

Non-transport fuels energy

63,654

66,518

(natural gas)

1. UK portion of total energy use was 6.4% (2020: 6.8%).

We drive actions country by country and site by site.
During 2021, further sites have carried out energy
audits, which have already led to energy efficiency
improvements, including the roll-out of LED lighting
at numerous sites and trials of new technologies.

Following the success of self-generation
of energy at our Perth site, we continue to
explore on-site energy generation through
various projects. In addition, we will continue
to source certified renewable energy,
where possible and economic to do so.

Sustainability ReportContents87

Sustainability Excellence
Continued

Case study
Minerals Centre of Excellence
in Perth, Australia

As a purpose-led company, Intertek’s mission is to
make the world a better, safer and more sustainable
place. This ethos is at the heart of our Minerals Global
Centre of Excellence in Perth.

The new facility features a 990kW solar system
making it one of the largest rooftop solar
installations in Western Australia. The system
provides on average a third of the daytime power
required by the laboratory. The facility also captures
and recycles laboratory wastewater to conserve this
precious resource.

Utilising technology and innovation with a focus on
automation will provide clients with faster, more
efficient analytical options without compromising on
quality. With the application of sustainability through
all parts of the project we are seeing improvements in
energy consumption, water management and emission
reductions through the harnessing solar energy.

Our progress and performance
Our annual environmental reporting cycle ran from
1 October 2020 to 30 September 2021. Intertek’s
reporting complies with the methodologies outlined
by the GHG Protocol ‘Corporate Accounting and
Reporting Standard’, ISO 140064-1 and the UK
Government’s ‘Environmental Reporting Guidelines:
including mandatory Greenhouse Gas emissions
reporting guidance’.

We measure and report our Scope 1 and 2 GHG
emissions as well as certain Scope 3 emissions
covering the categories of fuel and energy-related
activities, employee commuting and business
air travel.

Scope 3 emissions provide valuable insights on the
full emissions picture for a company. There are 15
potential Scope 3 categories, but not all are relevant
to every company. An independent third party
materiality assessment of our Scope 3 emissions
identified that seven were relevant to our
operations, and of these seven categories five were
material. Since 2019 we have been widening our
boundary definition of Scope 3 and reported on
additional categories.

Intertek Group plc | Annual Report & Accounts 2021

Asset recycling
We participate in the Hewlett Packard Enterprise
end-of-use management programmes, helping us to
address the social and environmental impacts of
rapid innovation. By refurbishing and recycling our
retired IT products, we are contributing to a circular
economy that returns value to our business while
helping to meet our sustainability goals.

A pilot was first carried out covering a few sites
across different jurisdictions in 2020 achieving 82%
of equipment being repurposed. The pilot provided
central visibility of our disposal practices.

In 2021 the programme achieved 41% of equipment
to be repurposed and 58% to be recycled, with 5.1mt
of waste kept from landfills.

Further details on our methodology for reporting and
the criteria used can be found within our Basis of
Reporting document.

This is available at
intertek.com/about/our-responsibility

During 2021 we have continued to improve our
performance. Scope 2 emissions have been reduced
through energy efficiency measures and the gradual
transition to renewable electricity.

With activities normalising, we were pleased to see
direct emissions continuing to reduce, reflecting the
implementation of site action plans and greater
transparency within the business on the sources of
our emissions.

We saw similar levels of emissions from Employee
Commuting to 2020, recognising a change in habits
and some intermittent Covid-19 restrictions across
our regions.

Business travel remains affected by travel
restrictions in place throughout 2021 due to
Covid-19. We expect levels to normalise over future
reporting cycles. We recognise the significant impact
of transportation on the environment and are
reviewing our overall approach and the influence we
have to reduce our impact.

Waste management
Intertek produces relatively small amounts of
hazardous and non-hazardous waste compared to
other industries. This includes chemicals, test
samples, paper, plastic and organic waste from our
offices and laboratories. The waste is produced in
varying proportions, determined by the industry or
industries served by each site. We operate a number
of waste management programmes across our
regions. In the US, this covers 122 sites to date and a
further roll-out is planned to extend the programme
across the remaining US sites and expand in Canada.

The programmes are focused on connecting our sites
to local opportunities for minimising how much
waste we send to landfill and to increase recycling.
We continue to work on improving reporting tools to
tailor actions.

Sustainability ReportContentsSustainability Excellence
Continued

Emissions (Scopes 1, 2, 3)

Scope

Emissions

Scope 1 Direct GHG emissions

Emissions from activities for operations which Intertek owns or
controls including the combustion of fuel and operation of facilities

tonne CO2e1

Global (excl. UK)

2021

57,776

2,176

2020

60,686

2,439

Scope 2 Indirect GHG emissions Emissions from the purchase of electricity, heat and steam

Global (excl. UK)

119,367

119,679

purchased for our use (location-based)

Emissions from the purchase of electricity, heat and steam
purchased for our use (market-based)

Scope 3

Employee Business Travel (Air travel only)2

Employee Commuting

2,670

3,188

Global (excl. UK)

121,659

123,200

488

2,151

Global (excl. UK)

5,722

11,289

956

Global (excl. UK)

35,666

56,670

Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope 2

Global (excl. UK)

Absolute tCO2e (market-based)

Carbon offsetting4

Intensity ratios – Scope 1, 2 and 3 emissions

Operational emissions5

CO2 per employee (location-based)

CO2 per employee (market-based)

CO2 per £m revenue6 (market-based)

Employee commuting

CO2 per employee commuting

Average number of employees during the reporting period

1,112

6,832

236

2,475

6,974

271

231,7163

267,111

4.35

4.29

4.34

67.90

71.39

0.85

1.31

43,511

45,092

1. CO2e – Carbon dioxide equivalent.

2. Please refer to our Basis of Reporting document for full details

of scope.

3. Excluding emissions relating to SAI Global Assurance.

4. Carbon offsetting through the acquisition and surrender of

emissions units on the voluntary markets.

Intensity ratios are based on the total of Scope 1, Scope 2 and
Scope 3 Fuel- and Energy-Related Activities.

6. Revenue for FY 2021 as shown on page 3.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents89

Sustainability Excellence
Continued

Independent assurance statement
to the Directors of Intertek
Group plc

EY’s responsibilities
Our responsibility is to express a conclusion on the
presentation of the Subject Matter based on the
evidence we have obtained.

We conducted our engagement in accordance with
the International Standard for Assurance
Engagements (ISAE 3000 Revised)1, Assurance
Engagements Other Than Audits or Reviews of
Historical Financial Information and the terms of
reference for this engagement as agreed with
Intertek on 6 January 2022. Those standards require
that we plan and perform our engagement to
express a conclusion on whether we are aware of
any material modifications that need to be made to
the Subject Matter in order for it to be in accordance
with the Criteria, and to issue a report. The nature,
timing, and extent of the procedures selected
depend on our judgement, including an assessment
of the risk of material misstatement, whether due to
fraud or error.

We believe that the evidence obtained is sufficient
and appropriate to provide a basis for our limited
assurance conclusions.

Our independence and quality control
We have maintained our independence and confirm
that we have met the requirements of the Code of
Ethics for Professional Accountants issued by the
International Ethics Standards Board for Accountants
and have the required competencies and experience
to conduct this assurance engagement.

EY also applies International Standard on Quality
Control1, Quality Control for Firms that Perform
Audits and Reviews of Financial Statements, and
Other Assurance and Related Services Engagements,
and accordingly maintains a comprehensive system
of quality control including documented policies and
procedures regarding compliance with ethical
requirements, professional standards, and applicable
legal and regulatory requirements.

Scope
We have been engaged by Intertek Group plc
('Intertek') to perform a ‘limited assurance
engagement,’ as defined by the International
Standards on Assurance Engagements, here after
referred to as the engagement, to report on selected
greenhouse gas performance data (the 'Subject
Matter') on page 88 in Intertek’s 2021 Annual Report
('the Report').

The Subject Matter comprises the following data
sets in the Report regarding the sustainability
performance of Intertek Group plc:
– Greenhouse gas emissions – Scope 1;
– Greenhouse gas emissions – Scope 2;
– Greenhouse gas emissions – Scope 3
– Fuel and energy related activities
– Employee commuting
– Business travel

– Greenhouse gas emissions – intensity ratio.

Other than as described in the preceding paragraph,
which sets out the scope of our engagement, we did
not perform assurance procedures on the remaining
information included in the Report, and accordingly,
we do not express a conclusion on this information.

Criteria applied by Intertek
In preparing the Subject Matter, Intertek applied the
methodology as described in the document Basis of
Reporting – GHG Emissions (the 'Criteria').

Intertek’s responsibilities
Intertek’s management is responsible for selecting
the Criteria, and for presenting the Subject Matter
Information in accordance with that Criteria, in all
material respects. This responsibility includes
establishing and maintaining internal controls,
maintaining adequate records, and making estimates
that are relevant to the preparation of the Subject
Matter Information, such that it is free from material
misstatement, whether due to fraud or error.

Intertek Group plc | Annual Report & Accounts 2021

4. Challenged the validation and collation processes
undertaken by Intertek management in relation to
the Subject Matter.

5. Reperformed calculations to check the accuracy
of the Subject Matter reported and the data
collation processes.

6. Tested underlying documentation for a sample,
based on professional judgement, of site-level
data points to determine the accuracy and
completeness of data points.

7. Examined the Report for the appropriate

presentation of the Subject Matter, including the
discussion of limitations and assumptions relating
to the data presented.

We also performed such other procedures as we
considered necessary in the circumstances.

Conclusion
Based on our procedures and the evidence obtained,
we are not aware of any material modifications that
need to be made to the Subject Matter as of
28 February 2022, in order for it to be in accordance
with the Criteria.

Restricted use
This report is intended solely for the information and
use of Intertek management and is not intended to
be and should not be used by anyone other than
those specified parties.

Ernst & Young LLP
London
28 February 2022

International Federation of the Accountants’ International
Standard for Assurance Engagements (ISAE3000) Revised,
Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information.

Description of procedures performed
Procedures performed in a limited assurance
engagement vary in nature and timing from and are
less in extent than for a reasonable assurance
engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is
substantially lower than the assurance that would
have been obtained had a reasonable assurance
engagement been performed. Our procedures were
designed to obtain a limited level of assurance on
which to base our conclusion and do not provide all
the evidence that would be required to provide a
reasonable level of assurance.

Although we considered the effectiveness of
management’s internal controls when determining
the nature and extent of our procedures, our
assurance engagement was not designed to provide
assurance on internal controls. Our procedures did
not include testing controls or performing procedures
relating to checking aggregation or calculation of
data within IT systems.

A limited assurance engagement consists of making
enquiries, primarily of persons responsible for
preparing the Subject Matter and related information,
and applying analytical and other appropriate
procedures.

Our procedures included:
1. Assessed whether all material data sources have
been included and that boundary definitions,
(referenced in page 88 of the Report and outlined
in the Basis of Reporting), have been
appropriately interpreted and applied.
2. Assessed whether the Intertek scope and

definitions, (referenced in page 88 of the Report
and outlined in the Basis of Reporting), for the
Subject Matter have been consistently applied to
the data.

3. Assessed whether site and business-level data

have been accurately collated by Intertek
management at a Global level, and whether there
is supporting information for the data reported by
sites and businesses in the Group to Intertek
management at a Global level.

Sustainability ReportContentsSustainability Excellence
Continued

Case study
Building Back Ever Better
one beach at a time

Case study
Joining the movement for
a cleaner planet

Case study
Intertek joins the 'Get Nature Positive' campaign

Positioning nature at the heart of our
business agenda
For millennia, humans have relied on the ability
of ecosystems to provide services like protection
from floods, regulation of diseases and pests,
sequestration and regulation of carbon, maintenance
of habitats, and provision of food and water.

Through the campaign, we have access to the Nature
Handbook: a practical ‘how to’ guide, developed
by business for business, in consultation with
biodiversity experts. It is designed to help businesses
better understand their impacts on nature, and
determine what actions they can take today and
in the years to come to protect and restore nature.

With these ecosystems under threat, Intertek is
proud to be a member of the ‘Get Nature Positive’
campaign, a voluntary coalition of businesses all
committed to restoring the natural world. Founded
by the Council for Sustainable Business, Get Nature
Positive seeks to build momentum on nature and
biodiversity by engaging with a broad cross-section
of business and other organisations such as the
Global Commons Alliance, the Science Based
Targets Network, and Business for Nature.

52%
of global GDP (US$44 trillion) is generated by
companies that are either highly dependent or
moderately dependent on nature (Source: PwC)

Intertek joins Great British Beach Clean 2021
A perfect complement to Intertek’s track record in
delivering Total Sustainability Assurance to the
marine sector, colleagues participated in a beach
clean event on the stunning Freshwater West
beach in Pembrokeshire, Wales, in September.
The event was organised on behalf of the Marine
Conservation Society ('MCS') in conjunction with
their Great British Beach Clean 2021 initiative.

The MCS’s main focus is on improving the health
of our oceans, and during the initiative data was
collected from across hundreds of beach cleans
along the UK’s coastlines. Working alongside
representatives from Greenlink Interconnector,
a key Intertek client, our colleagues were pleased
to survey a designated 100m-stretch of beach
to quantify the most prevalent marine litter –
feeding back the data points to MCS for their
environmental improvement campaign. We also
cleaned the entire intertidal beach area, managing
to remove a total of 36kg of rubbish from
the beach.

Intertek Group plc | Annual Report & Accounts 2021

Intertek Sweden hosted their very
own local Cleanup Day
World Cleanup Day in September 2021 united
more than 8.5 million people in 191 countries.
It harnesses the power of people around the
world to achieve incredible things by joining
together. Local people, businesses and
organisations come together to rid our
planet of trash, and build bridges between
communities, across all levels of society.

This year, Intertek Sweden did their bit by hosting
their very own local Cleanup Day, and more than
70 people from our Kista office donned work
gloves, grabbed a paper bag or two, and set out
to clean up their local environment. The result
was three full containers each containing an
incredible 660 litres of rubbish. Our people were
delighted to join in with our Keep Kista tidy day, as
it not only allowed them to do something useful
for the local environment, but they were also able
to enjoy some time outdoors with colleagues in
the middle of the workday.

Sustainability ReportContentsSustainability Excellence
Continued

Case study
Swachh Parisar, Swachh
Bharat (Clean Environment,
Clean India)

Intertek India’s community initiative to Build
Back Ever Better
For many years, parts of the Mohan Co-operative
Industrial Estate, the location of Intertek India’s
head office in New Delhi, were in a state of major
disrepair with no proper sanitation or waste
disposal. Intertek India stepped in and took the
lead to improve the area with two major hygiene
and sanitation improvement projects. In
November 2021, the second phase was
completed with creation of a vista of clean and
paved roads, better hygiene and sanitation
standards, safe access to the office, and a
general improvement in the quality of life in
the area.

Case study
Improving water quality in the Mesoamerican Reef

Intertek’s Building Back Even Better ethos is a natural
fit with the Alliance’s mission to save the world’s coral
reefs. We share their vision and commitment to
improving water quality, and continue to work with
them on their regional project to answer two key
questions: where is sewage pollution coming from
in the MAR, and how much of it comes from the
tourism industry.

Partnering with the Coral Reef Alliance
to understand the impact of tourism
There is an urgent need for better data on
the levels and sources of nutrient pollution in the
critically endangered Mesoamerican Reef ('MAR')
ecosystem in the Caribbean Sea, touching the
coasts of Mexico, Belize, Guatemala and
Honduras. Several water quality data and
monitoring programmes exist, but their
distribution is patchy and uncoordinated.

Covid-19 travel restrictions and local lockdowns
throughout the MAR have provided an
unprecedented “natural experiment” to better
understand a major source of nutrient pollution-
tourism. Intertek Mexico partnered with the Coral
Reef Alliance to support the implementation of a
coordinated water quality monitoring programme
across the MAR that quantified any changes in
water quality alongside changes in tourism levels
as countries re-opened their economies.

Intertek Mexico partnered
with the Coral Reef Alliance
to support the implementation
of a coordinated water quality
monitoring programme."

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContentsSustainability Excellence
Continued

Our community
Our global business spans more
than 100 countries and, as such,
we understand the huge
opportunity and responsibility
we have to make a positive
and lasting impact on our local
communities where we work.

As a business we contribute to our
communities in many ways. We provide
employment opportunities, volunteer,
fund education programmes and
support charities to benefit local
communities and neighbourhoods.

Each of our countries and business lines define their
own sustainability agendas, which are tied to the
Group’s priorities, aligned to the UN Sustainable
Development Goals and focus on their local
operations and communities. Our Beyond Net Zero
Steering Committee oversees community
investments at a global level.

In this section we provide a small selection of
highlights from the many community activities that
our colleagues are taking part in around the world.

74
Community projects our employees participated
in focusing on education, giving back to local
communities and preserving our environment

Intertek Group plc | Annual Report & Accounts 2021

Case study
Building Back Ever Better
on the streets of Portland

Litter Cleanup helps to make Oregon a better,
more sustainable place
Intertek PSI hit the streets of Portland, Oregon, to
help with one of many litter Cleanup events
organised by SOLVE, a non-profit organisation that
brings people together across Oregon to improve
the environment – focusing on tree planting, and
litter Cleanup.

In September, our team joined other association
members and local business volunteers to pick up
trash in an abandoned green space. A total of 28
volunteers worked together to collect 4,300
pounds of trash, which equates to more than two
tons! Approximately 500 hypodermic needles were
also disposed of properly during the Cleanup.

Case study
Making a positive impact
on the local community

Case study
South Africa Business
Assurance honours
Women’s Month

Colleagues at Intertek Cortland volunteer
for a variety of good causes
During the year, members of the Cortland team
have participated in a range of activities,
including an American Red Cross Blood Drive.
We hosted a corporate donation day, filling all the
available appointments, bringing in 25 goods
units, which could save as many as 75
American lives.

We had 13 participants in the ‘One Too Many’
NY 5k, which is hosted by the Child Advocacy
Center in Cortland to raise awareness of
and help to end child abuse. Each one ran or
walked the 3.1 mile course in September, with
one of our teammates winning the ‘fastest
walker’ award. That month, colleagues also
took part in the United Way’s Day of Caring,
in which volunteers bring the community and
businesses together by revitalising community
spaces, repairing buildings and walkways in
our parks, and gathering food and personal
items for the Wendy Thibeault Memorial Food
Drive, which helped stock more than a dozen
food pantries across Cortland County.

Paying tribute to the women of South Africa
Every year, in August, South Africa celebrates
Women’s Month – and 9 August is a public holiday
commemorating more than 20,000 women
marching to the Union Buildings on the day in
1956 to protest against the extension of Pass
Laws to women.

The South Africa Business Assurance team, which
is 100% female, launched a Build Back Ever Better
initiative that recognised the escalating issue of
‘period poverty’ in the country – i.e. the lack of
access to sanitary products due to financial
constraints. The team rallied around to donate
handbags, feminine hygiene products and much
more to the Home of Hope for Girls, a non-profit
organisation that offers a safe residence to
children and teens who have survived abusive
situations. They have 75 girls in full-time care
and support 150 more through an outreach
programme.

Your support has made a
difference in aiding a better
future for each and every
beneficiary in our care, in
restoring human dignity.”

Home of Hope for Girls

Sustainability ReportContents93

Case study
Intertek Malaysia gives a
Christmas Gift Of Love

Case study
Nurturing good eco
habits at school to
Build Back Ever Better

Case study
Sponsoring the Chongming
public welfare project

Bringing Christmas joy to senior citizens
in the community
Christmas Gift of Love 2021 is a project that was
initiated by the team at Intertek Malaysia to bring
enjoyment and happiness to elderly people in
their community, especially during these
uncertain times. All business lines, departments,
and colleagues joined the effort to help those at
the Rumah Victory Elderly Home. Residents were
delighted when the Intertek Malaysia team
arrived with goodies for everyone. We also made
a significant contribution to the Home, including a
15kg Washing Machine (which was top of their
Christmas list!), essential food such as rice,
noodles, cans, beverages and crackers, and
household necessities, such as toilet paper,
shampoos and disinfectant.

Intertek Hong Kong supports the reopening
of schools with verified STEM toys
Schools in Hong Kong were closed for months
during the pandemic, and students, ranging from
kindergartens to universities, were only able to
access online lessons. However, when schools
returned to more normal operation in April 2021,
Intertek Hong Kong colleagues were determined
to help them Build Back Ever Better, hosting
STEM and Green Days at kindergartens and junior
schools to welcome the pupils back.

In May and June, students watched videos on the
production and installation of energy generators
to help them understand the consequences of
overusing energy and how to avoid it. The
children also enjoyed the interactive display and
environment-themed games we provided. Using
STEM toys manufactured by our customers and
verified with our own STEM Toy Mark, we enabled
the children to brainstorm new ways to save or
generate energy through natural methods.

Intertek Shanghai supports students
through to graduation
Since 2007, Intertek Shanghai and the Chongming
Committee of the Communist Youth League have
jointly sponsored the Chongming public welfare
project. The project, known as “Study through
wind and rain, Intertek accompany you" has
supported 35 students from poor families.

Intertek Shanghai has not just provided financial
support to the students, we have also paid close
attention to their personal growth, helping them
throughout their studies. The project has
provided new opportunities for many students
over the years and this we saw a further four
outstanding students graduate and to begin the
next phase of their life journey.

Sustainability Excellence
Continued

Case study
Helping our communities
to Build Back Ever Better
supports Mombasa
Children’s Home

Generosity of Intertek employees in Kenya
supports Mombasa Children’s Home
The Salvation Army Mombasa Children’s Home
is home to around 40 girls and boys aged three
to 13 years, and acts as a safety net for
children who come from disadvantaged
backgrounds or have lost their parents and
carers. This is a very special charity for
everyone at Intertek Mombasa, as it is based on
the same road as our facility.

In July, the Kenya team came together to offer
donations to the Children’s Home. Thanks to the
fantastic generosity of our colleagues and a
contribution from company funds, much was
raised. The funds collected were used to
purchase stationery, food, toiletries, utensils,
undergarments, shoes, face masks and
blankets, with all the items identified by and
picked up as part of an extensive shopping
exercise by local team members. The team also
enjoyed the day with the children, exchanging
stories and presenting them with the
donations.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents94

Sustainability Excellence
Continued

Case study
Giving back to our local communities
in the US and Canada

Colleagues in Edmonton, Alberta, raised money to
provide 174 meals for the Hope Mission
Edmonton’s annual Christmas dinner, and in Guelph,
Ontario, our Intertek Catalyst team collected
donations to benefit their local food bank’s
Adopt-A-Family programme, using the money to
purchase stocking stuffer items for teens, tweens
and adults who are clients of the food bank.

Elsewhere, our Kentwood office in Michigan took
part in local community events such as ‘Be a Santa
to a Senior’, fulfilling holiday wish lists for residents
of a local nursing home, and our PSI colleagues in
Pittsburgh gave back through the Salvation Army’s
Angel Tree programme, which has been placing
gifts under the Christmas trees of participating
families for more than 25 years. A similar scheme in
San Antonio, Texas, provides support to women
who experience domestic violence, and a Christmas
celebration for families trying to recover and
regroup from domestic violence.

Finally, our team in York, Pennsylvania, conducted a
supply drive for the Society for the Prevention of
Cruelty to Animals (SPCA) of York County, collecting
and donating cleaning supplies, food, litter and
towels/blankets for the animals under the
SPCA’s care.

Intertek’s Season of Giving Challenge
to mark the holiday season
During our 2021 Season of Giving Challenge, our
sites were challenged to give back to their
community by participating in a local charity drive
or event. We are proud of everyone who
participated as part of our Intertek Kindness
programme and our Build Back Ever Better
movement, as so many colleagues showed how
together, we can make an incredible difference.

In fact, the response to the Challenge was
overwhelming, with many of our offices across the
US and Canada giving back to local families,
children, seniors and animals in need. For example,
colleagues from our Houston Westlake and Deer
Park, Texas, locations partnered with the Houston
Police Department to make Christmas possible for
students at a low-income school by donating nearly
400 toys they collected through office toy drives.

In Allentown, Pennsylvania, colleagues took part in
Penny Wars, a friendly competition where pennies
were collected in jars around the office, with the
proceeds going to the Breast Cancer Awareness
Foundation, and Soup Mondays, which raised
money towards 65 meals provided at the Allentown
Rescue Mission’s Thanksgiving dinner.

Colleagues in Arlington Heights hosted a toy drive
for the local Toys for Tots chapter, donating
Christmas gifts to children in need, while in Austin,
Texas, volunteers from Intertek Alchemy held a
successful fundraiser for the Austin Animal Center,
raising $3,500 through events like a favourite pet
pictures contest, silent auction, bake sale and pet
portrait sittings.

Intertek Group plc | Annual Report & Accounts 2021

Case study
Intertek takes part
in ‘Punkin Chunkin’ to
benefit local food banks

Our Electrical Laboratory in Cortland, NY,
competes for food donations
The team from Intertek’s Electrical Laboratory in
Cortland, New York, was delighted to participate
in the area’s first annual Punkin Chunkin in
October 2021. The event was set up to raise
money and food donations for the community’s
local food banks, and also gave colleagues the
opportunity to participate in a friendly
competition with other local organisations.

The competition was held at Yaman Park, and the
entry fee was a non-perishable food donation.
Intertek engineers worked with other colleagues
to build a slingshot capable of launching pumpkins
high into the air and toward the 200-foot target.
Each company that entered had ten chances to
hit the mark, and the team that scored the
highest number of points was the champion. We
didn’t take home the trophy, but the event was a
huge success and we raised $3,200 in cash, plus
around $2,500-worth of food items for the local
food banks

Case study
Intertek’s UK Sustainable
Growth Agenda

Making use of ‘Ever Better days’ to support
communities and protect the environment
Intertek colleagues in the UK dedicated an ‘Ever
Better day’ in 2021 to volunteer their time to
support a charity of their choice. A fantastic
opportunity to give back to their community and
the environment, the days have been used by
colleagues to do good in a variety of ways.

For example, Jon Bradshaw, our Support Services
Engineer, used his Ever Better Day to set up a
charity fishing match alongside his local fishing
syndicate. The match, along with donations from
the organisers, raised a total of £3,000 for the
Milton Keynes Cancer Centre. The funds raised
will enable the Centre to purchase a specialist
Chemotherapy chair. For Mark King, our Technician
Training specialist, his Ever Better Day was an
opportunity to help a local Scout group repair the
lawn mower used to keep their Milton Bryan camp
grounds neat and tidy. Mark had a busy day, and
also helped service their chainsaw, dig up some
unwanted trees, and cut them up for
camp-fire fuel.

Sustainability ReportContentsSustainability Excellence
Continued

Why we do it

We are passionate about creating an ever
better world for future generations

Build Back Ever Better

Join the BBEB movement to inspire
positive change in the world.
bbeb.com

Helping the world to Build Back Ever Better
Inspired by our purpose to bring quality, safety and
sustainability to life for an ever better world, during
2021, we launched the #BBEB platform, bbeb.com,
with the intention of creating community-based
movement to help people in their local community
space to inspire friends, family and public institutions
to Build Back an Ever Better world.

BBEB is the place that makes it easy for anyone to be
active on our platform, inspiring them to build back
ever better by making step-by-step sustainable
progress in the community, have a voice, to launch
ideas that can make the world better, no matter how
big or small. It could be anything from organising a
beach clean or litter pick, creating a new recycling
scheme, supporting clean energy, urban
regeneration, helping others in need and much more.
The important thing is that it’s simply a better way
forward.

Today, the multilingual site carries thousands of
powerful stories posted by individuals across the
world, highlighting inspirational initiatives from
individuals, groups, communities, organisations and
companies, all with the ambition of creating positive
change by demonstrating what can be achieved with
the right determination, focus and energy.

Our 44,000 colleagues are united by their shared
belief in the urgent need to make the world an
ever-better and ever-safer place for everybody.

Intertek is well placed to help our clients seize the
opportunities created by a more sustainably-driven
society, and we are truly inspired that what we do
every day has a positive impact on every aspect of
modern life.

We are committed to our sustainability agenda and
will continue to deliver sustainable value for all our
stakeholders; customers, employees, suppliers,
shareholders, regulators and our communities.

Sustainability is central to everything we do and we
can proudly say that Intertek is an amazing force
for good.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents
96

Sustainability Excellence
Continued

5
Sustainable
value creation

Our Services – ATIC

Our Sectors

The work we do today covers everything from testing toys to inspecting
power stations, and from certifying vaccines to providing end-to-end
Quality Assurance. Our innovation-led, end-to-end Total Quality
Assurance (‘TQA’) value proposition is designed to support our clients
24/7. We provide a fully integrated portfolio of Assurance, Testing,
Inspection and Certification (‘ATIC’) services to give our customers
complete peace of mind for their products, services and operating
systems. But the ATIC solutions we offer go beyond the quality and
safety of a corporation’s physical components, products and assets.
They go to the heart of the reliability of their operating processes and
quality management. We call it Total Quality Assurance because it
enables our clients to mitigate risk at every stage of their operations.

By focusing on the three sectors of Products, Trade
and Resources, we concentrate the full power of our
innovation capabilities into these attractive growth
and high-margin sectors.

We are an amazing force for good
in the world, delivering sustainable
growth for all stakeholders.

Our USP

Science-based Customer Excellence
in quality, safety & sustainability.

Intertek Group plc | Annual Report & Accounts 2021

Assurance
Enabling our customers to
identify and mitigate intrinsic risk
in their operations, their supply
and distribution chains and
quality management systems

Testing
Evaluating how our customers’
products and services meet
and exceed quality, safety,
sustainability and
performance standards.

Products
Ensuring the quality and safety
of physical components and
products, and risk assessment of
operating processes and quality
management systems.

Trade
Protecting the value and quality
of products during custody-
transfer, storage and
transportation, via analytical
assessment, inspection and
technical services.

Inspection
Validating the specifications,
value and safety of our
customers’ raw materials,
products and assets.

Certification
Formally confirming that our
customers’ products and services
meet all trusted external and
internal standards.

Resources
Optimising the use of assets
in oil, gas, nuclear and power
industries and minimising risk
in their supply chains through
technical inspection, asset
integrity management,
analytical testing and
ongoing training services.

Sustainability ReportContentsSustainability Excellence
Continued

Our Mid- to Long-Term Value Creation

Our high-margin, cash-generative Earnings model is
at the core of what makes us successful. It is based
on the delivery of our unique TQA value proposition.
The profitable delivery of ATIC services to customers
operating in the structurally attractive Products,
Trade and Resources economic sectors is dependent
on our capital-light business model and
entrepreneurial culture, which also enables us to
respond quickly to new growth opportunities. To
maximise returns, we continue to invest in high-
growth, high-margin areas and maintain a disciplined
approach to capital allocation.

Our Stakeholders:

Creating a positive impact for our stakeholders,
building trust and confidence

GDP+ organic
revenue growth
in real terms

Employees
Our people are our most valuable
asset and are critical to our success.
Customer-centric and passionate
about what they do, they deliver
sustainable value through
unmatched expertise and quality of
work for our customers every day.

Investors
Our investor stakeholders include all
groups that have an interest in the
success and sustainability of our
global business.

Investments in
high-growth and
high-margin
sectors

Intertek
Virtuous
Economics

Margin-accretive
revenue growth

Disciplined
capital allocation

Strong free
cash flow

Customers
We deliver innovative and bespoke
Assurance, Testing, Inspection and
Certification solutions to our
customers for their operations and
supply chains.

Communities
We are focused on achieving a
positive impact within the
communities where we operate,
supporting local causes and
partnering with charities.

Suppliers
Our suppliers provide products and
services that help us manage and
track the performance in our
supply chains.

Government and Regulators
We comply with all global, regional
and local regulations.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability ReportContents98

Corporate Governance

Chairman’s introduction to corporate
governance pages 100 to 101

Overview>

Board Leadership and
Company Purpose

Division of Responsibilities

Composition, Succession
and Evaluation

Audit, Risk and
Internal Control

This report has been
prepared in order to
provide all stakeholders
with a comprehensive
understanding of our
governance framework
and how we create
sustainable growth
for all.”

Andrew Martin
Chairman

>
>

Remuneration

A. Effective and entrepreneurial Board 106

F. Roles and responsibilities

122

J. Board appointments

B. Purpose, values, strategy and culture 106

G. Independence

C. Governance framework and
Board activities in 2021

H. External commitments and
conflicts of interest

109

123

K. Board skills, experience
and knowledge

123

L. Board evaluation

D. Stakeholder relations

114

I. Group Company Secretary support

125

E. Workforce engagement

114

124

M. Financial reporting; external auditor
and internal audit

130

P. Linking remuneration with purpose,
values and strategy

N. Fair, balanced and understandable
assessment

O. Internal financial controls;
risk management

134

Q. Remuneration Policy

R. Performance outcomes in 2021;
strategic targets

137

138

152

Intertek Group plc

| Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsGovernance structure

We are deeply committed to our sustainability
agenda. Underpinning the delivery of our
sustainability strategy is a strong governance
structure, to deliver sustainable value for all our
stakeholders, in particular our: customers,
employees, suppliers, shareholders, regulators
and communities.

Our Board of Directors is responsible for the overall stewardship of the
Group and delivery against strategy, through our Leadership Team. This
includes setting our values and standards, and overseeing sustainability
and corporate responsibility.

Sustainability governance is delivered by two newly formed
workstreams: the Net Zero Steering Committee and the Beyond Net
Zero Steering Committee. The Net Zero Steering Committee, chaired by
the CEO and made up of the Head of Sustainability, Chief Financial
Officer, Head of Finance-Sustainability and the Group General Counsel
focuses on the development of our net zero roadmap and overseeing
the development of our science-based reduction targets.

The Beyond Net Zero Steering Committee, which is also chaired by the
CEO and is made up of the Head of Sustainability, Group Chief
Innovation Officer, EVP Marketing & Communications, Director Group
Corporate Communications and the Group General Counsel, focuses on
the overall delivery against our sustainability strategy. Both Steering
Committees meet on a bi-monthly basis. To support the efforts of the
Steering Committees, formal and informal committees led by regional
management across the Group globally help to drive our regional
strategies for our people, the communities in which we operate, the
environment and our customers, through the dissemination of our
sustainability strategy.

Our risk management and governance is described in detail on pages
167 to 169.

Board

> Nomination Committee

> Audit Committee

> Remuneration Committee

Leadership Team

Risk Governance

Sustainability Governance

Group Risk Committee

Ethics and Compliance
Committee

Net Zero Steering Committee

Beyond Net Zero Steering Committee

Regional, divisional and
functional committees

Disclosure Committee

Regional management and finance

Regional Sustainability Committees
and Sustainability Champions

Intertek Group plc | Annual Report & Accounts 2021

Group Investment Committee

Sustainability Report / Directors' ReportContents
Chairman’s introduction

This report has been prepared in order to
provide all stakeholders with a comprehensive
understanding of our governance framework
and how we create sustainable growth for all."

Andrew Martin
Chairman

Intertek Group plc
Intertek Group plc | Annual Report & Accounts 2021
| Annual Report & Accounts 2021

100

Our number one priority remained the health, safety
and wellbeing of our people who have not only been
the key to our financial, operating and strategic
progress but have also supported each other, their
local communities, our businesses and customers.
The Board and I recognise and applaud their
commitment and resilience.

We recognise our obligation to society and champion
diversity with a strong focus on recruitment,
retention and development of colleagues who reflect
the communities in which we work and live. A diverse
workforce is one key to ensuring we deliver
sustainable value to our stakeholders.

I am proud that as a business we continue to make
good progress on our environmental impact.

We have signed up to the Science Based Targets
initiative as we strive to be net zero carbon no later
than 2050 and starting in 2021, we are planning to
include our targeted yearly group carbon emission
reduction in our company short-term incentive in
addition to revenue, operating profit and return
on invested capital. In 2021, we joined the LEAF
(Lowering Emissions by Accelerating Forest finance)
Coalition, furthering our commitment to a net zero
future.

Once again we will report how we have applied the
Corporate Sustainability Certification standards and
the principles of our Total Sustainability Assurance
programme to our own business. And our leading
sustainability credentials have been recognised with
the highest ESG rating from MSCI, the world’s largest
provider of Environmental, Social and Governance
('ESG') Indexes. This external validation
acknowledges the work of our people supporting the
sustainability agendas of our clients as well as being
focused on our own internal sustainability initiatives.

Investing
To further sustainability in our business and create
additional value for stakeholders, we continue to
invest organically and inorganically in opportunities
where we see high growth and high margins, strong
cash generation and low capital requirements.

Dear shareholder
The Board has developed a promise that defines our
work and purpose at Intertek.

Looking back
When I wrote my statement last year, little did I
realise that 12 months later the world would still be
seriously affected by Covid-19 and that I would again
be looking back on the impact it has had on our
personal and working lives.

The past year has been a real test of our strategy,
our high-quality business model, our people and our
culture. I am pleased to report that Intertek has risen
to the challenge. The Group has remained Purpose-led
and our people have continued to apply our vision and
to live our values, maintaining the highest levels of
service to our customers. It is therefore no surprise
that Intertek has delivered a strong performance of
which the Board and I are both proud and pleased.

Performance accelerated through the year, revenue
growth and margins steadily improving while cash
generation once again was robust. We are
recommending a final dividend of 71.6p making an
unchanged full-year dividend of 105.8p and the
dividend pay-out ratio 55%.

Sustainability
Sustainability is central to everything we do at
Intertek. Being a sustainable business is more than
just looking after the environment but making sure
that the business and its operations are resilient,
will deliver good financial returns over time while
recognising the impacts we have on society
and people.

Sustainability Report / Directors' ReportContents101

Governance and the Board
To underpin the successful delivery of long-term
sustainable growth and shareholder value, we are
committed to high standards of corporate
governance. The Board continues to support and
oversee the execution of our strategy and pays close
attention to business performance and stakeholder
engagement. Alongside our scheduled Board
meetings, last year we arranged an extensive
programme of virtual site and laboratory visits in
Europe, the USA and China. This gave the Board the
opportunity to really engage with and get feedback
from colleagues across the world, and see and feel
the culture operating within the various businesses.
We have received regular feedback reports from
investors throughout the year and last Spring I met
with a number of our leading institutional
shareholders.

I am pleased that today, the Board complies with the
provisions of both the FTSE Women Leaders Review
on gender diversity and the Parker Review on ethnic
diversity. We endeavour to continue to focus on
diversity as we recognise the importance of
developing the best talent.

Lena Wilson stepped down from the Board on
31 January 2021 as a Non-Executive Director and a
member of the Audit and Nomination Committees
and then Louise Makin retired on 30 June 2021 as a
Non-Executive Director and member of the Audit and
Nomination Committees.

Tamara Ingram, who joined the Board in December
2020 as a Non-Executive Director and a member of
the Remuneration Committee and Lynda Clarizio who
joined the Board on 1 March 2021 as a Non-
Executive Director and member of the Audit
Committee, both completed a full on-boarding
programme during 2021.

Ross McCluskey was promoted into an operational
role as Executive Vice President Europe and Central
Asia. As a consequence, he ceased to be an
Executive Director and Chief Financial Officer of
Intertek on 1 April 2021 when Jonathan Timmis was
appointed as an Executive Director and Chief
Financial Officer. I would like to welcome Jonathan,
Tamara and Lynda to the Board and thank Ross, Lena
and Louise for their excellent, diligent and valued
contribution and support during their tenure.

As Chairman, I am responsible for ensuring the
effectiveness of the Board, its Committees and
individual Directors. The evaluation and performance
review of the Board was external this year led by
Equity Culture. The evaluation concluded that the
Board and its Committees are all performing
effectively, with clear terms of reference and
meeting agendas. All of the necessary information to
enable constructive and productive discussion is
provided on a timely basis. Importantly, the Board has
a good balance of experience and knowledge to
ensure appropriate challenge and debate. The Board
also supports the culture, vision and values of
Intertek.

The Future
Looking to the future, we have a clear purpose, a
strong culture and the right strategy to deliver our
vision. Our global footprint, our expertise in Total
Quality Assurance, our leading market positions, the
passion and entrepreneurial spirit of our people and
our high-quality, cash generative earnings model
provide a solid foundation for sustainable growth.
We are in great shape to seize the opportunities that
are emerging in the ‘new normal’ to benefit all our
stakeholders.

Finally, I would like to express my and the Board’s
thanks to our people right across the business for
their continued passion, commitment and support.

Chairman’s introduction
Continued

Compliance with the 2018 UK Corporate Governance Code (‘Code’)

This report has been prepared in order to provide
stakeholders with a comprehensive understanding
of our governance framework and to meet the
requirements of the Code, the Listing Rules (‘LR’)
and the Disclosure Guidance and Transparency
Rules (‘DTR’). A copy of the Code is publicly
available at frc.org.uk.

Page 98 sets out how this Governance section has
been structured around the Code Principles.

The Board confirms that during 2021, the Company
has consistently applied the principles of good
corporate governance contained in the Code and
has complied with the provisions apart from the
following:

– Provision 13 states that the Chair should hold
meetings with the Non-Executive Directors
without management present. Two such
meetings are scheduled every year but during
2021 these meetings included the CEO as
necessitated by the business at the time. Two
Chair and Non-Executive Director meetings
have been scheduled for 2022 with the first
having taken place in February 2022.

– Provision 38 stipulates that the pension

contribution rates for Executive Directors
should be aligned with that of the workforce.
The pension contribution for all new Executive
Directors appointed to the Board since 2018
has been aligned with that of the workforce.
However, when the CEO joined Intertek in 2015
and prior to the introduction of provision 38 in
the Code issued in 2018, his contract stipulated
a pension contribution of 30% of base salary
per annum. This is more than the pension
contribution of the majority of the UK
workforce. Regardless of the obligations
outlined in the CEO’s contract, agreement was
reached with the CEO to reduce his pension
from 30% of base salary to 5% over a period of
five years from 2021. More information on the
engagement with shareholders on this issue is
outlined in the letter from the Chair of the
Remuneration Committee on pages 136 to 137.

A more detailed explanation of our compliance can
also be found on our website at intertek.com. The
information required to be disclosed in accordance
with DTR 7.2.6 can be found in the Other Statutory
Information section on pages 163 to 165.

In 2021, we strengthened and expanded our
capabilities through two acquisitions, SAI Global
Assurance and JLA. SAI Global, significantly increases
the scale and presence of our Business Assurance
offering in complementary geographies, specifically
Australia, USA, Canada and China and brings new
service capabilities in attractive end markets. JLA
provides an entry into the fast-growing agri-food
and beverage testing market in Brazil and enhances
our Assurance proposition to leading fast-moving
consumer goods companies.

We also continued to allocate capital to internal
projects for the long term, investing in innovation
and our asset base to expand our Total Quality
Assurance service. I am particularly proud of the EV
Centre of Excellence, a new state of the art facility
that will help electric and hybrid vehicle
manufacturers accelerate the development of their
equipment and systems capabilities. This is not the
only example of Intertek combining innovation and
sustainability – we also launched WindAware, a new
SaaS for wind farm operations and Intertek
CarbonZero for oil producers.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsBoard of Directors

102

Board promise

Andrew Martin
Chairman

André Lacroix
Chief Executive Officer

Jonathan Timmis
Chief Financial Officer

We recognise our responsibility to all
stakeholders and will strive to ask the
questions that matter and make the
right decisions.

We will be forward looking and use
our diverse perspectives and insights
to promote Intertek’s purpose of
bringing Quality, Safety and
Sustainability to life.

We will inspire our people to take
client relationships and our
performance to greater heights and
to create sustainable growth for all.

Appointed to the Board in May 2016; appointed Chairman in
January 2021

Appointed to the Board in May 2015

Appointed to the Board in April 2021

Committee: N

Nationality:

Ethnicity: White

Tenure: 5.5 years

Independent: Yes

Committee: N/A

Nationality:

Ethnicity: White

Tenure: 6.5 years

Independent: N/A

Committee: N/A

Nationality:

Ethnicity: White

Tenure: 0.75 years

Independent: N/A

Current principal external appointments:
Non-Executive Chairman of Hays plc and a Non-Executive
Director of the John Lewis Partnership Board.

Current principal external appointments:
None.

Key strengths:
– Wide-ranging and extensive financial background.
– Extensive experience of the travel, hospitality and

support services sectors.

Key strengths:
– Excellent track record of delivering long-term growth

Key strengths:
– Impeccable track record as an experienced finance

strategies and shareholder value globally across diverse
territories.

executive.

– Broad international experience in highly successful

– Strong leadership skills.

companies.

Experience:
Andrew was the Group Chief Operating Officer for Europe
and Japan for Compass Group plc until 2015, and prior to
that, he served as their Group Finance Director for eight
years until 2012. Before he joined the Compass Group, he
was the Group Finance Director at First Choice Holidays plc
(now TUI Group). Andrew also previously held senior financial
positions with Forte plc and Granada Group plc and was a
partner at Arthur Andersen.

He was previously a Non-Executive Director of easyJet plc
and Chair of their Finance Committee until August 2020.

Experience:
From 2005 to 2015, André was Group CEO of Inchcape plc,
during which time he strengthened its position in the global
automotive market with a track record of delivering
double-digit earnings growth with strong cash generation,
and created significant shareholder value as its market
capitalisation more than doubled during his tenure as Chief
Executive.

He was previously Chairman and Chief Executive Officer of
Euro Disney S.C.A., President of Burger King International
operations and formerly the Senior Independent Director of
Reckitt Benckiser Group plc from October 2008 to
December 2018.

Experience:
Until March 2021, Jonathan was the CFO Health at Reckitt
Benckiser Group plc where he also served as the Group
Controller, Regional Finance Director for North America and
Regional Finance Director for Southern Europe. Prior to his
time at Reckitt Benckiser, Jonathan spent several years in
senior finance roles with SAB Miller, including three years as
the Finance Director of Royal Grolsch and Finance Director
for the UK business. Jonathan’s early career in finance was
with PwC. Jonathan is a Fellow of the Chartered Institute of
Management Accounting.

Committees

Audit

Nomination

Remuneration

Committee Chair

Tenure is given as at 31 December 2021.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents

Board of Directors
Continued

103

Graham Allan
Senior Independent Non-Executive Director

Gurnek Bains
Non-Executive Director

Lynda Clarizio
Non-Executive Director

Tamara Ingram OBE
Non-Executive Director

Appointed to the Board in October 2017

Appointed to the Board in July 2017

Appointed to the Board in March 2021

Appointed to the Board in December 2020

Committee: N R

Nationality:

Ethnicity: White

Tenure: 4 years

Independent: Yes

Committee: N R

Nationality:

Ethnicity: Asian

Tenure: 4.5 years

Independent: Yes

Committee: A

Nationality:

Ethnicity: White

Tenure: 0.75 years

Independent: Yes

Committee: R

Nationality:

Ethnicity: White

Tenure: 1 year

Independent: Yes

Current principal external appointments:
Senior Independent Non-Executive Director of
InterContinental Hotels Group plc, Non-Executive Director
of Associated British Foods plc and Kuwait Food Company
(Americana) KSCP (privately owned) and a Director of Ikano
Retail Pte Ltd (privately owned). Chairman of Bata
International (privately owned) and adviser to Nando's Ltd.

Key strengths:
– Extensive international consumer and retail experience.
– Wide-ranging knowledge of the Asian market.
– Strong management knowledge and extensive board-level

experience.

Experience:
Graham was Group Chief Executive of Dairy Farm
International Holdings Limited, an Asian retailer
headquartered in Hong Kong, from 2012 to 2017. In 1992,
he joined Yum! Restaurants International (formerly PepsiCo
Restaurants International) where he held several senior
positions before assuming the role of President and CEO in
2003, leading the development of global brands KFC, Pizza
Hut and Taco Bell in more than 120 international markets.
Prior to his tenure at Yum! Restaurants, he worked as a
consultant including at McKinsey & Co Inc.

He was previously a Non-Executive Director of Yonghui
Superstores Co. Ltd in China and a Commissioner of Hero
Group, an Indonesian retailer.

Intertek Group plc | Annual Report & Accounts 2021

Current principal external appointments:
Managing Partner of Global Future Partnership LLP and CEO
of Global Future Think Tank.

Current principal external appointments:
Non-Executive Director of CDW Corporation, Emerald
Holding, Inc and Taboola.com Ltd (US listed companies), and
Resonate Networks, Inc., Simpli.fi Holdings, Inc, and Cambri
Oy (privately owned).

Current principal external appointments:
Non-Executive Director of Marsh & McLennan Companies,
Inc. and Marks and Spencer Group plc.

Key strengths:
– Wide-ranging experience working with senior leaders
internationally providing an important voice on people.

Key strengths:
– Strong track record of leadership in complex organisations.
– Significant experience in digital measurement and broader

Key strengths:
– A long-standing leadership career in advertising,

marketing and digital communication.

Experience:
Gurnek was the co-founder of YSC Ltd, a premier global
business psychology consultancy. He led the business as
Chief Executive Officer and Chairman for 25 years to a
position of global pre-eminence, and a client base
comprising over 40% of the FTSE 100. Gurnek has worked
extensively with multinational organisations in the areas of
culture change, vision and values, executive coaching and
assessment, board development and strategic talent
development.

He is Chair of Akram Khan Dance Company.

He has a doctorate in Psychology from Oxford University.

technology.

– A deep understanding of consumer brands and digital

– Extensive board-level experience.

strategy.

Experience:
Lynda was President of U.S. Media at Nielsen Holdings plc, a
global measurement and data analytics company, where she
worked from 2013 to 2018. Her prior experience includes
CEO, President and other leadership positions at AppNexus,
Inc., INVISION, Inc., AOL Inc. and Advertising.com. She
previously was a partner in the law firm Arnold & Porter,
where she practised law from 1987 to 1999.

Experience:
Tamara held leadership roles within WPP from 2002, and
was the Global Chair of Wunderman Thompson (a subsidiary
of WPP plc). Her executive experience includes senior roles
at Kantar Group, McCann Erickson and Saatchi & Saatchi UK,
where she held the roles of CEO and Executive Chair. Tamara
was previously a Non-Executive Director of Sage Group plc
and Serco Group plc.

She is Vice Chair of Human Rights First, a non-profit
international human rights organisation.

She is a Director of Save the Children International.

Sustainability Report / Directors' ReportContents

Board of Directors
Continued

104

Former Directors who
served during the year

Lena Wilson stepped down from the Board on
31 January 2021.

Ross McCluskey stepped down from the Board on
1 April 2021.

Dame Louise Makin stepped down from the Board
on 30 June 2021.

Gill Rider CB
Non-Executive Director

Jean-Michel Valette
Non-Executive Director

Appointed to the Board in July 2015

Appointed to the Board in July 2017

Committee: A R

Nationality:

Ethnicity: White

Tenure: 6.5 years

Independent: Yes

Committee: A

Nationality:

Ethnicity: White

Tenure: 4.5 years

Independent: Yes

Current principal external appointments:
Chair of Pennon Group plc and South West Water
(a subsidiary of Pennon Group plc) and Pro-Chancellor
of the University of Southampton.

Current principal external appointments:
Chairman of Sleep Number Corporation and Lead Director
of The Boston Beer Company, both of which are US listed
companies. Director and Audit Committee chair of Peet's
Coffee & Tea (private).

Key strengths:
– Successful global experience on the people agenda.
– Extensive experience as a Non-Executive Director.
– Strong experience on remuneration and sustainability

Key strengths:
– Extensive knowledge of the US market.
– Strong leadership and board-level experience,

with purpose-driven companies.

issues.

Experience:
Formerly, Gill was head of the Civil Service Capability Group
in the Cabinet Office, reporting to the Cabinet Secretary.
Prior to that, she held a number of senior positions with
Accenture, culminating in the post of Chief Leadership
Officer for the global firm. Previously Gill was a Non-Executive
Director of De La Rue plc and, until January 2020, Senior
Independent Director of Charles Taylor Plc, where she also
chaired their Remuneration Committee.

Experience:
Jean-Michel has more than 30 years’ experience in
management, US public company corporate governance,
strategic planning and finance. Previously, he was Chairman
of Peet’s Coffee and Tea, Inc., a US beverage company which
was listed at the time. He was also appointed as Managing
Director at the Robert Mondavi Winery before becoming
Chair. In his earlier career, Jean-Michel was President and
Chief Executive Officer of Franciscan Estates, Inc., a
premium wine company.

She is currently President of the Marine Biology Association
and was also previously President of the Chartered Institute
of Personnel & Development.

He currently serves as an independent adviser in the US
to select branded consumer companies.

He has an MBA from Harvard Business School.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents

Direct reports to the CEO

105

Global functions

Geographies

Global business lines

Tony George
Executive Vice President,
Human Resources

Ken Lee
Executive Vice President,
Marketing and Communications

Fred Bai
CEO, Greater China

Sandeep Das
Regional Managing Director,
South Asia

Gavin Campbell
President, Transportation
Technologies

John Fowler
Senior Vice President, Minerals

Timo Lieber
Vice President, Group ATIC
Innovation

Julia Thomas
Senior Vice President,
Corporate Development

Colm Deasy
Regional Managing Director,
Asia Pacific

Ian Galloway
Executive Vice President,
Middle East and Africa

Ian Galloway
Executive Vice President,
Global Trade

Christina Law
President, Global Softlines
and Hardlines

Mark Thomas
Group General Counsel and
Head of Risk & Compliance

Jonathan Timmis
Group Chief Financial Officer

Ross McCluskey
Executive Vice President,
Europe &
Central Asia

Carlos Velasco
President, Latin America

Bertrand Mallet
Executive Vice President,
Industry Services

Calin Moldovean
President, Business Assurance
and Food Services

Saranpal Rai
Senior Vice President, Electrical

Paul Reynish
President, Alchemy

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents106

We are also responsible for ensuring that the appropriate financial
resources and people with the right skills and behaviours are in place to
achieve the long-term strategy and deliver long-term sustainable
performance. Further information on our strategy and progress towards
delivering our strategic aims is set out in the Strategic Report on pages
14 to 25 and further information on the activities of the Board is
outlined in the table on pages 110 to 111.

The
Intertek value
proposition

Strategic
initiatives
for the year

The
5x5
strategy

Emerging
trends
shaping
the world

The
strategic review
involves a
360˚ review of:

Updates
on the
competitive
environment

Risk
environment

Long-term
structural
drivers

Regulatory
changes and
changes to
the economic
environment

The Intertek value proposition and purpose
Intertek has a rich cultural heritage which reaches back over 130 years
to some of the world’s leading pioneers in the Quality Assurance
industry, and our pioneering forefathers include giants of innovation
such as Thomas Edison. Their legacy and spirit lives on today
throughout Intertek and in our people as we continue to drive the global
development of the Quality Assurance industry. We have established a
purpose of ‘Bringing quality, safety and sustainability to life for an ever
better world’ which resonates strongly throughout Intertek; a purpose
which our people are rightly very proud to embody and incorporate
when meeting the needs and wishes of our stakeholders. Our purpose is
underpinned by a strong set of clear values, as outlined on page 19,
which are true to who we are and are the foundations that drive the
right cultural behaviours across the Group. To deliver this, we employ
people with the right potential, attitude, intellect and entrepreneurial
spirit, and we introduce them to our culture of excellence, innovation
and our exacting customer-focused service standards. By aligning the
quality of our people with our high-performance culture, we can deliver
our strategic objectives and our promise to customers and build
long-term and mutually rewarding relationships.

The Board, with the Leadership Team, sets the corporate culture that
defines our purpose and establishes an environment where values are
appreciated and respected, encouraging all of our people to ‘Do
Business the Right Way’. Our culture and values have been, and remain,
the core foundations of Intertek. Our 10X culture is one of
entrepreneurial spirit and high performance, where we are totally
focused on our customers, as outlined in the Sustainability Report on
pages 80 to 85.

Board Leadership and Company Purpose

Effective and entrepreneurial board
Our Board comprises a Chairman, CEO, CFO and six independent
Non-Executive Directors. We all have differing skills, a wide range of
diverse experience and extensive knowledge built up over a period of
time in our professional careers, which enables the Board to fully
understand the strategic business drivers of Intertek, but also the risks
and exposures associated with the multiple sectors and regions in
which the Company operates. During the year, we welcomed three new
Directors on the Board which brings new skills, views and perspectives
as outlined in the Nomination Committee report on pages 126 to 129.

The need for an effective and entrepreneurial Board to provide the right
leadership continues to be important; our combined experience of
dealing with economic crises over the past 30 years has helped to
inform and qualify us to effectively manage the ongoing impact of the
pandemic and the increasing awareness of the risks associated with
climate change, to ensure the long-term sustainable success of the
Company is not hindered. As such, our collective experiences have
enabled us to preserve the long-term value of the business for our
shareholders, our people and our customers, as well as the wider
community as a whole for years to come.

The governance of Intertek is the responsibility of the Board, with the
support of the Group Company Secretary, and provides the framework
of authority and accountability that operates throughout the Company
to ensure the needs of all stakeholders are considered and met. Good
governance requires the Board to lead, guide and support the business
in its quest for long-term sustainability and viability through strategic
planning and part of the governance structure in place is the
development, implementation and monitoring of the 5x5 strategic plan
for growth throughout the year. This is an ongoing process which is
reviewed annually by the Board and involves a thorough review of the
progress being made on the implementation of the strategy and the
five-year business plan. The strategic review involves a 360˚ review of
the Intertek value proposition, the 5x5 strategy, updates on the
competitive environment and regulatory changes. The changes to the
economic environment, the long-term structural drivers and emerging
trends shaping the world are discussed, as well as, the resulting impact
on Intertek, together with the strategic initiatives for the year and
ensures alignment with our purpose of bringing quality, safety and
sustainability to life for an ever better world.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsBoard Leadership and Company Purpose
Continued

Board oversight of culture

Area

Link to culture

107

Our success is based on a culture of trust amongst our
colleagues, globally. To support and ensure this trust,
we continuously monitor and develop further insights into the
culture operating within the business. In doing so, we review
the following throughout the year:

Intertek Group plc | Annual Report & Accounts 2021

View from the top

Town halls allow the dissemination of information to employees across the Group and enable local leadership to
communicate the right behaviours and cultural expectations, as well as give peer nominated awards for
demonstrating our 10X energies. Town halls occur monthly at every Intertek location globally; they are monitored as it
is a Core Mandatory Control and thus reported to the Audit Committee. The 10X growth, coaching, training, people
planning and the focus on recognition at all levels ensures that the right values and culture are driven throughout the
organisation.

Globally aligned reward
and incentive schemes

Health & wellbeing

Ethics and compliance
reports

Training

Key claims reports

Internal audit reports

Acquisitions

André Lacroix, Gurnek Bains and Tony George (Executive Vice President, Human Resources) held a session during
the year on the Board Promise and its role in shaping the culture within Intertek.
Our long-term incentive schemes are aligned so as to drive the right behaviours and values of our business, globally,
in line with our purpose. More information is outlined in the Remuneration Committee report on pages 136 to 162.

Due to the importance we place on safety within Intertek, we have updates at every Board meeting on Health &
Safety statistics across the Group to monitor trends year-on-year and ensure that the right practices are being
followed. There have been regular emails to the Board to closely monitor our people’s health and wellbeing during the
pandemic using a ‘5-category’ system, with ‘net’ data to reflect the number of people in each category, excluding
those who have now recovered or returned to work due to Covid-19.

We took important steps to support our own wellbeing by introducing our new global wellbeing programme, Kindness.
It is a personal experience that will help each one of our people make sure that they do the simple things to help build their
own personal strength and resilience – to help us re-energise, boost our wellbeing, and unleash our potential.
Updates at every Board meeting on all hotline and whistleblowing reports and analysis by issue type. This enables the
Board to determine if there are any trends which need further analysis or investigation. For more information see
pages 112 and 168.

Everyone in the organisation completes annual training on the Intertek Code of Ethics to demonstrate our
understanding of, and commitment to, the highest standards of business conduct and ensure that we do business
the right way. For more information see page 168. There is also annual training on the Core Mandatory Controls with
further information outlined on pages 75 and 134.
Updates at every Board meeting on all legal claims and a review of the significant legal claims by the Audit Committee
to monitor the trends and types of claims.

Updates at every Audit Committee meeting on internal audit reports, the areas of non-compliance with the Core
Mandatory Controls and actions taken to address the non-compliance together with trend analysis to underscore
that we are ‘Doing Business the Right Way’.

When the Board is considering acquisitions, one of the factors the Board considers is the culture of the business
being acquired and how it will fit within the Intertek Group. The Board deemed the acquisitions of JLA Brasil
Laboratório de Análises de Alimentos S.A and SAI Global Assurance to have similar cultures of high performance and
having passion for their customers.

Sustainability Report / Directors' ReportContents

108

Employees'
perspective on
our culture

Following the virtual induction that we both
received as new Non-Executive Directors on
the Board, we were delighted to see the
communality of culture, commitment to
values and purpose clearly demonstrated
during the Non-Executive Director induction
at each of the various sites and countries
across the Group."

Lynda Clarizio and Tamara Ingram
Non-Executive Directors

The 10X culture fosters work with integrity,
allows us to set goals that challenge our
capacity, promoting our efforts to advance
every day in continuous improvement,
aligned to corporate strategies and being
effective in our work."

Maria Victoria Zavala
Quality Assistant ('QHSE'), Chile

Virtual visits to locations across the
world to see the culture operating
in situ and receiving views on our
culture directly from employees:

I would never have expected such a natural
connection, communication, open
discussions, and information sharing.
We come from many walks of life, yet clearly
talk the same language, have the same
values, and pursue the same clear objective
to become even stronger. By the end of
these meetings, I can proudly say that
we were just one team."

The 10X culture is keeping us
motivated and giving us more
confidence in what we do best."

Marta Escudero, SAI EMEA Manager
and Regional Director, Business
Assurance UK, Spain & Portugal

Raymon Kartoredjo
Laboratory Manager
Suriname

A force
for good
At Intertek we are
passionate about our
purpose and today
that means striving
to make the world a
better, safer and
more sustainable
place for all.

Intertek Group plc

| Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsBoard and Committee framework

109

Our Board of Directors

The Board has the ultimate and collective
responsibility to promote the long-term sustainable
success of the Company, ensuring that value is
created for shareholders and contributes to wider
society through its effective, entrepreneurial and
innovative leadership of Intertek. They ensure that
the necessary resources are in place for the Company
to meet its objectives and measure performance
against them. Our Board consistently acts with
integrity, leads by example and promotes the culture
to ensure dissemination throughout the Company. It
sets the strategic aims of the Company, its purpose,
customer promise, vision and values in alignment
with our culture as outlined in the Strategic Report
on page 14 to 25.

The Board recognises the importance of its
obligations under section 172 of the Companies Act
2006 to engage with, and consider, key and relevant
stakeholders as part of its decision-making process.
More information on the principal decisions made by
the Board are on page 56.

The activities of the Board during 2021, and how the
Board’s governance contributes to the delivery of
Intertek’s strategy, is outlined on pages 110 to 111.

The Board delegates certain matters to its three
principal Committees to carry out business as
defined in their respective Terms of Reference. The
remit, authority and composition of each
Committee are clearly laid out and reviewed
regularly to ensure that the support provided to
the Board is effective. The Board also maintains the
Board Approval Matrix which outlines the matters
reserved for the Board. When necessary, the Board
may delegate very specific matters to ad hoc
subcommittees with clearly defined responsibilities
and for a limited period of time. The Terms of
Reference for each Committee and the Board
Approval Matrix are available at intertek.com.

Nomination Committee
Ensures the Board and its Committees have the correct balance of
skills, experience and knowledge and that adequate and orderly
succession plans are in place.

Audit Committee
Oversees the Group’s financial reporting, ensuring the effectiveness
and independence of the external and internal audit functions and
reviews the Group’s financial internal controls.

Remuneration Committee
Establishes the Group’s Remuneration Policy and ensures that it
supports the strategy promoting the long-term sustainable success
of the Group and there is a clear link between performance,
remuneration and alignment with our purpose, values and strategy.

Leadership Team

Supporting Committees

Intertek Group plc | Annual Report & Accounts 2021

The Board delegates specific responsibilities,
subject to certain financial limits, to management.
This is governed by the Core Mandatory Controls,
an annually reviewed and refreshed framework
that allows the delivery of the strategic aims and
financial performance whilst allowing risk to be
assessed and managed.

Biographical details of the Leadership Team can
be found on our website.

The Leadership Team operates a number of
supporting committees which provide oversight
on key business activities and risks, including the:

– Disclosure Committee
– Ethics and Compliance Committee
– Group Investment Committee
– Group Risk Committee
– Sustainability Operating Committee

Sustainability Report / Directors' ReportContents110

Board activities in 2021

The following pages give an insight into how we, as a Board, use our meetings as a mechanism for discharging
our responsibilities, including how the consideration of stakeholders is embedded into our workings as a Board
and the range of matters we considered and discussed throughout the year.

Each Board meeting follows a carefully structured agenda agreed in advance by the Chairman, CEO and Group
Company Secretary; this ensures that proper oversight of key areas of responsibility are scheduled regularly
and that adequate time is available for the Board to fully consider strategic matters. Every December, the
Board reviews, discusses and agrees the Group’s strategic plan and objectives. During the year, the Board then
monitors and reviews the performance of the business to ensure that the strategic objectives are being met.
The topics in the following table are presented to the Board for review against the 5x5 strategy to ensure that
the goals underlying our strategy for growth have been met during the year. The 5x5 strategy and goals are
outlined in the Strategic Report on pages 14 to 15 and the outcome of some of the decisions made by the
Board during the year in line with the 5x5 strategy are outlined on page 56.

In addition to regular items, we receive presentations from the Leadership Team and global leaders across the
business on their areas of responsibility and expertise. External speakers also present periodically to provide
an overview on global or regional matters. One meeting a year is conducted overseas, however, due to the
pandemic, this year it was again held virtually. At the start of the pandemic, we moved rapidly to virtual
meetings. The technology has worked extremely well and has enabled the Board and its Committees to fully
participate in all discussions and discharge our responsibilities seamlessly.

2021 Board Strategic Agenda

Group M&A strategy

Consideration and approval of acquisitions

Build Back Ever Better

Global business line reviews:
Electrical/Connected World/Softlines/
Hardlines

Group strategy update and strategic plan

Group Portfolio update

Group IT strategy

Topics

Link to strategic priorities

Link to stakeholders

Strategy
Link to risks: 01 02 03 04 05 06 07 08 09 10 11 12 13

Strategic priorities

Differentiated brand proposition

Topics for the 2021 strategy session

Superior customer service

2022 annual budget and five-year plan

Effective sales strategy

Growth and margin-accretive portfolio

Operational excellence

Key to stakeholder groups

Customers
Communities
Investors
People
Suppliers

i.
ii.
iii.
iv.
v.
vi. Other

Financial management and performance
Link to risks: 01 04 06 07 08 09 10 11 12 13

CEO report

Finance report

Investor Relations report

Financial forecasts

Approval of full-year results, Annual
Report & Accounts, half-year results and
the AGM circular and proxy

Dividends

i. ii. iii. iv. v. vi.

i. ii. iii. iv.

i. ii. iii. iv. v. vi.

i. ii. iii. iv. v.

i. ii. iii. iv. v. vi.

i. iv. v.

i. ii. iii. iv. v. vi.

i. ii. iii. iv. v.

i. ii. iii. iv. v. vi.

i. ii. iii. iv. v.

iii.

Principal risks

01 Reputation

02 Customer service

03 People retention

04 Macro-economic

05 Health, safety and wellbeing

06 Industry and competitive landscape

07 IT systems and data security

08 Covid-19

09 Contracting

10 Regulatory and political landscape

11 Business ethics

12 Sustainability

13 Financial risk

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents

Board activities in 2021
Continued

111

Topics

Link to strategic priorities

Link to stakeholders

Topics

Link to strategic priorities

Link to stakeholders

Compliance and risk
Link to risks: 01 02 03 04 05 06 07 08 09 10 11 12 13

Quarterly Integrated Risk, Control,
Compliance and Quality report

Modern Slavery Statement

Customers
Link to risks: 01 02 03 04 05 06 07 08 09 10 11 12

Group Innovation Strategy

Marketing Strategy

Other
Link to risks: 01 02 03 04 05 06 07 08 09 10 11 12 13

Europe and Central Asia
overseas Board meeting

i. ii. iii. iv. v. vi.

i. iii.

i. ii. iii. iv. v. vi.

People and culture strategy
Link to risks: 01 02 03 11 12 13

Group Talent Planning

Group People Strategy

Executive Committee succession planning

Sustainability
Link to risks: 01 03 04 05 06 08 10 12

Sustainability moments

TCFD risks opportunities and impact

Corporate governance
Link to risks: 01 02 03 04 05 06 07 08 09 10 11 12 13

Reports of the activities of the Audit,
Nomination and Remuneration
Committees

AGM preparation (Chairman’s script,
Questions & Answers, proxy votes and
voting reports)

Chairman’s corporate governance
roadshow feedback

Re-election of Directors at the 2021 AGM

Directors’ conflicts of interest

2021 External Board, Director and
Committee evaluation process

2020 Internal Board effectiveness review

Purchase of shares by ESOT

Intertek Group plc | Annual Report & Accounts 2021

iv.

i. ii. iii. iv. v. vi.

iii. iv. vi.

iii.

iii. iv.

i. ii. iii. iv. v. vi.

iv.

Sustainability Report / Directors' ReportContents

Board activities in 2021
Continued

Compliance, whistleblowing and fraud
Intertek is committed to maintaining a culture where issues of integrity
and professional ethics can be raised and discussed, which is aligned to
our values to always do the right thing with precision, pace and passion.
This also forms part of our 5x5 strategy for growth. The Group’s key
ethics and integrity policies are set out in the Code of Ethics and a
detailed description of the topics covered by the Code of Ethics, its
operation during the year and the outcomes of these policies are
contained in page 168. All third parties working are required, as a
condition of engagement, to document their acceptance and
understanding of the Intertek Code of Ethics, and Intertek Anti-Bribery
Policy before commencing work on our behalf. It is the responsibility of
each third party acting on Intertek’s behalf to understand and apply
these two Intertek Policies in their part of the business.

Whistleblowing is the responsibility of the Board and the Group has a
whistleblowing process, which includes a global hotline system enabling
all employees, contractors, suppliers and others to confidentially report
suspected misconduct or breaches of the Code of Ethics. Hotline
posters are required to be displayed in a clearly visible position in each
Intertek site and is a core mandatory control. This is supported by
dedicated Compliance Officers across the Group’s markets who
undertake the investigation of any issues arising from reports to the
hotline system or from other sources, such as routine compliance
questions. The Board receives quarterly reporting on whistleblowing
and integrity issues. The Group Compliance function is independent of
the Group’s operational business and reports directly to the Group
General Counsel.

112

Hotline poster in English

INTERTEK
HOTLINE

NEED TO
SPEAK OUT?

Your voice can make a difference

Do you have a concern about:

• Data falsiﬁcation?
• Fraud or theft?
• Conﬂicts of interest?
• Violation of company policies?
• Gifts, bribes, or kickbacks?

The Intertek Hotline is a simple and effective way for
you to express concerns regarding any potentially
unethical or illegal situations. Independently owned
and operated by Convercent, your concerns will be kept
secure and treated conﬁdentially.

Anyone who, in good faith, seeks advice, raises a
concern, or reports misconduct, is doing the right thing.
Whatever your concern may be, silence will only make a
bad situation worse.

7
1
0
2
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a
M

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p
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s
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P

Visit: intertekhotline.com
24 hours / 7 days a week

INTERTEK
HOTLINE

Hotline poster in Arabic

يف بغرت له
؟ام رمأ نع حاصفلإا
ًاقرف لكشي دق كتوص

؟تلاومع وأ ،ىشر وأ ،اياده •
؟لمعلا ناكم ةملاس •
؟لمعلا ناكم يف يرصنع زييمت وأ شرحت •

؟رخآ كاهتنا وأ ضراعت يأ •

:نأشب كوكش كدوارت له

؟تانايب ريوزت •
؟ةقرس وأ لايتحا •
؟حلاصم ضراعت •
؟ةكرشلا تاسايس كاهتنا •

نع ريبعتلل كيدي نيب ةلاعفو ةطيسب ةقيرط نخاسلا كترتنإ طخ دعي
وأ ةيقلاخأ ريغ نوكت نأ لمتحي فقاوم يأ نأشب كيدل كوكش ةيأ
هريدتو Convercent ةكرش هكلتمت نخاسلا طخلاف.ةينوناق ريغ
ةيرسب لماعُتسو ناملأاب ككوكش ىظحت فوس اذل ،لقتسم لكشب
.ردصملا ةلوهجم ىواكش ميدقت نكمي امك ،ةمات

كوكش نع غلابلإا وأ ةحيصن بلطل ةين نسحب ىعسي صخش يأ
،كدوارت يتلا كوكشلا تناك اًيأ .باوصلا لعفي هنإف ،كولس ءوس وأ
.اًءوس ةئيسلا فقاوملا ةدايز ىلإ لاإ تمصلا يدؤي نلف

intertekhotline.com :انعقوم اوروز
عوبسلأا يف مايأ 7 /ةعاس 24

INTERTEK
HOTLINE

您需要
舉報嗎？

您的舉報可以讓一切變得不同

您的問題是關於:

• 篡改資料?
• 欺詐或盜竊?
• 利益衝突?
• 違反公司政策?

• 收受禮品、賄賂或回扣?
• 工作場所的安全?
• 工作場所的騷擾或歧視?
• 任何其他抵觸或違規?

「Intertek 熱線」為簡單而有效的舉報途徑，讓您表達任

何潛在不道德或違法情況。「Intertek 熱線」是由獨立營
運服務供應商 Convercent 管理，您的舉報將會得到安全
保證，並會以保密方式處理，而且可以採用匿名方式進
行投訴。

任何人出於善意、尋求建議、提出問題或舉報不當行
為，均為正確的做法。無論您擔憂的是甚麼，沉默只會
讓情況變得更糟。

7
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i
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t
u
O
-

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s
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intertekhotline.com
每週7天，每天24小時

Hotline poster in Traditional
Chinese

Code of Ethics booklet in Spanish

Internal control and risk management

The Board is ultimately responsible for monitoring the Group’s system
of internal control and risk management and ensuring its effectiveness.
Monitoring and reviewing the effectiveness of the Group’s internal and
risk management controls is discharged by the Audit Committee and
they report to the Board on its evaluation of the systems in place. The
Board confirms that it has completed a robust assessment of the
Group’s emerging and principal risks and that the Company has fully
complied with the Financial Reporting Council’s (‘FRC’) Guidance on Risk
Management, Internal Control and Related Financial and Business
Reporting. Further information on the framework, its effectiveness and
on our financial risk management systems can be found in the Audit
Committee report on page 134.

Risk management and internal controls are embedded in the running of
each division, business line, country and support function and oversight
is provided by divisional, regional and functional risk committees. Each
risk committee in turn reports to the Group Risk Committee (‘GRC’). The
Group identifies and tracks its risk environment using a risk register
process whereby the risk committees produce a register of emerging
risks in their area of responsibility which are then consolidated at Group
level. The GRC uses the Group Risk Footprint for the year under review,
with associated mitigation action plans as its baseline, to then add new
emerging risks and/or plans, facilitated by the GRC’s quarterly risk
review process. The Board agreed the incorporation of three new risks
for 2022 being Contracting, Macro-economic and Sustainability and
noted the recalibration of existing risks as outlined on pages 44 to 49.
At each Board meeting during 2021, the Group General Counsel
presented an integrated risk, control, compliance and quality report
including a review of:

–

the Group’s emerging risks, the status of the quarterly emerging risk
mitigation action plans and the new quarterly emerging risk
mitigation plans;
the specific systemic risks including quarterly hotline and
whistleblowing reports, key claims and unlimited liability contracts;
and
the Group’s systemic risk environment, the status of the quarterly
systemic risk mitigation action plans and the new quarterly systemic
risk mitigation plans.

Further information on how Intertek has implemented an end-to-end
integrated approach to risk, control and compliance is outlined on pages
167 to 169.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents

113

Intertek is committed to tackling and minimising the effects of climate
change; in 2017 we set ourselves the target of reducing GHG emissions
per employee by 5% by 2023. Furthermore, we have signed up to the
Science-Based Targets initiative which means that we are formally
committed to setting independently verified science-based GHG
emission reduction targets. Our aim is for our science-based targets to
be aligned to limiting global temperature rise to below 1.5°C and
reaching net zero emissions no later than 2050.

In November 2021, Intertek joined other leading global companies and
governments as part of the LEAF Coalition, a new public-private
initiative designed to accelerate climate action by providing results-
based finance to countries committed to protecting their tropical
forests, which successfully mobilised $1billion in funding in the run up
to COP26. Intertek is proud to join the LEAF Coalition and contribute to
accelerating the pace and scale of global forest protection, in a period
when climate change concerns are ever prevalent.

Intertek has also joined the UN Race to Zero campaign – a global effort
from the United Nations Framework Convention on Climate Change
that calls for a resilient, zero-carbon recovery from the Covid-19
pandemic and is aligned with our own ambitious agenda to Build Back
Ever Better.

Governance and Sustainability

Sustainability is central to everything we do at Intertek and as a
purpose-led Company, it is anchored in our purpose, vision and values
and the Board, as part of their overall stewardship of the Company,
oversees the Group’s sustainability and corporate responsibility,
together with any material environmental and social issues. The Board
recognises the importance of sustainability to all our stakeholders,
together with the increasing risks associated with climate change and
ensures that at every Board and Committee meeting, the first item on
every agenda is a 'Sustainability Moment' to demonstrate its
importance to the future long-term sustainable success of Intertek.
The Board has delegated responsibility to two newly formed
workstreams: the Net Zero Steering Committee and the Beyond Net
Zero Steering Committee. Further information on the composition of
these steering committee's, together with their remit, is outlined on
page 99.

At Intertek, we believe that we are Born to Make the World Ever Better.
For more than 100 years, sustainability services have been core to our
global business. As a provider of Sustainability Assurance solutions, we
continue to innovate and launch products to support the sustainability
efforts of our customers, suppliers, people and investors. In April 2021,
we launched our new Intertek CarbonZero certification programme, an
independent and traceable carbon neutral certification programme for
products and services, which complements the Intertek CarbonClear
programme which was launched in July 2020. Intertek CarbonZero
certifies the achievement of carbon neutrality by combining emissions
intensity certifications such as CarbonClear, together with certification
of traceable high-quality carbon capture or reduction investments.
Intertek CarbonZero certification enables companies worldwide to
confidently market qualifying carbon neutral products and services as
Intertek CarbonZero Verified, demonstrating tangible and auditable
progress on the path to carbon neutrality. We have since issued the first
Intertek CarbonZero Verified certificate; the world’s first independent
carbon neutral certification for a crude oil trade.

Our other beyond net zero sustainability targets continue to be
embedded within the Group and we report progress on these on
page 28.

As a multinational company, we recognise that, although our own
operations may not be as energy intensive or resource depleting as
other industries, we are still exposed to various types and degrees of
risks associated with climate change. We therefore acknowledge that
it is important for us to lead the effort globally to mitigate the adverse
effects of climate change by both reducing our own emissions, as well
as helping those across our value chain. More detailed information on
our goals to address climate-related issues, and our strategy for
achieving these goals, can be found on pages 86 to 87.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents114

It’s inspiring to see how the BBEB
platform is gaining popularity among
Intertek colleagues. Every post leaves
a mark of its contributor and shows
great initiatives that everyone
can do to make the world ever
better, together.”
Iker Albestain
Marketing & Communications Manager, Intertek Spain

Workforce engagement

In line with the Code, this section outlines our engagement with our
employees. After extensive discussions when the Code was introduced,
we decided not to choose one of the methods suggested in provision 5
of the Code due to the global nature and size of the business, together
with the complexity and diverse make-up of the various sectors and
regions in which we operate. Instead, we utilise a multi-faceted
approach to workforce engagement to make certain that what is in
place ensures that we, as a Board, receive 360˚ multi-source feedback
to assist us in evaluating the different views and perspectives from our
employees across the Group. We keep our engagement mechanisms
under review and continue to believe that this methodology remains
effective as it enables us, the Board, to fully understand the views of
the workforce when taking such considerations into account as part of
our decision-making process. This is vital as our people are core to our
business and make it happen 24/7.

The way in which our people combine passion and innovation with
customer commitment to create a single unbeatable asset sets us apart
and is a vital element of our entrepreneurial, customer-centric culture.
The variable remuneration structure and policy for the Executive
Directors cascades down to the wider workforce and is communicated
throughout the Group, ensuring engagement across Intertek to ensure
alignment with our purpose, drive the right behaviours and to deliver
the 5x5 strategy. We are focused on ensuring that our strategy and
culture give our people the right platform to not only grow and develop
their careers, but to support our purpose in making the world a better
place by bringing quality, safety and sustainability to life for an ever
better world.

We have utilised technology to ensure that throughout the uncertain
landscape that the pandemic presented, we remained ever connected
with our people, globally. Microsoft Teams has been instrumental in
providing instant communication between all business lines and
functions; in particular it has enabled the Board to virtually meet and
visit far more employees and sites than previously possible.

Stakeholder relations

For more than 130 years, Intertek has understood its role in society as
companies around the world have depended on us to help ensure the
quality and safety of their products, processes and systems. We are
focused on driving long-term sustainable performance and recognise
the importance of considering Intertek’s responsibilities to our
customers, shareholders, and wider stakeholders. We, as a Board, are
clear on our legal duty to act in good faith, to promote the success of
the Group for the benefit of shareholders and have regard to the
interests of our stakeholders and other factors. These include the likely
consequence of any decisions we make in the long term; the interests
of employees; the need to foster the relationships we have with all of
our stakeholders; the impact of our operations on the community and
the environment; the desire to maintain the highest standards of
business conduct and to act fairly between shareholders.

The Directors’ duties under section 172 of the Companies Act 2006
help to underpin the good governance which is at the heart of what we
do. Details of how we met our obligations during 2021, by taking
account of shareholder and wider stakeholder interests in our strategic
planning and decision-making processes, are outlined in the section 172
statement on pages 55 to 61 in the Strategic Report. Today, the
expectations of all stakeholders – employees, customers, consumers,
investors, suppliers, communities and wider society, governments and
regulators – continue to rise. This statement summarises how we have
had regard for the need to foster the Company’s business relationships
with suppliers, customers and others, and the effect of that regard,
including on the principal decisions taken by us during 2021. Details of
the principal decisions we have taken during 2021 are set out on page
56 and the value we create for our stakeholders is outlined on pages 23
to 25 in the Strategic Report.

In 2021, we launched our Build Back Ever Better ('BBEB') platform at
bbeb.com and by making our Company ever better, and by helping our
clients to make their businesses ever better, Intertek is uniquely
positioned to inspire our communities and ultimately the world to Build
Back Ever Better. With BBEB we are building a movement to inspire
everyone within Intertek and beyond – our clients, friends and families,
communities and governments – to make a positive difference to
society.

The next section summarises how we have engaged with employees
during 2021 and how we have had regard to their interests and the
result of that engagement. Our approach to investing in our people to
attract, develop, retain and reward our employees is outlined on pages
73 to 79.

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Sustainability Report / Directors' ReportContents115

How did we engage?
The world needs Intertek more than ever, with the unrivalled
expertise of our people, our focus on delivering risk-based
Total Quality Assurance solutions, and our proven track record
of innovating and anticipating the growing needs of our clients
as the world around them grows more complex.

Our employees continue to go above and beyond their normal
call of duty and below are just a few examples of that:

Intertek’s Connected World launched App Assured, a new online facility
where clients can order a security test of their website or mobile
application with speed, convenience, and confidence. The Covid-19
pandemic has resulted in a surge of online activity – from e-commerce
to video conferencing to remote learning to livestreaming
entertainment, and, of course, social media. According to Statista, the
daily average in-home data usage in the US increased by nearly 40%
from March 2019 to March 2020. Not surprisingly, this has also brought
about an increasing number of cyber-attacks and security risks, making
Intertek’s expertise in cyber security more relevant than ever. App
Assured is a secure, online portal making online security accessible to
clients, existing or new, wherever they are in the world.

Intertek Lintec expanded the global reach of Protek Services to address
pandemic risk management for the maritime industry.

Business Assurance and Food Services issued a podcast aligned with
this year’s Earth Day theme, 'Save The Bees' with a discussion about
honey crystallisation, featuring Intertek experts.

Intertek Chemicals & Pharmaceuticals ensuring the microbiological
quality and safety of cosmetics by establishing challenge testing to
directly support our customers' need to launch safe, high quality and
innovative cosmetics products now and for future innovations.

Intertek Maison, Intertek’s Centre of Excellence dedicated to the luxury
and premium industries, announced the launch of Maison Sessioni, a
webinar series exploring the fashion world’s most pressing questions.
The webinar discussed ‘How to choose sustainable materials’ in fashion
and the fashion value chain – a key concern during the creative process
for designers and materials research, in compliance for product
managers considering quality and sustainability and, at the end of the
design and manufacturing process, to final consumers.

Intertek’s Softlines business line launched an innovative Mask Label
Program, a voluntary programme for Intertek customers who test their
mask products at one of our PPE Centres of Excellence. The Mask Label
Program will help support our customers by communicating the verified
quality and performance attributes of mask products through an
Intertek Mask Label.

Overleaf, we outline how the Board ensures that it has the right
touch-points across the world for employees, regardless of their
country or site, to engage. This ensures that their views are understood
to provide the necessary feedback and data that the Board can then
incorporate as part of its strategic decision-making process during the
year to determine the impact of such decisions on our employees.

The way our colleagues have come together to embody our purpose to
bring quality, safety and sustainability to life for an ever better world
has been an inspiration to all during the pandemic. Their commitment to
our customers to go above and beyond and deliver superior customer
service has truly demonstrated the strong customer-centric ethos at
the core of Intertek. Our success is based on the energy and enthusiasm
with which our people react to our meaningful purpose.

Our Vision
Our vision is to be the world’s most trusted partner for Quality
Assurance, underpinned by our shared values:

>
>
>
>
>

We are a global family that
values diversity.

We always do the right thing,
with precision, pace and passion.

We trust each other and have
fun winning together.

We own and shape our future.

We create sustainable growth.
For all.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsWorkforce engagement
Workforce engagement
Continued
Continued

Our engagement
with our people

2021

– Our Build Back Ever Better ('BBEB') platform was

116

– We engaged with our management personnel
electronically to amalgamate their knowledge
and experience to help towards the
development of our five-year strategic plan
by inviting them all to answer the following
question: "What is the most important thing
we need to do together to unleash the
potential of the Company and seize the
exciting growth opportunities ahead, as we
Build Back Ever Better?"

– The responses were collated and it enabled
us to enhance the development of our
five-year strategic plan by encapsulating the
knowledge and experience from individuals
fully immersed in the day-to-day operation of
our business lines.

– Our colleagues across the world continued to

send in their short Hero story videos about how
they or their team are bringing our purpose to
life through their work. The videos are available
to view on WhatsIn, our internal
communications system.

– Virtual visits to our laboratories: the October

overseas Board trip to Europe was held virtually
and after a presentation by each local manager
the Board were shown around the following
laboratories:
– Kista (Sweden)
– Rotterdam (Netherlands)
– Yenibosna (Turkey)
– Fürth (Germany)
– Kaufbeuren (Germany)
– Melbourn (UK)
– Geleen (Netherlands)
– Udine (Italy)
– Florence (Italy)
– Davy Avenue (UK)
– Manchester (UK)

– Virtual town halls were conducted

across the world. In total, André Lacroix
completed 35 town hall meetings
covering most of the countries we
operate in, and all the business lines we
have in our portfolio, with a total live
dial-in audience of around 12,500
colleagues. Question and answer
sessions were held to provide two-way
communication and a method of further
engagement.

launched internally in March 2021 and then externally
in December 2021. It has been a huge success and the
platform and all the related activities, including the
global launch webcast from André Lacroix, which was
attended by around 15,000 colleagues, have been
warmly welcomed all over the world. This platform has
also enabled the Board to directly see what issues have
been highlighted by our colleagues and the issues that
are of importance to them.

– The BBEB '10X Way!' 3.0 event which followed a

global launch webcast, was an amazing success with
six fully interactive workshops – each 90 minutes –
being run by employees live across the world in 64
countries with over 650 participants over three days.
They provided an incredible forum for ideas and
discussions with colleagues across Intertek.

Intertek Group plc

| Annual Report & Accounts 2021

– Virtual meetings with colleagues within the
business during 2021. The Chairman and
Non-Executive Directors have virtually met
20 leaders across the Group and had
presentations on their areas of expertise at
Board meetings throughout the year. The
Board was particularly interested to hear
feedback from our employees across the
different locations.

Sustainability Report / Directors' ReportContents>

–

In 2021, two of our NEDs stepped down from the
Board which saw the appointment of Tamara Ingram in
December 2020 and Lynda Clarizio in March 2021, in
their place. As part of their induction programme, both
of the newly appointed NEDs virtually visited seven
countries with presentations and tours by 26
managers where they were introduced to many other
colleagues during the tours. Their engagement with
the local workforce aided their induction and allowed
them to ask questions and understand any issues to
then be encapsulated and addressed in Board
discussions. The feedback was provided to the Board
at the July Board meeting.

Workforce engagement
Continued

117

– Updates on the status of the pandemic across
the world and information on our colleagues’
health and wellbeing using a ‘5-category’
system, with ‘net’ data to reflect the number of
people in each category, excluding those who
have now recovered/returned to work.

– The Non-Executive Directors undertook 28

virtual visits to our laboratories engaging with
our employees across the world.

–

In May 2021, we gave our UK colleagues the
opportunity to participate in a 'Learning at
Work’ week, providing them with the
opportunity to immerse themselves in lots of
opportunities to contribute to, as well as learn,
from their peers. One of the events was a
webinar held via Microsoft Teams which was
designed with the aim to help participants
define and achieve their personal growth plans,
as well as give them the opportunity to ask
questions about careers and their development
within the Group via a Q&A session with the UK
HR Director at the end of the webinar.

Intertek Group plc

| Annual Report & Accounts 2021

–

Intertek UK committed to Mental Health
Awareness Week allowing our UK colleagues to
dedicate time each day to focus on their
wellbeing. To support this, daily content was
made available in the form of videos and
webinars on wellness topics, hints and tips to
help be Kind to Your Mind, as well as resources
to allow the continuation of their wellbeing
journey.

Sustainability Report / Directors' ReportContentsWhat did we learn were the issues for
employees during 2021?
The engagement with our colleagues highlighted four main areas of
concern in 2021 as the pandemic continued:

" Will I continue to be safe at work?"

" What support is there to help
with my wellbeing?"

" Will the pandemic affect
my job security?"

" How do I know what is
happening in our business?"

118

In action

Rotterdam,
The Netherlands
Tour of the Rotterdam
laboratory by Chris Peirce,
Managing Director, showing the
various types of testing
undertaken at the laboratory.

Udine, Italy
Tour of the Electrical laboratory
by Arianna Fogar Regional
Manager Southern Europe
and France.

Fürth, Germany
Tour of the Hardlines, Softlines
and Business Assurance
laboratory by Holger Breins,
General Manager Hardlines and
Softlines DACH, and Jeniffer
Calderon Giraldo, Lab Manager,
demonstrating some of the
analytical testing undertaken.

Melbourn, United Kingdom
Tour of the Chemicals &
Pharmaceuticals laboratory by
Derek Solomon, Site Director.

Workforce engagement
Continued

Our Heroes
In 2020, we introduced the Intertek Hero videos to build a sense of
solidarity among our colleagues, recognise our people and to give real
meaning to our Purpose: ‘Bringing quality, safety and sustainability to
life’. These inspiring videos have enabled our people around the world to
stay connected, feel united and recognise each other. During 2020, we
published 100 videos from over 30 countries. This continued into 2021
with a couple of examples outlined below:

Intertek Cambodia and China
Intertek’s Cambodia and China Hardlines and Inspection teams
demonstrated 10X leadership to overcome challenges presented by the
Covid-19 pandemic to provide unparalleled customer service to support
one of our largest retail customers.

Intertek UK
One of our customers was made aware of a product quality issue and
urgently needed assistance. The Caleb Brett team at our Immingham
site responded and truly demonstrated their Inspirational Energy! With
almost zero notice, they collected samples and coordinated analysis of
each sample, with our team of chemist inspectors and lab technicians all
being involved, working 24/7 to complete the analysis to ensure minimal
disruption for our customer.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents119

How to wear a face mask
instructions

COMMENT MAINTENIR LA
DISTANCIATION SOCIALE?

Évitez les
poignées de
main ou les
accolades

1 mètre

Respectez la
distance
recommandée
(1 mètre)

Évitez les
regroupements

Gardez vos distances
avec les autres
personnes dans les
espaces communs
(toilettes, espace de
restauration, salles
de réunion, etc.)

Organisez des
réunions
virtuelles même si
vous êtes sur le
même site

Lavez-vous les
mains correctement

Portez un masque
sur l’ensemble des
sites, dans les espaces
communs et partagés
et bureaux individuels
et collectifs

Social distancing guide in
Portuguese

Handwashing instructions in
Chinese

(cid:25)(cid:19)(cid:8)(cid:3)

Workforce engagement
Continued

What did we do?
Safety at work
To ensure the health and safety of all of our employees, protocols and
measures were reviewed and updated to ensure the highest standards
of control, hygiene and prevention were in place pre, during and
post-lockdowns throughout the year across the world. Scientists and
researchers continue to improve their understanding of this novel virus
and we are reviewing studies as they are published, in order to evaluate
and update our HSE policy against the latest intelligence and to try to
anticipate what the mid- to longer-term impact on working practices
and societies might be. Regular bulletins have been sent to employees
as the requirements have changed in their country of work to continue
to ensure that our employees are safe.

Hygiene control and prevention guidance
Hygiene measures were set out on posters to be displayed at all
Intertek locations.

Employee support for wellbeing
We are conscious that the daily living routines for all continue to be
disrupted causing additional anxiety, loneliness, stress and strain and
some of our employees have been dealing with the loss of loved ones.
The importance of still taking time off was recognised and employees
were encouraged to take their holidays.

Our Intertek global wellbeing programme, Kindness, was introduced to
support the wellbeing of all employees. Kindness is a personal
experience that helps all employees make sure that they do the simple
things that help build their own personal strength and resilience – to
help re-energise, boost wellbeing and unleash our potential. Six spaces
were developed and each of these six spaces of wellbeing are available
to all employees as e-learning modules. The ten-minute modules
introduce the theory and science behind each area of wellbeing,
providing tips and suggestions on how to benefit and improve in that
area, exercises and tools to apply, and information on where to find out
more.

Every year, World Mental Health Day is observed internationally on
10 October. To support our people, initiatives took place across Intertek,
including the following:

In October 2021, Intertek Thailand and iStrong introduced an online
counselling service programme as our first Employee Assistance
Programme to support employees' mental wellbeing. The programme
aims to offer support to employees in balancing the pressures of work
with the needs of home and personal life. Employees can easily access
the services via a website and the counselling services are provided by
professional well-trained counsellors and are strictly confidential.

Intertek Group plc | Annual Report & Accounts 2021

Throughout October, virtual wellbeing sessions were organised in the
MENAP region, covering the following topics:

– Mental health;
– Yoga;
– Cancer awareness; and
– Health and Nutrition sessions.

The sessions included physical and mental activities with professional
instructors to help our colleagues connect with their minds and souls,
enlighten them about the importance of living a healthy lifestyle, and
develop ways to use their power in a positive way.

Intertek South Asia organised a virtual wellbeing session on ‘Mental
Health Matters’. The webinar covered the basics of mental wellbeing,
relaxation exercises and self-help strategies to maintain wellbeing,
warning signs of mental health decline, professional consulting advice,
and ways to support someone going through a mental health crisis. The
session also included time for detailed Q&A and feedback. The
participants found the session relevant, informative, and useful, saying
that they particularly appreciated the 'commonplace examples which
made it interesting', 'detailed explanations', and tips on how to handle
stress.

Through our Kindness programme, we will continue to support our
colleagues’ wellbeing and ensure a safe and healthy work environment
in which they can prosper.

Covid-19
The pandemic has brought much uncertainty into everyone’s lives, but
we believe that society has changed and we are in the ‘new normal’ and
are observing new trends and behaviours and demands for products
and services that didn’t exist prior to the pandemic. Consumers want
more sustainable products, supply chain simplicity, visibility and
traceability of goods, new solutions for hygiene, health and wellbeing,
as well as lower carbon emissions. Employers are being tasked with
developing and providing new tech and virtual remote-working
solutions. The world needs Intertek more than ever, with the unrivalled
expertise of our people, our focus on delivering risk-based Total Quality
Assurance solutions, and our proven track record of innovating and
anticipating the growing needs of our clients as the world around them
grows more complex. We provide mission-critical ATIC solutions to
enable the world’s supply chains to operate fully and safely, given the
increased expectations from all stakeholders to live in a better and
safer society.

Sustainability Report / Directors' ReportContents

120

Intertek Australia welcomed 150 special guests to the new Minerals
Centre of Excellence in Perth for a Build Back Ever Better family day.
Employees were given BBEB shirts and the children were presented
with “I am 100% of the Future” shirts and a gift pack with colouring-in
books and hats.

Their BBEB mural was coloured in by the children.

Intertek Building & Construction York, Pennsylvania organised a BBEB
Family Day at the laboratory where employees and family members
gathered for a fun-filled day creating, sharing, and inspiring change for
good. Attendees were encouraged to donate canned goods to be
provided to the York County Food Bank to help others in need. The
future generation spent the day decorating the lab with BBEB colouring
book pages and enjoyed face paintings, a dunk tank, bounce house,
snow cones, giveaways, lab tours, testing demonstrations and more!
The facility tour included the Materials Testing Lab, Mock-Up/WOLF,
Acoustics Testing Lab, Fire Testing Lab, and Missile Impact & Shocktube
capabilities. All attendees were provided with a pamphlet giveaway that
recognised Intertek’s BBEB initiative and encouraged individuals to join
the conversation on inspiring change and recognising the progress
being made at BBEB.com.

The day was both inspirational and energizing
for each of us that attended because it gave
us all a chance to showcase what we do to
our kids, our families and our friends. It
certainly brought our Purpose to life as it was
quite clear that our children expect us to
make the world a better, safer and more
sustainable place for all.”
Vinu Abraham
VP, Operations, Building & Construction.

Workforce engagement
Continued

Ongoing communication
2021 has been a year full of ups and downs, with the Covid-19
pandemic and other challenges. In spite of these circumstances, our
colleagues have been nothing less than extraordinary. An important
part of engagement is to ensure that there is ongoing communication
throughout the business with our colleagues. Our tool WhatsIn, our
global communication platform, keeps our colleagues updated with the
latest news across the world. André Lacroix, our CEO, also does global
webcasts for the Full Year and Half Year results and sends a message to
everyone in December wishing everyone a Happy Christmas.
In July 2021, a video was featured on WhatsIn as a "Special thank you to
all of you" outlining the fantastic achievements of our colleagues
around the world. We have also encouraged sites to have family days,
when safe to do so, so that their families also know more about Intertek
and what we do as they form part of the larger Intertek family. Here are
some of the family days which have taken place during the year:

Intertek Hong Kong held a Family Day, inviting the friends and families
of over 20 of our colleagues to visit the Intertek Hong Kong Office at Lai
Chi Kok, Kowloon. The day began with a lab tour. Friends and families of
our colleagues visited the Electrical, Softlines and Toys & Hardlines
laboratories where their parents work hard to achieve excellence.
During the tour, they were able to learn more about the workplace
where their loved ones work magic. After the tour, our co-workers and
their families joined the fun booth games introducing BBEB.com,
biodegradable textiles, e-toys, electrical safety and healthy food
choices. Our colleagues worked together to solve puzzles for prizes,
there was a prize wheel, photo booth, arts and crafts and so much more.

This is the first time I’ve experienced the
place my husband works in. The opportunity
to know more about my husband’s company,
with the noble mission of Building Back Ever
Better, really made me proud of Gary.”
Minami, wife of Gary Yu, Electrical Team
said the Family Day was an experience she will long cherish.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsInvestor and shareholder engagement

121

January
• Bank of America, SMID Virtual

Cap Conference

March
• Full year results 2020
• London, Edinburgh, Montreal, Chicago, Toronto, New York – Annual

• ODDO BHF Forum 2021

Results Roadshows

• Berenberg Virtual UK Corporate Conference 2021
•
• Bank of America Securities ESG Consumer & Retail Conference 2021

Jefferies Virtual Business Services Summit Conference

April
• Kepler Cheuvreux Madrid Virtual Roadshow
• Bank of America Securities Milan Investors – Virtual

May
• Trading Statement
• AGM
•

Jefferies Structural Winners Virtual Conference

The Board is committed to
maintaining an active and open
dialogue with investors and sees
this as an important part of the
governance process. At each
meeting, the Board receives a report
from the investor relations
department and analysts’ reports
are circulated to the Directors when
available. Feedback from meetings
held between executive
management, or the investor
relations department, and
institutional shareholders, is also
communicated to the Board.

June
•

Jefferies Structural Winners Virtual Conference
(continued from May)

• Numis PCFM Group Conference Call
• Barclays Testing, Inspection & Certification (‘TIC’)

Virtual Conference

• Berenberg US Roadshow – Virtual
• Berenberg Non-Holder Roadshow – Virtual
• UBS Business, Leisure and Transport Virtual

Conference 2021
JPM China Summit

•
• Kepler Cheuvreux 2nd Digital Pan-European ESG

Conference

July and August
• Half-year results 2021
• London, Edinburgh, Toronto, New York, US
Mid-Atlantic, Chicago & Midwest – Interim
Results (Virtual Roadshows)

September
• Berenberg Testing, Inspection & Certification

Conference 2021

• Bernstein 18th Annual Strategic Decisions Conference
• Citi’s Small, Mid-Cap & Growth Conference 2021
• UBS Business, Leisure and Transport Virtual

Conference 2021

October
•
• Stifel Virtual Roadshow Paris/Geneva

Jefferies 2021 UK Industrials Virtual Conference, London

November
• Goldman Sachs: Carbonomics Conference
• Trading Statement
• Frankfurt Virtual Roadshow
• AGM Update Statement (website)

December
• Societe Generale – The Premium Review 2021 Conference
• Credit Suisse 11th Annual European Business Service Conference
• Berenberg European Corporate Conference London
•

Jefferies Business Services Virtual Conference US West Coast

Intertek Group plc | Annual Report & Accounts 2021

Investor relations programme
Aimed at helping existing and potential investors
understand the Group’s business model, strategy,
financial performance and outlook. The programme is
wide-ranging and includes events and roadshows
throughout the year to update investors and sell-side
analysts on the developments of the Group.

Roadshows
Following the full-year and half-year results
announcements, the Executive Directors and Investor
Relations team held meetings with the principal
shareholders. Due to Covid-19, most meetings took
place online.

Board shareholder engagement
The Chair, following any engagement with shareholders,
ensures that the Board as a whole has a clear
understanding of their views. Intertek’s largest
shareholders, representing 60% of the share register,
are invited annually to meet with the Chairman to share
their views and discuss any corporate governance
matters. During April and May 2021, the Chair held five
meetings with shareholders and discussed a range of
topics including corporate governance, culture and the
increasing focus on climate change. The feedback was
presented and discussed with the Board at the May
board meeting. Following the 68.74% vote in favour of
the Remuneration Policy at the 2021 AGM, the
Remuneration Committee consulted with shareholders
on their reasons for voting against the Policy. See page
136 for further information on the engagement with
shareholders.

Resources
A wealth of information is available to investors in our
Annual Report & Accounts, half year announcements
and trading updates and Regulatory News Service
announcements. These materials are available on our
website and are supplemented by videos, webcasts and
presentations.

Conferences
Executive Directors and the Investor Relations team
attend industry conferences throughout the year,
providing the opportunity to meet a large number of
investors. Due to Covid-19, mostly virtual conferences
took place.

Feedback Forum
The Executive Directors and Investor Relations team
receive regular feedback from sell-side analysts and
investors during the year both directly and through the
Group’s corporate advisers. The Group Company
Secretary also receives feedback on governance
matters directly from investors and shareholder bodies.

Annual General Meeting (‘AGM’)
The Board welcomes the opportunity to meet with both
private and institutional investors at the AGM.

The 2022 AGM is currently scheduled to be held on
25 May 2022 at 9.00 a.m. at the Marlborough Theatre,
No. 11 Cavendish Square, London, W1G 0AN; however,
we will keep under review any restrictions that may
apply. The AGM provides the opportunity for all
shareholders to ask questions of the full Board on the
matters put to the meeting, including the Annual Report
& Accounts.

All Board members attend the AGM and, in particular, the
Chairs of the Audit, Nomination and Remuneration
Committees are available to answer questions. The Board
welcomes the opportunity to meet with both private and
institutional investors at the AGM. The Company proposes
a resolution on each separate issue and does not combine
resolutions inappropriately. The Notice of the AGM is sent
to shareholders by e-communications or by post and is
also available at intertek.com.

Due to the unprecedented circumstances presented by
the pandemic, and the uncertain local restrictions, the
2021 AGM was held with the necessary quorum present
at the Group’s Head Office and shareholders were able to
safely participate and ask any questions at the AGM
virtually using Microsoft Teams. The results of voting at
the AGM were published on the Company’s website.

Sustainability Report / Directors' ReportContentsDivision of Responsibilities

122

There is a clear division of responsibilities between the running of the Board (a key responsibility of the Chairman) and the day-to-day running of the Company’s business (the responsibility of the CEO).
These responsibilities have been formalised in writing.

The letters of appointment of the Non-Executive Directors, as well as the service agreements for the Executive Directors, are available for inspection at the Company’s registered office and at the
Annual General Meeting (‘AGM’).

Roles and responsibilities

Chairman – Andrew Martin
Key responsibilities

Chief Executive Officer – André Lacroix
Key responsibilities

Independent Non-Executive Directors
Key responsibilities

– Leading and governing the Board to ensure its overall

– Proposing and agreeing the Group Strategy with the Board.

– To constructively debate and add value with respect to the

effectiveness in directing the Company.

– Assessing and monitoring the culture within the Company and
ensuring that it aligns to the Company’s purpose and values.

– Ensuring that Directors receive accurate, timely and clear

information to enable them to discharge their duties to promote
the long-term sustainable success of the Company.

– Ensuring effective two-way communication between the Board,

shareholders and key stakeholders.

– Communicating to all Directors the views, issues and concerns

of major shareholders.

– Promoting a culture of openness and debate and facilitating

constructive Board relations and the effective contribution of
the Non-Executive Directors.

– Demonstrate objective judgement.

Senior Independent Non-Executive Director –
Graham Allan
Key responsibilities

– Providing a sounding board for the Chairman.

– Being available as an intermediary between the other Directors

and shareholders if necessary.

– Leading the annual performance review of the Chairman.

– Being available to meet with shareholders and other

stakeholders should they have any concerns that have not been
resolved through the normal channels.

Intertek Group plc | Annual Report & Accounts 2021

– Leading the day-to-day operations of the Group in line with the

agreed strategy and commercial objectives.

– Promoting and conducting the affairs of the Company with the

highest standards of ethics, integrity, sustainability and
corporate governance.

– Managing the Leadership Team.

proposals on strategy and risk management and offer specialist
advice.

– Scrutinise and hold to account the performance of management
and individual Executive Directors against agreed performance
objectives.

– Reviewing the appointment and removal of Executive Directors.

– Allocating sufficient time to the Company to discharge

their responsibilities.

Group Company Secretary – Fiona Evans
Key responsibilities

Chief Financial Officer – Jonathan Timmis
Key responsibilities

– Supporting the Chairman in delivering Board and governance

– Managing the financial delivery and performance of the Group.

procedures.

– Analysing the Company’s financial strengths and weaknesses

– Advising the Board on all governance matters.

and proposing corrective actions.

– Ensuring good information flows within the Board and its

– Managing the finance, accounting and IT departments.

Committees.

– Ensuring that the Company’s financial reports are accurate and

– Facilitating induction and assisting with professional

completed in a timely manner.

development as required.

– Developing and overseeing the systems that ensure that the
Company complies with all applicable codes, in addition to its
legal and statutory requirements.

– Facilitating access to independent professional advice at the

Group’s expense.

– Overseeing the capital structure of the Company, and

determining the best mix of debt, equity and internal financing.

Sustainability Report / Directors' ReportContentsDivision of Responsibilities
Continued

Independence
On appointment as Chairman of the Company on 1 January 2021, the
Board assessed and agreed that Andrew Martin was independent in
accordance with Provisions 9 and 10 of the Code. The Board continues
to review the independence of the Non-Executive Directors, other than
the Chairman, and considers that all of them continue to demonstrate
independence in both character and judgement, are free from any
conflicting interests and have independent oversight of governance
and compliance. The Chairman is committed to ensuring the Board
comprises a majority of independent Non-Executive Directors, who
objectively challenge management and monitor performance for the
benefit of all stakeholders. The Board determined that Lynda Clarizio
and Tamara Ingram were independent in accordance with the Code upon
their appointment to the Board.

In accordance with provision 11 of the Code, at least half of the Board,
excluding the Chair, are Non-Executive Directors whom the Board
considers to be independent.

The Board recognises the recommended term within the Code for
Non-Executive Directors and the Chairman to ensure the progressive
refreshing of the Board meets the evolving needs of the Company. More
information on the succession plans of the Board, to ensure the
appropriate combination of executive and independent Non-Executive
Directors on the Board, is outlined in the Nomination Committee report
on page 127.

Time commitment of Directors
The Board recognises the importance of all Non-Executive Directors
having the necessary time to commit to the business of Intertek and,
upon appointment, their letters of appointment stipulate the expected
time commitment whilst acknowledging that this may vary depending
upon the demands of the business and other events. All Directors made
themselves freely available as required, even at short notice, in order to
meet the needs of the business.

Procedures have been put in place and the Directors seek approval from
the Board before accepting any additional external appointments. When
assessing additional directorships, the Board considers the number and
nature of external directorships already held by the individual and the
expected time commitment for those roles. During 2021, the Board
gave approval to Louise Makin and Lynda Clarizio for new appointments.
Approval was granted as it was determined that the additional time
commitment, taking into account their current overall responsibilities,

Intertek Group plc | Annual Report & Accounts 2021

123

would not have an effect on their commitment to Intertek as a
Non-Executive Director. Prior to joining the Board, Tamara Ingram and
Lynda Clarizio disclosed their current commitments and the time
commitment involved. The Board was satisfied that Tamara and Lynda
could provide sufficient time to discharge their duties as Directors of
Intertek (see their biographies on page 103). As demonstrated, in the
Board meeting attendance table, all Directors who were eligible to
attend scheduled meetings attended every such meeting and every
unscheduled meeting of which there were two. Tamara Ingram and
Lynda Clarizio also spent additional time during 2021 for their induction
into the business and more information on this is on page 124 in the
Induction, Training, and Development section.

In addition to the scheduled Board meetings, there was frequent ad hoc
contact between Directors to discuss the Group’s affairs and the
development of its business. When required, the Board also met at short
notice on a quorate basis. During 2021, two additional Board meetings
were held to discuss acquisitions and all Directors were present at these
meetings.

Two meetings with the Chairman and the Non-Executive Directors,
without the Executive Directors or management being present, are
scheduled every year. The Chairman also maintains regular contact with
the Senior Independent Non-Executive Director.

Where Directors have concerns about the operation of the Board or the
management of the Company that cannot be resolved, the minutes will
reflect this. No such concerns were raised during the year.

Directors’ conflicts of interest
The Board operates a policy to identify, authorise and manage any
conflicts of interest to assist Directors in complying with their duty to
avoid actual or potential conflicts. The Directors are advised of the
process upon appointment and receive an annual refresher. Whenever
any Director considers that he or she is, or may be, interested in any
contract or arrangement to which the Company is, or may be, a party,
the Director gives due notice to the Board in accordance with the
Companies Act 2006 and the Articles.

The Conflicts of Interest Register is maintained by the Group Company
Secretary and the Board undertakes an annual review of each Director’s
interests, if any, including outside the Company. Any conflicts of
interests are reviewed when a new Director is appointed, or if and when
a new potential conflict arises. A formal process is also in place for
managing such conflicts to ensure no conflicted Director is involved in
any decision related to their conflict and, during the year, this process
operated effectively.

Board members and attendance
Board meeting attendance during the year to
31 December 2021

Scheduled
meetings
eligible to
attend

Meetings
attended

Board members

Andrew Martin (appointed Chairman
1 January 2021)

André Lacroix Chief Executive Officer

Jonathan Timmis (appointed 1 April 2021)
Chief Financial Officer

Ross McCluskey (resigned 1 April 2021)
Chief Financial Officer

Graham Allan
Senior Independent Non-Executive Director

Gurnek Bains Non-Executive Director

Lynda Clarizio (appointed 1 March 2021)
Non-Executive Director

Tamara Ingram Non-Executive Director

Dame Louise Makin (resigned 30 June 2021)
Non-Executive Director

Gill Rider Non-Executive Director

Jean-Michel Valette Non-Executive Director

Lena Wilson (resigned 31 January 2021)
Non-Executive Director

100%

Attendance from all Board members

Sustainability Report / Directors' ReportContentsComposition, Succession and Evaluation

Board appointments
The Board is committed to ensuring that it has the right balance of
skills, experience, knowledge and diversity, taking into account the
targets of the FTSE Women Leaders and Parker review, to lead Intertek
in these complex and fast-moving times and deliver our strategy and
TQA customer promise to be a force for good and make the world a
better and safer place. More information on the appointment process to
ensure that we have the right individuals who can inspire and provide
passionate leadership to deliver our 5x5 strategy is outlined in the
Nomination Committee report on pages 126 to 129.

Board skills, experience and knowledge
Induction, training and development
There is a full, formal and extensive induction programme which is
tailored to ensure that Directors joining the Board are provided with the
knowledge and materials to add value from an early stage. This is
managed by the Chairman and the Group Company Secretary. During
the year, Tamara Ingram, Lynda Clarizio and Jonathan Timmis received a
wealth of background information on the Company and details of Board
procedures, Directors’ responsibilities, various governance-related
issues and strategy and priorities within the Group. The induction also
includes a series of meetings with other members of the Board, senior
members of management and external advisers and visits to our
laboratories and sites. Due to the ongoing pandemic and restrictions on
travel, a comprehensive programme of virtual visits to our operations
was put in place. This enabled our new Directors to meet senior
management across the Group and our colleagues working in the labs in
China, Italy, Dubai, Germany, Turkey, the US and the UK over a period of
seven days. The feedback from the new Directors was that this was
one of the most professional and comprehensive induction programmes
that they had received which gave a great insight into the business,
operations and people. This process will continue to be kept under
review, taking into account Directors’ feedback.

Ongoing and continual development is crucial to our Directors remaining
highly engaged, effective and well informed. All Directors are kept up to
date with information about Intertek’s business and there is an ongoing
programme of information dissemination throughout the year. It is
important that the Directors have an appreciation of the business, both
in the UK and overseas. During the year, there were presentations from
the Leadership Team to the Board and meetings have been held on
regional strategy to increase the understanding of operations,
opportunities and risks. Intertek is now required to ‘comply or explain’
against the Task Force on Climate-related Financial Disclosures ('TCFD')
and these disclosures are outlined in this Annual Report & Accounts.
PwC held workshops with management and the Audit Committee in
June and July 2021 to explore these requirements in further detail.

Intertek Group plc | Annual Report & Accounts 2021

124

The Company also encourages Directors to attend briefings and
seminars offered by professional and commercial bodies in order to keep
abreast of current legal and regulatory requirements, especially within
their specialist fields such as audit or remuneration.

Board, Committee and Directors’ evaluation

2021
Externally
facilitated
evaluation

2023
Internal
evaluation

2022
Internal
evaluation

The effectiveness of the Board, and its Committees, is rigorously
reviewed annually and an independent externally facilitated Board
review is conducted every three years. The internal questionnaires are
reviewed and updated annually to ensure that the right questions are
asked and take into account changes in guidance and regulations.

The 2020 Board internal evaluation process was led by Sir David Reid,
with the support of the Group Company Secretary, and entailed:

the completion of detailed questionnaires by each Board member;

–
– discussions on the outcomes and recommendations with the

–

Chairman and each Board member; and
following discussion of the results of the evaluation the Board as
a whole, identifying and agreeing areas for improvement – the
strategy and strategic agenda having already been agreed at
the Board.

For each Committee of the Board a similar process was undertaken. The
Committee evaluations looked at ways in which they could improve
their overall effectiveness, their performance and areas of improvement
during the year. The outcome from these evaluations confirmed that
the Committees were performing well and were appropriately
constituted.

Following the 2020 Board evaluation, the findings from the internal
evaluation continued to be positive with strong scores in the six
categories that were evaluated. The findings from the evaluation
recognised the continuing drive to be ‘ever better’ and living the Board
promise which defines our work and purpose at Intertek. We identified
areas where more discussion time would be helpful especially in the
areas of strategy, customer insights and risk and these areas were
included in the Board agenda for 2021 and the ongoing assessment
and monitoring of culture within Intertek continued to be a focus for
2021. During 2020 and continuing into 2021, as necessitated by the
pandemic, we continued to hold virtual meetings and made the best use
of the extensive tools we have in place to ensure engagement with our
stakeholders, though physical meetings have now been taking place
with the necessary health & safety protocols and only in line with local
restrictions.

As planned, and recommended by the Code, the 2021 external
evaluation process was facilitated by an independent third party, Equity
Culture, under the direction of the Chairman. Equity Culture has no
other connection to the Company and was appointed after a review of
independent advisers in the field of formal Board evaluations.

The externally facilitated Board evaluation process, which considers the
Board composition, diversity and how effectively members work
together to achieve objectives, was led by the Chairman, with the
support of Equity Culture and the Group Company Secretary, and
entailed:

–

the review and agreement of a questionnaire to be used at meetings
with each Board member;

– one-to-one meetings with each Board member and the external

evaluator;

– preparation of a report by the external evaluator;
– discussions on the Board evaluation outcomes and
recommendations with the Chairman and CEO;

– discussion of the results of the evaluation with the Board as a

–

whole; and
the Board identifying and agreeing areas for improvement – the
strategy and strategic agenda having already been agreed at the
Board meeting in December 2021.

Sustainability Report / Directors' ReportContents125

The Board is very experienced, and this collective experience was an
important factor in ensuring that the Board continued to be as effective
throughout the pandemic as it had been before. This enabled the Board
to continue to effectively discharge all of its responsibilities despite
only having online meetings between March 2020 and up to December
2021. The technology employed to hold online meetings is felt to have
worked well and in particular, the online live tours of overseas sites
enabled even more sites to be visited than normal. These tours were
felt to be so valuable that, although they are not a substitute for
in-person visits, they will continue to be used more extensively in
future, enabling more sites to be visited.

The mechanics surrounding the Board and Committee meetings works
extremely well with well-structured agendas. The clarity of the papers
presented enables a complex business to be more easily understood
and the papers are of a very high and professional quality. Due to online
meetings taking place during the pandemic, there has been a little more
emphasis on presentations. As more face-to face meetings now take
place, there will be a return to a more discursive emphasis.

The Board recognised the importance of the work to create the Board
Promise to embody the role and purpose of all Board members in
promoting Intertek’s purpose of bringing Quality, Safety and
Sustainability to life and which informs the Board’s approach to its
duties to all stakeholders. Around the Board table there is great pride
in what Intertek does across the world for various stakeholders and in
the work that our incredible colleagues perform daily to make the world
a safer place with precision, pace and passion.

The ‘People Agenda’, including talent development, retention,
succession and employee engagement figures high on the agenda,
even more so given the importance of the highly qualified employee
base to the ongoing success of Intertek. Succession and talent planning
is a very thorough and thoughtful process with twice-yearly discussions
at the Board.

André continues to bring a real sense of clarity and alignment to
Intertek’s strategy and during the year the Board’s input and involvement
is sought on the areas to be incorporated into the annual strategic review,
with the most recent detailed discussion by the Board held last December.
Against the backdrop of extensive opportunity for the industry, the
discussions included a longer-term horizon, looking forward.

Sustainability is very clearly part of Intertek’s DNA and the Board
has great confidence in the Company’s environmental and social
credentials with a sustainability moment now part of every meeting
agenda. The Board will continue to consider whether a Board ESG
Committee is required, but at present it is considered that the ESG
agenda is so important, that it should be the responsibility of all of
the Board. Governance overall is seen to be sound.

There is a real sense of community of purpose on the Board with great
support and respect for the work André and the management team do
in addressing challenges as they arise, most recently with the pandemic,
and ensuring that the health and safety of our employees are always
the number one priority.

An internally-facilitated evaluation will be held in 2022.

Chairman and Director evaluation
The Non-Executive Directors, led by the Senior Independent Non-
Executive Director, conducted a performance review of Andrew Martin,
who was the Chairman during 2021. They considered his leadership,
performance and overall contribution to be of a high standard during
the year.

Andrew Martin, the Chairman, met with each Director to discuss their
individual contributions and performance, together with any training
and development needs. Following these reviews, the Board remains
satisfied that, in line with the Code, all Directors are able to allocate
sufficient time to the Company to enable them to discharge their
responsibilities as Directors effectively and that any current external
appointments do not detract from the extent or quality of time which
any Director is able to devote to the Company.

The Board recommends that shareholders should be supportive of their
re-election to the Board at the 2022 AGM.

Group Company Secretary support
The role and responsibilities of the Group Company Secretary are
outlined on page 122.

Composition, Succession and Evaluation
Continued

The last external review undertaken in 2018 flagged the progress
that had been made in a relatively short time since André Lacroix
joined Intertek in 2015, especially given the scale, complexity and
geographical spread of the business. André bringing clarity to Intertek’s
purpose, mission, vision, values and strategy with the Board continuing
on a journey from good-to-great, alongside that of the business. During
the three years up to 2019, the focus had been on reshaping the Board
and executive team, further refining and delivering the growth strategy
and moving from a decentralised, entrepreneurial portfolio approach to
a more integrated, customer-centric, company. Lastly, as with all good
companies, the Board culture was to aim for best in class and also for
continuing improvement which we call ‘Ever Better, Ever Stronger’. So,
plans were implemented to push on in what we call our ‘journey areas’
such as sustainability, where we believed we could deliver for society at
large and also our customers for whom we can provide our expertise
and services in the key areas of sustainability. This included
understanding views of our stakeholders, in particular focusing on
engagement with our workforce, which was already a priority of our
Board. As part of this, inter alia, we increased the number of site visits
our Non-Executive Directors made to the businesses around the world
as part of their monitoring of culture at ground level.

The key findings of this year’s external evaluation report are very
positive as outlined below.

During recent years, a strong culture of high performance and high
integrity with a clear sense of purpose has developed on the Board
and throughout the Company. Great care has been taken, when adding
new Board members, to ensure the right fit, culturally, and in terms of
beliefs and outlook to build on the existing excellent chemistry and
mutual respect on the Board. Lynda Clarizio and Tamara Ingram, both
of whom were on-boarded during 2021, were very positive about the
comprehensive induction process, noting the one-to-one meetings
held with the CEO, the Board members and Senior Management Team
followed by an around the world tour of Intertek including 2-hour
presentations from all the main global leaders, virtual site tours and
questions enabling the new Board members to experience the
dynamics of the business.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsNomination Committee report

The need to keep the Board refreshed but at
the same time maintain a knowledgeable and
experienced team of Non-Executive Directors
is crucial and forms a large part of the
Committee's work."

Andrew Martin
Chairman

Intertek Group plc
Intertek Group plc | Annual Report & Accounts 2021
| Annual Report & Accounts 2021

126

Dear shareholder,
I am pleased on behalf of the Nomination Committee
('Committee') to present the Committee's report
for 2021.

The Committee continues to focus its discussions
on reviewing the current experience and skills on
the Board and the likely future needs in order to
build up a total skills overview and identify any gaps;
the outcome from the Board evaluation is also used
to inform these discussions.

A priority is Executive and Non-Executive Director
succession planning. During the year, we had the
retirement of both Louise Makin and Lena Wilson as
they completed nine years since their date of
appointment as Non-Executive Directors. The need
to keep the Board refreshed but at the same time
maintain a knowledgeable and experienced team of
Non-Executive Directors is crucial and forms a large
part of the Committee’s work.

The Covid-19 global pandemic highlighted the
importance of a cohesive and experienced Board to
provide strength and resilience to help lead the Group
through any crisis. It is also now vital that we have
the right skills and expertise around the Board table
to help support the business to seize the sustained
long-term growth opportunities in our industry, as
the pandemic has made the case for Total Quality
Assurance clearer and stronger for our clients and
we now expect the $250 billion global Quality
Assurance market to grow faster post Covid-19.

The Committee has demonstrated its ability to
successfully identify the key characteristics
required on the Board and in March 2021, Lynda
Clarizio was appointed to the Board as a Non-
Executive Director. Lynda is a highly experienced,
committed, and well-rounded businesswomen with
a track record of outstanding leadership in her area
of expertise and proven adaptability; Lynda is an
excellent addition to the Board.

We also welcomed Jonathan Timmis to the Board
as Chief Financial Officer in April 2021 and Ross
McCluskey, the previous Chief Financial Officer,
moved into an operational role within the Intertek
Group with responsibility for Europe and Central Asia.

During the last two years, the Board and Senior
Management team have demonstrated their
versatility, adaptability and ability to react quickly
to evolving challenges, whilst simultaneously
navigating the Group through these unprecedented
times with the strategy remaining core to the
decision-making. Our colleagues at Board and
management level have illustrated the defining
characteristics we strive for in our Intertek leaders
when carrying out succession planning, which in
turn exemplifies the successful mechanics of
the Committee.

Andrew Martin
Chair of the Nomination Committee

Sustainability Report / Directors' ReportContentsNomination Committee report
Continued

Membership of the Committee
During the year, we held two formal meetings. Attendance of members
at formal meetings is shown in the table below. The Group Company
Secretary attends all formal meetings of the Committee and the
Committee invites the CEO and the EVP, Human Resources to attend
meetings when the subject matter deems their presence appropriate.

Committee meeting attendance during the year to
31 December 2021

Scheduled
meetings
eligible to
attend

Meetings
attended

Committee members

Andrew Martin (Chair)1

Graham Allan

Gurnek Bains

Dame Louise Makin (resigned 30 June 2021)

Lena Wilson (resigned 31 January 2021)

1. Appointed Chair of the Committee on 1 January 2021.

100%

attendance

Role and key responsibilities of the Committee
– Review the structure, size and composition of the Board and its

–

Committees.
Identify, review and nominate a diverse pipeline of candidates to fill
Board vacancies1.

– Evaluate the balance of skills, independence, knowledge, experience

and diversity on the Board and its Committees.

– Review the results of the performance evaluation process that
relates to the composition of the Board and its Committees.
– Review the time commitment required from Non-Executive

Directors.

– Review succession plans regularly.

1. Neither the Chairman nor the CEO participates in the recruitment of their own successor.

The full Terms of Reference of the Committee, which were updated in
2019, can be found on our website.

Intertek Group plc | Annual Report & Accounts 2021

127

Committee responsibilities and how we met them in the year
Performance evaluation
As part of the annual Board evaluation, the Committee’s performance
was evaluated by all Committee members and it was shown that the
Committee continues to be able and effective in discharging its duties
in accordance with its Terms of Reference and the requirements of the
Code.

Board and Committee composition
During the year, we continued to monitor the composition of the Board
and its principal Committees and the independence of our Non-
Executive Directors. We undertook our annual review of the Board’s
effectiveness and composition. To ensure that the Board comprises a
wide range of skills, experience and attributes, the Committee
discusses and reviews extensively the experience, skills and behaviours
required of future Directors, including the qualities of the individual
required to ensure the right fit with the culture and style of Intertek.

The review concluded that the current composition of the Board and
each Committee contained a good balance of skills, multi-industry
sector and geographic experience, as well as diversity. The Committee
also unanimously agreed, following the consideration of the
independence of each Non-Executive Director, that each Non-
Executive Director continued to be independent in accordance with the
criteria set out in the Code. The Chairman was independent upon
appointment.

Talent mapping, succession planning and senior management
succession
We continue to focus our discussions on the different time horizons
within our succession planning, including contingency planning for
sudden and unforeseen departures, the orderly replacement of current
Board members and senior management, and a longer-term view looking
at the relationship between the delivery of the Group strategy and
objectives and the skills needed on the Board now and in the future.

As part of our succession planning, the Committee initiated a search for
a new Non-Executive Director. In addition to the specific skills,
knowledge and experience deemed necessary, the role specification
contained criteria such as competency and personal qualities that
would be required for the position. The Committee also paid close
attention to ensure that the candidate selected exhibited the right
behaviours to fit the culture, values and ethics of the Group and would
also be able to allocate sufficient time to the Company to discharge
their responsibilities.

The Committee engaged Spencer Stuart, an external search agency
with no other connection to the Company or its individual Directors, to
assist with the selection process. An initial list of potential candidates
was produced and shortlisted. The Committee members and the
Chairman met separately with the shortlisted candidates, following

which they agreed to recommend to the Board the appointment of
Lynda Clarizio who was appointed to the Board on 1 March 2021. Lynda
has over 20 years’ experience in the media industry and her significant
experience in digital measurement and broader technology provides a
strong addition to the current skills on the Board.

As outlined in the 2020 Annual Report & Accounts, in 2020, the Board
approved the external appointment of Jonathan Timmis as Group Chief
Financial Officer, taking over from Ross McCluskey. Jonathan then joined
the Board on 1 April 2021.

Jonathan is a Fellow of the Chartered Institute of Management
Accounting. He has had an exceptional career with some of the top
companies in the world. At Reckitt Benckiser, Jonathan had a number of
senior roles including CFO Health, Group Controller, Regional Finance
Director for North America and Regional Finance Director for Southern
Europe. Prior to his time at Reckitt Benckiser, Jonathan spent several
years in senior finance roles with SAB Miller, including three years as the
Finance Director of Royal Grolsch and also for its UK business.
Jonathan’s early career in finance was with PricewaterhouseCoopers.

Ross McCluskey, who was appointed as Group Chief Financial Officer on
22 August 2018, was appointed into an operational role as Executive
Vice President Europe and Central Asia with effect from 1 April 2021.
Throughout Ross’s tenure as Group Chief Financial Officer, the Group’s
organisation capability significantly strengthened, as well as the cost,
cash, control and performance management processes throughout the
global finance function.

Following the Board changes previously discussed, subsequently there
were a number of changes to the composition of the Committees of the
Board: with effect from 1 January 2021, Andrew Martin stepped down
as Chair of the Audit Committee in line with Provision 24 of the Code
and Jean-Michel Valette was appointed Chair of the Audit Committee
with immediate effect. Gill Rider and Lynda Clarizio were also appointed
as members of the Audit Committee on 1 February 2021 and 1 July
2021, respectively, and Tamara Ingram was appointed as a member of
the Remuneration Committee on 1 July 2021.

With effect from 31 January 2021, Lena Wilson retired from her role on
the Board after having served for nearly nine years from the date of her
appointment as a Non-Executive Director. In addition, Louise Makin
retired from the Board on 30 June 2021 having served for nine years
from the date of her appointment. Throughout their tenure, they were
both diligent and valued members of the Board and the Committees
upon which they served, and we thank them for their enthusiasm,
dedicated service and valuable contribution.

Sustainability Report / Directors' ReportContents128

Chairman and Non-Executive Director
Appointment Process

Skills and Composition Review
The Committee reviews the structure and composition of the
Board, in turn considering the balance of skills, experience,
industry and geographic experience and knowledge, diversity,
independence, cognitive and personal strengths of the current
Board. When considering these factors, the Committee is
mindful of attributes which are favourable to assist in the
delivery of the Group’s strategy.

Creating the Brief
The Committee, following the skills and composition review,
compile a brief for the vacant position which outlines
favourable characteristics and attributes that they desire the
appointed individual to hold. This brief is then shared with the
chosen consultant who will utilise the brief to compile a list of
suitable candidates.

Longlist and Shortlist Review
The appointed consultant presents an initial longlist of
candidates. This list is then shortlisted using the brief as a
guide to determine suitability.

Due Diligence
Once the candidates are shortlisted, initial interviews are held
and the shortlist reduced further. The final candidates are
invited to separate meetings with the Committee members and
the CEO.

Recommendation
Once a preferred candidate is chosen, the Committee makes a
recommendation to the Board to appoint the individual into the
vacant position.

Nomination Committee report
Continued

Board reappointments
Having come to the end of her second three-year term as Non-
Executive Director on our Board on 30 June 2021, Gill Rider’s
appointment was reviewed. Following this review, the Board was happy
to reappoint Gill for a final three-year term, until 30 June 2024.

Where the reappointment of a member of the Committee is being
discussed, they are precluded from any involvement in the discussions.
In the instance where the reappointment of the Chairman is being
discussed, the Senior Independent Non-Executive Director would chair
the Committee meeting.

Biographies for all of the Directors are available on pages 102 to 104,
and a resolution for each Director will be proposed at the forthcoming
AGM for their re-election.

Board evaluation
The process and findings of the external evaluation of the Board and
the evaluations of each Committee and Director are outlined on pages
124 to 125. An evaluation can determine whether there are any gaps in
the skills and composition of the Board. Following the last evaluation, it
was concluded that the Board, each Committee and each Director
continue to perform effectively and contribute to the long-term
sustainable success of Intertek. The outcomes and the actions taken
from the evaluations undertaken in 2020 and 2021 are outlined on
pages 124 to 125 and the feedback from the Board evaluation is taken
into account when determining the key skills required for new Directors
on the Board for the future.

Diversity Policy
The Board and the Committee are committed to achieving a Board
which embraces diversity in culture, gender, skills, background, regional
and industry experience and other qualities to truly reflect the diverse
nature of our business which operates in more than 100 countries. All
of these factors are considered in determining the composition of the
Board to ensure that we have the best people to lead Intertek, a leading
Quality Assurance provider to industries worldwide.

In identifying suitable candidates to recommend for appointment to the
Board, the Committee considers all candidates on merit, against
objective criteria, and with due regard for the benefits of diversity on
the Board to achieve the most effective Board possible.

Due to the strategic importance of talent mapping and succession
planning to the long-term sustainable success of the Group, the Board,
as a whole, discusses and supports succession planning in the
Leadership Team and as part of that discussion review the diversity, as
well as talent mapping across the Group in respect to Regional, Country
and functional roles.

Intertek Group plc | Annual Report & Accounts 2021

This has enabled the Board to gather insights on the key success
factors desired for senior roles within the Group and support in
developing a diverse pipeline in order to drive the Group’s 5x5 strategy.
The Leadership Team can be found on page 105.

Our policy on Board gender diversity, which is available on our website
at intertek.com, supports the recommendations of the FTSE Women
Leaders Review (formerly the Davies Review and Hampton-Alexander
Review) (‘Review’), which encourages at least 33% representation of
women on FTSE 350 boards and with the Parker Review ‘Beyond One
by 21’, which recommended that FTSE 100 company boards should have
at least one ethnically diverse Director by 2021.

We met and complied with both the targets outlined in the Review and
the Parker Review by the end of 2020. As at 31 December 2021, we
had three female Non-Executive Directors representing 33% female
membership and one ethnically diverse Director on the Board.

The gender balance, ethnicity and geographical heritage of the Board
as at the date of this report is set out in the diagrams on the next page.
Also, one of our key performance indicators is to increase the proportion
of women in senior leadership roles to 30% by 2025. Intertek's Inclusion
& Diversity policy eliminates discrimination to ensure that employees
are treated fairly and feel respected and included in the workplace,
which is vital as our people are core to the delivery of the best service
to customers and driving the strategy of Intertek. As at 31 December
2021, as per the definition in the Code, the senior management gender
balance was 17 male and three female and their direct reports were
208 male and 69 female. Further details regarding gender balance
across the Group is outlined on page 77 within this report.

The Committee continues to monitor the overall inclusion and diversity
of Intertek’s leadership at Board and senior management level, to
ensure the broadest range of leaders are considered for new
appointments.

Sustainability Report / Directors' ReportContentsNomination Committee report
Continued

Skills and experience on the Board as at 31 December 2021

129

Director

Consulting

Risk
Management

Customer
Service/Care

People

Finance

International

Sustainability

Digital/
Technology

UK Listed
Company
Director

Previous/
Current CEO

UK NED
Experience

Andrew Martin1

André Lacroix

Jonathan Timmis2

Graham Allan

Gurnek Bains

Lynda Clarizio3

Tamara Ingram

Gill Rider

Jean-Michel Valette

1. Appointed Chairman on 1 January 2021.
2. Appointed 1 April 2021.
3. Appointed 1 March 2021.

In the FTSE Women Leaders Review
(formerly the Hampton-Alexander
Review) 2022, Intertek is ranked:

72 out of 98

FTSE 100 rankings for Women on Boards
and in Leadership

Ranked

of 48 in the Industrial Goods & Services
sector across the FTSE 350

Board composition and diversity as at 31 December 2021

Board balance by gender

Board balance by independence

Board tenure

Geographical heritage

Board ethnicity

Male
Female

67%
33%

Executive Directors
Independent Non-Executive Directors

22%
78%

0-3 years
3-6 years
6-9 years

33%
45%
22%

Europe
North America
Australasia
South East Asia

56%
22%
11%
11%

White
Asian

89%
11%

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents
130

Audit Committee report

I was delighted to welcome Gill Rider and
Lynda Clarizio as members of the Committee
on 1 February 2021 and 1 July 2021,
respectively. Their combined extensive global
business experience has brought valuable
skills and insights to the Committee table."

Jean-Michel Valette
Chair of the Audit
Committee

Intertek Group plc | Annual Report & Accounts 2021

Dear shareholder
On behalf of the Audit Committee (‘Committee’), I am
pleased, as its new Chair, to present the Committee’s
report for 2021.

I took up my current role with effect from 1 January
2021 following Andrew Martin's move to become
Chairman of the Board at the start of 2021. Since
then, I have been delighted to welcome Gill Rider and
Lynda Clarizio as members of the Committee on
1 February 2021 and 1 July 2021 respectively, and to
benefit from their combined global business
experience around the Committee table. We were
sad to lose the valuable contributions of both Louise
Makin and Lena Wilson as members of the Committee
when they retired as directors in June and January
respectively. I would like to express my grateful
thanks to both Louise and Lena for their service on
the Committee.

This report aims to outline the activities and the
responsibilities of the Committee, and is intended to
provide shareholders with an insight into key areas
considered in scrutinising the conduct of the
business, its management and auditor, to protect the
interests of our shareholders, the livelihoods of our
employees, and the confidence of our customers and
other stakeholders in the long-term financial
strength of our Group.

As Chair of the Committee, I shall, as did my
predecessor, make myself available to shareholders,

especially at the AGM, to facilitate the answering of
any questions that they may have around the scope
of the Committee’s responsibilities as a whole, the
Committee’s activities throughout the year, and any
other questions that may arise from this report.
However, as with many aspects of our business
during the year, the priority for the 2021 AGM was to
ensure our shareholders safety, making a physical
meeting unsuitable but arrangements were put in
place to ensure that shareholders were able to
participate using Microsoft Teams and given the
opportunity to ask the Committee any questions.

During 2021, whilst the Committee’s primary focus
centred on the accuracy of the Group’s financial
reporting, we have applied additional focus to assess
the risk management and internal control framework,
together with the additional work carried out to
support the long-term viability statement.
Regardless of the pandemic, Intertek’s business
model remains resilient, but like other companies
operating during these challenging times, we
continue to support and closely monitor the financial
results of the Group.

The Committee has also been monitoring the
heightened scrutiny on the external reporting of ESG
and more specifically sustainability and the effects
of climate change on companies. Intertek is now
required to ‘comply or explain’ against the Task Force
on Climate-related Financial Disclosures ('TCFD') and
these disclosures are outlined in this Annual Report
& Accounts. Following the request of the Committee
in February 2021, PwC held workshops with
management and the Committee in June and July
2021 to explore these requirements in further detail.
As part of TCFD compliance, we have reviewed and
approved management’s assessment of the physical
and transitional environmental risks to the Group.

We advised the Board that the 2021 Annual Report &
Accounts are fair, balanced and understandable and
provides the necessary information for our shareholders
to assess the Group’s position, performance, business
model and strategy. The process of review is described
in greater detail on page 134.

PricewaterhouseCoopers LLP (‘PwC’) completed their
sixth full audit of the Group for the year ended
31 December 2021. During the year, the Committee
reviewed and agreed the independence and

Sustainability Report / Directors' ReportContentsAudit Committee report
Continued

131

effectiveness of the audit process, in establishing positive relationships
and providing a good level of service to the Group, even though due to
the pandemic the majority of the work during 2021 was undertaken
remotely, whilst seeking continual improvements in the audit of
Intertek.

On appointment, new Committee members receive an appropriate
induction, consisting of meetings with senior management and the
Group’s internal and external auditors, a review of the Terms of
Reference, previous Committee meeting papers, minutes, and
information on the Group’s financial and operational risks.

Throughout the year, the Committee also ensured that separate
meetings with the CFO, Group Audit Director and the external auditor
took place without management present in order to provide an open
forum for any issues to be raised.

An external evaluation of the Committee was conducted during the
year, and concluded that the Committee is effective in discharging its
duties in accordance with its Terms of Reference and the requirements
of the Code.

An overview of the background, knowledge and experience of the
Committee Chair and each of the Committee members can be found on
pages 102 to 104 and in the Notice of the AGM.

During the year, the Committee held four formal meetings. Attendance
of members at meetings is shown in the table below.

Committee meeting attendance during the year to
31 December 2021

Jean-Michel Valette
Chair of the Audit Committee

Committee composition
The Board is satisfied that the Committee, led by Jean-Michel Valette,
has the recent and relevant financial experience and competence
relevant to the sectors in which Intertek operates, required by the Code.
Jean-Michel, Gill and Lynda collectively possess the qualities which,
when complemented by Jean-Michel's relevant Executive and recent
extensive Non-Executive financial experience, including his current role
as Chair of the Audit Committee of the Boston Beer Company in the US,
enable an effective committee. Previous to his role at Boston Beer,
Jean-Michel has been Audit Committee Chair of each of Sleep Number,
Inc and Peet's Coffee & Tea Inc, where, in each case, he was designated
Audit Committee financial expert. The Committee's collective
experience in the roles of Chief Executive Officer, as well as other senior
global positions, demonstrates their ability to oversee key risks, not just
financial, as well as maintain the intellectual curiosity and the
professional challenge needed to operate effectively as a committee.

During 2021, the composition of the Committee met the requirements
of the Code.

Effective 1 January 2021, Andrew Martin stepped down as Chair of the
Committee and Jean-Michel Valette took up his position. Following the
retirement of Lena Wilson as a Director on 31 January 2021, Gill Rider
was appointed a member of the Committee with effect from 1 February
2021. Furthermore, following the retirement of Louise Makin as a
Director on 30 June 2021, Lynda Clarizio was appointed a member of
the Committee with effect from 1 July 2021.

Intertek Group plc | Annual Report & Accounts 2021

Committee members

Jean-Michel Valette (Chair) (appointed Chair
on 1 January 2021)

Lynda Clarizio (appointed 1 July 2021)

Dame Louise Makin (resigned 30 June 2021)

Gill Rider (appointed 1 February 2021)

Lena Wilson (resigned 31 January 2021)

Scheduled
meetings
eligible to
attend

Meetings
attended

100%

attendance

Performance evaluation
The internal evaluation of the performance of the Committee was
conducted during the year and entailed the completion of a detailed
questionnaire by each of the Committee members, review and
discussion of the results of the evaluation and identifying and agreeing
areas for improvement. The Committee reviewed their functionality,
members’ individual strengths and identified any additional training
that may be beneficial. The review concluded that the timing of
meetings and clear annual agenda worked well, the composition of the
Committee was good with the two new members bringing fresh
perspectives to the discussions, there was very thorough reporting by
the Chair and the Committee to the Board and the meeting materials of
a very good quality. It was shown that the Committee is able and
effective in discharging its duties in accordance with its Terms of
Reference and the requirements of the Code.

Committee responsibilities and how we met them in the year
The Committee has specific responsibilities delegated to it by the Board
and the full Terms of Reference of the Committee can be found at
intertek.com. The Group Company Secretary, the audit partner and
members of his team attended all meetings held during the year. At the
invitation of the Committee, the Chairman, CEO, CFO, Group Director of
Financial Reporting and the Group Audit Director attended meetings.
Other members of senior management were invited to attend the
meetings as necessary.

The business of the Committee is linked to the Group’s financial
calendar of events and the timetable for the annual audit. The table
overleaf outlines what the Committee considered during 2021.

Financial Reporting
A principal responsibility of the Committee is to monitor the integrity of
the financial statements of the Group, having regard to the matters
communicated to us by the external auditor, and to measure the
performance of the Group against the financial goals of our strategy.
This is key for our shareholders and other stakeholders in order for them
to understand the financial strength of the business.

In order to fulfil this responsibility, we reviewed the full-year and
half-year results, as well as any formal announcements relating to the
Group’s financial performance, prior to release. We also reviewed
significant accounting policies and confirmed that it remains
appropriate to report as a going concern.

Going concern
We received a detailed report from management with the approach
taken to the going concern statement and viability statement which
included the projected funding requirements, the facilities available to
the Group, the sensitivity models used including an illustrative severe
yet plausible downside scenario of a reduction of 30% to the base profit
forecasts and the corresponding impact to cash flow forecasts in both
2022 and 2023 and the review of principal risks and uncertainties
undertaken.

The Committee reviewed the paper and challenged the assumptions
with management and after making diligent enquiries, the Directors
have a reasonable expectation, based upon current financial projections
and bank facilities available, that the Group has adequate resources to
continue in operation and meet its liabilities as they fall due over the
period. This conclusion is based on a review and an assessment of the
levels of facilities expected to be available to the Group, based on levels
of cash held, Group Treasury funding projections, and the Group’s
financial projections for a period to 31 December 2022. As disclosed in
note 14 of the financial statements, equivalent borrowing levels are
expected to be available at 31 December 2022. Note that $640 million
of USPP debt was raised during December 2021 and will be drawn
during Q1 of 2022. The proceeds will be used to repay US$140 million

Sustainability Report / Directors' ReportContentsAudit Committee report
Continued

Committee's activities during 2021

132

February

May

July

December

Management Highlights
Memorandum for the year ended
31 December 2020

Viability Statement

Intertek Assessment of PwC
Effectiveness

Management Highlights
Memorandum for the period ended
30 June 2021

Accounting update paper for the
year ended 31 December 2021

PwC Audit Plan and strategy for the
year ended 31 December 2021

Going Concern assessment

Internal controls update

Going Concern assessment

Internal Audit Report Q1 2021

PwC Interim review findings for the
period ended 30 June 2021

Letter of Representation to PwC
and Statement of Directors’
Responsibilities for the year ended
31 December 2020

Treasury policy update

Letter of Representation and
Statement of Directors’
Responsibilities for the period
ended 30 June 2021

Group Risk Process and Viability
Statement basis of preparation for
the year ended 31 December 2021

Core Mandatory Controls and
Assurance Map update

Draft 2021 Half-Year Results

Non-audit fee update

Internal Audit Q2 2021 update,
draft 2022 audit plan and
organisation update

PwC pre-year end accounting and
controls update

Private meetings without
management with (i) PwC and then
(ii) the CFO

Internal Assessment of Internal
Audit effectiveness

Internal Audit Report H2 2021

Internal Audit Plan for 2022 and
Internal Audit Charter

Private meetings without
management with Group Audit
Director

PwC report to the Committee for
the year ended 31 December 2020
and independence confirmation

Private meeting without
management with the Group Audit
Director

Draft 2020 Full-Year Results

Policy for engagement of External
Auditors, spend for 2020 and
pre-approval of non-audit activities
for the year ended 31 December
2021

Internal Assessment of Internal
Audit Effectiveness

Internal Audit Report Q4 2020

2021 Rolling Committee Agenda

2020 Evaluation of the Committee

Committee Terms of Reference

Private meetings without
management with (i) PwC and then
(ii) the CFO

Intertek Group plc | Annual Report & Accounts 2021

of senior notes that matured in January 2022 and SAI Acquisition
Facility B drawings of AU$264 million and US$291 million in March
2022. Following the recommendation of the Committee, the Board
continues to consider it appropriate to adopt the going concern basis in
preparing the Group’s financial statements (as disclosed in note 1 of the
financial statements on page 179) and has approved the long-term
viability statement as set out on page 44.

External auditor
The appointment, review and relationship with the external audit firm
and the annual review of the effectiveness of the external audit is a
responsibility that is delegated to the Committee.

The Committee monitors and reviews the independence and objectivity
of the external auditor and reviews the effectiveness of the external
audit process. The Committee also considers and makes
recommendations to the Board, to be put to shareholders for approval
at the AGM, in relation to the appointment, reappointment and removal
of the Group’s external auditor. It ensures that at least once every ten
years the audit services contract is put out to tender to enable us to
compare the quality and effectiveness of the services provided by the
incumbent auditor with those of other audit firms.

A transparent and independent audit tender process was completed in
2015 and PwC have been the Group’s auditors since May 2016. In line
with current regulation, the Group is required to put its external audit
process out to tender again in 2025–2026. In May 2021, Ian Chambers
stepped down from his role as the Audit Partner after serving as the
Audit Partner since May 2016, and Graham Parsons was appointed as
the new Audit Partner. Graham attended his first committee meeting in
May 2021, and an extensive induction took place to ensure a smooth
uninterrupted handover from Ian Chambers. The induction included
visits to many Intertek locations both in person and remotely using
technology.

The independence of the external auditor is critical for the integrity of
the audit. The Committee sought confirmation from the auditor that
they are fully independent from the Group’s management, are free from
conflicts of interest and have assessed the nature and level of
non-audit fees paid to PwC and have determined that PwC are fully
independent.

Effectiveness of the external audit process
The Committee conducts an annual review to assess the independence
and objectivity of the external auditor and the effectiveness of the
audit as part of the year-end process. This process is conducted in three
parts as outlined on the next page:

Sustainability Report / Directors' ReportContents133

Audit Committee report
Continued

1. PwC presents to the Committee its approach to safeguarding and

maintaining the quality and independence of their audit of the Group
and their auditors, including addressing any risks they face in
maintaining audit quality across their network. This is an extensive
report covering all aspects of the audit from the scope of work,
reporting the outcomes of findings, the key audit matters, fraud and
investigations, intercompany transactions, treasury, key risks, going
concern and IT environment. Each aspect is reviewed and debated
with the auditors. The Committee was satisfied that the audit was
extensive, sufficiently challenging and robust.

Following the completion of PwC’s 2020 audit, the Committee was
informed that the Audit Quality Review function of the Financial
Reporting Council had chosen the Group’s audit for its review. The
Committee has received a copy of the review and was pleased to
note that it did not identify any key findings and only a limited
number of improvements were required.

2. The views of management and the Directors on PwC’s service, level
of challenge, and application of professional judgement are obtained
via a questionnaire, and subsequent follow up as necessary. The
feedback is then presented to the Committee.

3. The key findings and recommendations from both processes, together
with any form of appropriate external valuation such as feedback
from shareholders and the FRC Audit Quality Inspection Report then
form the basis of the assessment of PwC’s effectiveness, together
with the Committee’s experience of dealing with PwC during the year.

The responses to the annual appraisal questionnaire were collated and
incorporated into the planning process for the following areas: Planning,
Fieldwork and Reporting.

Following this review, the Committee considered in detail the feedback
received from a selection of Intertek personnel, including Committee
members, group functions, regional finance teams and country finance
managers. The feedback scores from the survey demonstrated an
increase in the scores compared with prior year for two of three
sub-categories of Planning and Fieldwork. The overall perception of
PwC’s effectiveness remains positive, with 97% of respondents either
agreeing or mostly agreeing with the statements outlined in the
questionnaire. Overall, the audit went smoothly particularly given the
challenge of performing the audit remotely in many locations. Indeed,
several respondents commented that there were efficiencies gained
from this approach with meetings becoming more targeted and
focused. The audit findings and the areas to improve were discussed at
the May 2021 Committee meeting and PwC effectively addressed
questions and challenges provided by Committee members.

The Committee concluded, at the meeting held in May 2021, that PwC
remained independent and that, overall, PwC had completed a robust

Intertek Group plc | Annual Report & Accounts 2021

and fit-for-purpose audit process across the Group with a satisfactory
level of resources.

The effectiveness of the 2021 audit of the Group will be reviewed by
the Committee in May 2022.

Audit and non-audit fees
The Group has set out a policy on the provision of non-audit work by
the external auditor consistent with the 2019 Ethical Standard issued
by the FRC and it is designed to ensure that the provision of such
services does not create a threat or compromises the external auditor’s
independence and objectivity.

The policy outlines in detail the services that the external auditor
cannot provide including tax services, services that involve playing any
part in the management or decision-making of the audited entity
amongst others. It identifies certain types of engagement that the
external auditor shall, subject to the audit cap, be permitted to
undertake, including with respect to audit-related services such as
reporting required by law or regulation to be provided by an auditor,
reviewing interim financial information, reporting on regulatory returns,
reporting to a regulator on client assets and reporting on government
grants. With respect to non-audit services, the policy outlines the
services that can be provided by the external auditor as required by law
or regulation and are exempt from the non-audit fee cap.

In the event that an engagement for non-audit services arises, the policy
is designed to ensure that the external auditor is only appointed where it
is considered to be the most suitable supplier of the service and the
necessary prior approvals have been given in accordance with the policy.

The Committee annually reviews and re-approves the framework of
permitted non-audit services as set out in the policy, taking into
account any changes in legislation and best practice. PwC also provides
an update on the spend for non-audit services twice a year. For 2021,
the Committee pre-approved a total non-audit spend of £250,000.

As per the policy, all non-audit services have to be approved by the CFO,
and in the event that the pre-approved limit is exceeded, the Committee
Chair and the CFO have to approve an increase to the pre-approved
limit. In 2021, this process operated effectively.

A summary of the fees paid for non-audit services is set out in the next
column. The majority of the non-audit fees related to a review by PwC
of the Interim Results announcement, which is deemed a non-audit
service. This was considered appropriate as PwC also audit the full-year
results.

Further information is contained in note 4 to the Financial statements
on page 184.

Audit fee breakdown for services provided by PwC in 2021

Total non-audit fees

– audit-related services

– tax services

– other non-audit services

Audit fee

% of audit fee

2021
£m

0.1

–

4.7

2020
£m

0.2

–

4.8

The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014 (‘CMA Order’)
– Statement of compliance
The Group confirms that it complied with the provisions of the CMA
Order for the financial year under review.

Internal audit
The Group has an Internal Audit function, whose activities are overseen
by the Committee, which provides assurance over compliance with the
Group’s framework of financial CMCs.

The Committee monitors and reviews the effectiveness and resources
of the Internal Audit function. To this end, the Committee approves the
Internal Audit programme and charter for the year. The Committee
reviews the internal audit reports and monitors management’s
responsiveness to the findings and recommendations of the Group
Audit Director, as well as approving the appointment and removal of the
Group Audit Director as appropriate. The Committee noted that, despite
the ongoing pandemic, the Internal Audit team had completed the full
programme of audits planned for the year. When reviewing the
summary findings, management responses, progress against audit
recommended improvement plans and average compliance scores, the
Committee were satisfied that the Internal Audit function continued to
work effectively and focus its activities in the areas with most need.

Independent review of effectiveness
An independent review of effectiveness, which is generally carried out
every three years, was undertaken by Grant Thornton in 2019. Their
approach considered four key areas: Performance, Planning, People and
Positioning. The review concluded that Internal Audit is a valued
function of the business and that their role in defining expectations
and improving compliance with the financial CMCs is widely
acknowledged. They further concluded that the function exhibits a
number of areas of good practice, in particular in the continuous
improvement agenda of the team, as well as their innovative processes
and reporting. The report also highlighted that the remit of the Internal

Sustainability Report / Directors' ReportContents
134

Audit Committee report
Continued

Audit role could evolve and expand in the future. Given dislocations due
to Covid-19, the next review of effectiveness will be in 2023.

In 2021, the Committee:
– Oversaw the independence of Internal Audit by maintaining a direct
independent reporting line between the Group Audit Director and
the Committee Chair, and by meeting with the Group Audit Director
without the presence of management.

– Approved the audit plan aimed to ensure that all significant businesses

have received multiple audits considering the ongoing impact of
Covid-19 on the ability to undertake internal audits. The Committee
gave due consideration to local Government Covid-19 regulations in
each country and reviewed the audit plan accordingly with internal
audits outside of the US and China being carried out remotely.

– Reviewed reports on internal audit activities including overall progress
in delivering the plan and summaries of each audit performed, with
commentary on compliance with the financial controls framework,
areas of good practice and areas for improvements. The Committee
has noted a steady improvement in audit scores over the period since
the introduction of the Core Mandatory Controls framework.
– Monitored management progress on addressing audit actions.
– Reviewed the annual assessment on the effectiveness of the Group
Internal Audit function which included feedback from key business
stakeholders. An action plan for areas of improvement was approved.

The Committee satisfied itself that the quality, experience and
expertise of the function is appropriate for the business.

Fair, balanced and understandable assessment
The Code depicts that through its financial reporting, the Board should
provide a fair, balanced and understandable assessment of the Group’s
position and prospects. We, at the Board’s request, reviewed the 2021
Annual Report & Accounts to determine whether, taken as a whole, the
report meets the standard prescribed, whilst simultaneously providing
shareholders with the necessary information to facilitate their assessment
of the Group’s position, performance, business model and strategy.

In justifying this statement, the Committee has considered the robust
process that underpins it, which includes:

– clear guidance and instruction given to all contributors, including at

–

business line level;
revisions as a result of regulatory requirements monitored on a
regular basis;

– pre year-end discussions held with the external auditor in advance

of the year end reporting process;

– pre year-end input provided by the senior management team and

from corporate functions;

– a verification process dealing with the factual content of the reports

to ensure accuracy and consistency;

– comprehensive review by the senior management team to ensure

Intertek Group plc | Annual Report & Accounts 2021

–

overall consistency and balance;
review conducted by external advisers and the external auditor on
best practice with regard to the content and structure of the Annual
Report & Accounts;
review and consideration of the financial statements by the
Committee; and

– final sign-off by the Board.

Internal control and risk management systems
A key focus for the Committee is to monitor throughout the year and
keep under review the adequacy and effectiveness of the internal
financial controls and the internal control and risk management and
assurance systems across Intertek.

‘Doing Business the Right Way’ is at the heart of what we do and is a
key enabler of our 5x5 strategy for growth. The Intertek Core
Mandatory Controls (‘CMCs’) are an integral part of ‘Doing Business the
Right Way’, and provide the mechanism by which we define, monitor and
achieve consistently high standards in our control environment
throughout the whole organisation. At the end of the year, the
Committee undertook a review of the effectiveness of the CMCs and
Assurance Map to ensure that they continued to be fit for purpose.
Where non-compliances with the current CMCs were identified in the
2021 internal audit review process, remediation plans have been put in
place. For 2022, the effectiveness of the process was reviewed and
there were additional controls introduced to address the areas for
improvement identified in 2021. The new controls for 2022 relate
primarily to areas of finance control improvement identified during
2021 and data and IT asset security and IT/systems access rights.
Training on the financial CMCs is mandatory for all finance team
members, with certification for successful completion of scenario-
based test questions.

In order to provide assurance that the Intertek controls and policy
framework is being adhered to, a self-assessment exercise is
undertaken across the Group’s global operations. This exercise is
reviewed and refreshed each year to align to the updated control
framework and to support the continued development of the Group’s
control environment. An online questionnaire requesting confirmation
of adherence to controls: financial, operational, HR and IT is sent to all
Intertek operations. Where corrective actions are needed, the country is
required to provide an outline and a confirmed timeline. The results are
used as an input for the Internal Audit and Compliance Audit assurance
work for 2022.

Self-assessment responses are consolidated for review at a regional
level, with further review and sign-off of the consolidated self-
assessments in the regional risk committees, before a final consolidated
CEO and CFO review. A final summary assessment is provided to the
Committee. The self-assessment exercise has been reviewed during the
year to ensure global coverage and to reflect Intertek’s operational and

financial structure, and in order to enhance the alignment of the
self-assessment to the assurance process.

We annually review and approve the statements to be included in the Annual
Report & Accounts to ensure they remain relevant to the Group's strategy and
operations as well as complying with any regulatory requirements. A detailed
verification programme also provides assurance to the Committee and the
Board when checking that all the statements made in the Annual Report &
Accounts are accurate. Intertek’s Manual of Accounting Policies and
Procedures is issued to all finance staff giving instructions and guidance on all
aspects of accounting and reporting that apply to the Group. More
information on the risk governance and management system and processes is
outlined on pages 167 to 169. The Committee can confirm that it reviewed
the Group’s internal controls and risk management systems and concluded
that there was an effective control environment in place across the Group
during 2021, and up to the date on which these financial statements were
approved. No significant failings or weaknesses were identified.

Further information on how Intertek has implemented an end-to-end
integrated approach to risk, control and compliance is outlined on pages
167 to 169.

Whistleblowing and fraud
We reviewed the adequacy and security of the Group’s arrangements for
its employees and contractors to raise concerns, in confidence, about
possible wrongdoing in financial reporting or other matters ensuring that
these arrangements allow proportionate and independent investigation
of such matters and appropriate follow-up action. We are advised of any
significant notifications from the whistleblowing hotline and updated on
the investigations undertaken, conclusions and actions taken.

In addition, we review the Group’s systems and procedures for
detecting fraud, the prevention of bribery and receive regular reports
on non-compliance and keep under review the adequacy and
effectiveness of the compliance function.

Significant issues considered by the Committee
In preparation for each year end, the Committee reviews the significant
accounting policies, estimates and judgements to be applied in the
financial statements and discusses their application with management.
The external auditor also considers the appropriateness of these
assessments as part of the external audit. The Committee’s views,
comments and their insights are used to inform the processes and
approach taken by management in all areas of significant risk, thus
facilitating a Group-wide consistent and prudent approach.

In accordance with the Code, the external auditor prepares a report for the
Committee on both the half-year and full-year results, which summarises the
approach to key risks in the external audit and highlights any issues arising out
of their work on those risks, or any other work undertaken on the audit.

Sustainability Report / Directors' ReportContentsAudit Committee report
Continued

During the year, the Committee reviewed and considered the following estimates and areas of judgement to be exercised in the application of the accounting policies:

135

Area of Judgement

Claims

Taxation

Revenue Recognition

Acquisitions and fair value accounting

Impairment of Goodwill and other acquired
intangible assets

Committee comment

From time to time, the Group is involved in various claims and lawsuits incidental to the ordinary course of business. The Committee considered the claims provision
which reflects the estimates of amounts payable in connection with identified claims from customers, former employees and others. The Committee noted that once
claims have been notified, the finance teams liaise with the business to determine whether a provision is required, based on IAS 37 Provisions, Contingent liabilities
and Contingent assets (‘IAS 37’).
The level of provision is subsequently reviewed on a regular basis with the Group General Counsel, taking into account the advice of external legal counsel.
The Committee, following assurance from management and review of the position by the external auditor, considered and agreed that the claims provision, and
associated disclosures, were appropriate given the size and status of claims reported.

The determination of profits subject to tax is calculated according to complex laws and regulations, the interpretation and application of which can be uncertain. In
addition, deferred tax assets and liabilities require judgement in determining the amounts to be recognised, with consideration given to the timing and level of future
taxable income. The main areas of judgement in the Group tax calculation are the expected central tax provisions for the full year, including provisions related to
transfer pricing risk, and the recognition of the UK deferred tax asset.
Twice a year, the Committee receives a report from management providing an evaluation of existing risks and tax provisions which is reviewed by the Committee.
The Committee also considered reports presented by the external auditor before determining that the levels of tax provisioning were appropriate.

IFRS 15 Revenue from contracts requires an entity to recognise revenue in a way that shows the transfer of goods/services promised to customers is an amount that
reflects the expected consideration in return for transferring control of those goods or services to the customer.
The Committee reviewed the work completed regarding revenue and taking into account the views of the external auditor, agreed that the treatment was
appropriate.

The Committee was advised of the approach taken to acquisitions made in 2021 where their related fair values have been recognised on a provisional basis. Such
provisional amounts are subsequently finalised within the 12-month measurement period, as permitted by IFRS 3. Details of acquisitions in 2021 are set out in note
10 on page 192.
The Committee, following assurance from management and review of the position by the external auditor, was satisfied that the treatment was appropriate.

The Group is required to make judgements to estimate the fair value of assets and liabilities acquired; in particular, the amounts attributed to intangible assets such
as titles, brands, acquired customer lists and associated customer relationships. These judgements impact the amount of goodwill recognised on acquisitions. As
outlined in note 9 the Group has £1,241.4m of Goodwill which has arisen on acquisitions. An impairment assessment is required at least annually in respect of this
amount.
The Committee noted the update as at the year end and, taking into account acquisitions made during the year, and after seeking confirmation from the external
auditor, agreed the disclosure in note 9 on pages 189 to 192.

Accounts receivables and accrued income

The Group takes a prudent approach to provisioning of accounts receivable and accrued income balances in-line with IFRS 9, Financial Instruments.
The Committee noted the update as at the year-end and, considering the views of the external auditor, agreed that the Group’s provision was appropriate.

Consideration of Climate Change

Pensions

Mandatory TCFD reporting for premium listed entities has driven significant momentum regarding climate change related disclosures. The Group has set out its
consideration of climate change in respect of an impact on the financial reporting judgements and estimates arising from our assessment of climate change on the
Group as a whole.
The Committee reviewed the approach taken to consider the impact of climate change and the disclosures on pages 50 to 54 and taking into account the feedback
from the external auditor agreed the approach taken and the related disclosures.

The Group operates a number of post-employment plans. In most locations, these are defined contribution arrangements. However, there are defined benefit
schemes in the United Kingdom and Switzerland.
Having considered advice from external actuaries and assumptions used by companies with comparator plans, the Committee agreed that the assumptions used to
calculate the income statement and balance sheet assets and liabilities for post-employment plans were appropriate (see note 16).

Following reviews and discussions throughout the year of all the relevant papers presented and after considered discussion with management and the external auditor, the Committee had an understanding of the business
rationale for transactions and how they were being recorded and disclosed in the financial statements, and therefore agreed that the estimates and areas of judgement exercised by management were appropriate.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents136

Remuneration Committee report

The Board is confident that remuneration at
Intertek is aligned to the overall stakeholder
experience with the results reflecting the
strong performance during 2021."

Gill Rider
Chair

Intertek Group plc | Annual Report & Accounts 2021

Dear shareholder,
I am delighted to present our Remuneration
Committee report for the year ended 31 December
2021.

Business context
The pandemic has brought to life as never before the
importance of Intertek’s role in society, and we
continue to invest in new opportunities to help
foster a better and safer world for all post-Covid-19.
With our industry leading capability and expertise,
innovation and insight, Intertek is uniquely
positioned to seize these compelling growth
opportunities. The Group has continued to
demonstrate the effectiveness of our long-term
‘5x5’ differentiated strategy for growth in 2021, and
this is reflected by our strong progress made in the
year:
– Revenue of £2,786.3m: +6.5% at constant rates

and +1.6% at actual rates

– Robust LfL revenue growth of 5.6% at

constant rates: Products: +7.6%, Trade: +3.0%,
Resources +1.7%

– Broad-based LfL revenue growth and record

operating profit and margin in H2

– Double-digit adjusted operating profit growth
of +15.4% at constant rates and +10.8% at
actual rates

– Statutory operating profit of £433.2m, up 19.6%

YoY at constant rates

– Strong adjusted operating margin of 17.0%:
+130bps at constant rates and +140bps
at actual rates

– Double-digit adjusted diluted EPS growth
of +16.8% at constant rates and +11.6%
at actual rates

– Strong cash conversion delivered free cash flow

of £401.8m; financial net debt of £733m,
1.1x EBITDA

– Sustainable returns to shareholders with FY21
dividend of 105.8p in line with 2019 and 2020

2021 AGM voting
At the 2021 AGM, we put forward a revised
remuneration policy for shareholder approval, with
the primary changes being (i) a reduction of the
CEO’s pension from 30% of salary to 5% of base
salary, and in line with that commitment it will reduce
to 20% this year; (ii) significantly increasing the
shareholding requirements for our executives; (iii)
introducing post-cessation shareholding
requirements in line with best practice; and (iv)
increasing the maximum LTIP award for the CEO from
250% to 300% of salary. Whilst shareholders
provided positive feedback during consultation, the
Committee is mindful that only 68.7% felt they were
able to support the remuneration policy resolution at
the 2021 AGM.

Reflecting on the vote, we again engaged with
shareholders to allow them to express any concerns.
We learnt that, whilst our shareholders welcomed the
reductions being made to the CEO’s pension
arrangements, some of them were concerned that
the reductions were being made over a five-year
time period. We also received feedback that
shareholders would like to see the introduction of
ESG measures into our remuneration framework.

The Remuneration Committee (the 'Committee')
intends to engage with shareholders and discuss
how we continue to apply the Remuneration Policy.
The Remuneration Committee would also like to
thank our shareholders who took part in the
engagement process and values the feedback and
insights we have gained.

Sustainability Report / Directors' ReportContents137

Implementation of our Remuneration Policy in 2022
As we considered the effectiveness of our Remuneration Policy, we
believe it is working well and achieving our business objectives. For this
reason, we intend to continue the operation of the new policy with
some minor adjustments as detailed below. Our Remuneration Policy is
delivered consistently at all levels of the wider workforce. The
alignment of measures and metrics right through the organisation is
one of the key aspects of the policy.

Salary increases in the UK will amount to an overall increase of 2% in
payroll cost. Given the strong performance delivered by the executive
directors, the Committee has awarded the CEO and CFO a 2% salary
increase.

Reflecting shareholder comments regarding ESG, we are proposing a
change to the operation of our annual incentive plan for 2022. The
annual incentive is currently based 100% on financial performance:
80% based on a matrix of revenue and adjusted operating profit growth
and 20% based on ROIC. Keeping in mind the Group’s wider purpose of
bringing quality, safety and sustainability to life, the Committee
considered it would be appropriate to incorporate an ESG element into
the annual incentive framework. The ESG element will have a 15%
weighting and be based on performance against a Carbon Emissions
target. We have signed up to the Science Based Targets initiative, which
means that the ESG element will be based on independently verified
science-based emission targets. The 2022 annual bonus will therefore
be based on: 70% matrix of revenue and adjusted operating profit
growth, 15% ROIC and 15% ESG. No changes are proposed to quantum,
which will remain at a maximum of 200% of salary for both the CEO and
CFO. We believe this is an important step forward for Intertek and
aligning the whole organisation behind the ESG metric will make a big
positive difference.

No changes are proposed to the LTIP framework, with awards of 300%
and 200% of salary to be granted to the CEO and CFO respectively.
Awards will be based on three equally weighted metrics, Earnings Per
Share, Adjusted Free Cash Flow and Return on Invested Capital, with
details of the underlying targets for the awards set out on pages 147
and 148.

Alignment with strategy and purpose
Our Core Purpose of “Bringing Quality, Safety and Sustainability to life”
has never been more meaningful than in the present context, as we
continue to navigate the long-lasting impacts of the pandemic. Our
Purpose is supported by our Values, and we pride ourselves in living our
Values, with integrity and fairness sitting at the heart of all our
decisions. We believe that our remuneration policy and its
implementation are value-based, and will create sustainable momentum
of the business, our people, our customers and our shareholders in the
years to come, whilst also supporting the sustainable delivery of
Intertek’s clear and powerful differentiated 5x5 growth strategy.

Wider workforce
I would also like to take a moment to thank all of our colleagues for
having delivered a strong performance in 2021. Despite the impact of
the pandemic on our lives, the incredible work that our colleagues do
every day has continued. Collectively Intertek colleagues make a huge
positive impact for our customers, communities and for the world.

The Board is confident that remuneration at Intertek is aligned to our
shareholder interests and carefully designed to support our strategy. I
look forward to your support at our forthcoming AGM.

Yours sincerely,

Gill Rider
Chair of the Remuneration Committee

Remuneration Committee report
Continued

Pay for performance in 2021
For 2021, Executive Director incentive awards were based purely on
financial performance. As set out earlier in the Annual Report &
Accounts, in an external economic environment that continues to be
challenging, Intertek has delivered strong financial performance with
1.6% growth in revenue (6.5% at constant currency) and 10.8% growth
in adjusted operating profit (15.4% at constant currency), an adjusted
operating margin of 17.0% (up 130bps at constant currency), a
proposed full-year dividend of 105.8p and ROIC of 18.2%. Based on our
predetermined performance matrix, the Committee approved an annual
incentive result of 85% of maximum. Our shareholders will remember
that the majority of employees in the whole Group have a bonus that is
linked to the same metrics that we use throughout the business.

Over the longer term, the three-year performance of the Group has
delivered EPS CAGR growth of 0.8% and total shareholder return of
12.7%, slightly below the median of the FTSE 31-130. This has resulted
in a pay-out under the 2019 long-term incentive award of 0%.

When determining incentive outcomes the Committee exercised
independent judgement, taking into account a number of internal and
external considerations to determine whether the results felt
appropriate, including:

–

– overall share price performance in the year and the implementation
of our progressive dividend policy, which rewarded our shareholders
with a £115.6m payout for the final 2021 dividend;
the strategic actions taken by the Board to invest organically and
inorganically to seize the attractive growth opportunities; and
the overall stakeholder experience over the year, including the
experience of our clients, employees and communities.

–

It was the view of the Committee that the incentive outcomes
appropriately reflected performance in the period and the wider
shareholder experience, and the Remuneration Policy operated as
intended and therefore no discretion was applied.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents138

As a global service business, our success is critically dependent on the
performance and retention of our key people around the world.
Employment costs represent the major element of Group operating
costs. As a global Group, our pay arrangements take into account both
local and international markets and we operate a global Remuneration
Policy framework to achieve our reward strategy. Our benchmark peer
groups for the majority of our employees consist of international
industrial or business service organisations and similar-sized
businesses. For our more senior executives we base our remuneration
comparisons on a blend of factors, including sector, job complexity,
location, responsibilities and performance, whilst recognising the
Company is listed in the UK.

We believe that a significant proportion of remuneration for senior
executives should be related to performance, with part of that
remuneration being deferred in the form of shares and subject to
continued employment and longer-term performance. We also believe
that share-based remuneration should form a significant element of
senior executives’ compensation, so that there is a strong link to the
sustained future success of the Group.

Remuneration Committee report
Continued

DIRECTORS’ REMUNERATION POLICY
The section below sets out the Remuneration Policy for Executive and
Non-Executive Directors, which was approved by shareholders at the
AGM on 26 May 2021. There is no change to the Remuneration Policy
this year in-line with normal practice. The full Policy is set out in the
2020 Annual Report & Accounts. Some sections of the Policy have
been updated to reflect how it was applied in 2021 and our proposed
implementation of the Policy in 2022.

In determining the Remuneration Policy, which was approved last year,
the Committee followed a robust process which included discussions on
the content of the Policy at two Remuneration Committee meetings.
The Committee considered input from management, although conflicts
of interest were managed with decisions being taken by the members
of the Remuneration Committee, and our independent advisers as well
as in the context of best practice and guidance from our major
shareholders and the proxy advisory bodies.

Policy overview
We continue to focus on ensuring that our Remuneration Policy is
appropriate for the nature, size and complexity of the Group,
encourages our employees in the development of their careers and is
aligned to the Company’s strategy and is in the best interests of the
Company and its stakeholders. It is directed to deliver continued
sustainable profitable growth.

Our remuneration strategy is to:

– align and recognise the individual’s contribution to help us succeed
in achieving our 5x5 differentiated strategy for sustainable growth;

– attract, engage, motivate and retain the best available people by

positioning total pay and benefits to be competitive in the relevant
market and in line with the ability of the business to pay;
reward people equitably for the size of their responsibilities and
performance; and

–

– motivate high performers to increase shareholder value and share in

the Group’s success.

Each year the Committee approves the overall reward strategy for the
Group and sets the individual remuneration of the Executive Directors
and certain senior management. The Committee reviews the balance
between base salary and performance-related remuneration against
the key objectives and targets so as to ensure performance is
appropriately rewarded. This also ensures outcomes are a fair reflection
of the underlying performance of the Group.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsPurpose and link to strategy

Operation

Maximum opportunity

Performance measures

Remuneration Committee report
Continued

Remuneration Policy for Directors
The following table sets out the key aspects of the Remuneration Policy for Directors.

139

Element of pay

Base salary

To attract and retain high
performing Executive Directors to
lead the Group.

The Committee normally reviews salaries
annually, taking account of factors including,
but not limited to, the scale of responsibilities,
the individual’s experience and performance.

Benefits

To provide competitive benefits to
ensure the wellbeing of employees.

Pension

To provide competitive retirement
benefits.

Whilst the Committee takes benchmarking
information into account, its decisions are
based primarily on the performance of the
individual concerned against the above factors
to ensure that there is no unjustified upward
ratchet in base salary.

Benefits include, but are not limited to, annual
medicals, life assurance cover of up to six times
base salary, allowances in lieu of a company car
or other benefits, private medical insurance
(for the individual and their dependants) and
other benefits typically provided to senior
executives.

Executive Directors can participate in any
all-employee share plans operated by the
Company on the same basis as all other
employees.

Executive Directors can elect to join the
Company’s defined contribution pension
scheme, receive pension contributions into
their personal pension plan or receive a cash
sum in lieu of pension contributions.

Intertek Group plc | Annual Report & Accounts 2021

There is no prescribed maximum salary or
annual increase.

Individual performance is taken into account
when salary levels are reviewed.

In awarding any salary increases, the
Committee is guided by the general
increase for the employee population but
on occasions may need to recognise
other factors including, but not limited to,
development in role, change in
responsibility and/or variance to market
levels of remuneration.

The total value of these benefits
(excluding the all-employee plans) will
not normally exceed 12% of salary.

n/a

The maximum opportunity under any
all-employee share plan is in line with all
other employees and is as determined by
the prevailing HMRC rules.

For new Executive Directors pension
provisions will be in line with those of the
wider UK workforce (currently 5% of
salary).

n/a

For current Executive Directors –
reducing from 30% of salary by 5% each
year for five years until it is in line with
the wider UK workforce (currently 5% of
salary). In line with that commitment it
will reduce to 20% this year.

Sustainability Report / Directors' ReportContentsRemuneration Committee report
Continued

140

Element of pay

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

Annual Incentive Plan (‘AIP’)

To drive the short-term strategy
and recognise annual performance
against targets which are based on
business objectives.

Awards are based on Group annual
performance targets, with performance
targets normally set annually by the Board.

The maximum opportunity in respect of a
financial year is 200% of salary for each
Executive Director.

The annual incentive will be measured against
a range of key Group financial measures.

Incentive outturns are normally assessed by
the Committee at the year end, taking into
account performance against the targets and
the underlying performance of the business.

The Committee has the ability to adjust
the performance measures if not
appropriate in the context of overall
performance.

The Committee can adjust upwards the
incentive outturn (up to the maximum
set out above) to recognise very
exceptional circumstances or to
recognise circumstances that have
occurred which were beyond the direct
responsibility of the executive and the
executive has managed and mitigated
the impact of any loss.

The payout at below threshold performance is
0% of maximum, with 25% of the maximum
bonus normally payable for threshold
performance. Payouts between threshold and
maximum (100%) are determined on an annual
basis. Details of the payout schedule will be
disclosed in the relevant Directors’
Remuneration report.

Normally, 50% of any incentive is paid in cash
and 50% deferred into shares which will vest
after a period of three years subject to
continued employment.

Malus and clawback provisions apply.

The current intention is that none of the
incentive will be subject to non-financial
measures or personal performance measures.

The Committee, however, retains the
discretion to introduce such measures in the
future, up to a maximum of 20% of the
incentive.

Were the Committee to introduce such
measures, it would normally consult with the
Company’s largest institutional shareholders.

For 2022, the annual incentive will be based
on 70% matrix of revenue and adjusted
operating profit growth, 15% ROIC and 15%
ESG. The stretch targets, when met, reward
exceptional achievement and contribution.
There is no incentive payout if threshold
targets are not met.

Long Term Incentive Plan (‘LTIP’)

To retain and reward Executive
Directors for the delivery of
long-term performance.

Annual grant of conditional shares which vest
after three years, subject to Company
performance and continued employment.

Up to 300% of salary in respect of any
financial year.

LTIP awards are subject to an appropriate
balance of earnings, cash and capital
efficiency based performance measures.

To support the continuity of the
leadership of the business.

Awards may be made in other forms (e.g.
nil-cost options) if considered appropriate.

To provide long-term alignment of
executives’ interests with
shareholders by linking rewards to
Intertek’s performance.

The shares will also normally be subject to a
two-year holding period after vesting.

Performance targets are normally set annually
for each three-year performance cycle by the
Board.

Vesting is normally assessed by the Committee
after the end of the performance period, taking
into account performance against the targets
and the underlying performance of the
business. The Committee has the ability to
adjust incentive payments if it believes that
out-turns are not appropriate in the context of
overall performance.

Malus and clawback provisions apply.

Intertek Group plc | Annual Report & Accounts 2021

The Committee retains the discretion to
introduce another performance metric, with a
maximum weighting of up to one-third of the
incentive. Were the Committee to introduce
such measures, it would normally consult with
the Company’s largest institutional
shareholders.

For 2022, the LTIP award will be based on
earnings per share, return on invested capital
and adjusted free cash flow. Each measure will
have an equal weighting.

25% of an award will vest for achieving
threshold performance, increasing pro rata to
full vesting for the achievement of stretch
performance targets.

Sustainability Report / Directors' ReportContentsRemuneration Committee report
Continued

141

Element of pay

Purpose and link to strategy

Operation

Maximum opportunity

Performance measures

Share ownership guidelines

To increase alignment between
executives and shareholders.

Post-cessation of employment
shareholding

Non-Executive Directors’ fees

To ensure alignment of sustainable
performance between executives
and shareholders.

To attract and retain high-calibre
Non-Executive Directors through
the provision of market-competitive
fees.

500% of salary for the CEO.

n/a

300% of salary for the CFO.

n/a

Executive Directors required to hold
shares as per share ownership guidelines
for two years post-employment.

As for the Executive Directors, there is
no prescribed maximum annual increase.
The Committee is guided by the general
increase for the employee population but
on occasions may need to recognise
other factors including, but not limited to,
change in responsibility and/or variance
to market levels of remuneration.

Executive Directors are expected to retain any
vested shares (net of tax) under the Group’s
share plans until the guideline is met.

The guideline should normally be met within
five years of the guideline being set.

Further details of the share ownership
guidelines and the post-cessation shareholding
guidelines are set out in the Directors’
Remuneration report.

Holding and vesting periods for all share
awards will be adhered to post-employment.

A proportion of the fees (at least 50%) are paid
in cash, with the remainder used to purchase
shares.

Fees are primarily determined based on the
responsibility and time committed to the
Group’s affairs and appropriate market
comparisons.

The Chairman receives an all-inclusive fee.
Non-Executive Directors receive a base fee
and further fees for additional Board
responsibilities. Additional fees may be paid in
the exceptional event that Non-Executive
Directors are required to commit substantial
additional time above that normally expected
for the role.

With the exception of benefits-in-kind arising
from the performance of duties (and any tax
due on those benefits which is reimbursed by
the Company), no other benefits are provided.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsRemuneration Committee report
Continued

Selection of performance metrics
The annual incentive plan is based on performance against a mix of
financial and non-financial measures. The mix of financial measures is
aligned to the Group’s Key Performance Indicators (‘KPIs’) and is
reviewed each year by the Remuneration Committee to ensure that
they remain appropriate to reflect the priorities for the business in the
year ahead. The targets are set for each KPI to encourage continuous
improvement and challenge the delivery of stretch performance.

The 2022 LTIP award is based on earnings per share growth, return on
invested capital and adjusted free cash flow. The performance metrics
align with Intertek’s earnings model, which supports delivery of the
Company’s differentiated strategy, which aims to move the centre of
gravity of the Company towards high-growth, high-margin areas in our
industry. Earnings per share ensures that there is a clear focus on
margin-accretive revenue growth; adjusted free cash flow ensures
focus on strong cash management; and return on invested capital
ensures a focus on disciplined capital management.

A sliding scale of challenging performance targets is set for each
measure. The Committee reviews the choice of performance measures
and the appropriateness of the performance targets prior to each LTIP
grant. The Committee reserves the discretion to set different targets
for future awards, without consulting with shareholders. When setting
the targets for the annual incentive and the LTIP, the Committee takes
into account a range of factors, including the business plan, prior-year
performance, market conditions and consensus forecasts.

Terms of incentive awards
Deferred awards and LTIP awards may include the right to receive
(in cash or shares) the value of the dividends that would have been paid
on the shares that vest up to the time of vesting (or for LTIP awards, up
to the end of the relevant holding period). The Committee’s intention is
that such dividends would normally be settled in shares.

The Committee will operate the annual incentive plan and LTIP
according to the respective rules of the plans. The Committee will retain
flexibility in a number of areas regarding the operation and
administration of these plans, including (but not limited to) the
following:

– how to deal with a change of control or restructuring of the Group,

or a demerger or similar event (including how to assess performance
conditions and whether to time pro-rate awards); and
– how and whether any award may be adjusted in certain

circumstances (including in the event of a variation of share capital,
demerger, special dividend, or similar event).

Intertek Group plc | Annual Report & Accounts 2021

142

The Committee also retains the discretion within the Remuneration
Policy to adjust targets and/or set different measures and weightings
if it considers it is required so that the targets or conditions achieve
their original purpose. Revised targets/measures will be, in the opinion
of the Committee, no less difficult to satisfy than the original
conditions. The Committee may accelerate the vesting and/or the
release of awards if an Executive Director moves jurisdictions following
grant and there would be greater tax or regulatory burdens on the
award in the new jurisdiction.

Remuneration scenarios for Executive Directors
The chart on the next page illustrates how the Executive Directors’
remuneration packages vary at different levels of performance under
the Policy which will apply in 2022 for both the Chief Executive Officer
(‘CEO’) and Chief Financial Officer (‘CFO’).

Approach to recruitment and promotions
The remuneration package for a new Executive Director – base salary,
benefits, pension, annual incentive and long-term incentive awards
– would be set in accordance with the terms of the Company’s prevailing
approved Remuneration Policy at the time of appointment. The
Committee may set the base salary at a value to reflect the calibre,
experience and earnings potential of a candidate, subject to the
Committee’s judgement that the level of remuneration is in the
Company’s best interest. The maximum level of variable pay (annual
incentive and long-term incentive awards, or any combination thereof)
which may be awarded to a new Executive Director at or shortly
following recruitment shall be limited to 500% of salary. These limits
exclude buy-out awards and are in line with the ‘Remuneration Policy
for Directors’ set out previously.

The Committee may offer additional cash and/or share-based elements
to take account of remuneration relinquished when leaving the former
employer when it considers these buy-outs to be in the best interests
of the Company (and therefore shareholders) (‘buy-outs’).

Any such awards would reflect the nature, time horizons and
performance requirements attaching to the remuneration it is intended
to replace. Where appropriate, the Committee retains the flexibility to
utilise Listing Rule 9.4.2 for the purpose of making an award to
‘buy-out’ remuneration relinquished when leaving the former employer.
For external and internal appointments, the Committee may agree that
the Company will meet certain relocation expenses and continuing
allowances as appropriate. Additionally, in the case of any Executive
Director being recruited from overseas, or being recruited by the
Company to relocate overseas to perform their duties, the Committee
may offer expatriate benefits on an ongoing basis subject to their
aggregate value to the individual not exceeding 50% of salary
per annum.

For an internal Executive Director appointment, any variable pay
element awarded in respect of the prior role may be allowed to pay out
according to its terms, adjusted as relevant to take into account the
appointment. In addition, any other ongoing remuneration obligations
existing prior to appointment may continue. If a new Chairman or
Non-Executive Director is appointed, remuneration arrangements will
be in line with those detailed in the Remuneration Policy for Non-
Executive Directors set out in the Remuneration Policy for Directors.

Service contracts for Executive Directors
The service agreements of the Executive Directors are not fixed term
and are terminable by either the Company or the Director on 12 months’
notice and make provision, at the Board’s discretion, for early
termination by way of payment of salary and pension contributions in
lieu of 12 months’ notice. In calculating the amount payable to a
Director on termination of employment, the Board would take into
account the commercial interests of the Company and apply usual
common law and contractual principles. Any payments in lieu of notice
may be paid in a lump sum or may be paid in instalments and reduce if
the Director finds alternative employment. The service contracts are
available for inspection at the Company’s registered office. The
Committee reviews the contractual terms for new Executive Directors
to ensure these reflect best practice.

In summary, the contractual provisions are:

Provision

Detailed terms

Notice Period

12 months

Common law and
contractual principles

Remuneration
entitlements

Change of control

Common law and contractual principles apply

An incentive may be payable (pro rata where
relevant) and outstanding Share Awards may
vest (see below)

No Executive Director’s contract contains
provisions or additional payments in respect of
change of control. The treatment of annual
incentive awards and outstanding Share
Awards will be treated in line with the relevant
plan rules

There is no automatic entitlement to an annual incentive award in
the year of cessation of employment. The Committee may determine
however, that for certain leavers an annual incentive award may be
payable with respect to the period of the financial year served.
Any share-based entitlements granted to an Executive Director under
the Company’s share plans will be determined based on the relevant
plan rules.

Sustainability Report / Directors' ReportContents143

Remuneration Committee report
Continued

The default treatment under the 2011 LTIP, and under the 2021 LTIP, is
that any outstanding awards lapse on cessation of employment.
However, in certain prescribed circumstances, such as death, ill-health,
injury, disability or other circumstances at the discretion of the
Committee, ‘good leaver’ status may be applied.

For good leavers, Deferred Share Awards will vest in full on the original
vesting date (as permitted under the plan rules), unless the
Remuneration Committee determines that awards should vest at an
earlier date. LTIP awards will normally vest on the original vesting date
(they will normally, where appropriate, be subject to any holding period),
and subject to the satisfaction of the relevant performance conditions
at that time and reduced pro rata to reflect the proportion of the
performance period actually served. However, the Committee has
discretion to determine that awards vest at an earlier date and/or to
disapply time pro-rating, although it is envisaged that this would only
be applied in exceptional circumstances (for example, death). Any such
incidents, where discretion is applied by the Committee in relation to
Executive Directors, will be disclosed in the following Annual Report &
Accounts on Remuneration.

In determining whether an Executive Director should be treated as a
good leaver or not, the Committee will take into account the reasons for
their departure.

The Committee reserves the right to make any other payments
(including appropriate legal fees) in connection with an Executive
Director’s cessation of office or employment where the payments are
made in good faith on discharge of an existing legal obligation (or by
way of damages for breach of their obligation) or by way of settlement
of any claim arising in contravention with the cessation of an Executive
Director’s office or employment.

Value of remuneration packages at different levels of performance

£’000

8,000

7,500

7,000

6,500

6,000

5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

£7,873

58%

£6,361

48%

32%

26%

£3,841

39%

26%

£1,321

100%

34%

21%

17%

LTIP award

Annual incentive

Basic salary, beneﬁts and pension

£2,738

39%

22%

£3,274

49%

33%

18%

£1,668

32%

36%

£596

100%

Minimum

On-target

Maximum

Maximum 2

Minimum

On-target

Maximum

Maximum 2

A Lacroix, Chief Executive Officer

J Timmis, Chief Financial Officer

Points relating to the above table:
1. Salary levels are based on those applying on 1 April 2022.
2. The value of taxable benefits is based on the cost of supplying those benefits (as disclosed) for the year ended 31 December 2021.
3. The value of pension receivable by the CEO and CFO in 2022 is taken to be 20% of salary and 5% of salary, respectively.
4. The on-target level of annual incentive is taken to be 50% of the maximum opportunity.
5. The on-target level of the LTIP is taken to be 50% of the face value of the award at grant.
6. Share price movement and dividend accrual have not been incorporated into the first three scenarios. Share price growth of 50% has been assumed on the LTIP in the Maximum 2 scenario.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsRemuneration Committee report
Continued

Letters of appointment for Non-Executive Directors
The letter of appointment for each Non-Executive Director states that
they are appointed for an initial period of three years and all
appointments are terminable by one month’s notice on either side. At
the end of the initial period and after rigorous review, the appointment
may be renewed for a further period, usually three years, if the
Company and the Director agree and subject to annual re-election at
the AGM. Each letter of appointment states that if the Company were
to terminate the appointment, the Director would not be entitled to any
compensation for loss of office.

The table below sets out the terms for all the current Non-Executive
Directors of the Board.

144

Consideration of employment conditions elsewhere within
the Group
When setting the Remuneration Policy for Executive Directors, the
Remuneration Committee takes into account the pay and employment
conditions elsewhere within the Group. When considering the
remuneration arrangements for the Executive Directors for the year
ahead, the Committee is informed of salary increases across the wider
Group. The Committee also approves the overall reward strategy in
operation across the Group.

Andrew Martin

Graham Allan

Gurnek Bains

Lynda Clarizio

Tamara Ingram

Gill Rider

Jean-Michel Valette

Date of Appointment

Appointed Chair: 1 January 2021
Appointed to the Board: 26 May 2016
Reappointed: 26 May 2019

1 October 2017
Reappointed: 1 October 2020

Reappointed: 1 July 2020

1 March 2021

18 December 2020

1 July 2015
Reappointed: 1 July 2021

1 July 2017
Reappointed: 1 July 2020

Notice Period/Unexpired Term
as at 31 December 2021

One month/5 months

One month/21 months

One month/18 months

One month/26 months

One month/23 months

One month/30 months

One month/18 months

The remuneration strategy set out at the beginning of the Directors’
Remuneration Policy report reflects the strategy in place across all
employees across the Group. Although this remuneration strategy
applies across the Group, given the size of the Group and the
geographical spread of its operations, the way in which the
Remuneration Policy is implemented varies across the Group. For
example, annual incentive deferral applies at the more senior levels
within the Group and participation in the LTIP is at the Remuneration
Committee’s discretion and is typically limited to senior executives
employed within the Group.

Given the geographical spread of the Group’s operations, the
Remuneration Committee does not consider it appropriate to consult
employees on the Remuneration Policy in operation for Executive
Directors.

Consideration of shareholder views
The Committee values the opportunity to engage in meaningful
dialogue with its investors. After the 2021 AGM, the Committee
consulted with investors following the vote on the Remuneration Policy
and further details on the engagement is outlined in the Chair of the
Remuneration Committee’s letter on pages 136 and 137.

Legacy arrangements
The approved Directors’ Remuneration Policy provides authority to the
Company to honour any commitments entered into with current or
former Directors such as the vesting of outstanding share awards
(including exercising any discretions available to it in connection with
such commitments) that were agreed:

i. before the policy set out above, or any previous policy, came into

effect;

ii. at a time when a previous policy approved by shareholders was in
place provided that the payment is in line with the terms of that
policy; and

iii. at a time when the relevant individual was not a Director of the
Company and the payment was not in consideration for the
individual becoming a Director of the Company.

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Sustainability Report / Directors' ReportContents145

Committee responsibilities and how we met them in the year
We have specific responsibilities reserved to us by the Board and the
full Terms of Reference of the Committee, which were updated in 2019
and are reviewed annually, can be found on our website at intertek.com.

Matters delegated to the Committee

Determine the Company’s policy on remuneration for the
Executive Directors and senior executive management.

Determines the remuneration for the above and the
Chair, including any compensation on termination of
office.

Reviews the remuneration arrangements for the wider
employee population and considers issues relating to
remuneration that may have a significant impact on the
Group.

Provides advice to, and consults with, the CEO on major
policy issues affecting the remuneration of other
executives.

Responsible for establishing the selection criteria,
selecting, appointing and setting the terms of reference
for any remuneration consultants who advise the
Committee.

Keeps the Remuneration Policy under review in light of
regulatory and best practice developments and
shareholder expectations and ensure that the policy is
voted on at least every third year. Due regard is given to
the interests of shareholders and the requirements of
the Listing Rules and associated guidance.

Code provision

33, 36–40

36–40

Ensures each year that the Annual Director’s Report on
Remuneration is put to shareholders for approval at the
AGM and includes a description of the work of the
Committee.

Executive Director remuneration
We are responsible for determining the Company’s policy on the
remuneration of the Chairman, the Executive Directors and senior
executive management. We also determine their remuneration
packages, including any compensation on termination of office and
review to ensure their alignment with our culture and with those of the
workforce as a whole.

In the year we addressed this by reviewing and agreeing the
remuneration of the Executive Directors as well as the Leadership
Team. We received advice from Deloitte LLP (‘Deloitte’) to inform our
discussions.

Wider workforce remuneration and engagement
We also review the remuneration and related policies of the wider
workforce to ensure that incentives and rewards align to our purpose,
values and culture. As part of this we receive information on salary
increases, the design of the bonus and targets and on the 2021 Long
Term Incentive Plan and performance criteria. This is used to inform
decisions when setting the policy for Executive Director remuneration
and for when we consult with, or provide advice to, the CEO on major
policy issues affecting the remuneration of other executives. The
remuneration framework and the incentive structure that we have in
place cascades right down through the wider workforce and ensures
alignment with executive remuneration and the 5x5 strategy. We also
took into account the UK wider workforce salary increase when
determining the 2022 salary increase for the Executive Directors.
We ensure that we have effective engagement with the wider
workforce on the Group’s remuneration and related policies through
various escalation processes and communication forums including town
halls, WhatsIn, emails and leadership briefings. The regular town halls
that take place across the Group we find provide an opportunity for our
people to raise questions on remuneration which are addressed at the
meetings, with feedback directly fed to senior management and
then upwards.

During the year, we reviewed the salary levels for senior management
and the determination of the annual incentive payments and long-term
incentive outcome for 2021. We considered a report on the general
market trends that could impact the Group.

Remuneration Committee report
Continued

ANNUAL REPORT ON REMUNERATION
Committee membership and meeting attendance

Scheduled
meetings
eligible to
attend

Meetings
attended

Committee members

Gill Rider (Chair)

Graham Allan

Gurnek Bains

Tamara Ingram (appointed 1 July 2021)

100%

attendance

The above members were members throughout 2021, apart from
Tamara Ingram who was appointed a member of the Committee on
1 July 2021. During 2021 and at all times when Directors’ remuneration
for the year was considered, the composition of the Committee was
compliant with the Code. All members are independent Non-Executive
Directors. Prior to joining Intertek in July 2015, Gill had been Chair of the
Remuneration Committee at Charles Taylor plc since January 2012. This
enabled the Nomination Committee to recommend her appointment as
Chair of the Committee which was then approved by the Board.

On appointment, new Committee members receive an appropriate
induction consisting of meetings with senior personnel, advisers and as
appropriate, meetings with shareholders and other relevant
stakeholders. They also review the Terms of Reference, previous
Committee meeting papers and minutes. The Committee invites the
Chairman, CEO and the EVP, Human Resources to attend meetings
when it deems appropriate, except when their own remuneration is
discussed. No Director is involved in determining his or her own
remuneration. None of the Committee members has had any personal
financial interest, except as shareholders, in the decisions made by the
Committee. The Group Company Secretary acts as Secretary to the
Committee.

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Continued

146

Remuneration Policy and report
It is important that we keep the Remuneration Policy under review in
light of regulatory and best practice developments, Listing Rules and
Governance Code changes as well as shareholder expectations.

Advisers
To ensure that the Group’s remuneration practices drive and support
achievement of strategies and are market competitive, the Committee
obtains advice from various independent sources.

Statement of shareholder voting
At the 2021 AGM, a resolution was proposed to shareholders to
approve the Remuneration Policy. This resolution received the following
votes from shareholders:

We review the appointment of the remuneration consultant and
consider if they remain independent and applicable for the needs of the
Committee. In the event that we decide that they are no longer
appropriate, we would arrange a review and any subsequent
appointment.

In 2021, the Committee received advice from Deloitte, who they
appointed in 2015 for their particular expertise both at a local and
global level, due to the worldwide operations of the Group and,
following review, the Committee remains satisfied that their advice is
objective and independent and has sufficient breadth of knowledge to
support our deliberations across the diverse Group as a whole. Deloitte
are members of the Remuneration Consultants Group and adhere to the
voluntary Code of Conduct in relation to executive remuneration
consulting in the UK.

The fees paid to Deloitte in the year were £61,573 exclusive of VAT.
The charges for services are calculated on the basis of time spent and
the seniority of the personnel performing the work at their respective
rates.

In addition to the services provided to the Committee, Deloitte provided
unrelated tax services to the Group during the year. Deloitte do not
have any connection with any Directors of the Company.

External appointments
The Company recognises that, during their employment with the
Company, Executive Directors may be invited to become Non-Executive
Directors of other companies and that such duties can broaden their
experience and knowledge. Executive Directors may, with the written
consent of the Company, accept such appointments outside the
Company, and the policy is that any fees may be retained by the
Director. No Executive Director currently has an external appointment.

In favour

Against

Total

Withheld

Votes

91,627,222

41,668,760

133,295,982

2,431,490

68.74

31.261

82.592

1. A summary of the reasons for the votes against and the actions taken in response are

outlined in the Chair’s letter.

2. Percentage of total issued share capital voted.

At the 2021 AGM, a resolution was proposed to shareholders to
approve the Directors’ Remuneration report for the year ended
31 December 2020. This resolution received the following votes from
shareholders:

In favour

Against

Total

Withheld

1. Percentage of total issued share capital voted.

Votes

131,735,955

3,306,803

135,042,758

684,715

97.55

2.45

83.671

At the Company’s Annual General Meeting (‘AGM’) on 26 May 2021, the
Remuneration Policy was passed with a vote of 68.74%. Following the
2021 AGM, engagement took place with shareholders and an update
was published within six months of the AGM on our website in
accordance with the 2018 UK Corporate Governance Code. Information
on the results of that engagement are outlined in the Chair’s letter on
pages 136 to 137. The Remuneration Committee would like to thank
shareholders that took part in the engagement process and values the
feedback and insights it has gained.

In addition, we undertook a review of the Directors’ Remuneration
report to ensure compliance with Remuneration Reporting Regulations.
We discussed the 2021 proxy voting agencies reports and their
recommendations issued prior to the 2021 AGM.

Incentives
A key task for us each year is to review the outcomes for the incentive
schemes and agree on payment levels taking into account actual
performance and any extraordinary events which may have impacted
on performance. We will consider if there is a need to apply malus or
clawback and, should there be, we would agree the quantum.

We undertook, with external advice, a thorough review of the 2021
annual incentive targets, performance measures and the TSR and EPS
results to determine the percentage of incentive awards that would
vest in 2021.

We also agreed the performance conditions that should apply to the
LTIP awards granted in the year to vest based on the performance to
the end of 2023. We reviewed the quantum of awards given and were
satisfied that they reflected the Remuneration Policy and were
appropriate.

Committee review
We undertake an annual review of how effectively we are working as a
Committee and take steps to develop any areas identified for
improvement.

We also reviewed how we work as a Committee, members’ individual
strengths and also any additional training that may be beneficial. We
received updates on market trends in remuneration from Deloitte and
regular updates on corporate governance and policy changes.

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Continued

Directors’ Remuneration Policy – implementation in 2022

147

Elements

Base salary

Benefits

Implementation in 2022

Base salary for 2022:
– André Lacroix: £1,007,915
–
The UK work force has been granted an average yearly salary increase of 2%.

Jonathan Timmis: £535,500 (appointed as CFO with effect from 1 April 2021).

Includes, for example, annual medicals, life assurance cover of up to six times base salary, allowances in lieu of a company car or other benefits, private medical insurance and other benefits
typically provided to senior executives. Executive Directors can participate in any all-employee share plans operated by the Company on the same basis as all other employees.

Pension

From 1 June 2022, 20% reducing by 5% each year until it is in line with the wider UK workforce (currently 5% of salary) for the CEO. 5% of base salary for the CFO.

Total value of benefits (excluding all-employee plans) will not exceed 12% of salary.

Annual Incentive Plan (‘AIP’)

– Maximum opportunity for the CEO and CFO: 200% of base salary.
– 50% of any incentive is paid in cash and 50% is deferred into shares vesting after three years.
– Malus and clawback provisions apply.
– Performance metrics – 70% will be based on a matrix based on revenue and adjusted operating profit growth, 15% will be based on ROIC and 15% will be based on ESG, which for 2022
will comprise a Carbons Emissions target. Targets are not disclosed prospectively due to commercial sensitivity, however, detailed disclosure of the performance targets and actual
outturns will be provided in the following year.

– Annual incentive will continue to be subject to a quality of earnings review at the end of the year to ensure that payouts are appropriate based on the underlying performance of the

Group and to ensure that any awards are commensurate with the Group’s culture and values.

Long Term Incentive Plan
(‘LTIP’)

– Maximum opportunity for the CEO and CFO: 300% and 200% of base salary, respectively.
– Two-year holding period after vesting.
– Malus and clawback provisions apply.

– Performance metrics for awards being granted in 2022:

Measures

Definition

Earnings Per
Share (‘EPS’)
(1/3)

Annualised fully diluted, adjusted EPS
growth.

Measured on a constant currency basis.

Adjusted Free
Cash Flow (1/3)

Per the definition used for the Group’s KPIs
on page 26.

Free cash flow generated from operations
less net capital expenditure, net interest
paid and income tax paid. Adjusted for
separately disclosed items.

Measured on a constant currency basis.

Per the definition used on page 26.

Threshold
(25%)

Maximum
(100%)

Commentary

4%p.a.

10% p.a.

Compound annual growth rate targets.

£899m

£979m

Cumulative targets measured over three years.

Targets set taking into account stretch within business plan and expected capital expenditure
over the coming three years.

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Remuneration Committee report
Continued

Elements

Implementation in 2022

Measures

Definition

Return on
Invested Capital
(‘ROIC’) (1/3)

Adjusted operating profits less adjusted tax
divided by invested capital (net assets
excluding tax balances, net financial debt
and net pension liabilities).

Measured on a constant currency basis.

Per the definition used for the Group’s KPIs
on page 26.

Threshold
(25%)

Maximum
(100%)

Commentary

16.5%

20.5%

Cumulative adjusted operating profits divided by cumulative invested capital in each of the three
performance years.

Target set taking into account stretch within business plan, current ROIC performance, and
reflective of the Group’s strategy of making small bolt-on acquisitions which complement the
Group’s business.

The treatment of significant acquisitions would be determined at the time of the transaction.

Share ownership guidelines

Shareholding guidelines are 500% of salary for the CEO and 300% of salary for the CFO.
A post-cessation holding equivalent to the lower of the guideline target or the number of
shares held at the date of departure will be required to be held for a period of two years
from the Executive's departure date.

Non-Executive Directors’ fees
Fees for the Non-Executive Directors are determined by the Board, based on the responsibility and time committed to the Group’s affairs and appropriate market comparisons. Individual Non-Executive Directors do not take part
in discussions regarding their own fees.

Board membership

Chairman

Non-Executive Director

Senior Independent Non-Executive Director

Committee membership

Chair Audit Committee

Chair Remuneration Committee

Chair Nomination Committee

Member Audit Committee

Member Remuneration Committee

Member Nomination Committee

From
1 January
2022
£’000

From
1 January
2021
£’000

350

–

Pursuant to the policy of aligning Directors’ interests with those of shareholders, £10,000 of the fees paid to the Non-Executive Directors and £35,000 of the fees paid to the Chairman are used each year to purchase shares in
the Company.

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149

Remuneration in context
The following section sets out how the Remuneration Committee has addressed the factors in Provision 40, when determining Executive remuneration as set out in the 2018 UK Corporate Governance Code.

Code requirement

Intertek approach

Clarity
Remuneration arrangements should be transparent
and promote effective engagement with
shareholders and the workforce

Simplicity
Remuneration structures should avoid complexity
and their rationale and operation should be easy to
understand

Risk
Remuneration structures should 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
individual Directors and any other limits or
discretions should be identified and explained at
the time of approving the policy

Proportionality
The link between individual awards, the delivery of
strategy and the long-term performance of the
Company should be clear and outcomes should not
reward poor performance

Alignment with culture
Incentive schemes should drive behaviours
consistent with the Company’s purpose, values and
strategy

Variable remuneration arrangements, which are cascaded throughout the workforce, are based on clearly defined financial performance metrics which are aligned
with the Group’s 5x5 differentiated strategy for sustainable long-term growth.

Remuneration arrangements are simple, comprising the following key elements:

– Fixed element: comprises base salary, benefits and pension, which are aligned to that offered to the majority of the workforce.
– Short-term incentive: annual bonus which incentivises the delivery of financial and non-financial performance metrics linked to ESG. Half of the bonus is paid in

cash with the balance deferred into shares vesting after a period of three years.

– Long-term incentive: LTIP which incentivises financial performance over a three-year period, promoting long-term sustainable value creation for shareholders.

Awards are subject to a two-year holding period post-vesting.

Performance targets are calibrated to be aligned with the Group’s business plan which is set in line with the Group’s risk framework.

The Remuneration Committee retains the flexibility to review formulaic outcomes to ensure that they are appropriate in the context of overall performance of the
Group, including risk.

The remuneration scenario charts, set out on page 143, provide estimates on the potential future reward opportunity in a range of scenarios, including below
threshold, target and maximum performance (including share price appreciation).

Variable remuneration is directly aligned to the Group’s strategic priorities (through the selection of key financial performance metrics), with payments calibrated to
ensure that payments are only made where strong performance is delivered.

As noted above, the Remuneration Committee retains the flexibility to review formulaic outcomes to ensure that they are appropriate in the context of the overall
performance of the Group.

As set out on page 138, the Remuneration Policy at Intertek has been set to be appropriate for the nature, size and complexity of the Group, encourages our
employees in the development of their careers and is aligned to the Company’s strategy and is in the best interests of the Company and its stakeholders.

It is directed to deliver continued sustainable profitable growth.

Our remuneration strategy is to:

– align and recognise the individual’s contribution to help us succeed in achieving our 5x5 differentiated strategy for sustainable growth;
– attract, engage, motivate and retain the best available people by positioning total pay and benefits to be competitive in the relevant market and in line with the

ability of the business to pay;
reward people equitably for the size of their responsibilities and performance; and

–
– motivate high performers to increase shareholder value and share in the Group’s success through well designed and appropriately calibrated incentive schemes.

Intertek Group plc | Annual Report & Accounts 2021

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Continued

The following sections on pages 150 to 160 have been audited.

150

Directors’ remuneration earned in 2021 (audited)
The table below and on the following page summarises Directors’ remuneration received for 2021 and the prior year for comparison. Taken in the context of internal and external comparators, the Committee considered the
Executives’ remuneration to be appropriate.

Executive Directors

André Lacroix

2021

2020

Ross McCluskey

20217

2020

Jonathan Timmis

20218

Base salary or
fees
£’000

988

9741

121

4771

398

Benefits2
£’000

109

BIK arising from
performance of
duties
£’000

Annual incentive3
£’000

1,680

206

676

Long-term
incentives
£’000

1,1075

445

–

Pension6
£’000

Buyout awards
£’000

Total including
buyout awards
£’000

Total fixed
£’000

Total variable
£’000

268

292

–

3,048

2,470

351

574

2,1879

3,299

1,368

1,363

145

530

436

1,680

1,107

206

2,863

1. The Directors agreed to a 50% salary deferral for six months from 1 April 2020 and there was a six-month delay in the implementation of the 2020 annual salary increase.
2. Benefits include allowances in lieu of company car, annual medicals, life assurance and private medical insurance, and the use of a car and driver for the CEO (£20,370).
3. This relates to the payment of the annual incentive and Deferred Share Award for the financial year end. Further details of this payment are set out on the following pages.
4. This relates to the 2019 LTIP award due to vest March 2022. Further details on performance are set out on page 153. There was no discretion exercised in respect of the awards.
5. This figure has been updated to show the actual value of the vested LTIP share awards based on the share price of £53.83, the share price at vesting in March 2021, as the 2020 Report included figures based on the share price for the final quarter of 2020 (£59.07).
6. None of the Executive Directors had a prospective entitlement to a defined benefit pension.
7. This relates to the period from 1 January 2021 to 1 April 2021, from which date Ross McCluskey ceased to be a Director.
8. This relates to the period from 1 April 2021 when Jonathan Timmis was appointed as a Director.
9. This relates to the buyout awards granted to Jonathan Timmis when he joined the Company on 1 April 2021. Further information on these awards is outlined on page 155.

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Continued

Non-Executive Directors

Andrew Martin (appointed Chair 1 Jan 2021)

Sir David Reid (retired 31 Dec 2020)

Graham Allan

Gurnek Bains

Lynda Clarizio (appointed 1 March 2021)

Tamara Ingram

Dame Louise Makin (resigned 30 June 2021)

Gill Rider

Jean-Michel Valette

Lena Wilson (resigned 31 January 2021)

2021

2020

2021

2020

2021

2020

2021

2020

20214

2020

2021

20205

20216

2020

2021

2020

2021

2020

20217

2020

151

Base salary or fees1
£’000

Benefits2
£’000

BIK arising from
performance of
duties3
£’000

350

n/a

320

58.5

n/a

43.5

11.5

–

n/a

–

n/a

–

n/a

–

n/a

–

0.5

–

1.5

–

Total
£’000

350

n/a

348

59.5

n/a

43.5

86.5

83.5

11.5

1. Pursuant to the policy of aligning Directors’ interests with those of shareholders, £10,000 of the fees paid to the Non-Executive Directors and £35,000 of the fees paid to the Chairman were used to purchase shares in the Company.
2. With respect to the Non-Executive Directors no other benefits are provided (in 2020 Sir David Reid received a car allowance of £25,000).
3. Certain expenses relating to ensuring that the Directors were in a position in order to undertake the performance of their duties (not included in the Benefits column above) such as travel to and from Company meetings, related accommodation and completion of UK tax returns for overseas
Directors have been classified as taxable. In such cases, the Company will ensure that the Director is not out of pocket by settling the related tax via the PSA. In line with current regulations, these taxable benefits have been disclosed and are shown in the BIK arising from performance of
duties column. The figures shown are the cost of the taxable benefit.

4. The 2021 fees for Lynda Clarizio relate to the period from 1 March 2021, the date she was appointed to the Board.
5. The 2020 fees for Tamara Ingram relate to the period from 18 December 2020, the date she was appointed to the Board.
6. The 2021 figure for Dame Louise Makin relates to the period to 30 June 2021, the date she stepped down from the Board.
7. The 2021 figure for Lena Wilson relates to the period to 31 January 2021, the date she stepped down from the Board.

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Continued

Annual incentive (audited)
The annual incentive for 2021 was based solely on financial measures:

– 80% based on a matrix based on revenue and adjusted operating profit growth; and
– 20% based on return on invested capital (‘ROIC’).

Overview of the matrix (80% of the award)

Revenue performance (£m)

Maximum

Target

Threshold

Below threshold

Adjusted operating profit performance (£m)

Below threshold

Threshold

Target

Maximum

40%

30%

25%

65%

50%

35%

100%

75%

60%

Straight-line payouts occur between each of the points above threshold noted above.

The Company’s performance resulted in a Group annual incentive payout of 85% of maximum opportunity. Performance of individual components is shown below.

2021 Company performance against annual incentive targets (at 2020 constant currency)

Financial measures

Total external revenue1

Adjusted operating profit1

Revenue/profit matrix

Return on invested capital4

Total

%
Weighting

2021
Threshold

2021
Target2

2021
Maximum

2021
Actual

Achieved3

Weighted
achievement

£2,807.7m

£2,865.0m

£2,922.3m

£2,880.1m

£453.5m

£467.5m

£481.5m

£485.0m

22.20%

22.40%

22.60%

25.10%

80%

20%

100%

81.25%

100%

65.00%

20.00%

85%

1. Total External revenue calculated using LfL Revenue on constant 2020 exchange rates and Adjusted operating profit excludes certain non budgeted-non recurring items and Separately Disclosed Items.
2. Target is equivalent to 50% payout.
3. Percentage achieved against maximum targets.
4. Organic Return on invested capital as per definition used for the Group's KPIs on page 26.

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Continued

For 2021, the annual incentive outturn in cash and shares is as follows:

153

André Lacroix

Ross McCluskey2

Jonathan Timmis3

1. These awards vest three years after the date of grant, subject to continued employment or good leaver status. The deferred award is based on 50% of the annual incentive outturn.
2. Values shown reflect the period 1 January 2021 to 1 April 2021.
3. Values shown reflect the period 1 April 2021 to 31 December 2021.

Vesting of LTIP Share Awards (audited)
The LTIP Share Awards granted in 2019 are subject to performance for the three-year period ended 31 December 2021.

The performance conditions attached to this award and actual performance against these conditions are as follows:

Payable in
cash
£’000

840

103

338

Deferred
Share
Award1
£’000

840

103

338

Metric

Earnings Per Share (50%)

Total Shareholder Return (50%)

Total vesting

Performance condition

Annualised fully diluted, adjusted EPS growth, calculated on the basis of
foreign exchange rates adopted at the start of the performance targets

Threshold
target1

Stretch
target1

Actual
performance

Vesting
level

10%

0.8%

0.00%

Relative TSR performance against the FTSE 31 to 130
(excluding banks and investment trusts)

Median

Upper
quartile

Below
median2

0.00%

1. 25% of the LTIP share awards will vest at the threshold target and 100% will pay out at the stretch target.
2. TSR performance calculation was calculated by Deloitte; Intertek was ranked 51st of the 88 members of the comparator group of companies.

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Continued

The LTIP Share Awards granted in 2019 to the Executive Directors were as follows:

154

Executive Director

André Lacroix

Ross McCluskey

Jonathan Timmis1

Total

1. Appointed as a Director on 1 April 2021.

Number of
shares at grant

Number of
shares based on
accrued
dividends

Total number of
shares

Number of
shares to lapse

Number of
shares to vest

Value of vested
shares
£’000

50,117

20,051

n/a

2,909

1,162

n/a

53,026

(53,026)

21,213

(21,213)

n/a

70,168

4,071

74,239

(74,239)

n/a

The Committee considered the LTIP outturns in the context of the underlying financial performance of the Group and determined it was appropriate not to exercise its discretion.

LTIP Share Awards granted during the year (audited)
The following LTIP Share Awards were granted to the Executive Directors during 2021:

Executive Director

André Lacroix

Ross McCluskey

Jonathan Timmis

Type of award

Date of award

Basis of award
granted

Award price
£

Number of
shares over
which award
was granted

Face value of
award
£’000

% of face value
that would vest
at threshold
performance

Vesting
determined by
performance
over

LTIP Share

Award 12 March 2021 250% of salary

£53.36

46,296

2,470

LTIP Share
Award

LTIP Share

27 May 20211

50% of salary

£58.32

8,471

Award 12 March 2021 200% of salary

£53.36

18,159

494

969

LTIP Share
Award

1 April 2021 200% of salary

£56.11

18,713

1,050

Three years to
31 December
2023

25%

1. Award to André Lacroix was granted following shareholder approval of the Remuneration Policy at the Annual General Meeting held on 26 May 2021 which increased the total basis of award to the CEO from 250% to 300%.

The LTIP Share Awards granted in 2021 are conditional share awards subject to performance for the three-year period ending 31 December 2023. Shares are granted at the average of the mid-market quotation price for the
five days up to and including the day immediately before grant.

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Continued

The performance conditions attached to this award and the targets are as follows:

155

Metric

Earnings Per Share (33.3%)

Return on Invested Capital (33.3%)

Adjusted Free Cash Flow (33.3%)

Performance condition

Annualised fully diluted, adjusted EPS growth, calculated on a constant currency basis and per the EPS definition used for the
Group KPIs in the 2020 Annual Report & Accounts.

Adjusted operating profits less adjusted tax, divided by cumulative invested capital (being net assets excluding tax balances,
net financial debt and net pension liabilities) in each of the three years, measured on a constant currency basis.

Free cash flow generated from operations less net capital expenditure, net interest paid and income tax paid adjusted for
separately disclosed items and is measured on a constant currency basis. Cumulative targets measured over three years.

Threshold

target Maximum target

20%

10%

24%

£977m

£1,057m

Buyout awards
As disclosed in the 2020 Annual Report & Accounts, on 1 April 2021, as part of the remuneration terms relating to his appointment as an Executive Director, the Company agreed to compensate Jonathan Timmis for
performance share awards, share option awards and one-off restricted share awards forfeited by him on leaving Reckitt Benckiser Group plc. In determining the appropriate buyout award, the Committee took into account the
time horizons of awards forfeit, the nature of the awards and the performance conditions attached to those awards. Reflecting these factors, the Committee agreed to buyout the awards in the form of conditional share
awards with vesting periods relative to the awards being forfeit and to vest at the prevailing market rate on the day of vesting. The Committee therefore awarded Jonathan Timmis an award of 39,000 ordinary shares of 1p to
vest as per the table below:

Type Of Award

Buyout award

Total

Granted in 2021
Number of
shares

Award price

Face value of
award £’000

Dividend
accrued
in 2021

Vested in 2021
Number of
shares

Lapsed in 2021
Number of
shares

13,000

39,000

£56.11

729

–

2,187

258

774

–

31 December
2021
Number of
shares

13,258

39,774

Date of vesting

April 2022

April 2023

April 2024

Shares were awarded at a share price of £56.11, being the average closing mid-market price of an Ordinary Share of 1p on the trading days during the five trading days up to 31 March 2021 being the last trading day before the
award. Each award will ordinarily vest on its normal vesting date subject to Jonathan Timmis’ continued employment with Intertek. The awards may only be satisfied with market purchased shares or cash. No newly issued shares
or treasury shares will be used in connection with the awards. The buyout award shares attract dividend equivalent shares.

Deferred Share Awards granted during the year (audited)
There were no Deferred Share Awards granted to the Executive Directors in 2021.

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Continued

Share Plan Awards (audited)
The table below shows the Directors’ interests in the Intertek Share Plans, all of which are restricted stock units (‘RSUs’):

156

André Lacroix

2018

2019

2020

2021

Total

Type of Award

31 December 2020
Number of shares

Granted in 2021
Number of shares

Award price1
£

Dividend accrued
in 20212

Vested in 2021
Number of shares

Lapsed in 2021
Number of shares

31 December 2021
Number of shares

Date of vesting

LTIP Share3,4

Dividend

Deferred Share3

Dividend

LTIP Share4,5

Dividend

Deferred Share5

Dividend

LTIP Share6,7

Dividend

Deferred Share7

Dividend

LTIP Share8,11

Dividend

LTIP Share9,11

Dividend

47,037

2,522

18,815

1,007

50,117

1,913

15,135

576

44,900

250

10,532

199

–

46,296

–

8,471

–

49.49

–

49.49

–

47.378

–

47.378

–

53.94

–

48.126

–

53.36

–

58.324

–

996

–

300

–

893

–

209

–

920

–

168

(19,520)

(1,046)

(18,815)

(1,007)

–

(27,517)

(1,476)

–

50,117

2,909

15,135

876

44,900

1,143

10,532

408

46,296

920

8,471

168

Mar 2021

Mar 2022

May 2023

Mar 2023

Mar 2024

May 2024

193,003

54,767

3,486

(40,388)

(28,993)

181,875

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Continued

Ross McCluskey
(ceased to be a Director on 1 April 2021)

Type of Award

31 December 2020
Number of shares

Granted in 2021
Number of shares

Award price1
£

Dividend accrued
in 20212

Vested in 2021
Number of shares

Lapsed in 2021
Number of shares

31 December 2021
Number of shares

Date of vesting

2018

2019

2020

2021

Total

LTIP Share3,4

Dividend

Deferred Share3

Dividend

2,244

117

2,244

117

LTIP Share4,5

20,051

Dividend

Deferred Share5

Dividend

764

3,890

147

LTIP Share6,7

17,612

Dividend

Deferred Share7

Dividend

LTIP Share8,11

Dividend

LTIP Share9,11

Dividend

5,163

–

18,159

–

2,246

–

49.49

–

49.49

–

47.378

–

47.378

–

53.94

–

48.126

–

53.36

–

58.324

–

398

–

349

–

102

–

360

–

(931)

(48)

(2,244)

(117)

–

(1,313)

(69)

–

Mar 2021

–

20,051

Mar 2022

1,162

3,890

224

Mar 2022

17,612

May 2023

447

5,163

199

Mar 2023

18,159

Mar 2024

360

2,246

May 2024

52,544

20,405

1,330

(3,340)

(1,382)

69,557

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Continued

Jonathan Timmis
(appointed as a Director on 1 April 2021)

Type of Award

31 December 2020
Number of shares

Granted in 2021
Number of shares

Award price1
£

Dividend accrued
in 20212

Vested in 2021
Number of shares

Lapsed in 2021
Number of shares

31 December 2021
Number of shares

Date of vesting

2021

Total

Buyout award10

Dividend

Buyout award10

Dividend

Buyout award10

Dividend

LTIP Share11,12

Dividend

13,000

56.108

13,000

56.108

13,000

56.108

18,713

57,713

56.108

258

371

1,145

13,000

258

13,000

258

13,000

258

18,713

371

58,858

April 2022

April 2023

April 2024

1. Awards made are based on a share price obtained by averaging the closing share prices for the five dealing days before the date of grant.
2. The dividend shares are accrued on the date the dividend is paid and determined using the closing market price of the shares on that date. The dividend accruals relate to Share Awards made in lieu of not receiving cash dividends during the vesting period.
3. Awards vested on 21 March 2021, on which date the closing market price of shares was £53.83 having been granted on 21 March 2018 on which date the closing market price was £49.55. Awards were made at a share price of £49.49 being the share price obtained by averaging the closing

share prices for the five dealing days before the date of grant.

4. 50% of the LTIP Share Awards are subject to EPS and 50% are subject to relative TSR. The EPS threshold level was set at 4% per annum and the upper target at 10% per annum. Under the TSR condition, the Company’s TSR ranking is measured relative to the FTSE index members 31 to 130

(excluding banks and investment trusts).

5. Awards will vest on 21 March 2022, subject to continued employment or good leaver status, having been granted on 21 March 2019, on which date the closing market price was £47.70. Awards were made on a share price of £47.378 being the share price obtained by averaging the closing

share prices for the five dealing days before the date of grant.

6. One-third of the LTIP Share Awards are subject to EPS, one-third on Return on Invested Capital and one-third on Adjusted Free Cash Flow. Awards will vest on 29 May 2023, subject to continued employment or good leaver status, having been granted on 29 May 2020, on which date the closing

market price was £55.06. Awards were made at a share price of £53.94 being the share price obtained by averaging the closing share prices for the five dealing days before the date of grant. The LTIP shares will be subject to an additional two-year holding period post-vesting.

7. Awards will vest on 13 March 2023, subject to continued employment or good leaver status, having been granted on 13 March 2020 on which date the closing market price was £45.36. Awards were made at a share price of £48.126, being the share price obtained by averaging the closing

share prices for the five dealing days before the date of grant.

8. One-third of the LTIP Share Awards are subject to EPS, one-third on Return on Invested Capital and one-third on Adjusted Free Cash Flow. Awards will vest on 12 March 2024, subject to continued employment or good leaver status, having been granted on 12 March 2021, on which date the

closing market price was £53.06. Awards were made at a share price of £53.36 being the share price obtained by averaging the closing share prices for the five dealing days before the date of grant. The LTIP shares will be subject to an additional two-year holding period post-vesting.

9. One-third of the LTIP Share Awards are subject to EPS, one-third on Return on Invested Capital and one-third on Adjusted Free Cash Flow. Awards will vest on 27 May 2024, subject to continued employment or good leaver status, having been granted on 27 May 2021 on which date the closing

market price was £54.82. Awards were made at a share price of £58.324 being the share price obtained by averaging the closing share prices for the five dealing days before the date of grant. The LTIP shares will be subject to an additional two-year holding period post-vesting.

10. Awards will vest on 1 April 2022, 1 April 2023 and 1 April 2024, subject to continued employment or good leaver status, having been granted on 1 April 2021 on which date the closing market price was £57.20. Awards were made at a share price of £56.11, being the share price obtained by

averaging the closing share prices for the five dealing days before the date of grant.

11. One-third of the LTIP Share Awards are subject to EPS, one-third on Return on Invested Capital and one-third on Adjusted Free Cash Flow.
12. Awards will vest on 1 April 2024, subject to continued employment or good leaver status, having been granted on 1 April 2021 on which date the closing market price was £57.20. Awards were made at a share price of £56.11, being the share price obtained by averaging the closing share prices

for the five dealing days before the date of grant.

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159

Malus and clawback (audited)
Malus and clawback will operate, in respect of the 2011 Long Term Incentive Plan and the 2021 Long Term Incentive Plan, in various circumstances including where there is reasonable evidence of misbehaviour or material error,
conduct considered gross misconduct, breach of any restrictive covenants by participants, conduct which resulted in (a) significant loss(es) to the Company, failure to meet appropriate standards of fitness and propriety; a
material failure of management in the Company, a discovery of a material misstatement in the audited consolidated accounts or the behaviour of a Director has a significant detrimental impact on the reputation of the Group.
Clawback can be applied at any time during the clawback period, which is six years from the date of the award unless extended by the Remuneration Committee prior to the expiry of the initial clawback period.

The Committee has the discretion to reduce annual incentive payments if it believes that short-term performance has been achieved at the expense of the Group’s long-term future or vice versa. The Committee also retains the
discretion to reduce or reclaim payments if the performance achievements are subsequently found to have been significantly misstated.

Directors’ interests in ordinary shares (audited)
The interests of the Directors in the shares of the Company as at the year end, or date of ceasing to be a Director, are set out below. Save as stated in this report, during the course of the year, no Director or any member of his or
her immediate family have any other interest in the ordinary share capital of the Company or any of its subsidiaries. None of the Non-Executive Directors have share options or share awards.

André Lacroix5

Ross McCluskey6

Jonathan Timmis7

Andrew Martin

Graham Allan

Gurnek Bains

Lynda Clarizio8

Tamara Ingram9

Dame Louise Makin10

Gill Rider

Jean-Michel Valette

Lena Wilson11

Beneficially
owned at
31 December
2020

Beneficially
owned at
31 December
2021 or on
ceasing to be a
Director1

Outstanding
LTIP Share
Awards2

Outstanding
Deferred
Shares3

Shareholding as
a % of salary4

Shareholding
Guideline met

432,535

463,940

154,924

5,312

474

355

357

1,179

754

10,370

1,182

7,082

548

7,811

460

462

108

105

1,284

863

10,479

1,182

57,791

19,084

–

26,951

4,114

39,774

–

2,644

n/a

Yes

n/a

1. No changes in the above Directors’ interests have taken place between 31 December 2021 and 28 February 2022.
2. Subject to performance conditions.
3. Subject to continued employment or good leaver status.
4. Calculated as the number of shares beneficially owned at 31 December 2021 based on a share price of £56.30 as at 31 December 2021, being the last trading day, and applied to the annual salary for 2021.
5. Appointed 16 May 2015 with the guideline to hold 200% of base salary in shares by 16 May 2020. With effect from 26 May 2021, this was increased to 500% of base salary with effect from the AGM held on 26 May 2021, which has been exceeded.
6.
7. Appointed 1 April 2021 with a guideline to hold 200% of base salary in shares by 1 April 2026. This was increased to 300% of base salary with effect from the AGM held on 26 May 2021.
8. Appointed 1 March 2021.
9. Appointed 18 December 2020.
10. Stepped down from the Board with effect from 30 June 2021.
11. Stepped down from the Board with effect from 31 January 2021.

Joined Intertek in August 2016 with the guideline to hold 35% of base salary in shares by August 2021. This was increased on his appointment to Chief Financial Officer on 22 August 2018 to 200% to be achieved by August 2023. He stepped down from the Board with effect from 1 April 2021.

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Percentage change in remuneration levels
The table below shows the average movement in salary and annual incentive for UK employees between the 2019 and 2020, and the 2020 and
2021 financial year ends. The UK total employee population has been chosen as a comparator, as the parent company (Intertek Group plc) does not
have any employees apart from the Directors.

Remuneration Committee report
Continued

Post-employment share ownership requirements
In line with best practice on the post-cessation of employment
shareholding guidelines, Executive Directors are required to retain
shares equivalent to the lower of their actual shareholding and
in-employment shareholding requirement for two years after ceasing
employment with Intertek. These will be held in the company Nominee
account with the date that the holding restriction falls away annotated
on the account.

Payments to past Directors (audited)
Edward Leigh received 10,018 shares on 21 March 2021 which vested
at a share price of £53.83. This relates to the 2018 LTIP award, where
Edward was treated as a good leaver, with awards pro-rated based on
time served in employment. These vested in line with the LTIP awards
vesting for other Executives in respect of the performance period
ending on 31 December 2020 (41.5%) of maximum.

CEO (André Lacroix1)

CFO (to 1 April 2021) (Ross McCluskey)

CFO (from 1 April 2021) (Jonathan Timmis)

Average based on Intertek’s UK employees2

Chairman (to 31 Dec 2020) (Sir David Reid)

Chairman (from 1 Jan 2021) (Andrew Martin)

Ross McCluskey stepped down from his position as a Director on 1 April
2021 and details of his remuneration have been included earlier in the
report.

Graham Allan

Gurnek Bains

Payments for loss of office (audited)
Louise Makin and Lena Wilson received no payment on ceasing to be
Non-Executive Directors of the Company and no payments were made
to any Director of the Company for loss of office.

Lynda Clarizio (from 1 March 2021)

Tamara Ingram (from 18 Dec 2020)

Dame Louise Makin (to 30 June 2021)

Ross McCluskey continues to be employed by the Group and therefore
was not treated as a leaver for the purpose of outstanding incentive
awards on ceasing to be a Director.

Gill Rider

Lena Wilson (to 31 January 2021)

Jean-Michel Valette

Salary %

Annual Incentive %

Benefits%

2019/2020

2020/2021

2019/2020

2020/2021

2019/2020

2020/2021

1.0

0.5

n/a

3.2

n/a

1.44

(74.63)4

–

280.43

–

3250

(43.51)

11.69

(85.06)

13.89

(24.2)

12.2

n/a

(9.9)

n/a

n/a3

–

n/a

(12.4)

(2.5)

n/a

16.45

(25.1)

n/a

(100)

n/a

(59.3)

(63.5)

(77.2)

(48.9)

(2.31)

(54.72)

–

14.4

–

n/a3

(100)

(25)

1. The percentage change for incentive and benefits for André Lacroix are based on actual amounts earned from 2019, 2020 and 2021.
2. The Intertek UK employee group has been selected as the most appropriate comparator group, due to the diverse nature of the Group’s global employee population.
3. There was an increase in 2020/2021 in comparison to 2019/2020, however due to a 0% change in 2019/2020 it is not possible to calculate the percentage increase.
4. The percentage change for Ross McCluskey is based on the period 1 January to 1 April 2021, when he ceased to be an Executive Director.
5. The percentage change in the 2020 Annual Report & Accounts for 2019/2020 was misstated as an 131% increase. This has been corrected to 0%.

CEO pay ratio
The following table sets out the CEO’s pay ratio, comparing the CEO’s total
remuneration against that of UK employees. The table below shows the
required information from 2019 through to 2021. The slight increase in the
2021 CEO's pay ratio is predominantly due to much larger bonus earned in 2021.

25th
percentile
pay ratio

Median pay
ratio

75th
percentile
pay ratio

Method

2021 CEO

Option B

117:1

2020 CEO1

2019 CEO

Option B

94:1

205:1

90:1

72:1

152:1

56:1

50:1

107:1

1. These ratios have been updated to reflect actual LTI vesting value in the single pay figure.

The regulations also require the total pay and benefits and the salary
component of total pay to be set out as follows:

CEO remuneration

UK employee 25th percentile

UK employee median

UK employee 75th percentile

Base salary
£

Total pay
and benefits
£

988,153

3,047,636

24,872

26,115

30,341

33,938

46,113

54,300

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents161

The pay ratio reflects how remuneration arrangements differ as responsibility increases for more senior roles in the organisation, including reflecting
that an increased proportion is based on performance-related variable pay and short term based incentives for more senior executives.
The Committee is therefore comfortable that the pay ratio reflects the pay and progression policies at Intertek.

Relative importance of the spend on pay
The table below shows the movement in spend on staff costs between the 2020 and 2021 financial years, compared to dividends.

Staff costs1

Dividends

2021
£m

2020
£m

1,242.6

1,220.4

170.6

170.4

%
change

1.8%

0.1%

1. Staff costs are shown at actual rates. At constant currency, staff costs increased by 6.7%, reflecting a 5.9% foreign exchange impact.

Performance graph
Consistent with prior years, the graph alongside shows the TSR in respect of the Company over the last ten financial years, compared with the TSR
for the full FTSE 100 Index. The FTSE 100 is selected as the comparator group as it is a good representation of peer group companies and Intertek is
a constituent of the FTSE 100. TSR, reflecting the change in the value of a share and dividends paid, can be represented by the value of a notional
£100 invested at the beginning of a period and its change over that period.

£
400

300

200

100

2011

Intertek Group

FTSE 100

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Remuneration Committee report
Continued

In terms of reporting options, the Company chose option B, using the
most recent gender pay gap information to determine the relevant
employees at the 25th, 50th and 75th percentile to compare to CEO
pay, as that data was already available and is used for other reporting
purposes. It refers to gender pay data as of 1 April 2021 and uses the
single total figure methodology for the identified individuals. The pay
and benefits for the employees at the quartiles are their total actual
annual pay and benefits as of 31 December 2021.

With regards to representativeness of the ratios, Intertek is a very
diverse employer and has employees in many UK locations. Our
employees have many different qualifications and are working in and
serving almost all major industries. As a consequence, it is unlikely that
there is any one single individual whose pay and benefits is
representative of Intertek UK as a whole. Intertek have therefore also
looked at the total pay of the individuals immediately above and below
the 25th, 50th and 75th percentile. Looking at the spread of resulting
ratios, it was decided that the ‘best equivalent’ would be the arithmetic
mean of the total pay of three individuals around each reporting point:

– For the three employees around the 25th percentile: Ratios ranged

from 113:1 to 119:1, with an arithmetic mean of 117:1.

– For the three employees around the 50th percentile: Ratios ranged

from 86:1 to 92:1, with an arithmetic mean of 90:1.

– For the three employees around the 75th percentile: Ratios ranged

from 49:1 to 62:1, with an arithmetic mean of 57:1.

When calculating total pay and rewards, no pay components were
omitted. The Company used the calculation methodology as set out in
the relevant regulations (The Companies (Miscellaneous Reporting)
Regulations 2018). For part-time employees, their relevant pay and
benefit components have been adjusted to the equivalent full-time
figure for the relevant business. Full-time equivalent hours can vary
across locations and legal entities.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsRemuneration Committee report
Continued

162

CEO total remuneration
The total remuneration figures for the CEO during each of the past ten financial years are shown in the table below. Consistent with the calculation methodology for the single figure for total remuneration, the total
remuneration figure includes the total annual incentive and Deferred Share Award based on that year’s performance and LTIP share awards based on the three-year performance period ending in the relevant year. The annual
incentive payout and LTIP award vesting level as a percentage of the maximum opportunity are also shown for each of these years.

Total remuneration £’000

Annual incentive (%)

LTIP award vesting (%)

2012

2013

2014

5,298

3,195

2,011

83.1

100.0

34.6

81.8

38.4

25.2

W Hauser
2015

A Lacroix
2015

2016

2017

2018

2019

2020

2021

876

90.6

–

1,824

5,4521

11,4171

6,223

4,986

2,470

3,048

96.6

70.2

–

100.0

90.87

75.5

52.3

0.0

98.32

89.40

41.50

85.0

0.0

1. As reported in previous years, at the time of joining, the Company had bought out André’s existing share awards with his previous employer in two tranches of 91,575 and 91,574 shares vesting in 2016 and 2017, each at an award price of £28. The tranche that vested in 2017 vested at a

share price of £42.95, which represents an increase in our Company share price over the two years of over 53%. These awards were one-off awards and not part of his ongoing remuneration.

The graph below shows the total remuneration of the Intertek CEO over the ten-year period from 2012 to 2021.

£’000

12,000

10,000

8,000

6,000

4,000

2,000

Mirror awards5
LTIP (share price increase)4

LTIP (award share price)3

Annual incentive
Pension

Beneﬁts6
Salary

2012

2013

2014

2015 (WH)1

2015 (AL)2

2016

2017

2018

2019

2020

2021

1. Shows W Hauser remuneration based on period to 15 May 2015.
2. Shows A Lacroix remuneration for the period from appointment as CEO on 16 May 2015.
3. LTIP (award share price) shows the proportion of the LTIP value received which resulted from the share price on the award date.
4. LTIP (share price increase) shows the proportion of the LTIP value received which resulted from increase in the share price over the vesting period, which in 2021 was £175,283
5. Mirror Awards – as reported in previous years, at the time of joining, the Company had bought out André’s existing share awards with his previous employer in two tranches of 91,575 and 91,574 shares vesting in 2016 and 2017 each at an award price of £28. The tranche that vested in 2017

vested at a share price of £42.95 which represents an increase in our Company share price over the two years of over 53%. These awards were one-off awards and are not part of his ongoing remuneration.

6. Years 2018 to 2021 also include benefits in kind (‘BIK’) arising from performance of duties and will continue to include any BIK values in future years.

Approval of the Directors’ Remuneration report
The Directors’ Remuneration report, including both the Directors’ Remuneration Policy review report and the
Annual report on remuneration, was approved by the Board on 28 February 2022.

Intertek Group plc | Annual Report & Accounts 2021

Gill Rider
Chair of the Remuneration Committee

Sustainability Report / Directors' ReportContentsOther statutory information

In accordance with the requirements of the Companies Act 2006 (‘Act’)
and the Disclosure Guidance and Transparency Rules (‘DTR’) of the
Financial Conduct Authority (‘FCA’), the following section describes the
matters that are required for inclusion in the Directors’ Report and were
approved by the Board. Further details of matters required to be
included in the Directors’ Report that are incorporated by reference into
this report are set out below.

Annual Report & Accounts and compliance with Listing Rule
(‘LR’) 9.8.4 R
The Board has prepared a Strategic Report (pages 4 to 61) which
provides an overview of the development and performance of the
Company’s business together with any research and development
activities during the year ended 31 December 2021 and its position at
the end of that year. The Strategic Report also outlines any important
events since the end of the financial year and also likely future
developments in the business of the Company and Group.

For the purposes of compliance with DTR 4.1.5 R(2) and DTR 4.1.8 R,
the required content of the management report can be found in the
Strategic Report and this Directors’ Report, including the sections of
the Annual Report & Accounts incorporated by reference.

Intertek Group plc | Annual Report & Accounts 2021

163

For the purposes of LR 9.8.4C R, the information required to be
disclosed by LR 9.8.4 R can be found in the next table.

Topic

Location and page

1. Amount of interest capitalised

Not applicable

2. Any information required by LR 9.2.18 R

Not applicable

(Publication of unaudited financial information)

3. Details of long-term incentive schemes

Directors’ Remuneration
report (pages 136 to
162)

4. Waiver of emoluments by a Director

Not applicable

5. Waiver of future emoluments by a Director

Not applicable

6. Non pre-emptive issues of equity for cash

Not applicable

Information required by (6) above for any
unlisted major subsidiary undertaking of the
Company

Not applicable

8. Company participation in a placing by a listed

Not applicable

subsidiary

9. Any contracts of significance

Other statutory
information (page 164)

10. Any contracts for the provision of services by a

Not applicable

controlling shareholder

11. Shareholder waivers of dividends

12. Shareholder waivers of future dividends

Other statutory
information (page 164)

13. Agreements with controlling shareholders

Not applicable

Directors
The names of the members of the Board, as at the date of this report,
and their biographical details are set out on pages 102 to 104. During
the year, Andrew Martin was appointed as Chairman on 1 January 2021,
Lynda Clarizio was appointed as a Non-Executive Director of the Board
on 1 March 2021 and Jonathan Timmis was appointed Chief Financial
Officer and a Director on 1 April 2021. Lena Wilson stepped down from
the Board as a Non-Executive Director on 31 January 2021, Ross
McCluskey ceased to be Chief Financial Officer and a Director on 1 April
2021 after being promoted to an operational role as Executive Vice
President Europe and Central Asia and Louise Makin stepped down from
the Board as a Non-Executive Director on 30 June 2021.

Articles of Association
The Company’s Articles of Association contain provisions relating to the
retirement, election and re-election of Directors but, in accordance with
best practice, all Directors who wish to continue to serve will stand for
re-election at the Annual General Meeting (‘AGM’).

The Articles of Association set out the internal regulation of the
Company and cover such matters as the rights of shareholders, the
appointment or removal of Directors and the conduct of the Board and
general meetings. Copies are available upon request from the Group
Company Secretary and are available at the Company’s AGM. Further
powers are granted by members in general meeting and those currently
in place are set out in detail in the appropriate section of this report.

Directors’ indemnities
The Board believes that it is in the best interests of the Group to attract
and retain the services of the most able and experienced Directors by
offering competitive terms of engagement, including the granting of
indemnities on terms consistent with the applicable statutory
provisions. In accordance with the Articles of Association, the Company
has executed deed polls of indemnity for the benefit of the Directors of
the Company.

These provisions, which are deemed to be qualifying third-party
indemnity provisions (as defined by section 234 of the Act), were in
force during the financial year ended 31 December 2021, for the
benefit of the Directors and, at the date of this report, remain in force in
relation to certain losses and liabilities which they may incur (or have
incurred) in connection with their duties, powers or office.

Directors’ interests
Other than the Directors’ service agreements or letters of appointment,
none of the Directors of the Company had a personal interest in any
business transactions of the Company or its subsidiaries. The terms of
the Directors’ service agreements or letters of appointment and the
Directors’ interests in shares and share awards of the Company, in
respect of which transactions are notifiable to the Company and the
FCA under Article 19 of the UK Market Abuse Regulation, are disclosed
in the Remuneration report on pages 142, 144 and 159.

Directors’ powers
The Directors are responsible for the strategic management of the
Company and their powers to do so are determined by the provisions of
the Act and the Company’s Articles of Association.

Sustainability Report / Directors' ReportContentsSignificant agreements
The Company is not a party to significant agreements which take
effect, alter or terminate upon a change of control following a takeover
bid apart from a number of credit facilities with banks together with
certain senior notes issued by the Company. The total amount owing
under such credit facilities and senior note agreements as at
31 December 2021 is shown in note 14 to the financial statements.
These agreements contain clauses such that, in the event of a change
of control, the Company can offer to or must repay all such borrowings
together with accrued interest, fees and other sums owing as required
by the individual agreements.

The rules of the Company’s incentive plans contain clauses relating to a
change of control resulting from a takeover and, in such an event,
awards would vest subject to the satisfaction of any associated
performance criteria. The Company is not aware of any other
agreements with change of control provisions that are considered to be
significant in terms of their potential impact to the business.

There are no significant agreements or contracts in place with any
group company and a director of the Company or a major shareholder.

Other statutory information
Continued

Dividend
The Directors are recommending a final dividend of 71.6p per ordinary
share (2020: 71.6p) making a full-year dividend of 105.8p per ordinary
share (2020: 105.8p) which will, if approved at the AGM, be paid on
17 June 2022 to shareholders on the register at the close of business
on 27 May 2022.

Share capital
The issued share capital of the Company and the details of the
movements in the Company’s share capital during the year are shown in
note 15 to the financial statements.

The holders of ordinary shares are entitled to receive dividends when
declared, receive the Company’s Annual Report & Accounts, attend and
speak at general meetings of the Company, appoint proxies and
exercise voting rights. A waiver of dividend exists in respect of the
274,546 shares held by the Intertek Group Employee Share Ownership
Trust (‘Trust’) as at 31 December 2021 and with respect to future
dividends. Details of the shares purchased by the Trust during the year
are outlined in note 15 to the financial statements. There are no
restrictions on the transfer of ordinary shares in the Company.

The rights attached to shares in the Company are provided by the
Articles of Association, which may be amended or replaced by means of
a special resolution of the Company in a general meeting. The Directors’
powers are conferred on them by UK legislation and by the Company’s
Articles of Association.

No ordinary shares carry any special rights with regard to the control of
the Company and there are no restrictions on voting rights except that
a shareholder has no right to vote in respect of a share unless all sums
due in respect of that share are fully paid. There are no arrangements
known to the Company by which financial rights carried by any shares in
the Company are held by a person other than the holder of the shares,
nor are there any arrangements between holders of securities that may
result in restrictions on the transfer of securities or on voting rights
known to the Company. All issued shares are fully paid.

Shares are admitted to trading on the London Stock Exchange and may
be traded through the CREST system.

164

Allotment of shares
At the AGM held in 2021, the shareholders generally and
unconditionally authorised the Directors to allot relevant securities up
to approximately two-thirds of the nominal amount of issued share
capital.

It is the Directors’ intention to seek renewal of this authority in line with
guidance issued by the Investment Association. The resolution will be
set out in the Notice of AGM.

At the AGM held in 2021, the Directors were also empowered by the
shareholders to allot equity securities, up to 5% of the Company’s
issued share capital, for cash under section 570 of the Act. It is
intended that this authority be renewed, at the forthcoming AGM.

It is the Board’s intention, in line with guidance issued by the Pre-
Emption Group, to also propose the renewal of the additional special
resolution to allow the Company to allot equity securities up to a
further 5% of the Company’s issued share capital. This is applicable
when the Board determines a transaction to be an acquisition or other
capital investment, as defined by the Pre-Emption Group’s Statement of
Principles and is announced contemporaneously with the allotment or
has taken place in the preceding six-month period and is disclosed in the
announcement of the allotment.

Purchase of own shares
Shareholders also approved the authority for the Company to buy back
up to 10% of its own ordinary shares by market purchase until the
conclusion of the AGM to be held this year. The Directors will seek to
renew this authority for up to 10% of the Company’s issued share
capital at the forthcoming AGM. This power will only be exercised if the
Directors are satisfied that any purchase will increase the earnings per
share of the ordinary share capital in issue after the purchase, and
accordingly, that the purchase is in the interests of shareholders. The
Directors will also give careful consideration to gearing levels of the
Company and its general financial position. Any shares purchased in this
way may be held in treasury which, the Directors believe, will provide
the Company with flexibility in the management of its share capital.
Where treasury shares are used to satisfy Share Awards, they will be
classed as new issue shares for the purpose of the 10% limit on the
number of shares that may be issued over a ten-year period under the
relevant share plan rules. The Company currently holds no shares in
treasury.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsOther statutory information
Continued

165

Material interests in shares
Up to 28 February 2022, being the latest practicable date before the publication of this report, the following disclosures of major holdings of voting
rights have been made (and have not been amended or withdrawn) to the Company pursuant to the requirements of Rule 5 of the DTR of the FCA
(‘DTR 5’). The Company is not aware of any changes in the interests disclosed under DTR 5 since the year end.

Branches
The Company, through various subsidiaries has established branches in
a number of different countries in which the business operates. The list
of related undertakings is available on pages 209 to 217.

Auditor
The auditor, PricewaterhouseCoopers LLP, have expressed their
willingness to continue in office. Upon the recommendation of the Audit
Committee, a resolution to reappoint them as auditor and to determine
their remuneration will be proposed at the forthcoming AGM.

Financial instruments
Details about the Group’s use of financial instruments are outlined in
note 14 to the financial statements.

Annual General Meeting
The Notice of AGM, which is to be held on 25 May 2022, is available for
download from the Company’s website at intertek.com/investors. The
Notice details the business to be conducted at the meeting and
includes information concerning the deadlines for submitting proxy
forms and in relation to voting rights.

Statement of disclosure of information to auditors
The Directors who held office at the date of approval of this Directors’
Report confirm that, so far as they are aware, there is no relevant audit
information of which the Company’s auditor is unaware and each
Director has taken all reasonable steps that he or she ought to have
taken as a Director of the Company to make themselves aware of any
relevant audit information and to establish and ensure that the
Company’s auditor is aware of that information.

At date of notification

Shareholder

BlackRock Inc.

Direct
voting
rights

Indirect
voting
rights

Percentage
of voting
rights
attached to
shares

Voting
rights
through
financial
instruments

Percentage
of voting
rights
through
financial
instruments

Percentage
of total
voting
rights

Total voting
rights

– 10,473,019

6.49% 1,392,394

0.85% 11,865,413

7.34%

5.92%

5.03%

4.98%

4.96%

Fiera Capital Corporation

–

9,553,525

Mawer Investment Management Ltd

8,110,417

–

Marathon Asset Management LLP

Massachusetts Financial Services Company

–

8,037,714

8,004,731

5.92%

5.03%

4.98%

4.96%

–

9,553,525

8,110,417

8,037,714

8,004,731

These holdings are published on a Regulatory Information Service and on the Company’s website.

Our people
Information about the Group’s employees, employment of disabled persons policies and employment practices is contained within this report on
pages 73 to 79. Information on the employee share schemes is in the Directors’ Remuneration report and in note 17 to the financial statements on
page 206. The steps by the Company taken to inform, engage and consult with employees is outlined in pages 114 to 120 and in the Section 172
statement on page 55.

Stakeholders
Information on the steps by the Company taken to inform, engage and consult with our stakeholders is outlined in pages 114 to 120 and in the
Section 172 statement on pages 58 to 61.

Energy Use and Greenhouse Gas emissions (‘GHG’)
Information about the Group’s energy use, GHGs and methodologies used for the calculations are given in this report on pages 86 to 88.

Task Force on Climate-Related Financial Disclosures ('TCFD')
The climate-related financial disclosures consistent with TCFD recommendations are on pages 50 to 54.

Political donations
At the AGM in 2021, shareholders passed an ordinary resolution, on a precautionary basis, to authorise the Company to make donations to EU
political organisations and to incur EU political expenditure (as such items are defined in the Act) not exceeding £90,000.

During the year the Group did not make any such political donations (2020: £nil). It is the Company’s policy not, directly or through any subsidiary, to
make what are commonly regarded as donations to any political party.

At the forthcoming AGM of the Company, shareholders’ approval will again be sought to authorise the Group to make political donations and/or incur
political expenditure (as such terms are defined in section 362 to 379 of the Act). Further information is contained in the Notice of AGM.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContents166

Directors’ confirmations
The Directors consider that the Annual Report & Accounts, taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and
Company’s position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the
Directors’ Report confirm that, to the best of their knowledge:
–

the Group financial statements, which have been prepared in
accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position
and profit of the Group;
the Company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising
FRS 101, give a true and fair view of the assets, liabilities and
financial position of the Company; and
the Strategic 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 it faces.

–

In the case of each Director in office at the date the Directors’ Report is
approved:
– so far as the Director is aware, there is no relevant audit information

–

of which the Group’s and Company’s auditors are unaware; and
they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
auditors are aware of that information.

André Lacroix
Chief Executive Officer
28 February 2022

Registered Office:
33 Cavendish Square, London W1G 0PS

Registered Number: 04267576

Statement of Directors’ responsibilities
in respect of the financial statements

The Directors are responsible for preparing the Annual Report &
Accounts and the financial statements in accordance with applicable
law and regulation.

Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have prepared the
Group financial statements in accordance with UK-adopted international
accounting standards and the Company financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
“Reduced Disclosure Framework”, and applicable law).

Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and Company and of the profit or
loss of the Group for that period. In preparing the financial statements,
the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– state whether applicable UK-adopted international accounting

standards have been followed for the Group financial statements
and United Kingdom Accounting Standards, comprising FRS 101
have been followed for the Company financial statements, subject
to any material departures disclosed and explained in the financial
statements;

– make judgements and accounting estimates that are reasonable and

prudent; 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 responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable them
to ensure that the financial statements and the Directors’
Remuneration report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the
Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.

Intertek Group plc | Annual Report & Accounts 2021

Sustainability Report / Directors' ReportContentsRisk management

Identifying and
managing our risks
is key to creating
sustainable value

Managing risk is key to our
organisation being sustainable. Being
able to identify and prioritise both
opportunities and threats impacting
our business, we are able to achieve
our objectives over the long term in
order to sustain success.

Intertek has implemented an end-to-end integrated
approach to risk, control and compliance which:
embeds risk management throughout our business;
allows us to dynamically adapt our controls, policies
and assurance activities as our risk environment
changes; and creates responsibility and oversight of
our risk identification and risk mitigation actions to
ensure they are effective, relevant and robust.

167

Sustainability Report / Risk management

Our integrated risk management framework
Risk management is embedded throughout our
organisation using a framework of divisional, regional
and functional risk committees. These committees
meet quarterly to identify, monitor and assess the
risks within their area of responsibility using tools
which include a dashboard of leading and lagging risk
indicators and risk mitigation action plans. It is the
responsibility of each committee to assess whether
its risk environment is changing, whether it has the
right mitigation action plans and whether new or
different plans are required in response to new or
changing risks.

The risk committees report to our Group Risk
Committee which in turn provides a report on risk and
mitigation actions at each meeting of the Board.

Our integrated approach to identifying and
mitigating risks
At Intertek, we view our risk environment as
consisting of emerging risks (risks that are potential
or future-looking) and systemic risks (risks which are
concrete and actually present or inherent in our
operations). Emerging risks are assessed by
perceived likelihood and impact and addressed using
mitigation action plans on a ‘three lines of defence’
model. Systemic risks are addressed using our
internal controls, policies and procedures.

Our risk identification and mitigation approach is
integrated and dynamic as our risk committees
continually review their emerging risks and, to the
extent those risks start to become systemic (or ‘real’
rather than ‘potential’ risks), identify new controls,
policies or procedures so that we can put new
systemic mitigations in place.

Our integrated approach to risk assurance
We have an integrated approach to getting
assurance that our risks are being appropriately and
effectively identified and addressed. We use an
integrated assurance map, which takes each of our
emerging and systemic risks and maps an assurance
framework onto them by identifying the roles or
functions which are responsible for the management,
control and oversight of those risks.

Evidence that this assurance is robust is primarily
validated by our Internal Audit function (which audits
our financial controls and risks), by our Compliance
function (which audits our non-financial, operational
controls and risks), and by our CyberSecurity team
(which audits our IT controls and risks).

Our integrated approach to risk governance
and oversight
The Board ultimately reviews the Group’s risks,
controls and compliance and mitigation actions. The
Audit Committee is responsible for reviewing the
adequacy and effectiveness of that risk framework.
If this governance and oversight identifies new risks
or the need for new controls, policies or procedures,
those changes are made and fed back to the
framework of risk committees so that governance
and oversight results in a dynamic change to our risk
identification and mitigation action plans.

Task Force on Climate-related
Financial Disclosures ('TCFD')
The TCFD is a market-driven initiative shaping the
increased response measures to climate-related
financial risks. Mitigating and managing the risks
and opportunities associated with climate change
is fundamental for Intertek, to enable us to deliver
our purpose we evaluate climate related risks and
opportunities using our integrated risk management
approach. For our TCFD disclosures see pages 50
to 54.

Intertek Group plc | Annual Report & Accounts 2021

Contents
168

Sustainability Report / Risk management

Provided there is no conflict of interest, all reports
are also notified immediately to our Group Ethics &
Compliance Committee, which consists of our CEO,
CFO, EVP for HR and Group General Counsel. This
ensures the effective resolution both of individual
issues and of any systemic or process improvements
that can be made to address them.

During 2021, 112 reports of non-compliance with
the Code were made to our hotline. Of those reports,
19 were substantiated and required remedial action.
Of those substantiated claims:

–

there were no substantiated grievances relating
to human rights, labour practices or societal
impact breaches;
there were no environmental incidents;
there were no anti-trust incidents reported;
there were no reported violations of the rights

–
–
–
–
– of indigenous people; and
–

there were no cases of discrimination.

Five confirmed incidents were identified through our
hotline where employees were disciplined or
dismissed due to non-compliance with our
anti-corruption policy.

Public policy
Our Government & Public Affairs function interacts
with trade associations and governmental
authorities to provide input into industry and
regulatory improvements in product safety, quality
and risk assurance. Any interactions with
governments, governmental authorities or regulators
are reviewed by our Group Legal & Risk functions to
ensure that we comply fully with all laws and
regulations.

Ethics, integrity and professional conduct
Our commitment to the highest standards of
integrity and professional ethics is embedded in the
Group’s culture through the integrity principles set
out in our Code of Ethics (‘Code’). It sets clear
expectations that people working for our business
must act at all times with integrity and in an open,
honest, ethical and socially responsible manner. The
Code also covers health and safety, anti-bribery,
anti-competitive practices, labour and human rights.
The Board, as a whole, oversees the implementation
of human rights commitments and supports human
rights as defined in the Code.

We have a culture in which all issues relevant to our
professional conduct and the Code can be raised and
discussed openly without recrimination. We operate
a strict zero-tolerance policy regarding any breach of
our Code and any behaviour that fails to meet our
expected standards of integrity as a trusted leader in
the Quality Assurance industry.

To support this policy in action, all people working for,
or on behalf of, Intertek are required to sign the Code
upon joining the Group or before commencing work on
our behalf. This confirms their acceptance of the high
standards expected of them in all business dealings.

100%
of our colleagues are required to complete
our Code of Ethics training

Intertek employees or people acting on Intertek’s
behalf are responsible for applying the Code in their
own job role, their part of the business and location.
Every year, to support the continuing understanding
in this area, all of our people are required to complete
our comprehensive training course.

This training covers the Code and other important
professional conduct areas, such as data security and
operational controls. When completing the training, all
employees are required to sign a certificate confirming
their understanding that any breaches of the Code will
result in disciplinary action that may include summary
dismissal of the employee concerned.

Whistleblowing hotline
To empower our people and stakeholders to voice
any concerns about breaches of the Code or any of
our policies (including our Labour and Human Rights
Policy and Modern Slavery Policy), we have a
well-publicised hotline which can be used by all
employees, contractors and others representing
Intertek, or by third parties such as our customers or
people who are affected by our operations.

This whistleblowing hotline is run by an independent,
external provider. It is multi-language and is
accessible by phone and by email 24 hours a day.
Those concerned are encouraged to report any
conduct, compliance, integrity or ethical concerns
using the hotline. Information posters are present in
all of our sites.

If a report is made to the hotline, it is followed up by
Intertek’s Compliance officers. Our Group Compliance
function, which is independent of our operational
businesses and reports directly to our Group General
Counsel, fully investigates all reports received.

Risk management
Continued

Doing Business the Right Way
We continue to develop a best practice compliance
programme to ensure Intertek operates with the
highest standards of compliance and ethical business
practices, including through our supply chain partners.

We are committed to maintaining the total confidence
of our stakeholders. One of the Group’s primary
business objectives is to help our customers meet
quality standards for virtually any market in the world
and protect them against risk by ensuring compliance
with local, national and international laws.

The accuracy and validity of reports and certificates
that we provide are therefore important factors
which contribute to our success. Integral to this is
‘Doing Business the Right Way’; our internal risk,
control, compliance and quality programme.

Our compliance programme ensures:
–

that our people have the processes, tools and
training they need, and work to ensure a safe and
inclusive environment;
the services we provide and the contracts we
enter into are delivered with integrity and in line
with our commitment to Total Quality;

–

– every colleague commits to the highest standards

of professional conduct; and

– we deliver sustainable growth by managing our

risks and doing the right thing for the longer term.

Internal Audit is responsible for reviewing and
assessing Intertek’s business processes and provides
independent and objective assurance and advice that
adds value and improves our internal control systems
and operations.

Intertek Group plc | Annual Report & Accounts 2021

Contents169

Sustainability Report / Risk management

To ensure implementation, and to remain
uncompromising on Quality and Compliance, our Core
Mandatory Controls framework forms the mechanism
to define, monitor and achieve consistently high
standards. Control and oversight is provided through
our CyberSecurity Team, Group Legal & Compliance
and the Internal Audit team. We have mandatory
training on data privacy for all employees and global
data breach response processes.

Zero
Substantiated complaints concerning
breaches of customer data policy*

* As reported through our centralised system.

Risk management
Continued

Supply chains
Continued focus on suppliers
We are deeply committed to operating with integrity
by ‘Doing Business the Right Way’ and to pursuing our
corporate social responsibility activities through living
our strong values. Our suppliers have an important part
to play in contributing to our sustainability.

Intertek Sustainable Procurement policy

Our sourcing approach
We work with thousands of suppliers around the
world. We expect all suppliers to meet the same
internationally recognised human rights,
environmental and quality standards that we expect
of our own businesses. These include meeting local
legislative requirements but also applicable
international requirements for workers’ welfare and
conditions of employment, such as those set by the
International Labour Organization (‘ILO’) and the
Ethical Trading Initiative.

Large global suppliers offer stability in terms of
financial resilience, delivery capacity and pricing
structures, potentially coupled with better pricing
and improved margins. However, our supply chain is
quite diverse and geographically dispersed, and our
procurement teams need to find regional and local
suppliers. Through structured sourcing processes, we
select the best option for us while continuing to
support local suppliers that meet our business and
sustainability requirements. Over 50% of our annual
spend goes on regional and local suppliers, which
demonstrates our commitment to supporting the
communities in which we operate.

Evaluation of suppliers
Our corporate procedures govern our purchasing and
evaluation of vendors and subcontractors supplying
Intertek with goods and services.

Approval and evaluation may be based on quality,
health and safety, environmental performance and
delivery. Performance is also measured, recorded and
benchmarked against established objectives as part of
our disciplined performance management principles,
supported by our Quality Management System.

Further enhancements are planned to aid annual
reviews in 2022.

Intertek Group plc | Annual Report & Accounts 2021

Enterprise Security
At Intertek we have adopted a risk-based security
framework, based on international best practice, NIST
CyberSecurity Framework. Our framework guides clear
policies, standards and supporting guidelines, controls
and hiring. We continue to innovate, enhancing service
delivery and strengthening internal and external
customer relationships to protect customer, employee
and Intertek data.

There is regular reporting on progress of the security
programmes to governance and oversight
committees by our dedicated Chief Information
Security Officer, who leads a global team.

Detect
We define the appropriate activities for the timely
discovery of the occurrence of security events. We
monitor continuously and verify the effectiveness of
protective measures including network and physical
activities.

Respond
We ensure response planning processes are
executed during and after an incident, so that we
take appropriate action regarding situations and
contain their impact. We also implement
improvements, by incorporating lessons learned from
current and previous detection/response activities.

IDENTIFY

PROTECT

Our risk-
base d se curity
framework

DETECT

RECOVER

RESPOND

Identify
We develop a clear organisational understanding of
risks to our systems, people and data, enabling us to
prioritise efforts that are consistent with our risk
management strategy and business needs.

Protect
We put in place appropriate safeguards to ensure
delivery of critical services, including access control,
staff awareness and training, and data security.
These safeguards support our ability to limit or
contain the impact of potential events.

Recover
We undertake appropriate activities to maintain
plans for resilience and to restore any capabilities or
services that were impaired due to an incident. Our
recovery function ensures timely recovery to normal
operations to reduce the impact from an incident.

Zero
Number of complaints received from outside
parties and substantiated by the organisation*

Data protection
We believe that all our people and all our customers
have the right to data privacy, and so we have
adopted the best practices and standards set out in
the General Data Protection Regulation (‘GDPR’)
across all of our markets and operations, and in
relation to all individuals whose personal data we
obtain and use (not just individuals in the EEA).

Our Group Data Protection Policy is aligned with the
GDPR requirements to set out the minimum data
protection standards we apply throughout our
operations so that we use all personal data
transparently, fairly and securely.

Contents

Total Sustainability Assurance

Meeting our own
Standards

170

Sustainability Report / Total Sustainability Assurance

Quality & Safety

Risk Management

Provides assurance through management
systems certification, risk assessment,
internal audits and continual improvement
of processes.

Verifies an organisation’s insurance
coverage, risk processes, controls and
reporting, in addition to verifying a plan for
business continuity and disaster recovery.

Intertek has developed ten corporate certification standards.
Each standard is designed to verify specific corporate sustainability
topics. When your organisation becomes certified in all ten standards,
you have achieved Corporate Sustainability Certification.

Enterprise Security

Communities

Aims to manage and control IP assets and
cyber risk, while protecting data, privacy
and physical assets.

Monitors commitment to making a
positive impact on local communities as
well as global activities.

As a purpose-led organisation we hold ourselves
to the same high standards to which we certify
our clients and have committed to embed the
Total Sustainability Assurance ('TSA') standards
within our business and to audit ourselves
against them.

The TSA programme is based on ten corporate
sustainability standards that we believe define
a truly sustainable organisation today. We believe
our ten TSA standards are the most comprehensive
sustainability standards currently available and
include areas that are not covered in other
reporting frameworks.

Our ten TSA Corporate Certification Standards
demonstrate actionable, comparable, consistent
and reliable disclosures and provide assurance
beyond ESG disclosures and recognise that truly
sustainable solutions must address the important
operational aspects of every company, to cover
environment, products, processes, facilities,
assets, systems, corporate policies and
stakeholder engagement.

Progress in 2021
To embed the requirements of all ten standards
and review our progress we:
– Completed a self-assessment for each Standard

and agreed the scope with the internal audit team
for the benchmarking step of the process. The
audit team comprises subject matter experts
from our Business Assurance business line.
– Benchmarked our sustainability programmes
against the requirements of each Standard
with the internal audit team. This review focused
on the corporate head office and a selection of
operational sites that are representative of
the mix of business lines and activities within
our operations.

Performance is benchmarked against requirements
and based on maturity. On completion of the
benchmarking step the audit team will provide their
findings and assurance to what extent corporate
sustainability processes are in place, effective and
meeting the intent of the standard.

Outcomes will feed into our ever better approach and
provide valuable insights which will enable us to align
our sustainability initiatives and priorities further.

Compliance

Governance

Seeks to verify principles with integrity. It
also outlines senior management
accountability, compliance monitoring and
whistleblower policies.

Looks to build an accountable and diverse
governance structure, in addition to more
transparent stakeholder engagement.

Environment

Financial

Guides and contributes towards efforts
against climate change, management of
resources, proactive protection and
restoration of ecosystems, waste
reduction and compliance with current
environmental regulations.

Helps organisations to create long-term
plans, forecasts and strategic
management of finances while still
managing monthly reporting and
budgetary control.

People and Culture

Verifies that the systems and processes
are in place to attract, train and retain the
right employees by demonstrating a
supportive, transparent and fair company
culture.

Communications
& Disclosures

Defines metrics, internal and external
communications procedures for
maintaining external transparency.

Intertek Group plc | Annual Report & Accounts 2021

Contents

171

Sustainability Report / Transparency

Transparency

Transparency creates
accountability

Governance

We are committed to the highest
standards of corporate governance to
successfully deliver long-term sustainable
growth and shareholder value. Our reporting
demonstrates how we have engaged with,
and taken into consideration, the interests of
those stakeholders who are material to the
long-term success of our business.

Section 172 statement

Pages 55 to 61

Governance structure

Page 99

Directors' report

Pages 98 to 166

Engagement with our shareholders and wider stakeholder groups plays a key
role to help us understand the impact of our decisions on stakeholders, and
provide insight into their needs and concerns. We recognise that disclosures
and transparency are key catalysts for driving change.

In line with our own standard on Communications &
Disclosures, we deeply believe that total
transparency with robust disclosures and relevant
targets aligned to corporate strategy is integral for
corporations to demonstrate sustainability
accountability to their stakeholders.

Reporting on our sustainability performance
indicators in a consistent and accurate manner is
essential for transparent reporting. We follow our
own framework of the ten Total Sustainability
Assurance Corporate Certification standards as well
as GRI and SASB as a basis of preparation for the
majority of our sustainability performance indicators.

We are committed to reporting against voluntary
external indices to increase transparency, motivate
stakeholders and drive change within our business
and the value chain.

Completing external assessments demonstrates our
commitment to continuous improvement and helps
us to prioritise focus areas for future reporting
cycles.

Intertek Group plc | Annual Report & Accounts 2021

Communication guidance and policies
Our Corporate Communications & Public Relations
team look after the Group’s communications to the
Group’s corporate stakeholders. This includes
communications to the Group’s investors, the London
Stock Exchange, financial media and the financial
analysts that track and analyse the Group’s financial
performance. Internally, the team helps to support
local country marketing teams with corporate data
and advice where corporate communications to local
stakeholders, such as financial media or government
partners, are needed.

The media plays an important role in defining the
way Intertek is perceived by its stakeholders. Our
media policy sets out policies with respect to the
public release of information by employees to the
media, and how these requests are managed.

Internal communications
As part of the HR network’s efforts to continually
improve our development and retention of the best
people, our focus is to share the mission, values and
success of the Group with our people and develop a
supportive and inspiring workplace culture
worldwide. An important part of this is regular and
consistent engagement with our people through
employee communications. The Intertek Group
intranet is an internal communication hub. It enables
colleagues to stay connected and to share
knowledge across the Group in more than 100
countries.

Risk management

We build resilience through
systemic risk governance practices to
assure a strong culture of
risk-based business management.

Principal risks and
uncertainties

Pages 44 to 49

Risk management

Pages 167 to 169

TCFD

The Task Force on Climate-related Financial
Disclosures ('TCFD') sets out a framework for
companies to provide stakeholders with an
assessment of the financial implications of
climate change and what this means for
governance, strategy, risk and metrics. The
Annual report contains information in line
with the recommendations of the TCFD.

Governance

Page 53

Strategy

Pages 51 and 52

Risk management

Page 54

Metrics and Targets

Pages 54, 86 to 88

Sustainability
Disclosure index

Our Sustainability Disclosure index is
complementary to our published report and
sets out how our disclosures map to our own
Total Sustainability standards, the Global
Reporting Initiative ('GRI') Standards and
applicable Sustainability Accounting
Standard Board ('SASB') requirements.

Intertek Sustainability
Disclosure Index

intertek.com/investors/
sustainability

ContentsFinancial Report

172

The Financial Report comprises
the Group consolidated Financial
Statements and the Company
Financial Statements.

The Group consolidated Financial Statements
are on pages 173 to 217.

The Company Financial Statements are
on pages 218 to 222.

173 Consolidated income statement

174

Consolidated statement of
comprehensive income

175 Consolidated statement of

financial position

176 Consolidated statement of changes

in equity

178 Consolidated statement of cash flows

179 Notes to the financial statements

218 Intertek Group plc – Company balance sheet

219 Intertek Group plc – Company statement of

changes in equity

220 Notes to the Company financial statements

223 Independent Auditors’ Report

230 Glossary

– Alternative performance measures

232 Shareholder and corporate information

Intertek Group plc

| Annual Report & Accounts 2021

A
For(cid:27) for
G(cid:23)d

FINA N C I A L

Financial ReportContents173

Notes

2
4

14
14

Consolidated income statement

For the year ended 31 December

Revenue
Operating costs

Group operating profit/(loss)

Finance income
Finance expense

Net financing (costs)/income

Profit/(loss) before income tax

Income tax (expense)/credit

Profit/(loss) for the year

Attributable to:

Equity holders of the Company
Non-controlling interest

Profit/(loss) for the year

Earnings per share**

Basic

Diluted

See note 3.

*
** Earnings per share on the adjusted results is disclosed in note 7.

Intertek Group plc | Annual Report & Accounts 2021

Separately
Disclosed
Items*
£m

Total
2021
£m

Adjusted
results*
£m

Separately
Disclosed
Items*
£m

Adjusted
results*
£m

2,786.3
(2,312.4)

–
(40.7)

2,786.3
(2,353.1)

2,741.7
(2,314.0)

473.9

(40.7)

433.2

427.7

1.5
(29.9)

(28.4)

–
8.6

8.6

1.5
(21.3)

(19.8)

1.1
(36.0)

(34.9)

445.5

(32.1)

413.4

392.8

(118.0)

327.5

308.9
18.6

327.5

11.3

(106.7)

(100.2)

(20.8)

306.7

292.6

(20.8)
–

288.1
18.6

(20.8)

306.7

277.3
15.3

292.6

178.7p

177.9p

–
(49.5)

(49.5)

–
0.6

0.6

(48.9)

18.9

(30.0)

(30.0)
–

(30.0)

Total
2020
£m

2,741.7
(2,363.5)

378.2

1.1
(35.4)

(34.3)

343.9

(81.3)

262.6

247.3
15.3

262.6

153.6p

152.4p

Financial ReportContentsConsolidated statement of comprehensive income

174

For the year ended 31 December

Profit for the year

Other comprehensive income/(expense)
Remeasurements on defined benefit pension schemes
Tax on comprehensive income/(expense) items

Items that will never be reclassified to profit or loss
Foreign exchange translation differences of foreign operations
Net exchange gain on hedges of net investments in foreign operations
Gain on fair value of cash flow hedges

Items that are or may be reclassified subsequently to profit or loss

Total other comprehensive expense for the year

Total comprehensive income for the year

Total comprehensive income for the year attributable to:

Equity holders of the Company
Non-controlling interest

Total comprehensive income for the year

Notes

2021
£m

2020
£m

306.7

262.6

16
6

11.5
(0.5)

11.0
(24.7)
4.0
–

(20.7)

(9.7)

0.8
(3.1)

(2.3)
(53.9)
3.7
0.3

(49.9)

(52.2)

297.0

210.4

277.4
19.6

297.0

195.4
15.0

210.4

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents175

As at 31 December

Equity
Share capital
Share premium
Other reserves
Retained earnings

Notes

2021
£m

2020
£m

1.6
257.8
(102.5)
925.1

1.6
257.8
(80.8)
796.4

975.0
28.0

Total equity attributable to equity holders of the Company
Non-controlling interest

1,082.0
32.3

Total equity

1,114.3

1,003.0

* Working capital of negative £43.3m (2020: negative £4.0m) comprises the asterisked items in the above statement of financial position less

refundable deposits aged over 12 months of £6.7m (2020: £2.2m).

The financial statements on pages 173 to 217 were approved by the Board on 28 February 2022 and were
signed on its behalf by:

André Lacroix
Chief Executive Officer

Jonathan Timmis
Chief Financial Officer

Consolidated statement of financial position

As at 31 December

Assets
Property, plant and equipment
Goodwill
Other intangible assets
Defined benefit pension asset
Deferred tax assets

Total non-current assets

Inventories*
Trade and other receivables*
Cash and cash equivalents
Current tax receivable

Total current assets

Total assets

Liabilities
Interest-bearing loans and borrowings
Current taxes payable
Lease liabilities
Trade and other payables*
Provisions*

Total current liabilities

Interest-bearing loans and borrowings
Lease liabilities
Deferred tax liabilities
Defined benefit pension liabilities
Other payables*
Provisions*

Total non-current liabilities

Total liabilities

Net assets

Intertek Group plc | Annual Report & Accounts 2021

Notes

2021
£m

2020
£m

8
9
9
16
6

11
14

14
12
13

14
14
6
16
12
13

641.8
1,241.4
358.5
5.4
39.3

585.8
835.9
279.7
–
48.6

2,286.4

1,750.0

14.9
661.9
265.9
20.6

963.3

15.5
621.2
203.9
24.5

865.1

3,249.7

2,615.1

(462.0)
(59.1)
(63.5)
(667.8)
(13.2)

(31.0)
(53.8)
(61.4)
(576.2)
(28.8)

(1,265.6)

(751.2)

(537.2)
(228.8)
(67.4)
(4.0)
(31.9)
(0.5)

(592.8)
(162.8)
(59.7)
(12.1)
(26.1)
(7.4)

(869.8)

(860.9)

(2,135.4)

(1,612.1)

1,114.3

1,003.0

Financial ReportContentsConsolidated statement of changes in equity

176

For the year ended 31 December

At 1 January 2020
Total comprehensive (expense)/income for the year
Profit
Other comprehensive (expense)/income

Total comprehensive (expense)/income for the year

Transactions with owners of the Company recognised directly in equity
Contributions by and distributions to the owners of the Company
Dividends paid
Adjustment arising from changes in non-controlling interest
Purchase of own shares
Tax paid on Share Awards vested*
Equity-settled transactions
IFRS 16 effects of deferred tax

Total contributions by and distributions to the owners of the Company

Attributable to equity holders of the Company

Other reserves

Notes

Share capital
£m

Share premium
£m

Translation
reserve
£m

1.6

257.8

(37.3)

–
–

–

–
–
–
–
–
–

–

–
–

–

–
–
–
–
–
–

–

–
(49.9)

(49.9)

–
–
–
–
–
–

–

15
20
15
17
17

Retained
earnings
£m

Total before
non-controlling
interest
£m

Non-
controlling
interest
£m

Total equity
£m

727.7

955.9

29.4

985.3

247.3
(2.3)

245.0

(170.4)
(2.2)
(12.2)
(8.5)
17.7
(0.7)

247.3
(51.9)

195.4

(170.4)
(2.2)
(12.2)
(8.5)
17.7
(0.7)

(176.3)

15.3
(0.3)

15.0

(18.6)
2.2
–
–
–
–

(16.4)

262.6
(52.2)

210.4

(189.0)
–
(12.2)
(8.5)
17.7
(0.7)

(192.7)

Other
£m

6.1

–
0.3

0.3

–
–
–
–
–
–

–

At 31 December 2020

1.6

257.8

(87.2)

6.4

796.4

975.0

28.0

1,003.0

The tax paid on Share Awards vested is related to settlement of the tax obligation on behalf of employees by the Group via the sale of a portion of the equity-settled shares.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsConsolidated statement of changes in equity Continued

177

For the year ended 31 December

At 1 January 2021
Total comprehensive (expense)/income for the year
Profit
Other comprehensive (expense)/income

Total comprehensive (expense)/income for the year

Total contributions by and distributions to the owners of the Company

Attributable to equity holders of the Company

Other reserves

Notes

Share capital
£m

Share premium
£m

Translation
reserve
£m

1.6

257.8

(87.2)

Retained
earnings
£m

Total before
non-controlling
interest
£m

Non-
controlling
interest
£m

Total equity
£m

796.4

975.0

28.0

1,003.0

Other
£m

6.4

–
–

–

–
–
–
–
–
–

–

–
–

–

–
–
–
–
–
–

–

–
(21.7)

(21.7)

–
–
–
–
–
–

–

–
–

–

–
–
–
–
–
–

–

288.1
11.0

288.1
(10.7)

299.1

277.4

(170.6)
–
(11.4)
(6.7)
18.6
(0.3)

18.6
1.0

19.6

(17.0)
1.7
–
–
–
–

306.7
(9.7)

297.0

(187.6)
1.7
(11.4)
(6.7)
18.6
(0.3)

(170.4)

(15.3)

(185.7)

15
20
15
17
17
6

At 31 December 2021

1.6

257.8

(108.9)

6.4

925.1

1,082.0

32.3

1,114.3

The tax paid on Share Awards vested is related to settlement of the tax obligation on behalf of employees by the Group via the sale of a portion of the equity-settled shares.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents178

Notes

2021
£m

2020
£m

For the year ended 31 December

Cash flows from financing activities
Purchase of own shares
Tax paid on share awards vested
Drawdown of borrowings
Repayment of borrowings
Repayment of lease liabilities*
Dividends paid to non-controlling interest
Equity dividends paid

Net cash flow generated from/(used in) financing activities

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Exchange adjustments

Cash and cash equivalents at 31 December

Notes

14
14
14

2021
£m

2020
£m

(11.4)
(6.7)
471.3
(72.4)
(70.4)
(17.0)
(170.6)

(12.2)
(8.5)
279.9
(507.1)
(72.0)
(18.6)
(170.4)

122.8

(508.9)

86.6
183.4
(6.0)

264.0

(21.7)
213.0
(7.9)

183.4

The notes on pages 179 to 217 are an integral part of these consolidated financial statements.

Cash outflow relating to Separately Disclosed Items was £16.6m for year ended 31 December 2021 (2020:
£19.9m).

* Free cash flow of £385.2m (2020: £415.7m) comprises the asterisked items in the above consolidated
statement of cash flows.

Consolidated statement of cash flows

For the year ended 31 December

Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation charge
Amortisation of software
Amortisation of acquisition intangibles
Equity-settled transactions
Net financing costs
Income tax expense
Loss/(Profit) on disposal of property, plant, equipment and software

Operating cash flows before changes in working capital and

operating provisions

Change in inventories
Change in trade and other receivables
Change in trade and other payables
Change in provisions
Special contributions into pension schemes

Cash generated from operations
Interest and other finance expense paid
Income taxes paid

Net cash flows generated from operating activities*

Cash flows from investing activities
Proceeds from sale of property, plant, equipment and software*
Interest received*
Acquisition of subsidiaries, net of cash acquired
Consideration paid in respect of prior year acquisitions
Acquisition of property, plant, equipment and software*

Net cash flows used in investing activities

Intertek Group plc | Annual Report & Accounts 2021

8
9
9
17
14
6

14
10

306.7

262.6

150.6
18.7
29.3
18.6
19.8
106.7
0.1

650.5

0.6
(29.2)
62.0
(2.7)
(2.0)

679.2
(27.0)
(102.0)

550.2

1.0
1.5
(480.9)
(10.9)
(97.1)

(586.4)

156.6
17.4
28.1
17.7
34.3
81.3
(0.9)

597.1

3.5
52.9
36.8
(3.1)
(2.0)

685.2
(34.8)
(91.6)

558.8

7.6
1.1
–
(0.5)
(79.8)

(71.6)

Financial ReportContents179

Notes to the financial statements

1 Significant accounting policies

Basis of preparation
Accounting policies applicable to more than one section of the financial statements are shown below. Where
accounting policies relate to a specific note in the financial statements, they are set out within that note, to
provide readers of the financial statements with a more useful layout to the financial information presented.

Statement of compliance
Intertek Group plc is a public company incorporated in England & Wales and domiciled in the UK, limited by
shares.

The Group financial statements as at and for the year ended 31 December 2021 consolidate those of the
Company and its subsidiaries (together referred to as the ‘Group’) and include the Group’s interest in associates.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and
became UK-adopted international accounting standards, with future changes being subject to endorsement by
the UK Endorsement Board. Intertek Group plc transitioned to UK-adopted international accounting standards
in its consolidated financial statements on 1 January 2021. There was no impact or changes in accounting
policies from the transition. The Group financial statements have been prepared by the Directors in accordance
with these accounting standards in conformity with the requirements of the Companies Act 2006. The
Company financial statements present information about the Company as a separate entity and not about its
Group. The Company has elected to prepare its Company financial statements in accordance with UK GAAP,
comprising FRS 101 and applicable law; these are presented on pages 218 to 222.

Significant new accounting policies
During the year no new accounting standards were adopted by the Group.

Changes in accounting policies
The accounting policies set out in these financial statements have been applied consistently to all years
presented, apart from those disclosed below. There are no new accounting standards that are effective for
annual periods beginning on or after 1 January 2021 that have a material effect on the consolidated financial
statements of the Group. There are no accounting standards that are issued but not yet effective that are
expected to have a material effect on the consolidated financial statements of the Group.

The Interest Rate Benchmark Reform, which does not impact on the Group’s hedging instruments, is assessed
further in note 14.

In 2021 the Group changed its accounting policy to include finance expenses on tax balances within interest
expense. The impact of this change on the opening balance sheet and the prior year income statement is not
material and no restatement has been made. The impact on net finance costs for the year ending 31 December
2021 is an increased expense of £4.2m with a corresponding increase in tax liabilities.

Measurement convention
The financial statements are prepared on the historical cost basis except as discussed in the relevant
accounting policies.

Functional and presentation currency
These consolidated financial statements are presented in sterling, which is the Company’s functional currency.
All information presented in sterling has been rounded to the nearest £0.1m.

Intertek Group plc | Annual Report & Accounts 2021

Going concern
The Group has a broad customer base across its multiple business lines and in its different geographic regions
and is supported by a robust balance sheet and strong operational cash flows.

The Board has reviewed the Group’s financial forecasts up to 31 December 2023 to assess both liquidity
requirements and debt covenants.

In addition, the Group’s financial forecasts for 2022 and 2023, and the related liquidity position and forecast
compliance with debt covenants, have been sensitised for a severe yet plausible decline in economic conditions
(including an illustrative sensitivity scenario of a reduction of 30% to the base profit forecasts and the
corresponding impact to cash flow forecasts in each of these years). In addition, reverse stress testing has also
been applied to the model which represents a significant decline in cash flows compared with the 30%
downside sensitivity. Such a scenario is considered to be remote. The Board remains satisfied with the Group’s
funding and liquidity position, with the Group forecast to remain within its committed facilities and compliant
with debt covenants even following the 30% downside sensitivity. The sensitivity modelling excludes
additional mitigating actions (e.g. dividend cash payments, non-essential overheads and non-committed capital
expenditure) that are within management control and could be initiated if deemed required.

The undrawn headroom on the Group’s committed borrowing facilities at 31 December 2021 was £564.2.m
(2020: £494.0m). The maturity of our borrowing facilities is disclosed in Note 14 of the financial statements
with repayment of the Acquisition facilities and US$300m of senior notes required by 31 December 2023. Our
models forecast these to be repaid using existing facilities, including US$640m senior notes facility committed
for issue in December 2021 but which was not available for partial draw down until January 2022, with the
remainder available for drawdown in March 2022. Full details of the Group’s borrowing facilities and maturity
profile are outlined in note 14.

On the basis of its forecasts to 31 December 2023, both base case and downside, and available facilities, the
Board has concluded that there are no material uncertainties over going concern, including no anticipated
breach of covenants, and therefore the going concern basis of preparation continues to be appropriate.

Consideration of climate change
In preparing the financial statements, we have considered the impact of climate change (refer to page 50
within the Strategic Report for further information). There is no material impact on the financial reporting
judgement and estimates arising from our considerations which is consistent with the assertion that risks
associated with climate change are not expected to have a material impact on the viability of the Group in the
short, medium and long term. Specifically we note the following:
– The Group continues to invest in on-site renewable energy generation at our locations. Spend in 2021 was

not material.

– We have specifically considered the impact of climate change on the carrying value of fixed assets

(see note 8) and in our goodwill impairment assessment (see note 9).

– The Group has not bought carbon credits in 2021 to offset our measured Scope 1, 2 and 3 GHG emissions.

In 2020 the cost of purchasing carbon credits was less than £1m.

Government grants
Government grants are recognised in the income statement so as to match them with the related expenses
that they are intended to compensate. Where grants are received in advance of the related expenses, they are
initially recognised in the balance sheet and released to match the related expenditure. Non-monetary grants
are recognised at fair value. The related cash flow is classified in accordance with the nature of the activity.

Financial ReportContents180

Notes to the financial statements Continued

1 Significant accounting policies Continued

Basis of consolidation
Subsidiaries
Subsidiaries are those entities controlled by the Group. Control exists when the Group has power to direct the
relevant activities, exposure to variable returns from the investee and the ability to use its power over the
investee to affect the amount of investor returns. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.

For purchases of non-controlling interest in subsidiaries, the difference between the cost of the additional interest
in the subsidiary and the non-controlling interest’s share of the assets and liabilities reflected in the consolidated
statement of financial position at the date of acquisition, is reflected directly in shareholders’ equity.

Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising
from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of
impairment.

Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities (for example
cash, trade receivables, trade payables) denominated in foreign currencies at the reporting date are translated
at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are
generally recognised in the income statement. Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
For the policy on hedging of foreign currency transactions see note 14.

Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated to sterling at foreign exchange rates ruling at the reporting date.

The income and expenses of foreign operations are translated into sterling at cumulative average rates of
exchange during the year. Exchange differences arising from the translation of foreign operations are taken
directly to equity in the translation reserve. They are released to the income statement upon disposal. For the
policy on net investment hedging see note 14.

The most significant currencies for the Group were translated at the following exchange rates:

Value of £1

US dollar
Euro
Chinese renminbi
Hong Kong dollar
Australian dollar

Intertek Group plc | Annual Report & Accounts 2021

Assets and liabilities
Actual rates

Income and expenses
Cumulative average rates

31 December 2021

31 December 2020

1.35
1.19
8.59
10.52
1.86

1.35
1.10
8.81
10.47
1.78

2021

1.38
1.16
8.89
10.70
1.83

2020

1.28
1.13
8.88
9.96
1.87

Key Estimations and Uncertainties
The preparation of financial statements in conformity with IFRSs requires management to make judgements
and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the
estimates are revised and in any future years affected.

Discussed below are key assumptions concerning the future, and other key sources of estimation at the
reporting date, that could have a risk of causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year.

Impairment of goodwill
Following recognition of goodwill as a result of acquisitions, the Group determines, as a minimum on an annual
basis and including current year acquisitions, whether goodwill is impaired, which requires an estimation of the
future cash flows of the cash generating units to which the goodwill is allocated, as well as assumptions on
growth rates and discount rates – see note 9.

Employee post-retirement benefit obligations
For material defined benefit plans, the actuarial valuation includes assumptions such as discount rates,
return on assets, salary progression and mortality rates. Further details and sensitivity analysis are included
in note 16.

There are no critical accounting judgements.

Other accounting policies
Accounting policies relating to a specific note in the financial statements are set out within that note
as follows:

Revenue
Separately Disclosed Items
Taxation
Property, plant and equipment
Goodwill and other intangible assets
Trade and other receivables
Trade and other payables
Provisions
Borrowings and financial instruments
Capital and reserves
Employee benefits
Share schemes
Non-controlling interest

Note

2
3
6
8
9
11
12
13
14
15
16
17
20

Financial ReportContentsNotes to the financial statements Continued

181

2 Operating segments and presentation of results

The costs of the corporate head office and other costs which are not controlled by the three divisions are
allocated appropriately.

Accounting policy
Revenue
Revenue represents the total amount receivable for services rendered when there is transfer of control to the
customer, excluding sales-related taxes and intra-group transactions.

Inter-segment pricing is determined on an arm’s length basis. There is no significant seasonality in the Group’s
operations. Segment results include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.

Revenue from services rendered on short-term projects is generally recognised in the income statement when
the relevant service is completed, usually when the report of findings or test/inspection certificate is issued.
Short-term projects are considered to be those of less than two months’ duration.

The performance of the segments is assessed based on adjusted operating profit which is stated before
Separately Disclosed Items. The operating segment revenue disclosures provided under IFRS 8 are consistent
with the disaggregated revenue disclosure and recognition and measurement requirements of IFRS 15.

In line with IFRS15, rebates and customer discounts are considered to be variable consideration and have been
deducted from recognised Revenue.

A reconciliation to operating profit by division and Group profit for the year is included overleaf.

The principal activities of the divisions, and the customers they serve, are as follows:

Revenue is recognised using the five steps for revenue recognition. The majority of contracts are for less than
one year. The Group records transactions as sales on the basis of value of work done, with the corresponding
amount being included in trade receivables if the customer has been invoiced, or in contract assets, if billing
has yet to be completed. Performance obligations vary across business lines and regions, and on a contract-by-
contract basis. There may be more than one performance obligation per contract, for example Alchemy
Training Solutions contracts have multiple elements which are split between recognising Revenue at a point in
time for services such as right of use software licences and over time for other services delivered under the
same contract.

Long-term projects consist of two main types:
–
– staged payment invoicing occurs, requiring an assessment of percentage completion, based on services

time incurred is billed at agreed rates on a periodic basis, such as monthly; or

provided and revenue accrued accordingly.

Expenses are recharged to clients where permitted by the contract. Payments received in advance from
customers are recognised in contract liabilities to the extent that performance obligations have not been
satisfied.

The Group does not expect to have any material contracts where the period between the transfer of promised
goods or services to the customer and payment by the customer exceeds one year. As a consequence, the
Group does not adjust any of the transaction prices for the time value of money.

The Group has applied practical expedients in i) recognising assets from the costs incurred to obtain or fulfil a
contract; and ii) in disclosing unsatisfied performance obligations in contracts as contracts have an expected
duration of less than a year. The economic factors affecting revenue for both short- and long-term contracts
are consistent within each.

Operating segments
The Group is organised into business lines, which are the Group’s operating segments and are reported to the
CEO, the chief operating decision maker.

These operating segments are aggregated into three divisions, which are the Group’s reportable segments,
based on similar nature of products and services and mid- to long-term structural growth drivers. When
aggregating operating segments into the three divisions we have applied judgement over the similarities of
the services provided, the customer base and the mid- to long-term structural growth drivers.

Intertek Group plc | Annual Report & Accounts 2021

Products – Our Products division consists of business lines that are focused on ensuring the quality and safety
of physical components and products, as well as minimising risk through assessing the operating process and
quality management systems of our customers.

As a trusted partner to the world’s leading retailers, manufacturers and distributors, our Products business
lines support a wide range of industries including textiles, footwear, toys, hardlines, home appliances,
consumer electronics, information and communication technology, automotive, aerospace, lighting, building
products, industrial and renewable energy products, food and hospitality, healthcare and beauty, and
pharmaceuticals.

Across these industries we provide a wide range of ATIC services including laboratory safety, quality and
performance testing, second-party supplier auditing, sustainability analysis, products assurance, vendor
compliance, people assurance, process performance analysis, facility plant and equipment verification and
third-party certification.

The acquisition of SAI Global Standards and Assurance (‘SAI’), an assurance division that provides audit,
inspection and certification services is similar to our existing Business Assurance line and is recognised within
our Products division. The acquisition of SAI is in line with our 5x5 strategy, which aims to further strengthen
our Total Quality Assurance value proposition and expand our presence in attractive markets with long-term
growth opportunities. See note 10 for details of acquisitions.

Trade – Our Trade division consists of three global business lines with similar global and regional trade-flow
structural growth drivers with demand driven by population and GDP growth, the development of regional
trade, increased traceability and growth in port and transport infrastructure.

The division provides differing services which reflect the breadth of our ATIC offering, but the services provided
are similar in nature and include analytical assessment, inspection and technical services that are delivered to
the customers through issuing certificates or reports. The three business lines all assist our Trade-related
customers in protecting the value and quality of their products during their custody-transfer, storage and
transportation, globally. Our Trade-related customers are all dependent on, and intrinsically linked to, global
shipping and trade flows.

Financial ReportContentsNotes to the financial statements Continued

182

2 Operating segments and presentation of results Continued

The results of these divisions for the year ended 31 December are shown below:

Our Caleb Brett business provides cargo inspection, analytical assessment, calibration and related research and
technical services to the world’s petroleum and biofuels industries.

Our Government & Trade Services business provides inspection services to governments and regulatory bodies
to support trade activities that help the flow of goods across borders, predominantly in the Middle East, Africa
and South America.

Our AgriWorld business provides analytical and testing services to global agricultural trading companies and
growers.

Resources – Our Resources division consists of two business lines demonstrating similar mid- to long-term
structural growth drivers closely linked to our end-customer capital investment. Demand is driven by long-term
energy demand, supply chain risk management, sustainability of energy supply, infrastructure investments,
growth in alternative energy and focus on health and safety.

The division offers similar services across our range of Total Quality Assurance solutions to the oil, gas, nuclear,
power and minerals industries. Our Resources customers typically extract natural resources from the ground
and our services enable our customers to optimise the use of their assets and to minimise risk in their supply
chains. Delivery of our services is through issuing certificates or reports.

Our Industry Services business uses in-depth knowledge of the oil, gas, nuclear and power industries to provide
a diverse range of Total Quality Assurance solutions to optimise the use of customers’ assets and minimise the
risk in their supply chains. Some of our key services include technical inspection, asset integrity management,
analytical testing and ongoing training services.

Our Minerals business provides a broad range of ATIC service solutions to the mining and minerals exploration
industries, covering the resource supply chain from exploration and resource development, through to
production, shipping and commercial settlement.

Year ended 31 December 2021

Products
Trade
Resources

Total

Group operating profit
Net financing (costs)/income

Profit before income tax
Income tax (expense)/credit

Profit for the year

Year ended 31 December 2020

Products
Trade
Resources

Total

Group operating profit
Net financing (costs)/income

Profit before income tax
Income tax (expense)/credit

Profit for the year

Revenue from
contracts with
customers £m

Depreciation
and software
amortisation
£m

1,755.3
575.4
455.6

(106.3)
(43.7)
(19.3)

Adjusted
operating
profit
£m

399.7
51.6
22.6

Separately
Disclosed
Items
£m

(34.3)
(1.4)
(5.0)

Operating
profit
£m

365.4
50.2
17.6

2,786.3

(169.3)

473.9

(40.7)

433.2

473.9
(28.4)

445.5
(118.0)

(40.7)
8.6

(32.1)
11.3

433.2
(19.8)

413.4
(106.7)

327.5

(20.8)

306.7

Revenue from
contracts with
customers £m

Depreciation
and software
amortisation
£m

Adjusted
operating
profit
£m

Separately
Disclosed
Items
£m

Operating
profit
£m

1,681.6
592.6
467.5

2,741.7

(108.1)
(45.1)
(20.8)

(174.0)

351.6
47.1
29.0

427.7

427.7
(34.9)

392.8
(100.2)

292.6

(32.1)
(5.0)
(12.4)

(49.5)

(49.5)
0.6

(48.9)
18.9

(30.0)

319.5
42.1
16.6

378.2

378.2
(34.3)

343.9
(81.3)

262.6

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents183

Notes to the financial statements Continued

2 Operating segments and presentation of results Continued

Geographic segments
Although the Group is managed through a divisional structure, which operates on a global basis, under the
requirements of IFRS 8 the Group must disclose any specific countries that are important to the Group’s
performance. The Group considers the following to be the material countries in which it operates: the United
States, China (including Hong Kong) and the United Kingdom.

In presenting information on the basis of geographic segments, segment revenue is based on the location of
the entity recognising that revenue. Segment assets are based on the geographical location of the assets.

United States
China (including Hong Kong)
United Kingdom
Other countries and unallocated

Revenue from external customers

Non-current assets

2021
£m

837.1
550.3
173.9
1,225.0

2020
£m

870.8
517.9
161.6
1,191.4

2021
£m

974.2
81.4
226.8
959.3

2020
£m

962.2
77.2
191.2
470.8

Total

2,786.3

2,741.7

2,241.7

1,701.4

Major customers
No revenue from any individual customer exceeded 10% of total Group revenue in 2020 or 2021.

3 Separately Disclosed Items

Accounting policy
Adjusted results
In order to present the performance of the Group in a clear, consistent and comparable format, certain items
are disclosed separately on the face of the income statement. Separately Disclosed Items (‘SDI’) are items
which by their nature or size, in the opinion of the Directors, should be excluded from the adjusted result to
provide readers with a clear and consistent view of the business performance of the Group and its operating
divisions on a year-on-year basis A full glossary and definitions of adjusted performance metrics used by the
Group is included on page 230.

When applicable, these items include amortisation of acquisition intangibles; impairment of goodwill and other
assets; the profit or loss on disposals of businesses or other significant non-current assets; costs of acquiring
and integrating acquisitions; the cost of any fundamental restructuring; material claims and settlements; and
unrealised market or fair value gains or losses on financial assets or liabilities, including contingent
consideration.

Adjusted operating profit, which is a non-GAAP measure, excludes the amortisation of acquired intangible
assets, primarily customer relationships, as we do not believe that the amortisation charge in the income
statement provides useful information about the cash costs of running our business as these assets will be
supported and maintained by the ongoing marketing and promotional expenditure, which is already reflected in
operating costs. Amortisation of software, however, is included in adjusted operating profit as it is similar in
nature to other capital expenditure. The costs of any restructuring as part of our 5x5 differentiated strategy
for growth and integration costs are excluded from adjusted operating profit where they represent

Intertek Group plc | Annual Report & Accounts 2021

fundamental changes in individual operations around the Group and where they reflect the change of our
operational structure identified as part of the Group’s strategy that are not expected to recur in those
operations. 2020 was the last year of the fundamental restructuring activities consistent with the Group’s
5x5 strategy. The impairment of goodwill and other assets that by their nature or size are not expected to
recur; the profit and loss on disposals of businesses or other significant assets; and the costs associated with
successful, active or aborted acquisitions are excluded from adjusted operating profit to provide useful
information regarding the year-on-year performance of the Group’s operations.

As adjusted results include the benefits of the items detailed above, but exclude significant costs related to
those items, they should not be regarded as a complete picture of the Group’s financial performance, which is
presented on the face of the Income Statement under Total results. The exclusion of these items may result in
Adjusted operating profit being materially higher or lower than Total operating profit. In particular, where
significant impairments, restructuring charges and legal costs are excluded in any year, Adjusted operating
profit will be higher than Total operating profit.

Separately Disclosed Items
The Separately Disclosed Items are described in the table below:

Operating costs:
Amortisation of acquisition intangibles
Acquisition and integration costs
Restructuring costs

Total operating costs
Net financing income

Total before income tax
Income tax credit on Separately Disclosed Items

Total

(a)
(b)
(c)

(d)

2021
£m

(29.3)
(11.4)
–

(40.7)
8.6

(32.1)
11.3

(20.8)

2020
£m

(28.1)
(2.4)
(19.0)

(49.5)
0.6

(48.9)
18.9

(30.0)

(a) Of the amortisation of acquisition intangibles in the current year, £3.1m relates to the customer relationships, trade names and technology

acquired with the purchase of SAI Global Assurance (‘SAI’) in 2021.

(b) Acquisition and integration costs comprise £11.3m (2020: £2.0m) for transaction and integration costs in respect of successful, active and

aborted acquisitions in the current year, and £0.1m in respect of prior-years’ acquisitions (2020: £0.4m).

(c) During 2020 the Group implemented the final year of various fundamental restructuring activities, consistent with the Group’s 5x5 strategy.
These activities included site consolidations, closure of non-core business units, re-engineering of underperforming businesses and the
delayering of management structures.

(d) Net financing income of £8.6m (2020: £0.6m income) relates to the release of contingent consideration due to terms not being met in

relation to acquisitions from prior periods.

Financial ReportContents184

Notes to the financial statements Continued

4 Expenses and auditors’ remuneration

An analysis of operating costs by nature is outlined below:

Employee costs
Depreciation and software amortisation (notes 8 and 9)
Other expenses

Total

Certain expenses are outlined below, including fees paid to the auditors of the Group:

Included in profit for the year are the following expenses:
Property rentals
Lease and hire charges – fixtures, fittings and equipment
Government grants related to employee costs
Profit on disposal of property, fixtures, fittings, equipment and software

Auditors’ remuneration:
Audit of these financial statements
Amounts receivable by the auditors and their associates in respect of:

Audit of financial statements of subsidiaries pursuant to legislation

Total audit fees payable pursuant to legislation
Audit-related services

Total

5 Employees

Total employee costs are shown below:

Employee costs

Wages and salaries
Equity-settled transactions
Social security costs
Pension costs (note 16)

Total employee costs

Intertek Group plc | Annual Report & Accounts 2021

2021
£m

1,242.6
169.3
941.2

2020
£m

1,220.4
174.0
969.1

2,353.1

2,363.5

2021
£m

7.1
9.5
(15.6)
0.8

0.9

3.8

4.7
0.1

4.8

2020
£m

9.0
11.3
(22.5)
(0.2)

0.8

4.0

4.8
0.2

5.0

2021
£m

2020
£m

1,050.9
18.6
119.3
53.8

1,031.0
17.7
118.9
52.8

1,242.6

1,220.4

Details of pension arrangements and equity-settled transactions are set out in notes 16 and 17 respectively.

Average number of employees by division

Products
Trade
Resources
Central

Total average number for the year ended 31 December

Total actual number at 31 December

The total remuneration of the Directors is shown below:

Directors’ emoluments

Directors’ remuneration
Amounts charged under the long-term incentive scheme

Total Directors’ emoluments

6 Taxation

2021

2020

23,378
9,970
8,315
1,917

23,849
10,466
8,395
1,915

43,580

44,625

44,063

43,769

2021
£m

5.4
2.2

7.6

2020
£m

2.8
1.3

4.1

Accounting policy
Income tax for the year comprises current and deferred tax. Income tax is recognised in the same primary
statement as the accounting transaction to which it relates.

Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Tax provisions are recognised for uncertain tax positions where a risk of an additional tax liability has been
identified and it is probable that the Group will be required to settle that tax liability. Measurement is
dependent on management’s expectation of the outcome of decisions by tax authorities in the various tax
jurisdictions in which the Group operates. This is assessed on a case-by-case basis using in-house tax experts,
professional firms and previous experience. Where the outcome of discussions with tax authorities is different
from the amount initially recorded, this difference will impact the tax expense in the period in which the
determination is made.

Deferred tax
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between
the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes, except for:
–
–

recognition of consolidated goodwill;
the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit; and

– differences relating to investments in subsidiaries, branches, associates and interest in joint ventures, the
reversal of which is under the control of the Group and where it is probable that the difference will not
reverse in the foreseeable future.

Financial ReportContents185

Notes to the financial statements Continued

6 Taxation Continued

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates that have been enacted or substantively enacted at
the balance sheet date, for the periods when the asset is realised or the liability is settled. Deferred tax assets
and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable
entities which intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. The carrying amount of deferred tax assets is
reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Any additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividend.

Tax expense
The Group operates across many different tax jurisdictions. Income and profits are earned and taxed in the
individual countries in which they occur.

The statutory tax charge, including the impact of SDIs, of £106.7m (2020: £81.3m), equates to an effective
rate of 25.8% (2020: 23.6%) and the cash tax on adjusted results is 22.9% (2020: 23.3%).

The income tax expense for the adjusted profit before tax for the 12 months ended 31 December 2021 is
£118.0m (2020: £100.2m). The Group’s adjusted consolidated effective tax rate for the 12 months ended
31 December 2021 is 26.5% (2020: 25.5%).

Differences between the consolidated effective tax rate of 25.8% and notional statutory UK rate of 19.0%
include but are not limited to: the mix of profits; the effect of tax rates in foreign jurisdictions; non-deductible
expenses; the effect of movement in unrecognised deferred tax asset; movements in the provision for
uncertain tax positions; withholding tax on intra-group dividends; tax exempt income; and under/over
provisions in previous periods.

The Group receives tax incentives in certain jurisdictions, resulting in a lower tax charge to the income
statement. These tax incentives mainly relate to China’s High and New Technology Enterprise and Technology
Advanced Service Enterprise incentives. Without these incentives the adjusted effective tax rate would be
29.0% (2020: 28.0%).

Intertek Group plc | Annual Report & Accounts 2021

Tax charge
The total income tax charge, comprising the current tax charge and the movement in deferred tax, recognised
in the income statement is analysed as follows:

Current tax charge for the period
Adjustments relating to prior year liabilities

Current tax
Deferred tax movement related to current year
Deferred tax movement related to prior year
Deferred tax movement

Total tax in income statement

Tax on adjusted result
Tax on Separately Disclosed Items

Total tax in income statement

2021
£m

110.4
3.6

114.0
(2.1)
(5.2)
(7.3)

106.7

118.0
(11.3)

106.7

2020
£m

94.8
(3.7)

91.1
(2.4)
(7.4)
(9.8)

81.3

100.2
(18.9)

81.3

Reconciliation of effective tax rate
The following table provides a reconciliation of the UK statutory corporation tax rate to the effective tax rate
of the Group on profit before taxation.

Profit before taxation

Notional tax charge at UK standard rate 19.0% (2020: 19.0%)
Differences in overseas tax rates
Withholding tax on intercompany dividends
Non-deductible expenses
Tax exempt income
Change in tax rate impact
Movement in unrecognised deferred tax
Adjustments in respect of prior years1
Other2

Total tax in income statement

2021
£m

2020
£m

413.4

343.9

78.5
13.2
10.0
13.5
(7.0)
(0.1)
1.3
(1.6)
(1.1)

106.7

65.3
5.4
10.7
12.1
(5.7)
(0.5)
4.9
(11.1)
0.2

81.3

1. Adjustments in respect of prior years include a £1.2m charge relating to tax settlements, a deferred tax credit adjustment of £1.8m relating

to an earn-out payment and a £1.0m credit in the UK relating to higher double tax relief for overseas taxes.

2. The Other category contains R&D tax credits and super deductions of £2.6m (2020: £3.2m) and a net provision charge of £0.6m (2020:

£2.5m) following the review of uncertain tax provisions across multiple territories. The remainder represents other local taxes.

The main rate of UK corporation tax is 19.0% and it has been substantively enacted on 24 May 2021 that the
rate will increase to 25.0% from 1 April 2023. This has a consequential effect on the Group’s future tax charge
and has resulted in an increase in the UK net deferred tax asset of £0.4m.

Financial ReportContentsForeign exchange translation

differences of foreign
operations

Net exchange gain/(loss) on
hedges of net investments
in foreign operations
Gain on fair value of cash

flow hedges

Remeasurements on defined
benefit pension schemes
Tax on other items that will
never be reclassified to
profit or loss

Total other

comprehensive
(expense)/income for
the year

Notes to the financial statements Continued

6 Taxation Continued

Income tax recognised in other comprehensive income (‘OCI’)
As noted in the accounting policy, tax is recognised in the same place as the relevant accounting charge. The
income tax recognised on items recorded in other comprehensive income is shown below:

Before tax
2021
£m

Tax charge
2021
£m

Net of tax
2021
£m

Before tax
2020
£m

Tax charge
2020
£m

Net of tax
2020
£m

186

Deferred tax
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:

(24.7)

(53.9)

(2.8)

(56.7)

(24.7)

4.0

–

11.5

–

1.7

(2.2)

–

4.0

1.7

9.3

–

3.7

0.3

0.8

–

0.3

3.7

0.3

1.1

–

(0.6)

Total

Intangible assets
Property, plant and

equipment

Pensions
Equity-settled transactions
Provisions and other

temporary differences

Tax value of losses

Total

As shown on balance sheet:
Deferred tax assets*
Deferred tax liabilities*

Assets
2021
£m

0.3

6.6
1.2
7.7

62.9
10.9

89.6

Assets
2020
£m

Liabilities
2021
£m

Liabilities
2020
£m

Net
2021
£m

Net
2020
£m

0.4

7.1
1.8
8.3

52.0
9.0

78.6

(90.9)

(72.5)

(90.6)

(72.1)

(3.4)
(1.4)
–

(22.0)
–

(117.7)

(3.9)
–
–

(13.3)
–

(89.7)

3.2
(0.2)
7.7

40.9
10.9

3.2
1.8
8.3

38.7
9.0

(28.1)

(11.1)

39.3
(67.4)

(28.1)

48.6
(59.7)

(11.1)

(9.2)

(0.5)

(9.7)

(49.1)

(3.1)

(52.2)

The deferred tax by category shown above is not netted off within companies or jurisdictions. The balance sheet shows the net position
within companies or jurisdictions. The difference between the two asset and liability totals is £50.3m, but the net liability of £28.1m is the
same in both cases. Deferred tax assets totalling £3.8m have been recognised in companies which incurred a loss in either the current or prior
period. The deferred tax assets are recognised on the basis that these companies are projected to be profitable in future periods.

Income tax recognised directly in equity
As noted in the accounting policy, tax is recognised in the same place as the relevant accounting charge.
The income tax on items recognised in equity is shown below:

Movements in deferred tax temporary differences during the year
The movement in the year in deferred tax assets and liabilities is shown below:

Before tax
2021
£m

Tax charge
2021
£m

Net of tax
2021
£m

Before tax
2020
£m

Tax charge
2020
£m

Net of tax
2020
£m

Equity-settled
transactions

18.6

(0.3)

18.3

17.7

–

17.7

1 January 2021
£m

Exchange
adjustments
£m

Intangible assets
Property, fixtures, fittings

and equipment

Pensions
Equity-settled transactions
Provisions and other

temporary differences

Tax value of losses

Total

(72.1)

3.2
1.8
8.3

38.7
9.0

(11.1)

2.1

0.6
–
–

(1.6)
(0.2)

0.9

Recognised in
income
statement
£m

Recognised in
equity and OCI
£m

31 December
2021
£m

9.1

(0.7)
0.1
(0.1)

1.6
(2.7)

7.3

–

(90.6)

–
(2.2)
(0.5)

–
–

3.2
(0.2)
7.7

40.9
10.9

(2.7)

(28.1)

Acquisitions 1
£m

(29.7)

0.1
0.1
–

2.2
4.8

(22.5)

1. Deferred tax balances arising on the acquisition of SAI and JLA and remain subject to finalisation.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

187

6 Taxation Continued

7 Earnings per ordinary share

The calculation of earnings per ordinary share is based on profit attributable to ordinary shareholders of the
Company and the weighted average number of ordinary shares in issue during the year. Diluted earnings per
share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of
conversion of all potentially dilutive ordinary shares. Potential ordinary shares shall be treated as dilutive when,
and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per
share from continuing operations.

In addition to the earnings per share required by IAS 33 Earnings Per Share, an adjusted earnings per share has
also been calculated and is based on earnings excluding the effect of amortisation of acquisition intangibles,
goodwill impairment and other Separately Disclosed Items. It has been calculated to allow shareholders a
better understanding of the trading performance of the Group. Details of the adjusted earnings per share are
set out below:

Profit attributable to ordinary shareholders
Separately Disclosed Items after tax (note 3)

Adjusted earnings

Number of shares (millions)

Basic weighted average number of ordinary shares
Potentially dilutive share awards

Diluted weighted average number of shares

Basic earnings per share
Potentially dilutive share awards

Diluted earnings per share

Adjusted basic earnings per share
Potentially dilutive share awards

Adjusted diluted earnings per share

2021
£m

288.1
20.8

308.9

161.2
0.7

161.9

178.7p
(0.8)p

177.9p

191.6p
(0.8)p

190.8p

2020
£m

247.3
30.0

277.3

161.0
1.3

162.3

153.6p
(1.2)p

152.4p

172.2p
(1.3)p

170.9p

1 January 2020
£m

Exchange
adjustments
£m

Acquisitions
£m

Recognised in
income
statement
£m

Recognised in
equity and OCI
£m

31 December
2020
£m

Intangible assets
Property, fixtures, fittings

and equipment

Pensions
Equity-settled transactions
Provisions and other

temporary differences

Tax value of losses

Total

(87.0)

3.9
2.2
8.6

41.2
14.8

(16.3)

1.8

(0.3)
–
–

(2.1)
(0.3)

(0.9)

(1.1)

14.7

–
–
–

–
–

(1.1)

(0.4)
(0.2)
0.5

0.7
(5.5)

9.8

(0.5)

–
(0.2)
(0.8)

(1.1)
–

(2.6)

(72.1)

3.2
1.8
8.3

38.7
9.0

(11.1)

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the items shown below. The numbers shown are
the gross temporary differences, and to calculate the potential deferred tax asset it is necessary to multiply
these by the tax rates in each case:

Intangibles
Pensions
Provisions and other temporary differences
Tax losses
Foreign tax credits1
Property, fixtures, fittings and equipment

Total

2021
£m

29.3
1.5
–
161.9
12.0
0.5

205.2

2020
£m

28.7
1.5
0.2
150.7
12.0
–

193.1

1. The total unrecognised foreign tax credits is £3.2m, the grossed-up equivalent amount of which is £12.0m as stated above.

Deferred tax assets have not been recognised in respect of these items because it is not probable that future
taxable profits will be available in certain jurisdictions against which the Group can utilise the benefits from
them.

There is a temporary difference of £284.4m (2020: £276.4m) which relates to unremitted post-acquisition
overseas earnings. No deferred tax is provided on this amount as the distribution of these retained earnings is
under the control of the Group and there is no intention to either repatriate from, or sell, the associated
subsidiaries in the foreseeable future.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

188

8 Property, plant and equipment

Property, plant and equipment
The property, plant and equipment employed by the business is analysed below:

Accounting policy
Property, plant and equipment
Owned assets
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Leased assets
All leases where the Group is the lessee (with the exception of short-term and low-value leases) are recognised
in the statement of financial position. A lease liability is recognised based on the present value of the future
lease payments, and a corresponding right-of-use asset is recognised. The right-of-use asset is depreciated
over the shorter of the lease term or the useful life of the asset. Lease payments are apportioned between
finance charges and a reduction of the lease liability.

Low-value items, usually below £4,000, and short-term leases with a term of 12 months or less are not
required to be recognised on the balance sheet and payments made in relation to these leases are recognised
on a straight-line basis in the income statement. The Group leases various properties, principally offices and
testing laboratories, which have varying terms and renewal rights that are typical to the territory in which they
are located. Non-property includes all other leases, such as cars and printers. Normally the lease term is the
contractual start to end date, except when a break or extension option are reasonably certain to be taken,
which are considered on a lease-by-lease basis.

Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of
items of property, plant and equipment. Leased assets are depreciated over the shorter of the expected lease
term and their useful lives. Freehold land is not depreciated.

The estimated useful lives are as follows:

Freehold buildings
Leasehold buildings
Fixtures, fittings, plant and equipment

50 years
Term of lease
3 to 10 years

Depreciation methods, residual values and the useful lives of assets are reassessed at each reporting date.

Impairment
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated to determine the level of any impairment.

Cost
At 1 January 2020
Exchange adjustments
Additions
Disposals
Businesses acquired (note 10)

At 31 December 2020

Depreciation
At 1 January 2020
Exchange adjustments
Charge for the year
Disposals

At 31 December 2020

Net book value at 31 December 2020

Cost
At 1 January 2021
Exchange adjustments
Additions
Disposals
Businesses acquired (note 10)

At 31 December 2021

Depreciation
At 1 January 2021
Exchange adjustments
Charge for the year
Disposals

At 31 December 2021

Net book value at 31 December 2021

Intertek Group plc | Annual Report & Accounts 2021

Land and
buildings
£m

Fixtures,
fittings, plant
and equipment
£m

544.6
3.1
47.2
(81.3)
–

1,219.7
(10.2)
64.6
(97.9)
–

Total
£m

1,764.3
(7.1)
111.8
(179.2)
–

513.6

1,176.2

1,689.8

283.7
(2.9)
61.4
(72.8)

269.4

244.2

836.4
(3.8)
95.2
(93.2)

834.6

341.6

Land and
buildings
£m

Fixtures,
fittings, plant
and equipment
£m

513.6
(9.3)
127.1
(58.0)
3.8

1,176.2
(31.3)
93.7
(65.9)
2.3

1,120.1
(6.7)
156.6
(166.0)

1,104.0

585.8

Total
£m

1,689.8
(40.6)
220.8
(123.9)
6.1

577.2

1,175.0

1,752.2

269.4
(2.1)
61.4
(51.8)

276.9

300.3

834.6
(25.8)
89.2
(64.5)

1,104.0
(27.9)
150.6
(116.3)

833.5

1,110.4

341.5

641.8

Financial ReportContentsNotes to the financial statements Continued

189

8 Property, plant and equipment Continued

9 Goodwill and other intangible assets

The net book value of the right-of-use asset for leases comprised:

At 1 January 2021
Cost movement in year
Depreciation movement in year

Land and
buildings
£m

180.1
65.0
(4.8)

Other
£m

22.2
8.0
(3.7)

Total
£m

202.3
73.0
(8.5)

Net book value at 31 December 2021

240.3

26.5

266.8

Fixtures, fittings, plant and equipment include assets in the course of construction of £27.0m at 31 December
2021 (2020: £23.0m), mainly comprising laboratories under construction. These assets will not be depreciated
until they are available for use.

The net book value of land and buildings comprised:

Freehold
Leasehold

Total

2021
£m

57.1
243.2

300.3

2020
£m

62.0
182.2

244.2

Contracts for capital expenditure which are not provided in the financial statements amounted to £10.3m
(2020: £12.0m).

We have specifically reviewed our portfolio of freehold properties (total 2021 net book value of £57.1m) to
consider whether there are indications of material impairment arising from the potential physical risks arising
from climate change. We have not impaired any assets this year as a result of this exercise.

Accounting policy
Goodwill
Goodwill arises on the acquisition of businesses. Goodwill represents the difference between the cost of
acquisition and the Group’s interest in the fair value of the identifiable assets and liabilities acquired.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating
units (‘CGUs’) and is not amortised but is tested annually for impairment.

Acquisitions on or after 1 January 2010
From 1 January 2010, the Group has prospectively applied IFRS 3 Business Combinations (revised 2008).
Business combinations are accounted for using the acquisition method at the acquisition date, which is the
date on which control is obtained.

The Group measures goodwill as the fair value of the consideration transferred less the net recognised amount
(generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the
acquisition date.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are
expensed as incurred. Costs relating to acquisitions are shown in note 3.

Any contingent consideration payable is recognised at fair value at the acquisition date with subsequent
changes recognised in profit or loss.

If at the reporting date the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
can only be established provisionally, then these values are used. Adjustments to the fair values can be made
within 12 months of the acquisition date and are taken as adjustments to goodwill.

Acquisitions between 1 January 2004 and 31 December 2009
For acquisitions between 1 January 2004 and 31 December 2009, goodwill represents the excess of the cost
of the acquisition over the Group’s interest in the recognised amount (generally fair value) of the identifiable
assets, liabilities and contingent liabilities of the acquiree.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurred in connection with business combinations were capitalised as part of the cost of the acquisition.

The Group has taken advantage of the exemption permitted by IFRS 1 First-Time Adoption of International
Financial Reporting Standards and has not restated goodwill on acquisitions prior to 1 January 2004, the date
of transition to IFRS. In respect of acquisitions prior to 1 January 2004, goodwill represents the amount
recognised under the Group’s previous accounting framework.

Other intangible assets
When the Group makes an acquisition, management review the business and assets acquired to determine
whether any intangible assets should be recognised separately from goodwill. If, based on management’s
judgement, such an asset is identified, then it is valued by discounting the probable future cash flows expected
to be generated by the asset, over the estimated life of the asset. Where there is uncertainty over the amount
of economic benefit and the useful life, this is factored into the calculation.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

190

9 Goodwill and other intangible assets Continued

Intangibles
The intangibles employed by the business are analysed below:

Other intangible assets

Goodwill
£m

Customer
relationships
£m

Technology/
Know-how and
trade names
£m

Other
acquisition
intangibles
£m

Computer
software
£m

Total other
intangible
assets
£m

1,391.4
(24.3)
0.4
(4.4)
(3.0)

439.4
(7.5)
–
1.9
–

–

531.6
(7.4)
–
–

524.2

296.0
(4.1)
19.8
–

311.7

59.1
(1.7)
–
2.5
–

–

59.9

9.4
(0.4)
6.4
–

15.4

29.0
(0.7)
–
1.1
–

–

29.4

23.6
(0.4)
1.9
–

25.1

226.2
(4.4)
25.5
–
(20.0)

753.7
(14.3)
25.5
5.5
(20.0)

–

227.3

750.4

122.3
(1.2)
17.4
(20.0)

118.5

451.3
(6.1)
45.5
(20.0)

470.7

835.9

122.1

44.5

4.3

108.8

279.7

Re-presented*

Cost
At 1 January 2020
Exchange adjustments
Additions
Transfers
Disposal
Businesses acquired

(note 10)

Amortisation
At 1 January 2020
Exchange adjustments
Charge for the year
Disposal

At 31 December 2020

Net book value at

31 December 2020

At 31 December 2020

1,360.1

433.8

*Re-presented column order to show technology/know-how and trade names as a separate column and include
licences within Other.

Intangible assets arising on acquisitions and computer software are stated at cost less accumulated
amortisation and accumulated impairment losses. Identifiable intangibles are those which can be sold
separately or which arise from legal rights regardless of whether those rights are separable, and which have
finite useful lives.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives.
The estimated useful lives are as follows:

Computer software
Customer relationships
Technology and know-how
Trade names
Licences
Covenants not to compete

Up to 7 years
Up to 20 years
Up to 15 years
Up to 18 years
Contractual life
Contractual life

Impairment
Goodwill is not subject to amortisation and is tested annually for impairment and when circumstances indicate
that the carrying value may be impaired.

Other intangible assets are subject to amortisation and are reviewed for impairment whenever events or
changes in circumstances indicate that the amount carried in the statement of financial position may be less
than its recoverable amount.

Any impairment is recognised in the income statement within operating costs. Impairment is determined for
goodwill by assessing the recoverable amount of each asset or group of assets, i.e. cash generating unit, to
which the goodwill relates. A CGU represents an asset grouping at the lowest level for which there are
separately identifiable cash flows.

The recoverable amount of an asset or a CGU is the greater of its fair value less costs to sell and value in use. 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 estimation process is complex due to the inherent risks and uncertainties and if different estimates
were used this could materially change the projected value of the cash flows. An impairment loss in respect of
goodwill is not reversed.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents

Notes to the financial statements Continued

9 Goodwill and other intangible assets Continued

Other intangible assets

Goodwill
£m

Customer
relationships
£m

Technology/
Know-how and
trade names
£m

Other
acquisition
intangibles
£m

Computer
software
£m

Total other
intangible
assets
£m

Cost
At 1 January 2021
Exchange adjustments
Additions
Disposal
Businesses acquired

(note 10)

1,360.1
(9.5)
–
–

433.8
(2.5)
–
–

413.3

65.0

At 31 December 2021

1,763.9

496.3

Amortisation
At 1 January 2021
Exchange adjustments
Charge for the year
Disposal
At 31 December 2021

Net book value at

524.2
(1.7)
–
–
522.5

311.7
(1.7)
17.7
–
327.7

59.9
(0.1)
–
–

37.6

97.4

15.4
0.2
10.3
–
25.9

29.4
(0.4)
–
–

0.2

227.3
(0.9)
19.4
(5.8)

750.4
(3.9)
19.4
(5.8)

5.7

108.5

29.2

245.7

868.6

25.1
(0.5)
1.3
–
25.9

118.5
(0.8)
18.7
(5.8)
130.6

470.7
(2.8)
48.0
(5.8)
510.1

31 December 2021

1,241.4

168.6

71.5

3.3

115.1

358.5

Other intangible assets
Computer software additions of £19.4m (2020: £25.5m) relates to separately acquired computer software of
£7.8m (2020: £13.7m) and internally developed intangible assets of £11.6m (2020: £11.8m).

The Other acquisition intangibles net book value of £3.3m (2020: £4.3m) consist of guaranteed income, order
backlog, licences and covenants not to compete.

The average remaining amortisation period for customer relationships is eight years (2020: nine years).

Computer software net book value of £115.1m at 31 December 2021 (2020: £108.8m) includes software in
construction of £59.3m (2020: £58.2m). Research and development expenditure of £27.1m (2020: £28.0m)
was recognised as an expense in the year.

191

Goodwill
Goodwill arising from acquisitions in the current and prior year has been allocated to reportable segments
as follows:

Products
Trade
Resources

At 31 December

2021
£m

412.9
0.4
–

413.3

2020
£m

–
–
–

–

The total carrying amount of goodwill by CGU is as follows, which is also used for the assessment of the
Group’s impairment review.

Industry Services
Business Assurance
Food & AgriWorld
Caleb Brett
Government & Trade Services
Minerals
Softlines
Hardlines
Electrical & Connected World
Transportation Technologies
Building & Construction
Chemicals & Pharma

2021 pre-tax
discount rate

10.4%
8.5%
8.5%
8.8%
8.6%
10.1%
8.4%
8.3%
8.4%
8.5%
8.6%
8.1%

2021
£m

14.4
663.3
39.0
53.7
0.8
37.0
6.1
7.8
85.7
42.4
212.2
79.0

Net book value at 31 December*

1,241.4

2020
£m

14.5
274.4
17.1
55.2
0.8
38.7
6.2
8.1
86.1
42.9
212.0
79.9

835.9

All goodwill is recorded in local currency. Additions during the year are converted at the exchange rate on the date of the transaction and the
goodwill at the end of the year is stated at closing exchange rates.

Impairment review
In order to determine whether impairments are required, the Group estimates the recoverable amount of each
CGU. The calculation is based on projecting future cash flows over a five-year period and using a terminal value
to incorporate expectations of growth thereafter. The long-term growth rate is used in the perpetuity
calculations. A discount factor is applied to obtain a value in use which is the recoverable amount. Goodwill
arising in year from acquisitions is assessed for impairment separately from the above CGUs and on an
acquisition-by-acquisition basis. There were no impairment triggers for SAI Global from the date of acquisition
to the 31 December 2021. There would be no impact on the impairment review through the inclusion of SAI
Global within the CGU review. No impairments were required on goodwill arising in 2021 (2020: No
impairments).

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents192

Notes to the financial statements Continued

9 Goodwill and other intangible assets Continued

The calculation of the value in use includes assessment of long-term growth rates and discount rates.
Long-term growth rates predict growth beyond the Group’s planning cycle, and range from 1.7% to 2.6%
(2020: 1.8% to 2.6%). The discount rate for each CGU is based on the Group’s weighted average cost of capital
adjusted for the risks specific to the CGU. Pre-tax discount rates ranged from 8.1% to 10.4% (2020: 7.7%
to 12.3%).

Key assumptions
The key assumptions include the rate of revenue and profit growth within each of the territories and business
lines in which the Group operates. These are based on the Group’s approved budget and five-year strategic
plan. Finally, the discount rate used to bring the cash flow back to a present value varies depending on the
location of the operation and the nature of the operations. The estimated future cash flows are discounted to
their present value using a discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.

Sensitivity analysis
None of the reasonable downside sensitivity scenarios on key assumptions would cause the carrying amount
of each CGU to exceed its recoverable amount. The sensitivities modelled by management include:

(i) Assuming revenues decline each year by 1% in 2022 to 2026 from the 2022 budgeted revenues, with

margins increasing with base assumptions.

(ii) Assuming zero growth in operating profit margins in 2022 to 2026 with revenues increasing per base

assumptions.

(iii) Assuming an increase in the discount rates used by 1%.

Management considers that the likelihood of any or all of the above scenarios occurring is low.

In preparing our forecasts, including the rate of revenue and profit growth, we have also considered the
potential impact of climate change, and to reflect a severe impact of climate change transition risk through the
modelling across all CGUs, we have modelled an additional sensitivity of discounted cash flows with a limited
25-year life, excluding any terminal value. In this scenario, which we also consider to be a low probability, there
is no impairment.

10 Acquisitions

Acquisitions in 2021
On 7 September 2021 the Group acquired 100% of SAI Global Assurance (‘SAI’), a leading provider of assurance
services based predominantly in Australia, for a purchase price of AU$868.9m (£450.1m net of cash acquired)
generating goodwill of £388.4m. The Assurance division provides audit, inspection and certification services
and is similar to our existing Business Assurance line. The Standards division aggregates and distributes
standards via its online platform. The acquisition of SAI is in line with our 5x5 strategy, which aims to further
strengthen our Total Quality Assurance value proposition and expand our presence in attractive markets with
long-term growth opportunities. SAI will strengthen Intertek’s assurance offering by providing enhanced scale,
as well as complementary geographic coverage – SAI are a market leader in Australia, have scale presence in
the US, Canada, and UK, and have a fast-growing business in China – as well as new assurance capabilities in a
number of high-growth, safety-critical segments including food safety and QSR.

Intertek Group plc | Annual Report & Accounts 2021

On 1 July 2021 the Group acquired the trade and assets of Apras Sicea France (‘ASF’), a specialist in inspection
and testing of petroleum, petrochemical and related products, for a purchase price of EUR0.6m (£0.5m net of
cash acquired) generating goodwill of £0.4m.

On 19 July 2021 the Group acquired 100% of JLA Brasil Laboratório de Análises de Alimentos S.A. (‘JLA’), a
market-leading independent provider of Food, Agri and Environmental testing solutions, for a purchase price of
BRL218.3m (£30.4m net of cash acquired) generating goodwill of £24.5m.

Provisional details of the net assets acquired and fair value adjustments are set out in the following tables.
These analyses are provisional and amendments may be made to these figures in the 12 months following the
date of acquisition.

SAI Global Standards and Assurance
Total

Property, plant and equipment
Goodwill
Other intangible assets
Trade and other receivables
Trade and other payables
Provisions for liabilities and charges
Deferred tax liabilities
Minority Interest acquired
Net assets acquired

Others
Total

Property, plant and equipment
Goodwill
Other intangible assets
Inventories
Trade and other receivables
Trade and other payables
Deferred tax liabilities
Net assets acquired

2021

Provisional fair
value to Group
on acquisition
£m

3.7
388.4
99.6
54.6
(74.9)
(0.1)
(19.5)
(1.7)
450.1

2021

Provisional fair
value to Group
on acquisition
£m

2.4
24.9
8.9
0.1
0.7
(3.1)
(3.0)
30.9

Financial ReportContents193

Notes to the financial statements Continued

10 Acquisitions Continued

Goodwill and intangible assets
The total goodwill arising on acquisitions made during 2021 was £413.3m, of which £24.5m is expected to be
deductible for tax purposes. The goodwill arising represents the value of the assembled workforce and the
benefits the Group expects to gain from increasing its presence in the relevant sectors in which the acquired
businesses operate. The intangible assets of £108.5m primarily represent the value of customer relationships,
trade names and technology. The final values will be calculated within 12 months following the date of
acquisition. The deferred tax thereon was £22.5m.

Consideration paid
The total cash consideration for the acquisitions in the year was £496.7m (2020: £nil), with further contingent
consideration payable of £0.1m (2020: £nil) which is recognised in note 13. Cash consideration includes cash
acquired of £15.8m. The estimated purchase price net of cash was £480.9m.

Contribution of acquisitions to revenue and profits
In total, acquisitions made during 2021 contributed revenues of £44.2m and a statutory net profit after tax of
£2.4m from the date of acquisition to 31 December 2021. The Group revenue and statutory profit after tax for
the year ended 31 December 2021 would have been £2,872.5m and £311.3m respectively if the acquisitions
were assumed to have been made on 1 January 2021.

Acquisitions in 2020
There were no acquisitions completed in 2020.

11 Trade and other receivables

Accounting policy
Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at
the amounts considered recoverable (amortised cost). Estimates are used in determining the level of
receivables that will not, in the opinion of the Directors, be collected. The Group applies the simplified approach
permitted by IFRS 9, which requires the use of the lifetime expected loss provision for all receivables, including
contract assets. The provision calculations are based on historic credit losses and forward-looking data, namely
specific country-risk classifications with higher default rates applied to older balances. This approach is
followed for all receivables unless there are specific circumstances, such as the bankruptcy of a customer or
emerging market risks, which would render the receivable irrecoverable and therefore require a specific
provision. A provision is made against trade receivables and contract assets until such time as the Group
believes the amount to be irrecoverable, after which the trade receivable or contract assets balance is
written off.

Trade and other receivables
Trade and other receivables are analysed below:

Trade receivables
Contract assets
Other receivables
Prepayments

Total trade and other receivables

2021
£m

450.5
108.5
57.9
45.0

661.9

2020
£m

428.9
99.8
53.7
38.8

621.2

Trade receivables and contract assets are shown net of allowance for impairment losses of £13.8m (2020:
£18.9m) and £1.6m (2020: £5.3m) respectively. Net impairment on trade receivables and contract assets
charged as part of operating costs was £4.5m (2020: £1.7m) and £nil (2020: £1.7m) respectively.

There is no material difference between the above amounts for trade and other receivables and their fair value,
due to their short-term duration. There is no concentration of credit risk with respect to trade receivables as
the Group has a large number of customers who are internationally dispersed.

The ageing of trade receivables and contract assets at the reporting date was as follows:

Under 3 months
Between 3 and 6 months
Between 6 and 12 months
Over 12 months

Gross trade receivables and contract assets
Allowance for impairment

Trade receivables and contract assets, net of allowance

2021
£m

457.6
46.6
20.8
49.4

574.4
(15.4)

559.0

2020
£m

428.3
51.3
19.0
54.3

552.9
(24.2)

528.7

Included in trade receivables under three months of £384.6m (2020: £360.6m) are trade receivables of
£340.7m (2020: £315.4m) that are not yet due for payment.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents194

11 Trade and other receivables Continued

12 Trade and other payables

The movement in the allowance for impairment in respect of trade receivables and contract assets during the
year was as follows:

Impairment allowance for doubtful trade receivables and contract assets

At 1 January
Exchange differences
Acquisitions
Net impairment (gain)/loss recognised
Receivables written off

At 31 December

2021
£m

24.2
(0.6)
2.1
(4.5)
(5.8)

15.4

2020
£m

26.5
(1.4)
–
3.3
(4.2)

24.2

Sensitivity analysis
Trade receivables and contract assets are assessed for impairment using a calculated credit loss assumption.
A 0.25% variance in the assumed credit risk factor would impact impairment by £1.9m. There were no material
individual impairments of trade receivables or contract assets.

Accounting policy
Trade payables
Trade payables are recognised at the value of the invoice received from a supplier. The carrying value of trade
payables is considered approximate to fair value.

Trade and other payables
Trade and other payables are analysed below:

Trade payables
Other payables
Accruals
Contract liabilities

Total trade and other payables

Current
2021
£m

153.4
83.4
296.2
134.8

667.8

Current
2020
£m

142.0
82.9
248.1
103.2

576.2

Non-current
2021
£m

Non-current
2020
£m

0.9
15.5
9.4
6.1

31.9

0.8
17.5
5.2
2.6

26.1

The Group’s exposure to liquidity risk related to trade payables is disclosed in note 14. £80.5m of contract
liabilities at the end of 2020 was recognised in revenue in 2021 (2020: £61.0m).

Other payables include revenue taxes, interest payable and retirement liabilities.

Contract liabilities consist of consideration received in advance of the Group transferring the related good or
service to the client.

In one part of the Group an arrangement is available that allows payment terms to suppliers to be extended by up to
60 days. At 31 December 2021, this arrangement was applicable to trade payables totalling £2.8m (2020: £2.5m).

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

195

13 Provisions

14 Borrowings and financial instruments

Accounting policy
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation
that can be estimated reliably 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

At 1 January 2021
Exchange adjustments
Provided in the year:

in respect of current year acquisitions
in respect of prior year acquisitions

Released during the year
Utilised during the year
Businesses acquired (note 10)

At 31 December 2021

Included in:
Current liabilities
Non-current liabilities

At 31 December 2021

Contingent
consideration
£m

19.7
(0.3)
–
0.3
–
(8.5)
(10.9)
–

0.3

0.1
0.2

0.3

Claims
£m

3.0
(0.2)
5.1
–
–
(0.8)
(3.4)
–

3.7

3.7
–

3.7

Other
£m

13.5
–
3.8
–
–
(0.1)
(7.6)
0.1

9.7

9.4
0.3

9.7

Total
£m

36.2
(0.5)
8.9
0.3
–
(9.4)
(21.9)
0.1

13.7

13.2
0.5

13.7

The maximum contingent consideration, on a discounted basis, that could be paid in relation to acquisitions is
£21.1m. Further detail on the timing of the cash flow can be found in note 10. The contingent consideration is
a financial liability held at fair value through profit and loss with the measurement basis disclosed in note 14.

The Group is involved in various claims and lawsuits incidental to the ordinary course of its business. The
outcome of such litigation and the timing of any potential liability cannot be readily foreseen, as it is often
subject to legal proceedings. Based on information currently available, the Directors consider that the cost to
the Group of an unfavourable outcome arising from such litigation is unlikely to have a materially adverse
effect on the financial position of the Group in the foreseeable future.

The provision for claims of £3.7m (2020: £3.0m) represents an estimate of the amounts payable in connection
with identified claims from customers, former employees and other plaintiffs and associated legal costs. The
timing of the cash outflow relating to the provisions is uncertain but is likely to be within one year. Details of
contingent liabilities in respect of claims are set out in note 22.

The other provision of £9.7m (2020: £13.5m) includes integration provisions. The timing of the cash outflow is
uncertain, but is likely to be within one year.

Intertek Group plc | Annual Report & Accounts 2021

Accounting policy
Net financing costs
Net financing costs comprise interest expense on borrowings; interest expense on tax balances; facility fees;
interest receivable on funds invested; interest income and expense relating to pension assets and liabilities
and lease interest expense under IFRS16; net foreign exchange gains or losses on financial assets or liabilities;
unrealised market or fair value gains or losses on financial assets or liabilities, including contingent
consideration; and gains and losses on hedging instruments that are recognised in the income statement.
Interest income and interest expense are recognised as they accrue using the effective interest rate method.
As permitted by IAS 7, interest paid is classified within operating cash flows and interest received is classified
within investing cash flows.

In 2021 the Group changed its accounting policy to include finance expenses on tax balances within interest
expense. The impact of this change on the opening Balance Sheet and the prior year income statement is not
material and no restatement has been made. The impact on net finance costs for the year ending 31 December
2021 is an increased expense of £4.2m with a corresponding increase in tax liabilities.

Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently at amortised cost less
impairment losses (including bad debt provision).

Cash and cash equivalents and net debt
Cash and cash equivalents: Cash and cash equivalents on the balance sheet comprise cash at bank and in hand
and short-term deposits with original maturities of less than 90 days which are subject to an insignificant risk
of changes in value. In the consolidated statement of cash flows, net cash and cash equivalents comprise cash
and cash equivalents, as defined above, net of bank overdrafts. Net financial debt comprises borrowings less
cash and cash equivalents and total net debt is net financial debt plus the IFRS 16 lease liability.

Non-derivative financial liabilities
Trade and other payables are recognised initially at fair value and subsequently at their amortised cost.

Interest-bearing borrowings are initially recognised at fair value less transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective
interest basis.

Put options held by non-controlling interests that arise on acquisition are recognised initially at the present
value of the redemption amount. They are subsequently measured at amortised cost using the effective
interest method. The discount is unwound through SDIs as a finance charge.

Derivative financial instruments
The Group uses derivative financial instruments, including cross currency interest rate swaps and foreign
currency forwards, to hedge economically its exposure to foreign exchange and interest rate risks. In
accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for
speculative purposes.

Derivative financial instruments are recognised initially and subsequently at fair value; attributable transaction
costs are recognised in profit or loss when incurred. The gain or loss on remeasurement to fair value at each
period end is recognised immediately in the income statement except where derivatives qualify for hedge
accounting.

Financial ReportContentsNotes to the financial statements Continued

196

14 Borrowings and financial instruments Continued

The fair value of cross currency interest rate swaps is estimated using the present value of the estimated
future cash flows based on observable yield curves.

The fair value of foreign currency forwards is estimated using present value of future cash flows based on the
forward exchange rates at the balance sheet date.

Impairment
A financial asset is assessed for impairment at each reporting date by application of an expected loss model in
line with IFRS 9 requirements.

Net financing costs
Net financing costs are shown below:

Hedging
Hedge of monetary assets and liabilities
Where a derivative financial instrument is used economically to hedge the foreign exchange exposure of a
recognised monetary asset or liability, no hedge accounting is applied and any gain or loss on the hedging
instrument is recognised in the income statement in the same caption as the foreign exchange on the related
item.

Recognised in income statement

Finance income
Interest on bank balances

Total finance income

Hedge of net investment in foreign operations
The Group is exposed to foreign exchange risk exposure arising from its net investment in foreign currency
operations and net assets. To the extent that we have debt, we hold it in currencies that hedge the foreign
exchange risks from our net investments.

The portion of the gain or loss on an instrument designated as a hedge of a net investment in a foreign
operation that is determined to be an effective hedge is recognised directly in equity in the translation reserve.
The value in relation to the hedge instrument that is held within the cumulative foreign currency translation
reserve is recycled through the income statement when the hedged subsidiary is disposed of. If the instrument
is no longer deemed effective, then future movements in fair value are posted to the income statement.

Finance expense
Interest on borrowings
Net pension interest cost (note 16)
Foreign exchange differences on revaluation of net monetary assets and liabilities
Leases – IFRS 16
Facility fees and other*

Total finance expense*

Net financing costs*

Includes £8.6m income (2020: £0.6m income) relating to SDIs.

Cash flow hedges
Cash flow hedges comprise derivative financial instruments designated in a hedging relationship to manage
interest rate risk and foreign exchange risk to which the cash flows of certain assets and liabilities are exposed.
The Group is exposed to the variability in cash flows arising from the foreign exchange risk exposures.

Analysis of net debt

The effective portion of changes in the fair value of a derivative that is designated and qualifies for hedge
accounting is recognised in other comprehensive income. The value in relation to the hedge instrument that is
held within the cumulative cash flow hedge reserve (disclosed within other reserves) is recycled through the
income statement when the hedged item impacts the income statement. If the instrument is no longer
deemed effective, then future movements in fair value are posted to the income statement.

Cash and cash equivalents per the statement of financial position
Overdrafts

Cash per the statement of cash flows

2021
£m

1.5

(17.7)
(0.1)
2.3
(9.0)
3.2

(21.3)

(19.8)

2020
£m

1.1

(20.6)
(0.2)
(5.6)
(8.3)
(0.7)

(35.4)

(34.3)

2021
£m

265.9
(1.9)

264.0

2020
£m

203.9
(20.5)

183.4

Interest Rate Benchmark Reform
LIBOR was discontinued as a published benchmark rate for some currencies as of 1 January 2022. The Group
has reviewed and renegotiated significant borrowing and commercial contracts to replace LIBOR references
with alternative benchmark rates, as needed. USD LIBOR will remain a reference rate for contracts that have a
final fixing date in advance of USD LIBOR cessation on the 30th of June 2023.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

14 Borrowings and financial instruments Continued

The components of net debt are outlined below:

Cash

183.4

86.6

–

(6.0)

264.0

1 January 2021
£m

Cash flow
£m

Non-cash
movements £m

Exchange
adjustments
£m

31 December
2021
£m

Borrowings:
Revolving credit facility US$850m 2027
Senior notes US$15m 2021
Senior notes US$140m 2022
Acquisition facility ‘B’ AU$264.1m 2022
Acquisition facility ‘B’ US$290.7m 2022
Senior notes US$160m 2023
Acquisition facility ‘A’ AU$88.0m 2023
Acquisition facility ‘A’ US$96.9m 2023
Senior notes US$125m 2024
Senior notes US$120m 2025
Senior notes US$75m 2026
Other*

(135.5)
(11.1)
(103.7)
–
–
(118.5)
–
–
(92.6)
(88.8)
(55.5)
2.4

61.5
10.9
–
(142.0)
(210.9)
–
(47.3)
(70.3)
–
–
–
(0.8)

Total borrowings

(603.3)

(398.9)

Total net financial debt

(419.9)

(312.3)

–
–
–
–
–
–
–
–
–
–
–
3.1

3.1

8.1
0.2
(0.1)
0.1
(4.6)
(0.1)
–
(1.7)
(0.1)
–
–
–

1.8

(65.9)
–
(103.8)
(141.9)
(215.5)
(118.6)
(47.3)
(72.0)
(92.7)
(88.8)
(55.5)
4.7

(997.3)

(4.2)

(733.3)

Lease liabilities (note 1)

(224.2)

70.4

(142.4)

3.9

(292.3)

Total net debt

(644.1)

(241.9)

(139.3)

(0.3)

(1,025.6)

Includes other uncommitted borrowings of £0.8m and facility fees of £5.5m (2020: £2.4m).

Intertek Group plc | Annual Report & Accounts 2021

197

1 January 2020
£m

Cash flow
£m

Non-cash
movements £m

Cash

213.0

(21.7)

Borrowings:
Revolving credit facility US$800m 2021
Revolving credit facility US$850m 2025
Senior notes US$150m 2020
Senior notes US$15m 2021
Senior notes US$140m 2022
Senior notes US$160m 2023
Senior notes US$125m 2024
Senior notes US$120m 2025
Senior notes US$75m 2026
Other*

Total borrowings

Total net financial debt

Lease liabilities (note 1)

Total net debt

(285.5)
–
(114.7)
(11.5)
(107.0)
(30.6)
(95.6)
(30.6)
(57.4)
(109.5)

(842.4)

(629.4)

(246.0)

(875.4)

285.5
(130.3)
111.4
–
–
(89.8)
–
(59.8)
–
110.2

227.2

205.5

72.0

277.5

Includes other uncommitted borrowings of £nil and facility fees of £2.4m (2019: £0.7m).

Borrowings
Borrowings are split into current and non-current as outlined below:

–

–
–
–
–
–
–
–
–
–
2.2

2.2

(50.9)

(48.7)

Exchange
adjustments
£m

31 December
2020
£m

(7.9)

183.4

–
(5.2)
3.3
0.4
3.3
1.9
3.0
1.6
1.9
(0.5)

9.7

1.8

0.7

2.5

–
(135.5)
–
(11.1)
(103.7)
(118.5)
(92.6)
(88.8)
(55.5)
2.4

(603.3)

(419.9)

(224.2)

(644.1)

Senior term loans and notes
Other borrowings

Total borrowings

Analysis of debt

Debt falling due:
In one year or less
Between one and two years
Between two and five years
Over five years

Total borrowings

Current
2021
£m

461.2
(1.1)

460.1

Current
2020
£m

Non-current
2021
£m

Non-current
2020
£m

11.1
(0.6)

10.5

540.8
(3.6)

537.2

594.6
(1.8)

592.8

2021
£m

2020
£m

460.1
236.4
235.3
65.5

997.3

10.5
103.0
434.3
55.5

603.3

Financial ReportContentsNotes to the financial statements Continued

198

14 Borrowings and financial instruments Continued

Lease liabilities
Undiscounted lease liabilities are split into current and non-current as outlined below:

Description of borrowings
Total undrawn committed borrowing facilities as at 31 December 2021 were £564.2m (2020: £494.0m).

US$850m revolving credit facility
The Group has a US$850m multi-currency revolving credit facility, which is the Group’s principal facility and in
December 2021 was extended from 2026 to 2027. The impact of this was a transfer of £65.9m from
borrowings due to be repaid between two and five years to borrowings due to be repaid over five years.
Advances under the facility bear interest at a rate equal to a risk-free rate, or their local currency equivalent,
plus a margin, depending on the Group’s financial leverage. Drawings under this facility at 31 December 2021
were £65.9m (2020: £135.5m).

US$692m Acquisition Facility
In May 2021 the Group agreed a US$692m multi-currency acquisition facility to finance the acquisition of SAI
Global with £357.4m to be repaid in March 2022 and the balance of £119.3m repayable in 2023. Advances
under the facility bear interest at a rate equal to USD LIBOR or AUD BBSW, plus a margin. Drawings under this
facility at 31 December 2021 were £476.7m (2020: Nil).

Private placement bonds
In December 2010 the Group issued US$150m of senior notes repaid on 15 December 2020 at a fixed annual
interest rate of 3.91%.

In October 2011 the Group issued US$140m of senior notes repaid on 18 January 2022 at a fixed annual
interest rate of 3.75% and US$105m repayable on 18 January 2024 at a fixed annual interest rate of 3.85%.

In February 2013 the Group issued US$80m of senior notes. These notes were issued in two tranches with
US$40m repayable on 14 February 2023 at a fixed annual interest rate of 3.10% and US$40m repayable on
14 February 2025 at a fixed annual interest rate of 3.25%.

In July 2014 the Group issued US$110m of senior notes. These notes were issued in four tranches with
US$15m repaid on 31 July 2021 at a fixed annual interest rate of 3.37%, US$20m repayable on 31 July 2024 at
a fixed annual interest rate of 3.86%, US$60m repayable on 31 October 2026 at a fixed annual interest rate of
4.05% and US$15m repayable on 31 December 2026 at a fixed annual interest rate of 4.10%.

In December 2020 the Group issued US$200m of senior notes. These notes were issued in two tranches with
US$120m repayable on 2 December 2023 at a fixed annual interest rate of 1.97% and US$80m repayable on
2 December 2025 at a fixed annual interest rate of 2.08%.

In December 2021 the Group issued US$640m of senior notes that will be drawn during 2022. The note was
issued in four tranches with US$150m repayable on 13 January 2027 at a fixed annual interest rate of 2.24%,
US$165m repayable on 15 March 2028 at a fixed annual interest rate of 2.33%, US$165m repayable on
15 March 2029 at a fixed annual interest rate of 2.47% and US$160m repayable on 15 March 2030 at a fixed
annual interest rate of 2.54%.

Analysis of lease liabilities falling due:
Current:
Repayable in less than 1 year
Non-current:
Repayable in 1–2 years
Repayable in 2–5 years
Repayable in more than 5 years

Total lease liabilities

2021
£m

2020
£m

71.8

56.6
98.2
150.5

68.3

49.7
80.6
93.5

377.1

292.1

Financial risks
Details of the Group’s treasury controls, exposures and the policies and processes for managing capital and
credit, liquidity, interest rate and currency risk are set out below, and in the Strategic Report – Financial Review
that starts on page 30.

Credit risk
Exposure to credit risk
Credit risks arise mainly from the possibility that customers may not be able to settle their obligations as
agreed. The Group monitors the creditworthiness of customers on an ongoing basis. The Group’s credit risk is
diversified due to the large number of entities, industries and regions that make up the Group’s customer base.

The carrying amount of financial assets represents the maximum credit exposure. At the reporting date this
was as follows:

Trade receivables, net of allowance (note 11)
Cash and cash equivalents

Total

2021
£m

450.5
264.0

714.5

2020
£m

428.9
183.4

612.3

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
as follows:

Asia Pacific
Americas
Europe, Middle East and Africa

Total

2021
£m

130.2
175.9
144.4

450.5

2020
£m

120.4
169.9
138.6

428.9

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

199

14 Borrowings and financial instruments Continued

The following are the undiscounted contractual cash flows of financial liabilities/(assets) including interest
(for floating rate instruments, interest payments are based on the interest rate at 31 December):

Counterparty risk
Cash and cash equivalents and available borrowing facilities are at risk in the event that the counterparty is not
able to meet its obligations in regards to the cash held or facilities available to the Group. The Group also enters
into transactions with counterparties in relation to derivative financial instruments. If the counterparty was
not able to meet its obligations, the Group may be exposed to additional foreign currency or interest rate risk.
Counterparty credit risk inherent in all hedge relationships is monitored throughout the period of the hedge but
this risk is not expected to be significant.

The Group, wherever possible, enters into arrangements with counterparties who have a robust credit
standing, which the Group defines as a financial institution with a credit rating of at least investment grade.
The Group has existing relationships with a number of banks that meet this criterion, and seeks to use their
services wherever possible while avoiding excessive concentration of credit risk. Given the diverse geographic
nature of the Group’s activities, it is not always possible to use a relationship bank. Therefore the Group has set
limits on the level of deposits to be held at non-relationship banks to minimise the risk to the Group. It is also
Group policy to remit any excess funds from local entities back to Intertek Group Treasury in the UK. Given the
controls in place and based on a current assessment of our banking relationships, management does not
expect any counterparty to fail to meet its obligations.

Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its obligations as and when they fall due. The
Group’s policy is to:
– ensure sufficient liquidity is available to Group companies in the amounts, currencies and locations required

to support the Group’s operations; and

– ensure the Group has adequate available sources of funding to protect against unforeseen internal and

external events.

To ensure this policy is met, the Group monitors cash balances daily, projects cash requirements on a rolling
basis and funds itself using debt instruments with a range of maturities.

2021

Non-derivative financial

liabilities/(assets)

Senior term loans and notes
Other loans
Trade payables (note 12)
Lease liabilities
Contingent consideration

(note 13)

Derivative financial
liabilities/(assets)
Foreign currency forwards

Outflow
Inflow

Cross currency interest rate

swaps
Outflow
Inflow

Carrying
amount
£m

Contractual
cash flows
£m

Six months
or less
£m

6–12
months
£m

1–2 years
£m

2–5 years
£m

More than
five years
£m

1,002.0
(4.7)
154.3
292.3

1,035.3
0.8
154.3
377.1

112.5
–
149.5
37.6

366.2
0.8
3.9
34.2

243.5
–
0.7
56.6

247.4
–
0.2
98.2

65.7
–
–
150.5

0.3

–

0.1

–

0.2

–

1,444.2

1,567.8

299.6

405.2

300.8

346.0

216.2

–
(0.8)

928.3
(929.1)

–
–

(0.8)

–
–

–

–
–

–

–
–

–

–
–

–

Total

1,443.4 1,567.0

298.8

405.2

300.8

346.0

216.2

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

14 Borrowings and financial instruments Continued

2020

Non-derivative financial

liabilities/(assets)

Senior term loans and notes
Other loans
Trade payables (note 12)
Lease liabilities
Contingent consideration

(note 13)

Derivative financial
liabilities/(assets)
Foreign currency forwards

Outflow
Inflow

Cross currency interest rate

swaps
Outflow
Inflow

Carrying
amount
£m

Contractual
cash flows
£m

Six months
or less
£m

6–12
months
£m

1–2 years
£m

2–5 years
£m

More than
five years
£m

605.7
(2.4)
142.8
224.2

654.1
0.1
142.8
292.1

7.8
–
138.2
36.3

19.1
0.1
3.8
32.0

115.3
–
0.7
49.7

454.6
–
0.1
80.6

57.3
–
–
93.5

19.7

20.9

12.5

–

8.4

–

2021

990.0

1,110.0

194.8

55.0

165.7

543.7

150.8

–
(0.9)

538.8
(539.7)

–
–

(0.9)

–
–

–

–
–

–

–
–

–

–
–

–

Cash
Trade receivables (note 11)
Trade payables (note 12)

2020

Cash
Trade receivables (note 11)
Trade payables (note 12)

Total

989.1

1,109.1

193.9

55.0

165.7

543.7

150.8

Interest rate risk
The Group’s objective is to manage the risk to the business from movements in interest rates, and to provide
stability and predictability of the near-term (12-month horizon) interest expense. Under the Group’s treasury
policy, management may fix the interest rates on up to 80% of the Group’s debt portfolio for the period of the
current financial year. The Group’s debt portfolio beyond this period is to be managed within the range of a
20%–60% fixed-to-floating rate ratio. To achieve this, the Group uses bank debt facilities, US private
placements and derivative products.

Sensitivity
At 31 December 2021, it is estimated that the impact on variable rate net debt of a general increase of 3% in
interest rates would be a decrease in the Group’s profit before tax of approximately £9.6m (2020: £10.6m).
This analysis assumes all other variables remain constant.

Foreign currency risk
The Group’s objective in managing foreign currency risk is to safeguard the Group’s financial assets from
economic loss due to fluctuations in foreign currencies, and to protect margins on cross currency contracts and
operations. To achieve this, the Group’s policy is to hedge its foreign currency exposures where appropriate.

Intertek Group plc | Annual Report & Accounts 2021

200

The net assets of foreign subsidiaries represent a significant portion of the Group’s shareholders’ funds and a
substantial percentage of the Group’s revenue and operating costs are incurred in currencies other than
sterling. Due to the high proportion of international activity, the Group’s profit is exposed to exchange rate
fluctuations. Two types of risk arise as a result: (i) translation risk, that is, the risk of adverse currency
fluctuations in the translation of foreign currency operations and foreign assets and liabilities into sterling; and
(ii) transaction risk, that is, the risk that currency fluctuations will have a negative effect on the value of the
Group’s commercial cash flows in various currencies.

The foreign currency profiles of cash, trade receivables and payables subject to translation risk and transaction
risk, at the reporting date, were as follows:

Carrying
amount
£m

264.0
450.5
154.3

Carrying
amount
£m

183.4
428.9
142.8

Sterling
£m

10.7
34.4
15.9

Sterling
£m

2.6
23.9
13.4

US dollar
£m

79.3
209.5
55.4

US dollar
£m

44.1
208.2
56.8

Chinese
renminbi
£m

Hong Kong
dollar
£m

Other
currencies
£m

54.9
40.1
16.7

(0.8)
6.9
2.0

119.9
159.6
64.3

Chinese
renminbi
£m

Hong Kong
dollar
£m

Other
currencies
£m

49.1
35.6
14.1

(1.3)
6.9
1.9

88.9
154.3
56.6

Recognised assets and liabilities
Changes in the fair value of foreign currency forwards that economically hedge monetary assets and liabilities
in foreign currencies, and for which no hedge accounting is applied, are recognised in the income statement.

Cash flow hedge
The Group has AU$264.1m drawn against the US$692m Acquisition Facility, which will be repaid during March
2022.

A proportion of the Australian dollar debt was hedged using a 264m AUD/GBP currency forward contract, that
will mature in March 2022, to eliminate changes in the cash flows of the Australian dollar principal repayment
related to changes in foreign exchange rates.

In 2021 a £1.8m loss relating to the Australian dollar hedge was allocated to the cash flow hedge reserve.

Hedge of net investment in foreign operations
The Group’s foreign currency denominated loans are designated as a hedge to protect the same amount of net
investment in the Group’s foreign currency operations and net assets, against adverse changes in exchange
rates. The nominal amount of these loans as at 31 December 2021 was £845.1m (2020: £605.7m).

189.6m USD/GBP foreign currency forwards were designated as a hedge to protect the same amount of net
investment in the Group’s USD operations and net assets, against adverse changes in exchange rates..

Financial ReportContentsOther comprehensive income

Nominal
amounts in
local
currency

Carrying
value
£m

1 January
2020
£m

Fair value
gain/(loss)
deferred to
OCI
£m

FX (gain)/
loss
recycled to
the income
statement
£m

Hedges
closed in
year
£m

31
December
2020
£m

201

Notes to the financial statements Continued

14 Borrowings and financial instruments Continued

A foreign exchange gain of £4.0m (2020: £3.7m foreign exchange gain) was recognised in the translation
reserve in equity, reflecting the translation of the Group’s foreign currency denominated loans to sterling and
the impact of changes in fair value of the foreign currency forwards. The Group has the following hedging
instruments:

Other comprehensive income

Nominal
amounts in
local
currency

Carrying
value
£m

1 January
2021
£m

Fair value
gain/(loss)
deferred to
OCI
£m

FX (gain)/
loss
recycled to
the income
statement
£m

Hedges
closed in
year
£m

31
December
2021
£m

2020

Cash flow hedges – foreign

exchange and interest rate
risk

Cross currency interest rate

swaps – discontinued

Hedges of net investment in

a foreign operation –
foreign exchange risk
Cross currency interest rate

swaps – continuing

2021

Cash flow hedges – foreign
exchange and interest
rate risk

Foreign currency forward –

continuing

AU$264m

(1.8)

Hedges of net investment
in a foreign operation –
foreign exchange risk
Foreign currency forward –

continuing

US$189.6m

3.0

–

Cross currency interest rate

swaps – discontinued

Foreign currency borrowings

–

(19.0)

– continuing

£845.1m

845.1

(50.4)

Foreign currency borrowings

– discontinued

–

(173.2)

846.3

(242.6)

(1.8)

1.8

–

3.0

–

1.0

–

2.2

2.9

(46.5)

(2.9)

(176.1)

1.8

–

(238.6)

The Group has entered into AU$264m of foreign currency forwards which pay USD and receive AUD; maturing
in March 2022. The foreign currency forwards are bifurcated into two relationships: 1) A cash flow hedge of
AU$264m versus GBP foreign currency risk in AUD denominated borrowings; and 2) A net investment hedge of
USD versus GBP foreign currency risk in USD denominated net assets of the Group.

The weighted average exchange rates of the forwards are GBP/USD 1.3209 and GBP/AUD 1.8388

Intertek Group plc | Annual Report & Accounts 2021

–

(0.3)

(0.9)

1.2

–

Cross currency interest rate

swaps – discontinued

Foreign currency borrowings –

continuing

£605.7m

605.7

(110.7)

Foreign currency borrowings

3.0

– discontinued

(19.0)

–

(121.8)

605.7

(246.6)

(13.8)

(5.2)

19.0

–

8.9

–

2.8

–

(19.0)

51.4

(50.4)

(51.4)

(173.2)

1.2

–

(242.6)

The foreign currency forwards are disclosed within other receivables in the statement of financial position.

The critical terms of the forward contracts and their corresponding hedged items are matched and the Group
expects highly effective hedging relationships. Net ineffectiveness on the cash flow and net investment
hedges recognised in the income statement was nil.

Hedge ineffectiveness may occur due to:
a) the fair value of the hedging instrument on the hedge relationship designation date if the fair value is not

nil;

b) changes in the contractual terms or timing of the payments on the hedged item; and
c) a change in the credit risk of the Group or the counterparty with the hedged instrument.

The hedge ratio for each designation will be established by comparing the quantity of the hedging instrument
and the quantity of the hedged item to determine their relative weighting; for all of the Group’s existing hedge
relationships the hedge ratio has been determined as 1:1.

The carrying values of the hedging instruments; US$620.0m senior notes, AUD88.0m and US$387.6m
acquisition facilities and RCF drawings EUR40.0m, CHF8.0m and AUD20.0m are included within long-term
borrowings within the statement of financial position.

Fair value gains and losses on the hedging instruments designated in the cash flow and net investment hedges
have been presented as ‘fair value on cash flow hedges’ and ‘net exchange on hedges of net investments in
foreign operations’ respectively within the statement of other comprehensive income.

Financial ReportContentsNotes to the financial statements Continued

202

14 Borrowings and financial instruments Continued

15 Capital and reserves

Foreign exchange loss of £1.8m recycled from the cash flow hedge reserve are presented in interest on
borrowings within finance expenses in the income statement.

Sensitivity
It is estimated that an increase of 10% in the value of sterling against the US dollar and Chinese renminbi
(the main currencies impacting the Group) would have decreased the Group’s profit before tax for 2021
by approximately £24.7m (2020: £17.9m). This analysis assumes all other variables remain constant.

It is estimated that an increase of 10% in the value of sterling against the currencies of the hedging
instruments would have increased OCI by approximately £89.7m (2020: £55.1m) which would be offset by the
retranslation of the Group’s investment in foreign operations in the same currencies. This analysis assumes all
other variables remain constant.

Fair values
The table below provides a comparison of book values and corresponding fair values of all the Group’s financial
instruments by class.

Accounting policy
Dividends
Interim dividends are recognised as a movement in equity when they are paid. Final dividends are reported as a
movement in equity in the year in which they are approved by the shareholders.

Own shares held by the Employee Share Ownership Trust (‘ESOT’)
Transactions of the Group-sponsored ESOT are included in the Group financial statements. In particular, the
Trust’s purchases of shares in the Company are debited directly in equity to retained earnings.

Share capital

Group and Company

Allotted, called up and fully paid:
Ordinary shares of 1p each at start of year
Share awards

2021
number

2021
£m

2020
£m

161,393,127
–

161,393,127

1.6
–

1.6

1.6
–

1.6

Book value
2021
£m

Fair value
2021
£m

Book value
2020
£m

Fair value
2020
£m

Ordinary shares of 1p each at end of year

Shares classified in shareholders’ funds

Financial assets
Cash and cash equivalents
Trade receivables (note 11)
Foreign currency forwards*

Total financial assets

Financial liabilities
Interest-bearing loans and borrowings
Trade payables (note 12)
Contingent consideration**

Total financial liabilities

264.0
450.5
0.8

715.3

997.3
154.3
0.3

1,003.3
154.3
0.3

1,151.9

1,157.9

183.4
428.9
0.9

613.2

603.3
142.8
19.7

765.8

183.4
428.9
0.9

613.2

621.7
142.8
19.7

784.2

Foreign currency forwards are categorised as Level 2, under which the fair value is measured using inputs other than quoted prices
observable for the liability, either directly or indirectly.

** Contingent consideration is categorised as Level 3 under which the fair value is measured using unobservable inputs – being the EBITDA

performance of the acquired companies.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs).

The holders of ordinary shares are entitled to receive dividends and are entitled to vote at general meetings of
the Company.

During the year, the Company issued nil (2020: nil) ordinary shares in respect of all share plans.

Purchase of own shares for trust
During the year ended 31 December 2021, the Company financed the purchase of 216,310 (2020: 225,165)
of its own shares with an aggregate nominal value of £2,163 (2020: £2,252) for £11.4m (2020: 12.2m) which
was charged to retained earnings in equity and was held by the ESOT. This trust is managed by an independent
offshore trustee. During the year, 255,034 shares were utilised to satisfy the vesting of share awards
(note 17). At 31 December 2021, the ESOT held 274,546 shares (2020: 313,270 shares) with an aggregate
nominal value of £2,745 (2020: £3,133). The associated cash outflow of £11.4m (2020: £12.2m) has been
presented as a financing cash flow.

Dividends

Amounts recognised as distributions to equity holders:
Final dividend for the year ended 31 December 2019
Interim dividend for the year ended 31 December 2020
Final dividend for the year ended 31 December 2020
Interim dividend for the year ended 31 December 2021

2021
£m

–
–
115.5
55.1

2021
Pence per
share

–
–
71.6
34.2

Dividends paid

170.6

105.8

2020
£m

115.3
55.1
–
–

170.4

2020
Pence per
share

71.6
34.2
–
–

105.8

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents203

Notes to the financial statements Continued

15 Capital and reserves Continued

After the reporting date, the Directors proposed a final dividend of 71.6p per share in respect of the year
ended 31 December 2021, which is expected to amount to £115.6m. This dividend is subject to approval by
shareholders at the Annual General Meeting and therefore, in accordance with IAS 10 Events After the
Reporting Date, it has not been included as a liability in these financial statements. If approved, the final
dividend will be paid to shareholders on 17 June 2022.

Reserves
Translation reserve
The translation reserve comprises foreign currency differences arising from the translation of the financial
statements of foreign operations as well as the translation of liabilities that hedge the Group’s net investment
in foreign operations.

Other
This reserve includes a merger difference that arose in 2002 on the conversion of share warrants into share
capital, as well as the cash flow hedge reserve.

16 Employee benefits

Accounting policy
Pension schemes
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions
into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution pension plans are recognised as an employee benefit expense in the
income statement as incurred.

Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.

The Group’s net obligation in respect of material defined benefit pension plans is calculated separately for each
plan by estimating the amount of future benefit that employees have earned in return for their service in the
current and prior years; that benefit is discounted to determine its present value. The fair value of any plan
assets is deducted.

In calculating the defined benefit surplus or deficit, the discount rate is the yield at the reporting date on AA
credit-rated bonds that have maturity dates approximating the terms of the Group’s obligations and that are
denominated in the same currency in which the benefits are expected to be paid. The calculation is performed
annually by a qualified actuary using the Projected Unit Credit method.

The increase in the present value of the liabilities expected to arise from the employees’ services in the
accounting period is charged to the operating profit in the income statement. The expected return on the
schemes’ assets and the interest on the present value of the schemes’ liabilities, during the accounting period,
are shown as finance income and finance expense, respectively.

Intertek Group plc | Annual Report & Accounts 2021

The Group operates a number of pension schemes throughout the world. In most locations, these are defined
contribution arrangements. However, there are significant defined benefit schemes in the United Kingdom and
Switzerland. The United Kingdom Scheme is funded, with assets held in separate trustee-administered funds
and the Switzerland Scheme is an insured scheme. The scheme in the United Kingdom were closed to new
entrants in 2002. Other funded defined benefit schemes are not considered to be material and are therefore
accounted for as if they were defined contribution schemes.

In line with IAS 19 and IFRC 14, if a scheme has a surplus this is recognised on the statement of financial
position if the economic benefit is available to the Group as a result of the surplus. Economic benefit is defined
as when an entity has an unconditional right to a refund from the scheme whilst the scheme is ongoing; or
assuming the gradual settlement of the scheme liabilities over time until all members have left the scheme/
died; or assuming the full settlement of the scheme’s liabilities in a single event. In the event of a surplus, the
relevant scheme rules will be reviewed in line with IFRC 14 and a legal opinion obtained to identify if the
surplus can be recognised by the Group.

The Group recognises all actuarial remeasurements in each year in equity through the consolidated statement
of comprehensive income.

Total pension cost
The total pension cost included in operating profit for the Group was:

Defined contribution schemes
Defined benefit schemes – current service cost and administration expenses

Pension cost included in operating profit (note 5)

2021
£m

(51.4)
(2.4)

(53.8)

2020
£m

(50.6)
(2.2)

(52.8)

The pension cost for the defined benefit schemes was assessed in accordance with the advice of qualified
actuaries. The last full triennial actuarial valuation of The Intertek Pension Scheme in the United Kingdom
(‘United Kingdom Scheme’) was carried out as at 31 March 2019, and for IAS 19 accounting purposes has been
updated to 31 December 2021. The Switzerland Scheme was valued for IAS 19 purposes as at 31 December
2021. The average duration of the schemes are 20 years and 15 years for the United Kingdom and Switzerland
schemes, respectively.

Defined benefit schemes
The cost of defined benefit schemes
The amounts recognised in the income statement were as follows:

Current service cost
Scheme administration expenses
Net pension interest cost (note 14)

Total charge

2021
£m

(2.0)
(0.4)
(0.1)

(2.5)

2020
£m

(1.8)
(0.4)
(0.2)

(2.4)

The current service cost and scheme administration expenses are included in operating costs in the income
statement and pension interest cost and interest income are included in net financing costs.

Financial ReportContents204

Notes to the financial statements Continued

16 Employee benefits Continued

Included in other comprehensive income:

Remeasurements arising from:
Demographic assumptions
Financial assumptions
Experience adjustment
Asset valuation

Other

Total

2021
£m

(1.4)
8.1
(2.1)
7.5
(0.6)

11.5

2020
£m

4.1
(14.9)
0.9
10.4
0.3

0.8

Company contributions
The Company assessed the triennial actuarial valuation for the United Kingdom Scheme and its impact on the
scheme funding plan in 2021 and future years. In 2022 the Group expects to make normal contributions of
£2.7m (2021: £1.3m) and has made a special contribution of £2.0m (2021: £2.0m). The next triennial valuation
is due to take place as at 31 March 2022 and will include a review of the Company’s future contribution
requirements.

Pension asset/liability for defined benefit schemes
The amounts recognised in the statement of financial position for defined benefit schemes were as follows:

The fair value changes in the scheme assets are shown below:

Fair value of scheme assets at 1 January
Interest income
Normal contributions by the employer
Special contributions by the employer
Contributions by scheme participants
Benefits paid
Effect of exchange rate changes on overseas schemes
Remeasurements
Scheme administration expenses
Contribution to fund scheme administration expenses

Fair value of scheme assets at 31 December

2021
£m

150.4
1.8
1.3
2.0
0.6
(7.2)
(0.6)
7.5
(0.4)
–

155.4

2020
£m

136.8
2.4
1.3
2.0
0.5
(3.8)
1.1
10.4
(0.4)
0.1

150.4

Asset allocation
Investment statements were provided by the Investment Managers which showed that, as at 31 December
2021, the invested assets of the United Kingdom Scheme totalled £137.0m (2020: £131.5m), broken down
as follows.

31 December 2021

Fair value of scheme assets
Present value of funded defined benefit obligations

Surplus/(Deficit) in schemes

United
Kingdom
Scheme
£m

137.0
(131.6)

5.4

Switzerland
Scheme
£m

18.4
(22.4)

(4.0)

Total
£m

155.4
(154.0)

1.4

Asset class

Equities
Property
Liability-Driven Investment*
Corporate debt instruments
Cash

Total

Investments are included at fair value. The pooled investment vehicles are held under a managed fund policy in the name of the Scheme.
Pooled investment vehicles (including the LDI Fund) which are not traded on active markets, but where the investment manager has provided
a monthly trading price, are valued using the last single price, provided by the investment manager at or before the year end. The LDI Fund
provides the hedge against adverse movements in inflation and interest rates. It seeks to match the sensitivity of the Scheme’s liability cash
flow to changes in interest rates and inflation; it is invested in gilts, swaps, futures, repo contracts and money market instruments.

The United Kingdom Scheme had bank account assets of £1.2m as at 31 December 2021 (2020: £0.6m).

The United Kingdom Scheme invested assets comprising both quoted and unquoted assets. The value of
quoted assets in 2021 was £17.3m (2020: £28.6m), included within equities in the above table, with the
remaining assets being unquoted. The Switzerland Scheme is fully insured.

Intertek Group plc | Annual Report & Accounts 2021

United Kingdom Scheme

2021
£m

72.1
5.2
16.8
38.0
4.9

2020
£m

83.8
10.1
17.7
12.6
7.3

137.0

131.5

Financial ReportContents205

The table above shows, for the United Kingdom Scheme, the number of years a male or female is expected to
live, assuming they were aged either 40 (and lives to 65) or 65 at 31 December. The mortality tables adopted in
2021 for the United Kingdom Scheme are S3PA tables, based on the CMI 2019 mortality projection model with
a 1.00% long-term annual rate for future improvements. In 2020 the S3PA tables were used, based on the CMI
2019 mortality projection model with a 1.00% long-term annual rate for future improvement. For the
Switzerland Scheme, the mortality table adopted in 2021 is the BVG2020 and in 2020 is the BVG2015, an
industry standard in Switzerland which is based on statistical evidence of major Switzerland pension funds.

Sensitivity analysis
The table below sets out the sensitivity on the United Kingdom pension assets and liabilities as at
31 December 2021 of the two main assumptions:

Change in assumptions

No change
0.25% rise in discount rate
0.25% fall in discount rate
0.25% rise in inflation
0.25% fall in inflation

UK Scheme

Increase/
(decrease) in
surplus/deficit
£m

–
(5.4)
5.5
2.8
(2.8)

Liabilities
£m

131.6
126.2
137.1
134.4
128.8

The United Kingdom Scheme is also subject to the mortality assumption. If the mortality tables used are rated
up/down one year, the value placed on the liabilities increases by £6.5m and decreases by £6.1m, respectively.

Funding arrangements
United Kingdom Scheme
The Trustees use the Projected Unit Credit Method with a three-year control period. Currently the scheme
members pay contributions at the rate of 8.5% of salary. The employer pays contributions of 16.4% of salary,
plus £0.2m per year to fund scheme expenses and has made an additional contribution of £2.0m in 2021 to
reduce the deficit disclosed by the 2019 valuation.

Notes to the financial statements Continued

16 Employee benefits Continued

Changes in the present value of the defined benefit obligations were as follows:

2021
£m

162.5
2.0
1.9
0.2
(7.2)
(0.7)
(4.7)

154.0

2020
£m

150.2
1.8
2.6
0.2
(3.8)
1.3
10.2

162.5

United Kingdom Scheme

Switzerland Scheme

2021
%

1.90
2.25
–

2.25
1.8

2020
%

1.35
1.8
–

1.9
1.6

2021
%

0.35
n/a
1.0

n/a
n/a

2020
%

0.2
n/a
1.0

n/a
n/a

United Kingdom Scheme

Switzerland Scheme

2021

47.8
21.8
50.1
23.9

2020

47.8
21.8
50.1
23.9

2021

49.1
22.6
50.9
24.4

2020

45.6
22.7
48.2
24.5

Defined benefit obligations at 1 January
Current service cost
Interest cost
Contributions by scheme participants
Benefits paid
Effect of exchange rate changes on overseas schemes
Remeasurements

Defined benefit obligations at 31 December

Principal actuarial assumptions:

Discount rate
Inflation rate (based on CPI)
Rate of salary increases
Rate of pension increases:
CPI subject to a maximum of 5% p.a.
Increases subject to a maximum of 2.5% p.a.

The Switzerland Scheme is an insured plan.

Life expectancy assumptions at year-end for:

Male aged 40
Male aged 65
Female aged 40
Female aged 65

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents206

Notes to the financial statements Continued

16 Employee benefits Continued

Funding risks
The main risks for the schemes are:

Investment return risk:

Investment matching risk:

If the assets underperform the returns assumed in setting the funding
targets then additional contributions may be required at subsequent
valuations.

The schemes invest significantly in equities, whereas the funding targets are
closely related to the returns on bonds. If equities fall in value relative to the
matching asset of bonds, additional contributions may be required.

Longevity risk:

If future improvements in longevity exceed the assumptions made for
scheme funding then additional contributions may be required.

Role of third parties
The United Kingdom Scheme is managed by Trustees on behalf of its members. The Trustees take advice from
appropriate third parties including investment advisers, actuaries and lawyers as necessary.

17 Share schemes

Accounting policy
Share-based payment transactions
The share-based compensation plans operated by the Group allow employees to acquire shares of the
Company. The fair value of the employee services, received in exchange for the grant of shares, is measured at
the grant date and is recognised as an expense with a corresponding increase in equity. The charge is
calculated using the Black Scholes method and expensed to the income statement over the vesting period of
the relevant award. The charge for the Deferred Share Awards is adjusted to reflect expected and actual levels
of vesting for service conditions. The expense of the LTIP Share Awards is calculated using the Monte Carlo
method and the fair value adjusted for the probability of TSR performance conditions being achieved.

Share plans
2011 Long Term Incentive Plan
The Deferred Bonus Plan 2005 was replaced in 2011 with the Intertek 2011 Long Term Incentive Plan (‘LTIP’).
Deferred Share Awards (previously Share Awards) and LTIP Share Awards (previously Performance Awards)
have been granted under this plan. The first awards were granted on 7 April 2006. The awards under these
plans vest three years after grant date, subject to fulfilment of the performance conditions. The weighted
average remaining contractual life of share options outstanding at the end of the period is one year.

2021 Long Term Incentive Plan
The Intertek 2021 Long Term Incentive Plan (‘2021 Plan’) was approved at the 2020 Annual General meeting
as the Intertek 2011 Long Term Incentive Plan was approaching the end of its 10-year life cycle. The 2021
Plan is broadly similar to the previous Long Term Incentive Plan, but with amendments to take account of
developments in market practice. The awards made in 2021 were made under the 2021 plan with the first
awards made on 12 March 2021. The awards under these plans vest three years after grant date, subject to
fulfilment of the non-market based performance conditions.

Intertek Group plc | Annual Report & Accounts 2021

2021

2020

Outstanding awards

At beginning of year
Granted*
Vested**
Forfeited

Deferred Share
Awards

LTIP Share
Awards

784,932
200,550
(246,474)
(76,302)

889,937
325,562
(103,321)
(320,336)

Total awards

1,674,869
526,112
(349,795)
(396,638)

Deferred Share
Awards

LTIP Share
Awards

812,317
278,996
(244,837)
(61,544)

927,395
315,054
(258,438)
(94,074)

Total awards

1,739,712
594,050
(503,275)
(155,618)

At end of year

662,706

791,842 1,454,548

784,932

889,937

1,674,869

Includes 11,298 Deferred Share Awards (2020: 12,570) and 16,232 LTIP Share Awards (2020: 12,239) granted in respect of dividend
accruals.

** Of the 349,795 awards vested in 2021, nil were satisfied by the issue of shares and 230,734 by the transfer of shares from the ESOT
(see note 15). The balance of 119,061 awards represented a tax liability of £6.3m (2020: £8.0m) which was settled in cash on behalf
of employees by the Group, of which £5.5m was settled by the Company.

Buyout Awards
On 1 April 2021, Jonathan Timmis was granted conditional rights to acquire 39,000 shares under a one-off
arrangement as a condition of his recruitment as CFO of the Company, granted under the Long Term Incentive
Plan 2021. The award comprised three parts of 13,000 shares, vesting on 1 April 2022, 1 April 2023 and
1 April 2024. Further details are shown in the Remuneration report on pages 136 to 163.

Deferred Share Plan
Awards may be granted under the Deferred Share Plan (‘DSP’) to employees of the Group (other than the
Executive Directors of the Company) selected by the Remuneration Committee over existing, issued ordinary
shares of the Company only. The DSP was adopted primarily to allow for the deferral of a proportion of
selected employees annual bonus into shares in the Company but may also be used for the grant of other
awards (such as incentive awards and buyout awards for key employees) in circumstances that the
Remuneration Committee deems appropriate. Awards will normally have a three-year vesting period. Awards
may be made subject to performance conditions and are subject to normal good and bad leaver provisions and
malus and clawback.

Outstanding awards

At beginning of year
Granted*
Vested**
Forfeited

At end of year

2021

2020

Deferred Share
Awards

Total
awards

Deferred Share
Awards

45,881
33,641
(31,308)
(10,846)

68,560
21,762
(36,574)
(7,867)

Total
awards

68,560
21,762
(36,574)
(7,867)

37,368

45,881

Includes 1,180 Deferred Share Awards (2020: 1,062) granted in respect of dividend accruals.

*
** Of the 31,308 awards vested in 2021, 24,300 were satisfied by the transfer of shares from the ESOT (see note 15). The balance of 7,008
awards represented a tax liability of £0.4m which was settled in cash on behalf of employees by the Group, of which £0.3m was settled by
the Company.

Financial ReportContentsNotes to the financial statements Continued

207

17 Share schemes Continued

18 Subsequent events

Equity-settled transactions
During the year ended 31 December 2021, the Group recognised an expense of £18.6m (2020: £17.7m). The
fair values and the assumptions used in their calculations are set out below:

On 13 January 2022 a US$150m senior note was drawn following the issuance of US$640m of private
placement bonds in December 2021.

Fair value at measurement date (pence)
Share price (pence)
Expected volatility
Risk-free interest rate

Time to maturity (years)

Fair value at measurement date (pence)
Share price (pence)
Expected volatility
Risk-free interest rate

Time to maturity (years)

2021 Awards

Deferred Share
Awards

Share
Awards

LTIP Share
Awards

5,345
5,345
n/a
n/a

1–3

4,791
4,791
n/a
n/a

4,855
4,855
25.2%
0.35%

2020 Awards

Deferred Share
Awards

Share Awards

LTIP Share
Awards

5,429
5,429
n/a
n/a

1–3

4,814
4,814
n/a
n/a

4,793
4,793
24.0%
0.02%

The expected volatility is based on the historical volatility, adjusted for any expected changes to future
volatility due to publicly available information.

The weighted-average exercise prices of all share awards in the year are £nil (2020: £nil).

All Share Awards are granted under a service condition. Such condition is not taken into account in the fair
value measurement at grant date. The LTIP Share Awards (TSR element) are granted under a performance-
related market condition and as a result this condition is taken into account in the fair value measurement at
grant date. From 2020 the LTIP Share Awards are granted under performance-related non-market conditions
only.

On 24 February 2022 the Group gave notice to prepay US$482.2m of the US$692m Acquisition Facility on
1 March 2022, utilising funds to be drawn from the USPP notes issued in December 2021.

19 Capital management

The Directors determine the appropriate capital structure of Intertek; specifically how much capital is raised
from shareholders (equity) and how much is borrowed from financial institutions (debt) in order to finance the
Group’s activities. These activities include ongoing operations as well as acquisitions as described in note 10.

The Group’s policy is to maintain a robust capital base (including cash and debt) to ensure the market and key
stakeholders retain confidence in the capital profile. Debt capital is monitored by Group Treasury assessing the
liquidity buffer on a short- and longer-term basis as discussed in note 14. Financial net debt has increased from
£419.9m at 31 December 2020 to £733.3m at 31 December 2021, primarily reflecting the acquisition of SAI
Global. The Group has a strong balance sheet with financial net debt to EBITDA of 1.1x.

During 2021, the Group has continued the working capital focus and through disciplined performance
management, working capital has reduced by £39.3m to negative £43.3m. Working capital is defined on page
175.

The Group uses key performance indicators, including return on invested capital (‘ROIC’) and adjusted diluted
earnings per share to monitor the capital position of the Group to ensure it is being utilised effectively. The rate
of ROIC, defined as adjusted operating profit less adjusted taxes divided by invested capital, measures how
effectively the Group generates profit from its invested capital. This is a key measure to assess the efficiency
of investment decisions and is also an important criterion in the decision-making process. ROIC in 2021 was
18.2% (2020: 21.6%). Adjusted diluted earnings per share is a key measure of value creation for the Board and
for shareholders and in 2021 was 190.8p (2020: 170.9p).

The dividend policy also forms part of the Board’s capital management policy, and the Board ensures there is
appropriate earnings cover for the dividend proposed at both the interim and year end. Our dividend policy aims
to deliver sustainable dividend growth over time, based on a target dividend payout ratio of c.50%. Reflecting
the Group’s strong cash generation in 2021 and reduced leverage, the recommended final dividend is 71.6p
bringing the full-year dividend to 105.8p, which is in line with 2020, and the dividend payout ratio to 55%.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsNotes to the financial statements Continued

208

20 Non-controlling interest

22 Contingent liabilities

Guarantees, letters of credit and performance bonds

2021
£m

28.7

2020
£m

26.0

Litigation
The Group is involved in various claims and lawsuits incidental to the ordinary course of its business, including
claims for damages, negligence and commercial disputes regarding inspection and testing, and disputes with
employees and former employees. The Group is not currently party to any legal proceedings other than
ordinary litigation incidental to the conduct of business. These claims are not currently expected to result in
meaningful costs and liabilities to the Group. The Group maintains appropriate insurance cover to provide
protection from the small number of significant claims it is subject to from time to time.

Tax
The Group operates in more than 100 countries and with complex tax laws and regulations. At any point in
time it is normal for there to be a number of open years which may be subject to enquiry by local authorities. In
some jurisdictions the Group receives tax incentives (see note 6) which are subject to renewal and review and
reduce the amount of tax payable. Where the effect of the laws and regulations is unclear, estimates are used
in determining the liability for the tax to be paid. The Group considers the estimates, assumptions and
judgements to be reasonable but this can involve complex issues which may take a number of years to resolve.

At 31 December 2020, the Group disclosed a contingent liability of £16.3m in respect of EU State Aid. In April
2021, the European Commission issued its decision in a state aid investigation into the Group Financing
Exemption in the UK controlled foreign company (‘CFC’) rules. The European Commission found that part of the
Financing Exemption constitutes state aid. HMRC has concluded that Intertek did not benefit from unlawful
state aid as a result of its Group Financing Exemption claims. This matter is now regarded as closed and as a
result there is no longer an associated contingent liability in this regard.

Accounting policy
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as
owners and therefore no goodwill is recognised as a result of such transactions.

Non-controlling interest
An analysis of the movement in non-controlling interest is shown below:

At 1 January
Exchange adjustments
Share of profit for the year
Adjustment arising from changes in non-controlling interest
Dividends paid to non-controlling interest

At 31 December

21 Related parties

2021
£m

28.0
1.0
18.6
1.7
(17.0)

32.3

2020
£m

29.4
(0.3)
15.3
2.2
(18.6)

28.0

Identity of related parties
The Group has a related party relationship with its key management. Transactions between the Company and
its subsidiaries and between subsidiaries have been eliminated on consolidation and are not discussed in this
note.

Transactions with key management personnel
Key management personnel compensation, including the Group’s Directors, is shown in the table below:

Short-term benefits
Post-employment benefits
Equity-settled transactions

Total

2021
£m

9.7
0.8
7.7

18.2

2020
£m

11.6
0.8
10.4

22.8

More detailed information concerning Directors’ remuneration, shareholdings, pension entitlements and other
long-term incentive plans is shown in the audited part of the Remuneration report. Apart from the above, no
member of key management had a personal interest in any business transactions of the Group.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents209

Notes to the financial statements Continued

23 Principal Group companies

The principal subsidiaries whose results or financial position, in the opinion of the Directors, principally affect
the figures of the Group have been shown below. All the subsidiaries shown were consolidated with Intertek
Group plc as at 31 December 2021. Unless otherwise stated, these entities are wholly owned subsidiaries and
the address of the registered office is Academy Place, 1–9 Brook Street, Brentwood, Essex, CM14 5NQ,
United Kingdom.

Company name

Intertek Finance plc
Intertek Holdings Limited (i)
Intertek Technical Services, Inc. (ii)
Intertek Testing Services Holdings Limited (i)
Intertek Testing Services Hong Kong Limited (iii)
Intertek Testing Services Limited Shanghai (iv)
Intertek Testing Services NA, Inc. (v)
Intertek Testing Services Shenzhen Limited (vi)
Intertek USA, Inc. (vii)
Intertek USD Finance Limited
Labtest Hong Kong Limited (viii)
RCG-Moody International Limited
Testing Holdings USA, Inc. (v)

Country of Incorporation and
principal place of operation

England
England
USA
England
Hong Kong
China
USA
China
USA
England
Hong Kong
England
USA

Activity

Finance
Holding
Trading
Holding
Trading
Trading
Trading
Trading
Trading
Finance
Trading
Holding
Holding

(i) Directly owned by Intertek Group plc.
(ii) Registered office address is: 25025 I-45, Suite 300, Spring, TX 77380, United States.
(iii) Registered office address is: 2/F Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong.
(iv) Equity shareholding 85%, company controlled by the Group based on management’s assessment; Registered office address is: 2nd Floor,

West District, Free Trade Test Zone, Zhangyang Road, Shanghai, China.

(v) Registered office address is: 3933 US Route 11, Cortland, NY 13045, United States.
(vi) Registered office address is: 3-5/F of Bldg. 1, 1-5/F of Bldg. 3, No. 4012, Wuhe Ave. North, Bantian Street, Yuanzheng Science and Technology

Industrial Park, Shenzhen, Guangdong, China.

(vii) Registered office address is: 200 Westlake Park Blvd., Westlake Building 4, Suite 400, Houston, TX 77079, United States.
(viii) Registered office address is: 2/F, Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong.
(ix) Registered office address: 544 Bickley Road, Maddington WA 6109, Australia.

Group companies
In accordance with section 409 of the Companies Act 2006, a full list of related undertakings is set out below.
Related undertakings comprise subsidiaries, partnerships, associates, joint ventures and joint arrangements.
The principal subsidiaries listed above have not been duplicated in the list below.

Where no address is listed, the address of the registered office is Academy Place, 1–9 Brook Street, Brentwood,
Essex, CM14 5NQ, United Kingdom. Unless otherwise stated, the share capital for all related undertakings
included in this note comprises ordinary or common stock shares which are indirectly held by Intertek Group plc
as at 31 December 2021. The percentage held by class of share is stated where this is less than 100%. No
subsidiary undertakings have been excluded from the consolidation.

Fully owned subsidiaries
0949491 B.C. Limited
1200-925 West Georgia Street, Vancouver, British Columbia, V6C 3L2, Canada

Intertek Group plc | Annual Report & Accounts 2021

4th Strand, LLC (i) (xv)
1950 Evergreen Boulevard, Suite 100, Duluth, GA 30096, United States
Acucert Labs, LLP (xv)
82/2, Shreyas, 25th Road, Sion West, Mumbai, 400022, India
Acumen Security, LLC
2400 Research Blvd, Suite 395, Rockville, MD 20850, United States
Adelaide Inspection Services Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Admon Labs Servicios Corporativos y Administrativos, S.A. de C.V.
Boulevard Adolfo Lopez Mateos #2259, Atlamaya, Alvaro Obregon, Ciudad de Mexico, C.P. 01760, Mexico
Advancing Food Safety Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Ageus Solutions Inc.
255 Michael Cowpland Dr., Suite 200, Ottawa, Ontario, K2M 0M5, Canada
Alchemy Investment Holdings, Inc.
5300 Riata Park Court, Austin, TX 78727, United States
Alchemy Systems, L.P. (xv)
5301 Riata Park Court, Austin, TX 78727, United States
Alchemy Systems Training, Inc.
5300 Riata Park Court, Austin, TX 78727, United States
Alchemy Systems Training Limited
Alchemy Training Technologies, Inc.
1 Germain Street, Suite 1500, Saint John, NB E2L 4V1, Canada
Aldo Abela Surveys Limited
98 Triq Patri Magri, Marsa, MRS 2200, Malta
Alta Analytical Laboratory, Inc. (i)
200 Westlake Park Blvd., Westlake Building 4, Suite 400, Houston, TX 77079, United States
Amtac Certification Services Limited (ii)
CVR Global LLP, Town Wall House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Angus Management, LLC(xv)
5300 Riata Park Court, Austin, TX 78727, United States
Anstat Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Architectural Testing, Inc.
130, Derry Court, York, PA 17406, United States
Architectural Testing Holdings, Inc.
130 Derry Court, York, PA 17406, United States
Bellini & Sandrini Holding LTDA
Rua Carlos Tosin, 860, sala 1, Distrito Industrial, Distrito Industrial, Estado de São Paulo, Brazil
Bigart Ecosystems, LLC(xv)
212 S. Wallace Avenue Bozeman, MT 59715, United States
Caleb Brett Ecuador S.A.
Centro Commercial Mall del Sol, Av. Joaquín Orrantia González y Juan Tanca Marengo, Torre B, Piso 5, Oficina 505,
Guayaquil, Ecuador

Financial ReportContents210

Notes to the financial statements Continued

Cantox U.S. Inc.
100 Davidson Avenue, Suite #102, Somerset, NJ 08873, United States
Capcis Limited (ii)
CVR Global LLP, Town Wall House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Catalyst Awareness, Inc. (iii)
43 Carolinian Lane, Cambridge, ON N1S 5B5, Canada
Center for the Evaluation of Clean Energy Technology, Inc.
3933 US Route 11, Cortland, NY 13045, United States
Check Safety First Limited
Checkpoint Solutions Ltd
Cistera Limited(i)
C/O RobSec Limited, 5705, 57th Floor, The Center, 99 Queen’s Road Central, Hong Kong
Cristal International Care Limited (ii)
CVR Global LLP, Town Wall, House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Cristal International Limited (viii) (ii)
CVR Global LLP, Town Wall, House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Cristal Middle East SAE
22 El-Imam Ali, Almazah, Heliopolis, Cairo Governorate, Egypt
Cristal North Africa CNA
Immeuble, SOGIT Faisant angle de la rue, lac victoria, et rue du des lacs de mazurie, les berges du lac, 1053
Tunis Le bureau, B5 situé, au 2ème étage, Tunis, Tunisia
Cristal World Wide Limited (ii)
CVR Global LLP, Town Wall, House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Ecristal Europe Limited (ii)
CVR Global LLP, Town Wall, House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Ecristal Limited (i)
Electrical Mechanical Instrument Services (UK) Limited (ii)
Unit 19 & 20 Wellheads Industrial Centre, Dyce, Aberdeen, AB21 7GA, United Kingdom
Electronic Warfare Associates-Canada, Ltd (iii)
1223 Michael Street North, Suite 200, Ottawa, ON K1J 7T2, Canada
Enertech Australia Pty. Limited
544 Bickley Road, Maddington WA 6109, Australia
Entela-Taiwan, Inc
4700 Broadmoor Avenue SE, Suite 200, Kentwood, MI 49512, United States
Esperanza Guernsey Holdings Limited
PO Box 472, St Julian’s Court, St Julian’s Avenue, St Peter Port, GY1 6AX, Guernsey
Esperanza International Services (Southern Africa) (Pty.) Limited
Charter House, 13 Brand Road, Glenwood, Durban, South Africa
Excel Partnership, Inc.
250 S. Wacker Drive, Suite 1800, Chicago, IL 60606, United States
Fivetix Professional Services Private Limited
F-Wing, I Floor, Tex Centre, 26-A Chandiwali Farm Road, Andheri (East) Mumbai Mumbai City MH 400072, India
Four Front Research (India) Pvt Limited (ii)
Plot# 847, 5th Floor, Near Electricity Substation, Ayyappa Society Road, Madhapur, Hyderabad, Telangana,
500081, India

Intertek Group plc | Annual Report & Accounts 2021

Frameworks Inc.
1595 Sixteenth Avenue, Suite 301, Richmond Hill, ON L4B 3N9, Canada
Gamatek, S.A. de C.V.
Alanis Valdez #2308, Industrial, Monterrey, Nuevo Leon, Mexico
GCA Calidad y Analisis de Mexico, S.A. de C.V.
Jacarandas #19, San Clemente, Alvaro Obregon, Ciudad de Mexico, C.P. 01740, Mexico
Gellatly Hankey Marine Services (M) Sdn. Bhd.
Unit 30-01 Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200
Kuala Lumpur, Malaysia
Genalysis Laboratory Services Pty Limited (vi)
544 Bickley Road, Maddington WA 6109, Australia
Geotechnical Services Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Global Trust Certification (UK) Limited
Global X-Ray & Testing Corporation
112 East Service Road, Morgan City, LA 70380, United States
Global X-Ray Holdings, Inc. (ix)
112 East Service Road, Morgan City, LA 70380, United States
H.P. White Laboratory Inc.
3114 Scarboro Road, Street, MD 21154, United States
Hawks Acquisition Holding, Inc.
545 E. Algonquin Road, Arlington Heights, Illinois 60005, United States
Hi-Tech Holdings, Inc.
CT Corporation System, 1200 S.Pine Island Road, Plantation, FL 33324, United States
Hi-Tech Testing Service, Inc.
CT Corporation System, 1999 Bryan Street Suite 900, Dallas, TX 75201, United States
ILI Infodisk, Incorporated.
205 W. Wacker Dr, Suite 1800, Chicago, IL 60606, United States
ILI Limited
Inspection Services (US), LLC
237 Stuart Road, Amelia, LA 70340, United States
International Cargo Services, Inc. (i)
c/o CT Corp, 8550 United Plaza Blvd, Baton Rouge, LA 70809, United States
International Inspection Services Limited
33/37 Athol Street, Douglas, IM1 1LB, Isle of Man
Intertek (Mauritius) Limited
2 Palmerston Road, Phoenix, Mauritius
Intertek (Schweiz) AG
TechCenter, Kaegenstrasse 18, 4153 Reinach, Switzerland
Intertek Algeria Ltd EURL
Zone urbaine Garidi 1, N°C7/C8, Bâtiment F1, 1er étage Local N°1 , 16051, Kouba, Wilaya d’Alger, Algeria
Intertek Argentina Certificaciones S.A. (iii)
Cerrito 1136 3rd floor CF, Ciudad Autónoma de Buenos Aires, C1010AAX, Argentina
Intertek Aruba N.V.
Lago Heights Straat 28A, San Nicolas, Aruba

Financial ReportContents211

Notes to the financial statements Continued

Intertek Asset Integrity Management, Inc.
25025 I-45, Suite 300, Spring, TX 77380, United States
Intertek ATI SRL
266-268 Calea Rahovei Street, Building 61, 1st Floor, Sector 5, Bucharest, Romania
Intertek Australia Holdings Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Intertek Azeri Limited
2236 Mirza Davud Str., Xatai District, Baku, AZ 1026, Azerbaijan
Intertek BA EOOD
24A Akad. Metodi Popov Str., Floor 5, Sofia, 1113, Bulgaria
Intertek Bangladesh Limited
Phoenix Tower, Plot–407 (3rd Floor), Tejgaon I/A, Dhaka, Bangladesh
Intertek Belgium NV
Kruisschansweg 11, 2040 Antwerp, Belgium
Intertek Burkina Faso Ltd Sarl (i)
Ouagadougou, Secteur 13, Parcelle 21, Lot 11 Section EO Arrondissement de Nongr’Masson, Ouagadougou, 11
GP 1429, Burkina Faso
Intertek C&T Australia Holdings PTY Ltd (i)
544 Bickley Road, Maddington, WA 6109, Australia
Intertek C&T Australia Pty Ltd (i)
Level 3, 235 St Georges Terrace, Perth WA 6000, Australia
Intertek Caleb Brett (Uruguay) S.A. (xiv)
Cerrito 507, 4th Floor, Of. 46 and 47, Montevideo, 11000, Uruguay
Intertek Caleb Brett Chile S.A.
Avenida Las Condes N° 11287 Torre A, oficina 301 A Las Condes, Santiago, Chile
Intertek Caleb Brett El Salvador S.A. de C.V.
Recinto Industrial de RASA zona industrial de Acajutla, Sonsonate, El Salvador
Intertek Caleb Brett Germany GmbH
Georgswerder Bogen 3, D-21109 Hamburg, Germany
Intertek Caleb Brett Panama, Inc.
Zona Procesadora para la Exportacion de Albrook, Building 6, Ancon Panama, Panama
Intertek Caleb Brett Venezuela C.A.
2a AV El Mirador Edif. Saragon Palace Piso, PH-602/603 La Campina, Caracas, 1050, Venezuela
Intertek Canada Newco Limited
1829-32nd Avenue, Lachine, QC H8T 3J1, Canada
Intertek Capacitacion Chile Spa
Avenida Las Condes N° 11287 Torre A, oficina 301 A Las Condes, Santiago, Chile
Intertek Capital Resources Limited
Intertek Certification AB
Torshamnsgatan 43, Box 1103, Kista, S-164 22, Sweden
Intertek Certification AS
Leif Weldings vei 8, 3208 Sandefjord, Norway
Intertek Certification France SAS
67 Boulevard Bessières, 75017, Paris, France

Intertek Group plc | Annual Report & Accounts 2021

Intertek Certification GmbH
Marie-Bernays-Ring 19a, 41199 Monchengladbach, Germany
Intertek Certification Japan Limited
Nihonbashi N Bldg, 1-4-2, Nihonbashi – Horidomecho, Chuo-ku, Tokyo, 103-0012, Japan
Intertek Certification Limited
Intertek Colombia S.A.
Calle 127A No. 53A-45, Oficina 1103, Bogotá, Colombia
Intertek Commodities Mozambique Lda (xvi)
Rua 1233, NR 72 R/C, Distrito Urbano 1, Maputo, Mozambique
Intertek Consulting & Training (UK) Limited
Northpoint Aberdeen Science & Energy Park, Exploration Drive, Bridge of Don, Aberdeen, AB23 8HZ, United
Kingdom
Intertek Consulting & Training (USA), Inc.
25025 I-45, Suite 300, Spring, TX 77380, United States
Intertek Consulting & Training Colombia Limitada
Calle 127A No. 53A-45, Oficina 1103, Bogotá, Colombia
Intertek Consulting & Training Egypt (ii)
46 B Street #7, Maadi, Cairo, Egypt
Intertek Consumer Goods GmbH
Würzburger Strasse 152, 90766 Fürth, Germany
Intertek Curacao N.V.
Barendslaan #3, Rio Canario Willemstad, Curacao, Netherlands Antilles
Intertek de Guatemala SA
46 Calle 21-53 Zona 12, Expobodega 46, Edificio 10, Guatemala Ciudad, Guatemala
Intertek de Nicaragua S.A.
Zona Franca Astro KM 47, Carretera Tipitapa Masaya, Nave 20, Managua, Nicaragua
Intertek Denmark A/S
Dokhavnsvej 3, 4400 Kalundborg, Denmark
Intertek Deutschland GmbH
Stangenstrasse 1, 70771 Leinfelden-Echterdingen, Germany
Intertek DIC A/S
Buen 12, 2, 6000 Kolding, Denmark
Intertek do Brasil Inspecoes Ltda
Av Eng. Augusto Barata s/n, Alamoa, Santos, SP, CEP11095-650, Brazil
Intertek Egypt for Testing Services
2nd Floor, Block 13001, Piece 15, Street 13, First Industrial Zone, (Beside Abou Ghali Motors), Elobour City,
Cairo, Egypt
Intertek Evaluate AB
Torshamnsgatan 43, Box 1103, Kista, S-164 22, Sweden
Intertek Finance No. 2 Ltd (x)
Intertek Finland OY
Teknoublevardi 3-5, FI-01530 Vantaa, Finland
Intertek Fisheries Certification Limited (ii)
CVR Global LLP, Town Wall House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Intertek Food Services GmbH
Olof-Palme-Strasse 8, 28719 Bremen, Germany

Financial ReportContents212

Notes to the financial statements Continued

Intertek France SAS
ZAC Ecopark 2, 27400, Heudebouville, France
Intertek Fujairah FZC
P.O. Box 1307, Fujairah, United Arab Emirates
Intertek Genalysis (Zambia) Limited
Plot No 25/26 Nkwazi House, Nkwazi and Cha Cha Cha Roads, PO Box 31014, Lusaka, Zambia
Intertek Genalysis Madagascar SA
Saint Denis Terrain II, Parcel 2 Ambatofotsy, Ampandrianomby, Madagascar
Intertek Genalysis South Africa Pty Ltd
544 Bickley Road, Maddington WA 6109, Australia
Intertek Ghana Limited
1st Floor Gian, Towers Office, Number 2 Community, Gian Towers Tema, Accra, Accra Metropolitan,
P.O. BOX GP 199, Ghana
Intertek Global (Iraq) Limited
Intertek Global Limited
1st Floor, Liberation House, Castle Street, St Helier, JE1 1GL, Jersey
Intertek Health Sciences Inc. (v)
2233 Argentia Road, Suite # 201, Mississauga, ON L5N 2X7, Canada
Intertek Holding Deutschland GmbH
Stangenstrasse 1, 70771 Leinfelden-Echterdingen, Germany
Intertek Holdings France SAS
ZAC Ecopark 2, 27400 Heudebouville, France
Intertek Holdings Italia SRL (xvi)
Via Guido Miglioli 2/A, Cernusco sul Naviglio, 20063, Milano, Italy
Intertek Holdings Nederland B.V.
Leerlooierstraat 135, 3194AB Hoogvliet, Rotterdam, The Netherlands
Intertek Holdings Norge AS
Oljevegen 2, Tananger, 4056, Norway
Intertek Ibérica Spain, S.L.
Alameda Recalde, 27-5., 48009, Bilbao, Vizcaya, Spain
Intertek India Private Limited
E-20, Block B1, Mohan Co-operative Industrial Area, Mathura Road, New Delhi, 110044, India
Intertek Industrial Services GmbH
Marie-Bernays-Ring 19a, 41199 Monchengladbach, Germany
Intertek Industry and Certification Services (Thailand) Limited
539/2 Gypsum Metropolitan Tower, 11C Fl., Sri-Ayudhaya Road, Tanon – Phayathai Subdistrict, Khet
Ratchathewi, Bangkok, 10400, Thailand
Intertek Industry Holdings (Pty) Ltd
53 Phillip Engelbrecht Drive, Woodhill Office Park Building 2, 1st Floor Unit 8B Meyersdal, Gauteng, 1448, South
Africa
Intertek Industry Holdings Mozambique Limitada
Cidade de Maputo, Distrito Kampfumo, Baiiro Sommerchield, Avenida 1301 n˚97, Mozambique
Intertek Industry Services (S) Pte Ltd
2 International Business Park, #10-09/10, The Strategy, 609930, Singapore
Intertek Industry Services Brasil Ltda
Alameda Mamore 503, Alphaville, Barueri-SP, 06454-040-SP, Brazil

Intertek Group plc | Annual Report & Accounts 2021

Intertek Industry Services de Argentina S.A.
Cerrito 1136, 2nd floor CF, Ciudad Autonoma de Buenos Aires, C1010AAX, Argentina
Intertek Industry Services Japan Limited
Nihonbashi N Bldg, 1-4-2, Nihonbashi – Horidomecho, Chuo-ku, Tokyo, 103-0012, Japan
Intertek Industry Services Romania Srl
266-268 Calea Rahovei Street, Building 61, 1st Floor, Sector 5, Bucharest, Romania
Intertek Industry WLL
Office # 24, Building 400, Road 3207, Mahooz, Block 332, Manama, Bahrain
Intertek Inspection Services Ltd
2561 Avenue Georges V, Montreal-Est, QC H1L 6S4, Canada
Intertek Inspection Services Scandinavia AS
Leif Weldings vei 8, 3208 Sandefjord, Norway
Intertek Inspection Services UK Limited
Intertek International France SAS
67 Boulevard Bessières, 75017, Paris, France
Intertek International Gabon SARL
Quartier Montagne Sainte – Immeuble Dumez, 2éme étage, Libreville, B.P: 13312, Gabon
Intertek International Guinee S.A.R.L. (i)
Conakry Republique de Guinee, Compte Bancaire: 52481.369.10 0 (SGBG), Conakry Guinea
Intertek International Inc.
8600 NW 17th Street, Suite 100, Miami, FL 33126, United States
Intertek International Kazakhstan, LLC
Building 2A, Abay street, Atyrau City, 060002, Kazakhstan
Intertek International Limited
Intertek International Ltd Egypt
69, Road 161, Intersection with Road 104, Ground Floor, Maadi, Cairo, Egypt
Intertek International Nederland BV
Leerlooierstraat 135, 3194AB Hoogvliet, Rotterdam, The Netherlands
Intertek International Niger SARL
BP 2769, 2nd Floor Lot 792 Block Q, Independance Boulevard, Rue GM-20, Niger
Intertek International Suriname N.V.
Prins Hendrikstraat 49, Paramaribo, Suriname
Intertek International Tanzania Limited
Minazini Street, Kilwa Road 5, Dar es Salaam, United Republic of Tanzania
Intertek Italia SpA
Via Guido Miglioli 2/A, Cernusco sul Naviglio, 20063, Milano, Italy
Intertek Japan K.K.
Pier City Shibaura Building, 4F, 3-18-1, Kaigan, Minato-ku, Tokyo, 108-0022, Japan
Intertek Kalite Servisleri Limited Sirketi
Cevizli Mah. Tansel Cad. No: 12-18, Maltepe, Istanbul, Turkey
Intertek Korea Industry Service Ltd
Yeouido Dept Bldg #916, 36-2, Yeouido-Dong, Youngdeungpo-Gu, Seoul, 150-749, South Korea
Intertek Labtest S.A.R.L
Route 110, (par Chefchaouni), Lot Saadi no. 20, Q.I. Aïn Sebaâ 20 250, 4eme Etage, Casablanca, Morocco

Financial ReportContents213

Notes to the financial statements Continued

Intertek Limited
Borco Administration Bldg, West Sunrise Highway, Freeport, Grand Bahama, The Bahamas
Intertek Management Services (Australia) Pty Ltd
544 Bickley Road, Maddington WA 6109, Australia
Intertek Med SARL AU
Zone Franche Logistique Tanger Med, Plateau Bureaux 4, Lot 130, Tanger, Morocco
Intertek Medical Notified Body AB
Torshamnsgatan 43, Box 1103, Kista, S-164 22, Sweden
Intertek Minerales Services SARL (i)
Rue KM 10, Route de Kouroussa S/P Karifamoriah, Commune Urbaine de Kankan, Guinea
Intertek Minerals Limited
Osu Badu Street, Airport Residential Area, Accra, Greater Accra, CP8196, Ghana
Intertek Myanmar Limited (i)
Classic Strand Cono, No.693/701, Room (4-A), (4th Floor), Merchant Road, Pabedan Township, Yangon,
Myanmar
Intertek Nederland B.V.
Leerlooierstraat 135, 3194 AB Hoogvliet, Rotterdam, The Netherlands
Intertek Nominees Limited
Intertek OCA France SARL
Route Industrielle – Centre Routier, 76600, Gonfreville L’Orcher, France
Intertek Overseas Holdings, Eritrea Limited (i)
Intertek Overseas Holdings Limited
3rd Floor, Warsay Avenue, P.O. Box 4588, Asmara, Eritrea
Intertek Pakistan (Private) Limited
Intertek House, Plot No.1-5/11-A, Sector-5, Korangi Industrial Area, Karachi, Pakistan
Intertek Poland sp.z.o.o.
Cyprysowa 23 B, 02-265, Warsaw, Poland
Intertek Polychemlab B.V.
Koolwaterstofstraat 1, 6161 RA, Geleen, The Netherlands
Intertek Portugal, Unipessoal Lda (xvi)
Rua Antero de Quental, 221-Sala 102, 4455-586, Perafita-Matosinhos, Portugal
Intertek Quality Services Ltd (i)
Intertek Resource Solutions (Trinidad) Limited (i)
#91-92 Union Road, Marabella, Trinidad, Trinidad and Tobago
Intertek Resource Solutions, Inc.
25025 I-45, Suite 300, Spring, TX 77380, United States
Intertek Rus JSC
Electrozavodskaya street, 27, building 2, 125047, Moscow, Russian Federation
Intertek S.R.O
Sokolovská 131/86, Karlín, Praha 8, 186 00, Czech Republic
Intertek Saudi Arabia Limited
Southern Olaya Center, Office No. 213, Makkah Al-Mukaramah Street, P.O. Box 2526, Al-Khobar, 31952, Saudi
Arabia
Intertek ScanBi Diagnostics AB
Box 166, Alnarp, SE-230 53, Sweden

Intertek Group plc | Annual Report & Accounts 2021

Intertek Secretaries Limited (i)
Intertek Semko AB
Torshamnsgatan 43, Box 1103, Kista, S-164 22, Sweden
Intertek Services (Pty) Ltd
151 Monument Road, Aston Manor, 1619, South Africa
Intertek Servicios C.A. (i)
Res. San Ignacio, Calle San Ignacio de Loyola con Avenue Francisco de Miranda, Local 3, Chacao, Caracas,
Venezuela
Intertek Statius N.V.
Man ‘O’ War #B3, Oranjestad, St. Eustatius, Netherlands Antilles
Intertek Surveying Services (USA), LLC (xv)
16441 Space Center Boulevard, Suite D-100, Houston, TX 77058, United States
Intertek Surveying Services UK Limited
Averon House 3 Dail Nan Rocas, Teaninich Industrial Estate, Alness, IV17 0PH, United Kingdom
Intertek Technical Inspections Canada Inc. (iv)
1829-32nd Avenue, Lachine, Quebec, H8T 3J1, Canada
Intertek Technical Services PTY Limited
544 Bickley Road, Maddington WA 6109, Australia
Intertek Technical Testing and Analysis Private Limited Company (i)
Bole Sub City Woreda 04, House Number 064/A/, Abune Yosef, Addis Ababa, 4260, Ethiopia
Intertek Testing & Certification Limited
Intertek Testing and Inspection Services UK Limited
Intertek Testing Management Ltd
Intertek Testing Services (Australia) Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
Intertek Testing Services (Cambodia) Company Limited
13AC, Street 337, Sangkat Boeung Kak I, Khan Tuol Kork, Phnom Penh, Cambodia
Intertek Testing Services (East Africa) (Pty) Limited
5th Floor Charter House, 13 Brand Road Glenwood, Kwa-Zulu Natal, 4001, South Africa
Intertek Testing Services (Fiji) Pte Limited
c/o BDO, Level 10, FNPF Place, 343 Victoria Parade, Suva, Fiji
Intertek Testing Services (Guangzhou) Ltd
No.3-1, Road 1, Xinhaixin Street, Huangge, Nansha District, Guangzhou, Guangdong, China
Intertek Testing Services (ITS) Canada Ltd
105-9000 Bill Fox Way, Burnaby BC V5J 5J3, Canada
Intertek Testing Services (Japan) K. K.
Nihonbashi N Bldg, 1-4-2, Nihonbashi – Horidomecho, Chuo-ku, Tokyo, 103-0012, Japan
Intertek Testing Services (NZ) Limited
3 Kepa Road, Ruakaka, Northland, 0171, New Zealand
Intertek Testing Services (Shanghai FTZ) Co., Ltd
1/F, Building No.4 Shanghai 801 Yi Shan Road, Shanghai, 200233, China
Intertek Testing Services (Singapore) Pte Ltd.
3 Irving Road #05-01 to 05, Tai Seng Centre, 369522, Singapore
Intertek Testing Services (Thailand) Limited
1285/5 Prachachuen Road, Wong-Sawang Sub-District, Bangsue District, Bangkok, 10800, Thailand

Financial ReportContentsNotes to the financial statements Continued

Intertek Testing Services Argentina S.A.
Cerrito 1136, piso 3ro, Frente. Ciudad Autonoma de Buenos Aires, (C1010AAX), Argentina
Intertek Testing Services Bolivia S.A.
Calle Chichapi # 2125, Santa Cruz, de la Sierra, Bolivia
Intertek Testing Services Caleb Brett Egypt Limited
Intertek Testing Services Chongqing Co., Limited
1F/6F Building 3 No.5 East Gangcheng Loop Road, Chongqing China
Intertek Testing Services de Honduras, S.A.
Edificio la Pradera, locales 5 y 6. 1-2 Ave, 1 calle, Puerto Cortes, Barrio el Centro, Honduras
Intertek Testing Services De Mexico, S.A. De C.V. (iii)
Poniente 134, No 660 Industrial Vallejo, Mexico DF CP, 02300, Mexico
Intertek Testing Services Environmental Laboratories Inc. (i)
Lexis Document Services, 15 East North Street, Dover, DE 19901, United States
Intertek Testing Services NA Limited
1829-32nd Avenue, Lachine QC H8T 3J1, Canada
Intertek Testing Services NA Sweden AB (i)
c/o Intertek Semko AB, Box 1103, Kista, 16422, Sweden
Intertek Testing Services Namibia (Proprietary) Limited
15th Floor, Frans Indongo Gardens, Dr Frans Indongo Street, Windhoek, Namibia
Intertek Testing Services Pacific Limited
2/F, Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong
Intertek Testing Services Peru S.A.
Jr. Mariscal Jose de la Mar No. 200 Urb., Res. El Pino, San Luis, Lima, Peru
Intertek Testing Services Philippines, Inc.
Intertek Building, 2307 Chino Roces Avenue Extension, Metro Manila, Makati City, 1231, Philippines
Intertek Testing Services Taiwan Limited
8F No. 423 Ruiguang Rd, Neihu District, Taipei, 11492, Taiwan
Intertek Testing Services Tianjin Limited
1-6/F, Block B, No. 7 Guiyuan Road, Hi-Tech Pack, Tianjin, China
Intertek Testing Services Zhejiang Ltd
Building No.2, Juanhu Science and Technology Innovation Park, No. 500 East Shuiyueting Road, Haining City,
Zhejiang Province, China
Intertek Timor, S.A.
Hotel Timor, Colmera, Vera Cruz, Dili, Timor-Leste
Intertek Training Malaysia Sdn. Bhd.
6-L12-01, Level 12, Tower 2, Menara PGRM, No. 6 & 8 Jalan Pudu Ulu, Cheras, 56100 Kuala Lumpur, Malaysia
Intertek Trinidad Limited
#91-92 Union Road, Marabella, Trinidad and Tobago
Intertek UK Holdings Limited
Intertek Ukraine (xvii)
Chernomorskogo Kazachestva, 115, Office 507, Odessa, 65003, Ukraine
Intertek USA Finance LLC
c/o CSC Services of Nevada, Inc., 2215-B Renaissance Dr, Las Vegas NV 89919, United States
Intertek Vietnam Limited
3rd & 4th floor, Au Viet Building, No. 01 Le Duc Tho Str., Mai Dich Ward, Cau Giay District, Hanoi City, Vietnam

Intertek Group plc | Annual Report & Accounts 2021

214

Intertek West Africa SARL
Rue du Canal de Vridi Face Appontement, SIAP, Abidjan, 15 BP 882, Côte d’Ivoire
Intertek West Lab AS
Oljevegen 2, 4056 Tananger, Norway
Intertek Genalysis SI Limited
c/o Baoro & Associates, Top Floor, Y. Sato Building, Point Cruz, Honiara, Solomon Islands
ITS (PNG) Limited
Section 27 Allotment 27, Voco Point, Lae, Morobe Province, Papua New Guinea
ITS (Subic Bay), Inc.
Area 8 – 10, Lots 11/12 Boton Wharf, Argonaut Highway, Subic Bay, Freeport Zone, Olongapo City, Philippines
ITS Hong Kong NA, Limited (i)
2/F Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong
ITS Labtest Bangladesh Limited
Phoenix Tower, Plot – 407 (3rd Floor), Tejgaon I/A, Dhaka, Bangladesh
ITS Testing Holdings Canada Limited
9000 Bill Fox Way, Suite 105, Burnaby, British Columbia, V5J 5J3, Canada
ITS Testing Services (UK) Limited
ITS Testing Services Co. LLC
Ras Tanura KSA, PO Box 216, 31941, Saudi Arabia
JLA Brasil Laboratório de Análises de Alimentos S.A.
Rua Carlos Tosin, 860, sala 1, Distrito Industrial, Distrito Industrial, Estado de São Paulo, Brazil
KJ Tech Services GmbH (xii)
Kirschberg 20, 64347, Griesheim, Germany
Laboratorio Fermi S.A. de C.V.
Jacarandes #15, San Clemente, Alvaro Obregon, Ciudad de Mexico, C.P. 01740, Mexico
Laboratorios ABC Química, Investigación y Análisis, S.A. de C.V. (xiii)
Jacarandas #19, San Clemente, Alvaro Obregón, Ciudad de Mexico, C.P. 01740, Mexico
Laboratory Services International Rotterdam B.V.
Pittsburghstraat 9, 3047 BL, Rotterdam, The Netherlands
Labtest International Inc.
545 E. Algonquin Road, Arlington Heights, IL 60005, United States
Lintec Testing Services Limited
Louisiana Grain Services, Inc. (i)
c/o CT Corp, 8550 United Plaza Blvd, Baton Rouge LA 70809, United States
Mace Land Company, Inc.
3114 Scarboro Road, Street, MD 21154, United States
Management & Industrial Consultancy (i)
59 Road No.104, Second Floor, Maadi, Cairo, Egypt
Management Systems International Limited (i)
Materials Testing & Inspection Services Limited (ii)
CVR Global LLP, Town Wall House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Materials Testing Lab, Inc.
145 Sherwood Avenue, Farmingdale NY 11735, United States
McPhar Geoservices (Philippines) Inc. (i)
Building 7 & 8 Philcrest 1 Compound, Km23 West Service Road, Bo. Cupang, Muntinlupa City, Philippines

Financial ReportContentsNotes to the financial statements Continued

Melbourn Scientific Limited
Melbourn Scientific, Saxon Way, Melbourn, Hertfordshire, Royston, SG8 6DN, United Kingdom
Metoc Limited
Midwest Engineering Services, Inc.
CT Corporation System, 8020 Excelsior Dr., Suite 200, Madison WI 53717, United States
Moody (Shanghai) Consulting Co., Ltd
Room 403, No.5-6, Lane 1218, Wanrong Road, Jing ‘an District, Shanghai, China
Moody Energy Technical Service Co Ltd
Suite B2206 Dongyu Building, A1 Shuguangxili, Chaoyang District, Beijing 100028, P. R. China
Moody International (Holdings) Limited (vii)
Moody International (India) Private Limited
E-20, Block B1, Mohan Co-operative Industrial Area, Mathura Road, New Delhi, 110044, India
Moody International (Russia) Limited
Moody International Certification India Limited
E-20, Block B1, Mohan Co-operative Industrial Area, Mathura Road, New Delhi, 110044, India
Moody International Holdings LLC (xv)
237 Stuart Road, Amelia, LA 70340, United States
Moody United Certification Limited (i)
2F, No. 5 Building, 912 Bibo Road, Pudong, Shanghai, 201203, China
MT Group LLC
145 Sherwood Avenue, Farmingdale NY 11735, United States
MT Operating of New Jersey, LLC (xv)
145 Sherwood Avenue, Farmingdale NY 11735, United States
MT Operating of New York, LLC (xv)
145 Sherwood Avenue, Farmingdale NY 11735, United States
N T A Monitor Limited
NDT Services Limited
Northern Territory Environmental Laboratories Pty Ltd (i)
544 Bickley Road, Maddington WA 6109, Australia
NTA Academy Limited (ii)
CVR Global LLP, Town Wall House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
NTA Monitor (M) Sdn Bhd
No. 18-B, Jalan Kancil off Jalan Pudu, 55100 Kuala Lumpur, Wilayah Persekutuan, Malaysia
Paulsen & Bayes-Davy Ltd
2/F, Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong
Petroleum Services of Union Lab Sdn. Bhd.
Suite C-7-10 (B), Level 9, Block C, UE3 Corporate Offices, Menara Uncang Emas, No 85 Jalan Loke Yew, Taman
Miharja, 55200 Kuala Lumpur, Malaysia
Pittsburgh Testing Laboratory Inc.
PSI, 850 Poplar Street, Pittsburgh PA 15220, United States
Profesionales Contables en Asesoría Empresarial y de Ingenieria S.A.S.
Calle 120, No. 45A – 32, Bogota, Colombia
Professional Service Industries (Canada) Inc. (i)
200 Bay Street, Suite 3800, Royal Bank Plaza, South Tower, Toronto ON M5J 2J7, Canada
Professional Service Industries, Inc.
545 E. Algonquin Road, Arlington Heights, IL 60005, United States

Intertek Group plc | Annual Report & Accounts 2021

215

Professional Service Industries Holdings, Inc.
545 E. Algonquin Road, Arlington Heights, IL 60005, United States
PSI Acquisitions, Inc.
545 E. Algonquin Road, Arlington Heights, IL 60005, United States
PT. Moody Technical Services
Graha STR 3rd floor, Suite#302, Jl. Ampera Raya No. 11, Jakarta, 12550, Indonesia
PT. RCG Moody (i)
Graha STR 3rd floor, Suite#302, Jl. Ampera Raya No. 11, Jakarta, 12550, Indonesia
PT. SAI Global Indonesia
Graha Iskandarsyah Lantai 4, Jalan Iskandarsyah Raya Nomor 66-C, Kebayoran Baru, Jakarta, 12160, Indonesia
QMI-SAI Canada Limited
20 Carlson Court, Suite 200, Toronto ON M9W7K6, Canada
RCG Moody International Uruguay S.A.
Cerrito 507, 4th Floor, Off. 46, 47, Montevideo 11000, Uruguay
SAI Global (Thailand) Ltd
No 52/120, 3rd Floor, Grand Langsuam Condominium, Soi Langsuan, Phloenchit Road, Lumpini, Pathumwan,
Bangkok 10330, Thailand
SAI Global Assurance Learning Limited
SAI Global Assurance Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
SAI Global Assurance Services Limited
SAI Global Assurance Services sp. z o.o.
Oszczepników 4, 02-633 Warszawa, Poland
SAI Global Australia (China) Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
SAI Global Australia Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
SAI Global Certification Services Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
SAI Global CIS UK Limited
SAI Global Czech s.r.o. (ii)
Vodnická 325/1, Újezd, Prague 4, 149 00, Czech Republic
SAI Global GmbH
Friedrich-Ebert-Anlage 36, 60325 Frankfurt am Main, Germany
SAI Global GP
205 W. Wacker Dr, Suite 1800, Chicago, IL 60606, United States
SAI Global, Inc.
615 South DuPont Highway, Dover, DE 19901, United States
SAI Global Italia S.R.L.
Corso Tazzoli 235/3, CAP 10137, Turin, Italy
SAI Global Korea Co., Ltd
(Dangjeong-dong, Intertek Building) 3, Gongdan-ro 160beon-gil, Gunpo-si, Gyeonggi-do, Seoul, South Korea
SAI Global Mexico, S. de R.L. de C.V
Monte Everest #615, Lomas de Chapultepec, Ciuda de Mexico, Distrito Federal, 11000, Mexico

Financial ReportContentsNotes to the financial statements Continued

SAI Global Pty Limited
544 Bickley Road, Maddington WA 6109, Australia
SAI Global SARL
29 Rue du Pont, 92200 Neuilly-sur-Seine, France
SAI Global UK Holdings Limited
SAI Global US Holdings, Inc.
205 W. Wacker Dr, Suite 1800, Chicago, IL 60606, United States
Schindler & Associates (L.C.) (i) (xv)
24900 Pitkin Road, Suite 200, The Woodlands TX 77386, United States
Shanghai Orient Intertek Testing Services Company Limited
3F, No 15-16, Lane 1988 Changzhong Road, Shanghai, China
Shanghai Tianxiao Investment Consultancy Company Limited
Room 502, No.5-6, 1218 WanRongRoad, 200070, Shanghai, China
Technical Company for Testing and Conformity Services & Systems LLC
Gates No. 1/2/6, Building 73/ Area 903, Karadah, Al Rusafa, Baghdad, Iraq
Testing Holdings Sweden AB
Torshamnsgatan 43, Box 1103, Kista, S-164 22, Sweden
Tourcheck Limited (ii)
CVR Global LLP, Town Wall, House, Balkerne Hill, Colchester, Essex, CO3 3AD, United Kingdom
Tradegood.com International Limited(i)
2/F, Garment Centre, 576 Castle Peak Road, Kowloon, Hong Kong
Van Sluys & Bayet NV
Kruisschansweg 11, 2040 Antwerp, Belgium
White Land Company, Inc.
3114 Scarboro Road, Street, MD 21154, United States
Wilson Inspection X-Ray Services, Inc.
Michael E Wilson, 6010 Edgewater Dr., Corpus Christi TX 78412, United States
Wisco SE Asia PTE Limited (i)
3 Irving Road #05-01 to 05, Tai Seng Centre, 369522, Singapore
Youngever Holdings Ltd
Ritter House, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands

Related undertakings where the effective interest is less than 100%
Caleb Brett Abu Dhabi LLC (49.0%) (xix)
CB UAE (Private) Ltd, c/o Al Nahiya Group, PO Box 3728, Abu Dhabi, United Arab Emirates
CQC-SAI Management Technologies (Beijing) Co., Ltd (70%)
Level 21, Suite 2101-2103A, Beijing AVIC Building, No 10B, East 3rd Ring Road, Chaoyang Dist, Beijing,
P.R.China, 100022
Euro Mechanical Instrument Services LLC (49.0%)
PO Box 46153, Abu Dhabi, United Arab Emirates
International Inspection Services LLC (70.0%) (xix)
PO Box 193, Al Hamriyah, Muscat, PC 131, Oman
Intertek (Qeshm Island) Limited (51.0%)
Unit 107, Goldis Building, Valiasr Boulevard, Qeshm Island, Islamic Republic of Iran
Intertek Angola LDA (99.0%)
282 Rua Amilcar Cabral no.147 2nd floor, Apartment Z, Luanda, Angola

Intertek Group plc | Annual Report & Accounts 2021

216

Intertek Caleb Brett Tzn Limited (75%)
Plot number 5, Minizani str.-Opposite Roman Catholic Church, Kilwa Road, Kurasini Temeke, Dar Es Salaam,
15109, United Republic of Tanzania
Intertek Certification International Sdn. Bhd. (40%)
6-L12-01, Level 12, Tower 2, Menara PGRM, No. 6 & 8 Jalan Pudu Ulu, Cheras, 56100 Kuala Lumpur, Malaysia
Intertek Engineering Service Shanghai Limited (90%)
Room 301-6, No.14, Lane 1401, JiangChang Road, Jing ’an District, Shanghai, China
Intertek Engineering Services (Wuhu) Ltd (90%)
No. 65 Chang Ye Street, YinHu District, Wuhu, China
Intertek ETL SEMKO KOREA Limited (90.0%)
5F, Intertek building, Gongdan-ro, 160beon-gil 3, Gunpo-si, Gyeonggi-do, 15845, South Korea
Intertek Global International LLC (49%)
Building 242, Office No.3, C-Ring Road, Doha, PO Box 47146, Qatar
Intertek GM Testing Service Zhuhai Co., Ltd (70.0%)
6F of Research and Development Building, Guangdong-Macau TCM Park Commercial Service Center, 2682
Huan Dao Bei Road, Hengqin New Area, Zhuhai, Guangdong China
Intertek Industry Services (PTY) LTD (69.9%)
3 EL Wak Street, Vereeniging, 1930, Gauteng, South Africa
Intertek Industry Services Colombia Limited (99.0%)
Calle 127A No. 53A-45, Oficina 1103, Bogotá, Colombia
Intertek Inspection (Malaysia) Sdn. Bhd. (40%) (xi)
D-28-3, Level 28, Menara Suezcap 1, No. 2 Jalan Kerinchi, Gerbang Kerinchi Lestari, 59200 Kuala Lumpur,
Malaysia
Intertek Kimsco Co., Ltd (50.0%)
9F, Hansan Building, 115, Seosomun-ro, Jung-gu, Seoul, 04515, South Korea
Intertek Lanka (Private) Limited (70.0%)
Intertek House, No: 282, Kaduwela Road, Battaramulla, Sri Lanka
Intertek Libya Technical Services and Consultations Company Spa (65.0%)
P.O Box 3788, Hay Alandalus, Gargaresh, Tripoli, Libya
Intertek Life Bridge (Shanghai) Testing Services Co., Ltd (80.0%)
4F, No.6 BLD,Lane 1218,Wanrong Road, Shanghai, China 200070
Intertek Ltd (99.9%)
Borco Administration Bldg, West Sunrise Highway, Freeport, Grand Bahama, The Bahamas
Intertek – QNP LLP (xvii) (51.0%)
Building 2A, Abay street, Atyrau City, 060002, Kazakhstan
Intertek Robotic Laboratories Pty Limited (50.0%)
544 Bickley Road, Maddington WA 6109, Australia
Intertek South Africa Holdings (Pty) Ltd (75.0%)
5th Floor, Charter House, 13 Brand Road, Glenwood, Kwazulu-Natal, South Africa
Intertek Test Hizmetleri Anonim Sirketi (85.0%)
Merkez Mahallesi, Sanayi Cad. No.23, Altindag Plaza, Yenibosna-34197, Istanbul, Turkey
Intertek Testing Services (South Africa) (Proprietary) Limited (49.5%)
5th Floor, Charter House, 13 Brand Road, Glenwood, Durban, South Africa
Intertek Testing Services Korea Limited (50.0%)
1st Fl., Aju Digital Tower, 284-56, Seongsu-dong 2-ga, Seongdong-gu, Seoul 133-120, South Korea

Financial ReportContents217

Associates
Intertek Geronimo JV Limited (i) (48.9%)
1, North Industrial Area, Klan Street, Accra, Ghana
Lynx Diagnostics Inc. (xviii) (50.0%)
#220, 8 Perron Street, St Albert AB T8N 1E4, Canada
Moody International Certification Ltd (40.0%)
53, Nautic, Triq l-Ortolan, San Gwann, SGN 1943, Malta
Moody International Morocco (30.0%)
28, Rue de Provins, 2 eme etage, Casablanca, Morocco
Moody International SA (35.0%)
4 Rue Des Brasseurs, Zone 3 Abidjan, Côte d’Ivoire

Dormant.

In Liquidation/Strike off requested.

Ownership held in class A, B, C, D and E common shares.

(i)
(ii)
(iii) Ownership held in class A and B common shares
(iv) Ownership held in class A and E shares.
(v)
(vi) Ownership held in class A, B, C, D, E and F shares.
(vii) Ownership held in ordinary and ordinary-A shares.
(viii) Ownership held in ordinary, ordinary-A, ordinary-B and deferred shares.
(ix) Ownership held in ordinary and preference shares.
Ownership held in ordinary and redeemable shares.
(x)
(xi) Ownership held in ordinary and redeemable preference shares.
(xii) Ownership held in No.1, No.2.1 and No.2.2 shares.
(xiii) Ownership held in class I Series B shares and class II Series B shares.
(xiv) Ownership held in ordinary bearer shares.
(xv) Ownership held in membership units.
(xvi) Ownership held in quota capital shares.
(xvii) Ownership held in charter capital.
(xviii) Intertek shares joint control over the company under a shareholders’ agreement.
(xix) The Group obtains 99% of the economic benefit of the company.

Notes to the financial statements Continued

Intertek Testing Services Nigeria Limited (60.0%)
No. 2 Bombay Crescent, Apapa, Lagos, Nigeria
Intertek Testing Services Sichuan Co., Ltd (90.0%)
No 1, Jiuxiang Blvd, Pharmacy Industry Park, Luzhou National High Technology District, Sichuan, China
Intertek Testing Services Wuxi Ltd (70.0%)
1/F, No.8 Fubei Road, Xishan Economic Development Zone, Wuxi, Jiangsu, 214101, China
ITS Caleb Brett Deniz Survey A S (xviii) (50.0%)
Ulus Mah. Oz Topuz cad. no.32, Besiktas, Istanbul, 34340, Turkey
ITS Testing Services (M) Sdn Bhd (74.0%)
Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No.8, Jalan Kerinchi, 59200
Kuala Lumpur, Malaysia
ITS Testing Services Holdings (M) Sdn Bhd (49.0%)
Unit 30-01 Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200
Kuala Lumpur, Malaysia
Moody International Angola Ltda (i) (xvi) (78.6%)
Rua de Macau, Edifico ex Edil Apto 1, Res de Chao Esq. C.P 215, Cabinda, Angola
Moody International Bangladesh Limited (99.9%)
House 6, Road 17/A, Block E, Ground Floor, Banani, Dhaka, 1213, Bangladesh
Moody International Holdings Chile Ltda (99.0%)
Avenida Las Condes N° 11287 Torre A, oficina 301 A Las Condes, Santiago, Chile
Moody International Lanka (Private) Ltd (99.9%)
no.5, St Albans Place, Colombo-4, Sri Lanka
Moody International Philippines, Inc. (i) (92.5%)
Intertek Building, 2310 Chino Roces Avenue Extension, Metro Manila, Makati City, 1231, Philippines
PT Citrabuana Indoloka (xviii) (50.0%)
Jl. Raya Bogor KM 28, RT/RW. 04/07, Kel. Pekayon, Kec. Pasar Rebo, Jakarta Timur, 13710, Indonesia
PT. Global Assurance Services (ii) (99.8%)
Graha Iskandarsyah Raya No.66-C, Jakarta, 12160, Indonesia
PT. Intertek Utama Services (xviii) (49.0%)
Jl. Raya Bogor KM. 28, RT/RW. 04/07, Kel. Pekayon, Kec. Pasar Rebo, Jakarta Timur, 13710, Indonesia
Qatar Calibration Services LLC (49.0%)
Petrotec, PO Box 16069, 8th Floor, Toyota Tower, Doha, Qatar
RCG Moody International de Venezuela S.A. (i) (99.0%)
Res Morgana, p_4, #04, Av.Andres Bello, Fco de Miranda, Los Polos Grandes, Caracas, Venezuela
SAI Global (Cyprus) Holdings Limited (60.0%)
1 Lampousas Street, 1095 Nicosia, Cyprus
SAI Global Eurasia Limited (60.0%)
19 Lit A, 7 Quarter River Wolves, 192102 St. Petersburg, Russian Federation
SAI Global Japan Kabushiki Kaisha (68.0%)
MK Bldg. 8F, 2-28-22 Shiba, Minato-ku Tokyo, Japan
Shanghai Moody Management & Technical Services Co. Ltd (i) (90.0%)
Room 225, No. 14 at Lane No. 1700 Luo Shan Road, Shanghai, China
Société SAI Global Tunisia SARL (75.0%)
67, Avenue Alain Savary, Cite les Jardins 2 Bloc A, Tunis, Tunisia
Société Tunisienne Intertek Caleb Brett SARL (51.0%)
67 rue Ech-Chem, Tunis, 1002, Tunisia

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents
Intertek Group plc – Company balance sheet

218

As at 31 December

Fixed assets
Investments in subsidiary undertakings

Current assets
Debtors due within one year

Cash at bank and in hand

Creditors due within one year
Other creditors

Net current assets

Total assets less current liabilities

Net assets

Capital and reserves
Called up share capital
Share premium
Profit and loss reserves

Shareholders’ funds

The profit for the financial year was £163.2m (2020: £222.4m).

The financial statements on pages 218 to 222 were approved by the Board on 28 February 2022 and were signed on its behalf by:

André Lacroix
Chief Executive Officer

Company number: 04267576

Jonathan Timmis
Chief Financial Officer

Intertek Group plc | Annual Report & Accounts 2021

Notes

2021
£m

2020
£m

(E)

347.3

342.2

(F)

(G)

(H)
(H)
(H)

408.1

408.1
1.1

409.2

(5.5)

403.7

751.0

420.5

420.5
0.9

421.4

(6.6)

414.8

757.0

751.0

757.0

1.6
257.8
491.6

751.0

1.6
257.8
497.6

757.0

Financial ReportContentsIntertek Group plc – Company statement of changes in equity

219

At 1 January 2020
Total comprehensive income for the year
Profit

Total comprehensive income for the year

Transactions with owners of the company recognised directly in equity
Contributions by and distributions to the owners of the Company
Dividends paid
Purchase of own shares
Tax paid on Share Awards vested
Equity-settled transactions

Total contributions by and distributions to the owners of the Company

At 31 December 2020

At 1 January 2021
Total comprehensive income for the year
Profit

Total comprehensive income for the year

Total contributions by and distributions to the owners of the Company

At 31 December 2021

Intertek Group plc | Annual Report & Accounts 2021

Notes

Share capital
£m

Share premium
£m

Profit and loss
reserves
£m

Total
equity
£m

1.6

257.8

447.6

707.0

(B)

(D)

(E)

(B)

(D)

(E)

–

–
–
–
–

–

1.6

–

–
–
–
–

–

–
–
–
–

–

257.8

222.4

(170.4)
(12.2)
(7.5)
17.7

(172.4)

497.6

(170.4)
(12.2)
(7.5)
17.7

(172.4)

757.0

257.8

497.6

757.0

–

–
–
–
–

–

163.2

(170.6)
(11.4)
(5.8)
18.6

(169.2)

1.6

257.8

491.6

751.0

Financial ReportContents220

Notes to the Company financial statements

(A) Accounting policies – Company

The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to the Company’s financial statements.

Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (‘FRS 101’) in conformity with the requirements of the Companies Act 2006.

These financial statements have been prepared on a historical cost basis. The Company continues to adopt the
going concern basis of accounting in preparing these financial statements. Further detail on going concern can
be found in note 1 to the Group financial statements.

In preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements UK-adopted International Accounting Standards (‘Adopted IFRSs’), but makes amendments
where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the
FRS 101 disclosure exemptions has been taken.

These financial statements are presented in sterling, which is the functional currency of the Company.
All information presented in sterling has been rounded to the nearest £0.1m.

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;
–
– an additional balance sheet for the beginning of the earliest comparative period following the retrospective

the effects of new, but not yet effective, IFRSs;

change in accounting policy;

– disclosures in respect of the compensation of Key Management Personnel; and
– certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7
Financial Instrument Disclosures on the basis that the consolidated financial statements include the
equivalent disclosures.

As the consolidated financial statements include the equivalent disclosures, the Company has also taken the
exemptions under FRS 101 available in respect of IFRS 2 Share-Based Payment in respect of Group-settled
share-based payments.

The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial
statements.

Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its
own profit and loss account.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods
presented in these financial statements.

Intertek Group plc | Annual Report & Accounts 2021

Foreign currencies
Transactions in foreign currencies are recorded to the Company’s functional currency, sterling, using the rate of
exchange ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange prevailing at the balance sheet date. All foreign exchange
differences are taken to the profit and loss account.

Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss
account except to the extent that it relates to items recognised directly in equity or other comprehensive
income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences
are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business combination; and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised.

Dividends on shares presented within shareholders’ funds
Dividend income is recognised in profit or loss on the date that the Company’s right to receive payment is
established. Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the
extent that they are appropriately authorised and are no longer at the discretion of the Company. Unpaid
dividends that do not meet these criteria are disclosed in the notes to the financial statements.

Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provisions for impairment.

Intercompany financial guarantees
When the Company enters into financial guarantee contracts to guarantee the indebtedness of other
companies in the Group, the Company considers these to be insurance arrangements and accounts for them as
such. In this respect the Company treats the guarantee contract as a contingent liability, until such time as it
becomes probable that the Company will be required to make a payment under the guarantee.

Share-based payments
Intertek Group plc runs a share ownership programme that allows Group employees to acquire shares in the
Company. Details of the share schemes are given in note 17 of the Group financial statements.

Investments impairment review
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and
subsequently measured at cost less any accumulated impairment losses. Estimates are used in determining the
level of investment that will not, in the opinion of the Directors be recoverable.

Financial ReportContents221

Notes to the Company financial statements Continued

Recoverability of receivables
Amounts owed by Group undertakings are recognised initially at the value of the invoice or loan raised and
subsequently at the amounts considered recoverable (amortised cost). Estimates are used in determining the
level of receivables that will not, in the opinion of the Directors be collected. The Company applies the
simplified approach permitted by IFRS 9, which requires the use of the lifetime expected loss provision for all
receivables. The provision calculations are based on a review of all receivables to see if there are specific
circumstances which would render the receivable irrecoverable and therefore require a specific provision.

Significant new accounting policies and standards
No significant new accounting policies or standards were adopted in the year ending 2021.

(B) Profit and loss account
Amounts paid to the Company’s auditors and their associates in respect of services to the Company, other than
the audit of the Company’s financial statements, have not been disclosed as the information is required instead
to be disclosed on a consolidated basis. The Company does not have any employees (2020: nil).

Details of the remuneration of the Directors are set out in the Remuneration report.

In the application of the Company’s accounting policies, the Directors are required to make judgements,
estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent
from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised, if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.

The assumptions which have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities are outlined below. There are no critical estimates which have a significant risk of causing
a material adjustment to the carrying amount of assets and liabilities in the next financial year.

Key Estimations and Uncertainties

There are no critical accounting judgements or estimates.

(D) Dividends

The aggregate amount of dividends comprises:

Final dividend paid in respect of prior year but not recognised as a liability

in that year

Interim dividends paid in respect of the current year

Aggregate amount of dividends paid in the financial year

2021
£m

2020
£m

115.5
55.1

170.6

115.3
55.1

170.4

The aggregate amount of dividends proposed and recognised as liabilities as at 31 December 2021 is £nil
(2020: £nil). The aggregate amount of dividends proposed and not recognised as liabilities as at 31 December
2021 is £115.6m (2020: £115.6m).

(E) Investment in subsidiary undertakings

Cost and net book value
At 1 January
Additions due to share-based payments
Recharges of share-based payments to subsidiaries

At 31 December

2021
£m

2020
£m

342.2
18.6
(13.5)

347.3

339.6
17.7
(15.1)

342.2

The Company has made Share Awards to the employees of its directly and indirectly owned subsidiaries, and as
such, the Company recognises an increase in the cost of investment in subsidiaries of £18.6m (2020: £17.7m).
Details of the principal operating subsidiaries are set out in note 23 to the Group financial statements.

The Company had two direct subsidiary undertakings at 31 December 2021: Intertek Testing Services
Holdings Limited and Intertek Holdings Limited, both of which are holding companies, are incorporated in the
United Kingdom and registered in England and Wales. All interests are in the ordinary share capital and all are
wholly owned. In the opinion of the Directors, the value of the investments in subsidiary undertakings is not
less than the amount at which the investments are stated in the balance sheet.

There is no impairment to the carrying value of these investments (2020: £nil).

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Financial ReportContentsNotes to the Company financial statements Continued

222

(F) Debtors

(I) Related party transactions

Amounts owed by Group undertakings – due within one year

Total debtors

2021
£m

408.1

2020
£m

420.5

The amounts owed by Group undertakings are unsecured, have no fixed date of repayment and are repayable
on demand. A mixture of the amounts due are interest bearing and interest free.

Details of related party transactions are set out in note 21 of the Group financial statements.

(J) Contingent liabilities

The Company is a member of a group of UK companies that are part of a composite banking cross-guarantee
arrangement. This is a joint and several guarantee given by all members of the Intertek UK cash pool,
guaranteeing the total gross liability position of the pool which was £0.4m at 31 December 2021 (2020: £4.0m).

From time to time, in the normal course of business, the Company may give guarantees in respect of certain
liabilities of subsidiary undertakings.

2021
£m

5.5

2020
£m

6.6

(K) Subsequent events

Details of post-balance sheet events relevant to the Company and the Group are given in note 18 of the Group
financial statements.

(G) Creditors due within one year

Amounts owed to Group undertakings

The amounts owed to Group undertakings are unsecured, have no fixed date of repayment and are repayable
on demand. A mixture of the amounts due are interest bearing and interest free.

(H) Statement of changes in equity

Details of share capital are set out in note 15 and details of share-based payments are set out in note 17 to
the Group financial statements.

A profit and loss account for Intertek Group plc has not been presented as permitted by Section 408 of the
Companies Act 2006. The profit for the financial year, before dividends paid to shareholders of £170.6m
(2020: £170.4m), was £163.2m (2020: £222.4m) which was mainly in respect of dividend income in relation to
2021.

The Company has sufficient distributable reserves to pay the 2021 final dividend and the anticipated 2022
interim dividend. When required, the Company can receive additional dividends from its subsidiaries to further
increase distributable reserves.

The Group settled in cash the tax element of the Share Awards vested in 2021 amounting to £6.7m (2020:
£8.5m) of which the Company settled £5.8m (2020: £7.5m).

During the year ended 31 December 2021, the Company purchased, through its Employee Benefit Trust,
216,310 (2020: 225,165) of its own shares with an aggregate nominal value of £2,163 (2020: £2,252) for
£11.4m (2020: £12.2m) which was charged to profit and loss reserves.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContentsIndependent auditors’ report
to the members of Intertek Group plc
Report on the audit of the financial statements

Opinion
In our opinion:
–

Intertek Group plc’s group financial statements and company financial statements (the “financial
statements”) give a true and fair view of the state of the group’s and of the company’s affairs as at
31 December 2021 and of the group’s profit and the group’s cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
the company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101
“Reduced Disclosure Framework”, and applicable law); and
the financial statements have been prepared in accordance with the requirements of
the Companies Act 2006.

–

223

Our audit approach
Overview
Audit scope
– We performed full scope audit procedures over 59 legal entities and performed specific audit procedures

on a further 6 entities, covering 29 territories in total.

– Taken together, the entities over which audit work was performed accounted for 79% of the group’s

revenue and 85% of the group’s statutory profit before tax.

Key audit matters
– SAI Global Assurance acquisition accounting in relation to the valuation of intangible assets (group)
Impairment of goodwill and other intangible assets (group)
–
– Valuation of defined benefit pension scheme liabilities (group)
– Uncertain tax positions (group)
–

Impairment of investments in subsidiary undertakings (parent)

We have audited the financial statements, included within the Annual Report & Accounts (the “Annual Report”),
which comprise: the consolidated statement of financial position and company balance sheet as at
31 December 2021; the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of cash flows, consolidated statement of changes in equity and company statement
of changes in equity for the year then ended; and the notes to the financial statements, which include
a description of the significant accounting policies.

Materiality
– Overall group materiality: £20,650,000 (2020: £19,700,000) based on 5% of profit before tax

(2020: 5% of the weighted average profit before tax of 2018-2020).

– Overall company materiality: £7,500,000 (2020: £7,600,000) based on 1% of total assets.
– Performance materiality: £15,450,000 (2020: £14,775,000) (group) and £5,625,000

(2020: £5,700,000) (company).

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the
audit of the financial statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.

Other than those disclosed in the Directors’ Report, we have provided no non-audit services to the company
or its controlled undertakings in the period under audit.

The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement
in the financial statements.

Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance
in the 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) identified by the auditors, 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, and any comments we make on the results of our procedures
thereon, 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.

This is not a complete list of all risks identified by our audit.

SAI Global Assurance acquisition accounting in relation to the valuation of intangible assets and Impairment
of investments in subsidiary undertakings are new key audit matters this year. Impact of COVID-19 and
Completeness and valuation of customer claims, which were key audit matters last year, are no longer included
because of a reduction in the level of estimation uncertainty associated with the future impact of COVID-19
and resulting impact on the amounts presented in the financial statements and due to there not being any
significant liabilities in relation to customer claims in recent years. Otherwise, the key audit matters below
are consistent with last year.

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224

Key audit matter

How our audit addressed the key audit matter

Key audit matter

How our audit addressed the key audit matter

SAI Global Assurance acquisition accounting
in relation to the valuation of intangible
assets (group)
Refer to the Audit Committee report on page 130
and to note 10 in the financial statements.

The group acquired SAI Global Assurance group of
companies on 7 September 2021, for consideration
(net of cash acquired) of £450.1 million.

Management engaged an external expert to support
them with the fair valuation of the acquired
intangibles. Acquired intangible assets of £99.6
million were identified and recognised in respect of
this acquisition. These included customer
relationships (£59.7 million), brands (£33.9 million)
and other identifiable intangibles (£6.0 million). The
determination of the fair value of these intangibles
involves a significant level of estimation, particularly
around future cash flows and involves making key
assumptions of revenue growth rates, margins,
discount rate, customer attrition rate and long-term
growth rates. In making such future assumptions
there is an inherent level of estimation uncertainty
and subjectivity.

We validated the mathematical accuracy of
management’s models and appropriateness of the
methodologies used to determine the fair values,
with support from our internal valuation experts.

Impairment of goodwill and other intangible
assets (group)
Refer to the Audit Committee report on page 130
and to note 9 in the financial statements.

The group had £1,241.4 million of goodwill and a
further £358.5 million of other intangible assets
recognised on the balance sheet at 31 December
2021. The potential impairment of goodwill and
other intangible assets is dependent on future cash
flows of the underlying Cash Generating Units
(“CGUs”) and there is a risk that, if these cash flows
are not sufficient to support the carrying value,
the assets may be impaired.

Accounting standards require management to
perform an annual assessment of the carrying value
of goodwill, and other intangible assets are assessed
where there are indications that they are impaired.

As this assessment is based on the future value in
use, and a significant amount of value is based on
the value to perpetuity of the CGUs, future cash
flows must be estimated, which can be highly
judgemental and could significantly impact the
carrying value of the assets.

We obtained an understanding of the assumptions
used to determine these estimates and identified the
following key assumptions:
– Discount rates: We engaged our valuation experts
to challenge the reasonableness of the discount
rates using comparable market data.

– Forecast revenue growth rates and margins:
We compared the assumptions in respect of
forecast revenue growth rates and margins with
historical trading experience; obtained market
evidence on the forecasts through our own
independent research; examined actual trading
performance post acquisition; and compared the
forecasts to the Board approved budget and
five-year forecast.

– Customer attrition rates: In respect of the
customer relationship intangible asset, we
challenged management on the customer
attrition rate assumption and forecast cash flows.
We considered an alternate customer attrition
profile through independent modelling based on
historical customer sales with the support of our
valuation experts. Our independent modelling
validated management’s estimate of the
fair value.

We assessed management’s estimate of
the fair values of the acquired intangibles
and the related disclosures and concluded
that these were appropriate.

We evaluated management’s cash flow forecasts and
understood the process by which they were
determined and approved. This included confirming
that the forecasts were consistent with the latest
Board approved budgets and checking the
methodology and mathematical accuracy of the
underlying calculations, with no exceptions
identified.

We evaluated the inputs included in the value in use
calculations and challenged the key assumptions,
particularly for the higher risk CGU, Caleb Brett, by
obtaining evidence including in respect of:
–

the growth rates used in the cash flow forecasts
by comparing them with historical results,
external forecasts and our understanding of
the business;

– using our internal valuation experts to evaluate

–

the discount rate by comparing the cost of capital
for the group with comparable organisations; and
the long-term growth rates by comparing these
with publicly available market data on projected
growth rates in key territories such as the UK,
USA and China.

We performed sensitivity analyses around these
assumptions. We also challenged the extent to which
climate change considerations had been reflected,
as appropriate, in management’s impairment
assessment process.

Having ascertained the extent of change in those
assumptions that either individually or collectively
would be required for an impairment to arise,
we considered the likelihood of such a movement
occurring.

Our testing did not identify any indicators of
impairment and confirmed that it would require
significant downside changes before any impairment
would be triggered.

In addition, we assessed the appropriateness of the
CGUs used in the impairment assessment, the useful
economic lives of the other intangible assets and the
related disclosures and concluded that these were
appropriate.

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225

Key audit matter

How our audit addressed the key audit matter

Key audit matter

How our audit addressed the key audit matter

Valuation of defined benefit pension scheme
liabilities (group)
Refer to the Audit Committee report on page 130
and to note 16 in the financial statements.

The group had gross pension liabilities of £154.0
million and a net surplus of £1.4 million recognised on
the balance sheet at 31 December 2021.

The valuation of pension liabilities involves the
exercise of judgement and technical expertise in
choosing appropriate actuarial assumptions such as
the discount rate, inflation level, mortality rates and
salary increases.

Management engaged external actuarial experts to
assist them in selecting appropriate assumptions and
to calculate the liabilities. The methodologies and
assumptions utilised are judgemental and could
significantly impact the magnitude of the liabilities
recognised.

Uncertain tax positions (group)
Refer to the Audit Committee report on page 130
and to notes 6 and 22 in the financial statements.

Provisions in relation to potential tax exposures are
subject to judgement and involve estimation
techniques that could influence the current tax
positions. The group operates in a large number of
jurisdictions, which increases the risk of non-
compliance in relation to transfer pricing
considerations relating to intercompany financing,
management recharges and trading transactions.

The individually largest uncertain tax position within
the group has previously been in relation to EU State
Aid where a contingent liability of £16.3m had been
disclosed. As set out in note 22 this has been
resolved during the year.

We utilised our internal actuarial experts to evaluate
whether the assumptions and methodology used in
calculating the pension liabilities were reasonable,
by:
– Assessing whether salary increases and mortality
rate assumptions were reasonable based on the
consideration of the specifics of each plan,
pension plans of similar maturity to the group’s
and industry benchmarks;

– Evaluating the consistency of the discount and
inflation rate assumptions with our internally
developed benchmarks based on national data;
and

– Reviewing the methodology and calculations
prepared by external actuaries to assess their
appropriateness and the consistency of the
assumptions used.

Based on our procedures, we concluded that the key
assumptions utilised lay within acceptable ranges
and that the methodology was appropriate. We
assessed the related disclosures included in the
group financial statements and concluded that these
were appropriate.

We involved our internal tax specialists in our testing
of the appropriateness of the techniques, estimates
and judgements taken over current tax balances in
relation to the transfer pricing risk. In so doing, we
evaluated:
– Third party tax advice received by the group;
– The status of recent and current tax authority

audits and enquiries;

– The outturn of previous claims;
–

Judgemental positions taken in tax returns and
current year estimates; and

– Management’s methodology, calculations and
assumptions utilised in provisions recorded, or
rationale for not recording a provision.

The procedures above did not identify any material
issues with regards to the valuation of current and
deferred tax balances.

Impairment of investments in subsidiary
undertakings (parent)
Refer to note E in the financial statements.

The parent company had £347.3 million of
investments in subsidiary undertakings. There is a
risk that the performance of the subsidiary
undertakings is not sufficient to support the carrying
value and the assets may be impaired. Management
has performed an assessment of impairment
indicators with none being identified.

We evaluated management’s assessment of
impairment indicators and considered the
consistency with other audit procedures performed.
We concluded management’s view that no
impairment indicators exist was reasonable.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion
on the financial statements as a whole, taking into account the structure of the group and the company,
the accounting processes and controls, and the industry in which they operate.

The group is split into three reporting segments: Products, Trade and Resources and the operations are spread
across over 100 territories and approximately 600 legal entities. The results are not consolidated at a territory
or regional level, so we determined that the most appropriate level at which to scope our audit was the legal
entity level.

When determining our scope, the key financial measure used was profit before tax. Due to the disaggregation
of the group’s results across the various entities, we identified three individually financially significant legal
entities, two within China and one within the United States. As a result, we instructed our component teams
to perform audits of the complete financial information of these entities.

We considered the territories in which PwC are appointed statutory auditor. Of these, 22 territories (including
China) accounted for the majority of external profit, and we therefore focused our considerations on these
territories. Within these territories, we then excluded any legal entities with no external balances, such as
intermediate holding companies, and those entities with highly immaterial revenue. This left 53 legal entities
(including the two financially significant legal entities in China) for which we instructed our local teams to
perform audits of the complete financial information for the purpose of the group audit. In addition,
we performed full scope audit procedures over two head office legal entities.

In certain territories, notably the US, Canada and Brazil, there is no statutory audit requirement and so we
considered whether procedures needed to be performed to supplement our coverage. We selected eight of
the largest entities in the United States and Canada for full scope audits (including the financially significant
component in the United States), representing those with the largest contribution to group profit, and a
further legal entity in each of the United States and Brazil over which we performed specified procedures
over the complete financial information.

We instructed a local audit firm to perform an audit of the complete financial information for one legal entity
in Bangladesh for the purpose of the group audit.

We identified a further four legal entities in Japan, Colombia and Saudi Arabia over which we instructed specific
audit procedures to be performed over revenue and receivables to supplement coverage over these key
financial statement line items.

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226

In total we performed procedures relating to 65 legal entities in 29 territories, which together accounted for
79% of the group’s revenue and 85% of the group’s profit before tax.

This, together with additional procedures performed at the group level (including audit procedures over
business acquisitions, impairment assessments, defined benefit pension schemes, tax and consolidation
adjustments), gave us the evidence we needed for our opinion on the financial statements as a whole.

Through our audit planning procedures we have made enquiries of management to understand the process
they have adopted to assess the extent of the potential impact of climate change risk on the group’s financial
statements. Management’s assessment is in the context of the new principal risk this year in relation to
Sustainability, together with the additional disclosures included this year in the Annual Report on the impact of
climate change on the future prospects of the business. Management considers that the impact of climate
change does not give rise to a material financial statement impact. In response, we have used our
understanding of the group to evaluate management’s assessment; in particular we have considered how
climate change risks would impact the assumptions made in the forecasts prepared by management used in
their impairment analyses, as referenced in the key audit matter in relation to the impairment of goodwill and
other intangible assets above.

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall
group materiality. The range of materiality allocated across components was between £1.4 million and £7.5
million. Certain components were audited to a local statutory audit materiality that was also less than our
overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality
was 75% (2020: 75%) of overall materiality, amounting to £15,450,000 (2020: £14,775,000) for the group
financial statements and £5,625,000 (2020: £5,700,000) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements,
risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the
middle of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above £1,100,000 (group audit) (2020: £900,000) and £1,100,000 (company audit) (2020: £900,000) as well
as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the
going concern basis of accounting included:
– An assessment of management’s base case and severe but plausible scenarios, challenging the key

assumptions;

Based on our professional judgement, we determined materiality for the financial statements as a whole
as follows:

– Considering the group’s available financing, including related covenants, and maturity profile to assess

liquidity through the assessment period;

Overall materiality

£20,650,000 (2020: £19,700,000).

£7,500,000 (2020: £7,600,000).

Financial statements – group

Financial statements – company

– Testing the mathematical integrity of the forecasts and the models and reconciled these to Board approved

budgets; and

– Performing our own independent sensitivity analysis to assess appropriate downside scenarios.

How we determined it

Rationale for benchmark
applied

5% of profit before tax (2020: 5% of
the weighted average profit before
tax of 2018-2020)

We considered that the most
appropriate benchmark on which to
calculate materiality was the group’s
profit before tax. This year, current
year profit before tax has been used
as a benchmark instead of the
three-year weighted average
benchmark used in 2020 when
performance was adversely impacted
for a period by the COVID-19
pandemic.

1% of total assets

These are a single set of company
accounts for an entity which has no
external revenue and takes advantage
of the exemption offered under S408
of Companies Act 2006 not to present
its income statement in its financial
statements, which are presented
alongside the group financial
statements within the Annual Report.
As a result, the determination of
materiality was based on the total
assets of this non-trading holding
company within the group.

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’s and the 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 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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to
the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ 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.

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Independent Auditors’ Report Continued

Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial
statements and our auditors’ report thereon. The directors are responsible for the other information, which
includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of
assurance 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 an
apparent material inconsistency or material misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of 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 based on these
responsibilities.

With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures
required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report
certain opinions and matters as described below.

Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic
Report and Directors’ Report for the year ended 31 December 2021 is consistent with the financial
statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained
in the course of the audit, we did not identify any material misstatements in the Strategic Report and
Directors’ Report.

Directors’ Remuneration
In our opinion, the part of the Remuneration Committee report to be audited has been properly prepared
in accordance with the Companies Act 2006.

Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term
viability and that part of the corporate governance statement relating to the company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information are described in the Reporting on other
information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the financial statements and our knowledge
obtained during the audit, and we have nothing material to add or draw attention to in relation to:
– The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;

– The disclosures in the Annual Report that describe those principal risks, what procedures are in place to

identify emerging risks and an explanation of how these are being managed or mitigated;

– The directors’ statement in the financial statements about whether they considered it appropriate to adopt

the going concern basis of accounting in preparing them, and their identification of any material
uncertainties to the group’s and 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;

– The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this

assessment covers and why the period is appropriate; and

– The directors’ statement as to whether they have a reasonable expectation that the company will be able
to continue in operation and meet its liabilities as they fall due over the period of its assessment, including
any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in
scope than an audit and only consisted of making inquiries and considering the directors’ process supporting
their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is consistent with the financial statements and our
knowledge and understanding of the group and company and their environment obtained in the course of
the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement is materially consistent with the financial statements and
our knowledge obtained during the audit:
– The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the group’s and
company’s position, performance, business model and strategy;

– The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and

– The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to
the company’s compliance with the Code does not properly disclose a departure from a relevant provision of
the Code specified under the Listing Rules for review by the auditors.

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Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s 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 the directors either intend to liquidate the group or the
company or to cease operations, or have no realistic alternative but to do so.

Auditors’ 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 auditors’ 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 (UK) 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to fraud, anti-bribery and corruption laws, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws
and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and
relevant tax legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation
of the financial statements (including the risk of override of controls), and determined that the principal risks
were related to fraudulent journal entries to manipulate the financial performance and management bias in
significant accounting estimates in order to achieve management incentive scheme targets. The group
engagement team shared this risk assessment with the component auditors so that they could include
appropriate audit procedures in response to such risks in their work. Audit procedures performed by the group
engagement team and/or component auditors included:
– Enquiry of management, those charged with governance and the group’s legal counsel around actual and

potential fraud and non-compliance with laws and regulations;

– Auditing the risk of management override of controls, including through testing journal entries and other
adjustments for appropriateness, testing accounting estimates (because of the risk of management bias),
and evaluating the business rationale of significant transactions outside the normal course of business;
– Enquiry of group’s staff in tax and compliance functions to identify any instances of non-compliance with

laws and regulations;

– Obtaining and understanding the results of whistleblowing procedures and assessing any related

investigations;

– Enquiry of the group’s Head of Internal Audit and reviewing internal audit reports; and
– Reviewing financial statement disclosures and testing to supporting documentation to assess compliance

with applicable laws and regulations.

Intertek Group plc | Annual Report & Accounts 2021

There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically involves selecting a limited number of items for testing,
rather than testing complete populations. We will often seek to target particular items for testing based on
their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at: frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body
in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not,
in giving these opinions, accept or assume responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.

Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not obtained all the information and explanations we require for our audit; or
– adequate accounting records have not been kept by the company, or returns adequate for our audit have

not been received from branches not visited by us; or

– certain disclosures of directors’ remuneration specified by law are not made; or
–

the company financial statements and the part of the Remuneration Committee report to be audited are
not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 25 May 2016
to audit the financial statements for the year ended 31 December 2016 and subsequent financial periods.
The period of total uninterrupted engagement is six years, covering the years ended 31 December 2016 to
31 December 2021.

Financial ReportContents229

Independent Auditors’ Report Continued

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency
Rule 4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report filed on
the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory
Technical Standard (“ESEF RTS”). This auditors’ report provides no assurance over whether the annual financial
report will be prepared using the single electronic format specified in the ESEF RTS.

Graham Parsons
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 February 2022

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents230

Glossary – Alternative performance measures

Introduction
In the reporting of financial information, the Directors have adopted various Alternative Performance Measures
(‘APMs’). These measures are not defined by UK-adopted international accounting standards. As adjusted
results and measures include the benefits of certain separately disclosed items (as detailed in note 3), but
exclude significant costs related to those items, they should not be regarded as a complete picture of the
Group’s financial performance, which is presented on the face of the Income Statement under Total results.
The exclusion of these items may result in Adjusted operating profit being materially higher or lower than Total
operating profit. In particular, where significant impairments, restructuring charges and legal costs are
excluded in any year, Adjusted operating profit will be higher than Total operating profit.

Purpose
The Directors believe that APMs assist the user of the Annual Report and Accounts in providing useful
information around trends, performance and the position of the Group between reporting periods and across
operating divisions by adjusting for non-recurring factors assessing the Total results of the Group, as well as
aiding users in understanding the Group’s performance. APMs are commonly used by management for
performance review, budget setting and forecasting across the Group.

Some of the metrics shown for the Group are translated at constant exchange rates. Constant rates compares
both 2021 and 2020 figures at the average and year-end exchange rates for 2021, in order to remove the
impact of currency translation from the Group’s growth figures.

Changes to APMs
There have been no significant changes to the definitions of existing APMs or the APMs used by the Group in
the year.

Reconciliations
Reconciliations between statutory and adjusted measures can be found in the Financial Review on page 30.

APM

Closest equivalent statutory measure

Adjustments to reconcile adjusted to statutory

Definition and purpose

Like-for-like revenue (‘Lfl’)

No direct equivalent

Acquisitions, business disposals and rebates (2020 only).

Adjusted free cash flow

Net cash flows from operating
activities

Includes cash flows from acquisition and sale of PPE, repayment of lease
liabilities and interest received.

Adjusted operating profit*

Statutory Operating profit*

Excludes the impact of cash flow SDIs.

Separately disclosed items (see note 3) including amortisation of acquisition
intangibles; impairment of goodwill and other assets; the profit or loss on
disposals of businesses or other significant non-current assets; costs of
acquiring and integrating acquisitions; the cost of any fundamental
restructuring; material claims and settlements; significant recycling of
amounts from equity to the income statement; and unrealised market or fair
value gains or losses on financial assets or liabilities, including contingent
consideration.

Intertek Group plc | Annual Report & Accounts 2021

Including acquisitions following their 12-month anniversary of ownership
and removing the historical contribution of any business disposals/closures.
For 2020, Lfl revenue has been adjusted to present certain rebates net
within revenue to permit comparability period to period where 2021 Lfl
revenue is also presented net of rebates.

Excluding acquisitions and disposals demonstrates the Group’s performance
for comparable operations year-on-year by removing any inflation of
revenue in the current year or prior year contributed from new acquisitions
or disposals.

Free cash flow includes net cash flows from operating activities and certain
cash flows from investing activities and the repayment of lease liabilities.
The following items are excluded: all other cash flows from financing
activities. This measure reflects the cash available to shareholders. This is a
key performance metric for the incentive scheme

Adjusted operating profit is a key measure of Group’s performance and is
based on operating profit before the impact of separately disclosed items.
These items relate to income or costs that are excluded from adjusted
operating profit due to their nature or size to provide readers with a clear
and consistent view of the business performance of the Group and its
operating divisions on a year-on-year basis.

Financial ReportContentsGlossary – Alternative performance measures Continued

231

APM

Closest equivalent statutory measure

Adjustments to reconcile adjusted to statutory

Definition and purpose

Adjusted operating margin

Statutory operating margin

As per Adjusted operating profit.

Adjusted diluted earnings per
share

Statutory Diluted Earnings per
share

Separately disclosed items after tax (see note 3) including amortisation of
acquisition intangibles; impairment of goodwill and other assets; the profit
or loss on disposals of businesses or other significant non-current assets;
costs of acquiring and integrating acquisitions; the cost of any fundamental
restructuring; material claims and settlements; significant recycling of
amounts from equity to the income statement; and unrealised market or fair
value gains or losses on financial assets or liabilities, including contingent
consideration.

Adjusted operating profit divided by revenue, both before the impact of
separately disclosed items. These items relate to income or costs that are
excluded from adjusted operating profit due to their nature or size to
provide readers with a clear and consistent view of the business
performance of the Group and its operating divisions on a year-on-year
basis.

This metric relates to profit after tax before separately disclosed items
divided by the weighted average number of ordinary shares in issue during
the financial year adjusted for the effects of potentially dilutive shares. This
is a key performance metric for the incentive scheme

Adjusted cash flow from
operations

Cash flow from operations

Cash flows relating to separately disclosed items, as identified in the cash
flow statement.

This excludes the impact of the cash flows relating to separately disclosed
items to reflect the cash flows available during recurring operations.

Adjusted net financing costs

Statutory net finance costs

Changes in fair value of contingent consideration.

Adjusted profit after tax

Statutory profit after tax

As per Adjusted profit and additionally any separately disclosed tax related
items are excluded.

ROIC (based on adjusted
profit)

Organic ROIC (based on
adjusted profit)

No direct equivalent

Adjusted operating profit is the profit measure used in calculating ROIC.

No direct equivalent

Adjusted operating profit is the profit measure used in calculating organic
ROIC, excluding acquisitions following their 12-month anniversary of
ownership and removing the historical contribution of any business
disposals/closures.

Net financial debt

No direct equivalent

Total net debt less lease liabilities.

Adjusted EBITDA

Statutory EBITDA

Earnings before interest, tax, depreciation and amortisation and excluding
separately disclosed items (see note 3) including amortisation of acquisition
intangibles; impairment of goodwill and other assets; the profit or loss on
disposals of businesses or other significant non-current assets; costs of
acquiring and integrating acquisitions; the cost of any fundamental
restructuring; material claims and settlements; significant recycling of
amounts from equity to the income statement; and unrealised market or fair
value gains or losses on financial assets or liabilities, including contingent
consideration.

* Operating profit is presented on the Group income statement. It is not defined per IFRS, however, is a generally accepted profit measure.

Intertek Group plc | Annual Report & Accounts 2021

Adjusted net financing costs exclude income or costs that due to their
nature or size provide the readers with a clear and consistent view of the
business performance of the Group on a year-on-year basis.

Adjusted profit after tax is based on profit after tax before the impact of
separately disclosed items. These items relate to income or costs that are
excluded from adjusted operating profit due to their nature or size to
provide readers with a clear and consistent view of the business
performance of the Group and its operating divisions on a year-on-year
basis.

Adjusted profit after tax (as defined above) divided by invested capital. This
is a key performance metric for the incentive scheme.

Adjusted profit after tax (excluding acquisitions as defined above) divided
by invested capital (excluding invested capital in acquisitions).

This measure shows the non-operational financial debt of the Group,
excluding lease liabilities.

This metric removes the impact of both separately disclosed items and
interest, tax, depreciation and amortisation to provide a clear and consistent
view of the business performance of the Group year-on-year at a level
before the impact of some non-cash items and financing costs.

Financial ReportContentsShareholders and corporate information

232

Shareholders’ enquiries
Any shareholders with enquiries relating to their shareholding should, in the first instance, contact our
Registrar, EQ (Equiniti), using the telephone number or the address below.

Independent Auditors
PricewaterhouseCoopers LLP
1 Embankment Place, London WC2N 6RH
T: +44 (0) 20 7583 5000

Electronic shareholders communications
Instead of receiving paper copies, shareholders can elect to receive communications by email each time the
Company distributes documents. This can be done by registering for email communications at www.shareview.
co.uk. In the event that you change your mind or require a paper version of any document in the future, please
contact the Registrar.

Brokers
J.P. Morgan Cazenove
25 Bank Street, Canary Wharf, London E14 5JP
T: +44 (0) 20 7742 4000

Access to EQ Shareview allows shareholders to view details about their shareholdings, submit a proxy vote for
shareholders meetings and notify a change of address. In addition to this, shareholders can complete dividend
mandates online which facilitates the payment of dividends directly into a nominated bank account.

Goldman Sachs International
Plumtree Court, 25 Shoe Lane, London EC4A 4AU
T: +44 (0) 20 7774 1000

ShareGift
If you have a small shareholding which is uneconomical to sell, you may want to consider donating it to
ShareGift, a share donation charity. Details of the scheme are available from:

Credit Suisse International
One Cabot Square, London,E14 4QJ
T: +44 (0) 20 7888 8888

Registered office
Intertek Group plc
33 Cavendish Square, London W1G 0PS
T: +44 (0) 20 7396 3400
www.intertek.com
Registered number: 04267576
ISIN: GB0031638363
LEI: 2138003GAT25WW1RN369
London Stock Exchange Industrials/Professional Business Support Services
FTSE 100
Symbol: ITRK

ShareGift at www.sharegift.org
T: +44 (0) 20 7930 3737

Share price information
Information on the Company’s share price is available at www.intertek.com.

Financial calendar
Financial year end
Full Year results announced
Annual General Meeting and Trading Update
Ex-dividend date for final dividend
Record date for final dividend
Final dividend payable
Half-Year results announced
Ex-dividend date for interim dividend
Record date for interim dividend
Interim dividend payable
Trading Update

Investor relations
E: investor@intertek.com
T: +44 (0) 20 7396 3400

31 December 2021
1 March 2022
25 May 2022
26 May 2022
27 May 2022
17 June 2022
29 July 2022
15 September 2022
16 September 2022
6 October 2022
24 November 2022

Registrars
EQ
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
T: 0371 384 2653 (UK)*
T: +44 121 415 0804 (outside UK)

Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday, excluding bank holidays in England and Wales.

Intertek Group plc | Annual Report & Accounts 2021

Financial ReportContents

This report has been printed on material which is certified
by the Forest Stewardship Council®. The paper is made at
a mill with ISO 14001 Environmental Management System
accreditation. Printed using vegetable oil based inks,
printer is also certified to ISO 14001 Environmental
management system and FSC® certified.

INTERTEK GROUP PLC
33 Cavendish Square,
London, W1G 0PS
United Kingdom

Tel +44 20 7396 3400
info@intertek.com
intertek.com